Monthly Archives: June 2019

‘It’s a temporary timeout’: Trump and Xi agree to negotiations, but offer no clear path to end US-China trade war

CNBC/Spencer Kimball/6-29-2019

“And if history is any guide to the future, the gentlemen’s agreement struck between the leaders of the world’s two largest economies over the weekend in Osaka offers no clear path to rolling back tariffs and ending a trade war that threatens to tip the global economy into recession.”

USAGOLD note: This article lays out some less than enthusiastic early reaction to the Trump-Xi meeting on Saturday . . .  Goldman Sachs says “no substantive progress was announced.”

Posted in Today's top gold news and opinion |

Gold nanoparticles improve effectiveness of medicines

“’Gold nanoparticles can be used to target tumours. When exposed to a light source, the nanoparticles release heat and destroy neighbouring cancer cells. We could also attach a drug to the surface of the nanoparticles to be delivered to a specific location,’ said UNIGE researcher Sandra Hočevar.”

USAGOLD note:  Sticking with our technology theme, a promising development from researchers at the University of Geneva in Switzerland. . .  .

Posted in Today's top gold news and opinion |

$700 quintillion asteroid ignites space mining gold rush between Mars and Jupiter

Outer Places/Chris Mahon/2-12-2018

“The asteroid Psyche 16 is a very special space rock: it’s almost entirely made of metal, including iron, nickel, and gold, which has led astronomers to believe that it was originally the core of a planet. It’s also estimated to be worth around $700 quintillion—enough to give each of the 7.6 billion people on Earth about $92 billion each. You read that correctly—$92 billion each. This asteroid has the potential to make us all richer than the Pharaohs—or, you know, crash the world economy.”

USAGOLD note:  Not to worry.  Scientists say it will take 25 years to prove up this huge gold nugget floating out there in space, then another 50 years to get to the commercial start phase, assuming of course we can overcome a few technological challenges – like getting there, being able to stay there, figuring out a way to get back (with the metal), engineering production on an asteroid, etc. . . . .

Posted in Today's top gold news and opinion |

Silver specs strongly boost bullish bets to 16-week high

Through Tuesday, June 22, 2019
Charts and commentary courtesy of
Tables courtesy of GoldSeek

Note: Commitment of Traders reports are published Friday with data from the previous Tuesday.

Gold specs raise bullish bets sharply for 4th week

Gold Non-Commercial Speculator Positions:

Large precious metals speculators raised their bullish net positions higher in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 236,554 contracts in the data reported through Tuesday June 25th. This was a weekly boost of 32,231 net contracts from the previous week which had a total of 204,323 net contracts.

The week’s net position was the result of the gross bullish position (longs) gaining by 23,475 contracts (to a weekly total of 298,108 contracts) and combined with the gross bearish position (shorts) that fell by -8,756 contracts for the week (to a total of 61,554 contracts).

Spec Sentiment Strengthens

The gold large speculator position rose sharply for a fourth straight week and has risen by a total of just about +150,000 net contracts in these last four weeks. The gold speculator position had recently been as low as +37,395 contracts on April 23rd (just 10 weeks ago) before seeing a bullish surge in sentiment and shooting to higher levels over these past 10 weeks.

Gold bets are above the +200,000 contract level for a second straight week and are now at the highest level since September 9th of 2017.

Gold Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -260,150 contracts on the week. This was a weekly fall of -36,295 contracts from the total net of -223,855 contracts reported the previous week.

Gold Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1418.70 which was an increase of $68.00 from the previous close of $1350.70, according to unofficial market data.

Silver specs strongly boost bullish bets to 16-week high

Silver Non-Commercial Speculator Positions:

Large precious metals speculators continued to bet in favor of Silver in the futures markets again this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 30,565 contracts in the data reported through Tuesday June 25th. This was a weekly gain of 16,049 net contracts from the previous week which had a total of 14,516 net contracts.

The week’s net position was the result of the gross bullish position (longs) rising by 4,298 contracts (to a weekly total of 97,573 contracts) that combined with the gross bearish position (shorts) that dropped by -11,751 contracts for the week (to a total of 67,008 contracts).

Silver had recently fallen into bearish territory in late April and through the month of May with positions marking a low of -22,409 contracts on May 28th. Since then sentiment has turned around sharply in the past month.

Silver large speculator positions continued to jump higher this week and the net position increased by over +10,000 contracts for a fourth consecutive week. This week’s rise by more than +16,000 contracts is the largest one-week gain since December 31st.

The rising speculator sentiment has pushed the current standing for the Silver bullish position to the highest level since March 5th when bets totaled +32,521 contracts.

Silver Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -53,552 contracts on the week. This was a weekly shortfall of -19,065 contracts from the total net of -34,487 contracts reported the previous week.

Silver Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $1530.00 which was a rise of $30.70 from the previous close of $1499.30, according to unofficial market data.

US Dollar Index Speculators trim bullish bets

US Dollar Index Speculator Positions

Large currency speculators lowered their bullish net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 22,366 contracts in the data reported through Tuesday June 25th. This was a weekly decline of -6,183 contracts from the previous week which had a total of 28,549 net contracts.

This week’s net position was the result of the gross bullish position decreasing by -5,992 contracts (to a weekly total of 34,327 contracts) in addition to the gross bearish position which saw rose by 191 contracts for the week (to a total of 11,961 contracts).

Large currency speculators cut their bets of the US Dollar Index for the third time in the past four weeks and by the largest one-week decline since March. The overall trend for speculator bets has been steadily lower in recent months since reaching a high of +40,513 contracts on January 13th.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (
Posted in COT Reports |

The gold train is leaving the station

SharpsPixley/Ross Norman/6-21-2019

“Market observers have hitherto condemned gold for a lacklustre performance over the last few years, seemingly oblivious to the headwinds it has faced from a strong US dollar and a few other factors. That is to say simply that the US dollar price has not fared too well – yet in 72 currencies gold is now at or at least within a few percentage points of being at an all time high. We seem to forget that US citizens represent only 4% of the planet’s population.  Perhaps most significantly, gold is only 2.5% from a record high in Indian rupee terms. This deeply important and highly price sensitive market should perhaps be the most keenly observed barometer of gold sentiment.  Indians are cany – in gold, they are the ‘smart money’. “

USAGOLD note:  London-based Ross Norman raises important issues about the value of gold in a range of currencies that not many are thinking about.  His point on India’s gold demand is well-taken. India’s citizenry have stockpiled about 25,000 tonnes of gold, according to the World Gold Council.  The world’s governments and central banks, by way of contrast, hold about 34,000 tonnes of gold. Norman’s article begins with an interesting anecdotal tale about an investor from Turkey.

Posted in Today's top gold news and opinion |

The world now has $13 trillion of debt with below-zero yields

Bloomberg/Adam Haigh

“Joining the club of government debt with 10-year yields below zero this week were Austria, Sweden and France. Japanese and German rates plumbed fresh all-time lows amid a global bond rally that even got Wall Street pondering life with Treasuries yields under 1%.”

USAGOLD note:  That list of below-zero countries is likely to grow in the weeks and months ahead.

Repost from 6-23-2019

Posted in Today's top gold news and opinion |

DoubleLine’s Gundlach says Fed’s ‘pivot’ is following bond market’s lead

Reuters/Jennifer Alban

“Jeffrey Gundlach, chief executive of DoubleLine Capital and the most widely followed bond investor, said the Federal Reserve’s dovish turn in its policy statement on Wednesday took its lead from the bond market. The Fed is doing ‘what the bond market says – with a lag,’ said Gundlach, who oversees more than $130 billion in assets. ‘The bond market definitely helped to encourage the ‘Fed pivot.’”

USAGOLD note:  If Gundlach is right, and we think he is on to something, it might at least partially explain gold’s strong reaction since the Fed issued its statement this afternoon. ‘What the bond market says is: “Lower rates are here – not on the way. . . but here.” Gundlach, we might add, is an advocate of gold ownership in this financial environment.  To get more of a feel for Gundlach’s thinking, we recommend a visit to the link.

Repost from 6-19-2019

Posted in Today's top gold news and opinion |

Gold finds support, treks higher, paces sidelines awaiting Trump-Xi outcome

(USAGOLD – 6/28/2019) – Gold continued to pace the sidelines this morning awaiting the outcome of the Trump-Xi meeting in Japan on Saturday.  The good news, though, comes from a technical perspective. For a second time this week, the yellow metal found support just above the $1400 mark then trekked higher regaining almost $10 in the price to finish at $1411. In today’s early going, it is up another $3 at $1414.  Silver is level on the day at $15.28.

Whether or not gold has drawn a line in the sand at $1400 remains to be seen, but traders and speculators are likely to take note of those reversals as a good sign. As of this morning’s pricing, gold is up $15 for the week (1%) and up $108 in the month of June (8.25%).  Silver is level on the week, but up 69¢ for the month (4.75%).

A Financial Times article on gold published this morning highlights a couple of eye-catching quotes from money managers whose clients invest in gold.  Laurie Kamhi, managing director of a fund that serves entrepreneurs and executives says, “You’d be surprised at how many of them invest in bars as a way to store money.”  Brent Armstrong, a partner at Weatherly Asset Management which caters to clients $2 million to $25 million in assets, says gold is a unique commodity. “We can look at its use in jewelry and electronic products,” he says, “but it’s also been a human emotional store of value for thousands of years.”

Money managers, by and large, focus their attention on the bottom line, i.e., the return on investment.  With gold, though, there is also a psychological reward – peace of mind. In the end, there is much to be said for the non-monetary side of the precious metals, i.e., that quality which addresses the need for a reliable store of wealth in financially challenging and uncertain times.

Quote of the Day
“I remember being told many years ago on a South African game reserve that the buffalo was the most dangerous of the big five game animals. In large part, this is because of the complacency shown towards them relative to the other, more obviously dangerous big five game animals (ie the lion, leopard, rhino and elephant). It’s also a fact that unlike the other big five, the buffalo gives no warning of an imminent charge. It’s complacency that gets you killed, and the same goes for investors with the macro-risks. We all know what the big macro-imbalances are out there, caused by years of loose money, but investors continue to ignore them at their peril.” – Albert Edwards, SocGen

Chart of the Day

Chart note: Up until the “double oughts,” the manual on gold read that it performed well under inflationary and deflationary circumstances, but not much else. However, as the decade of asset bubbles, financial institution failures, and global systemic and sovereign debt risk progressed, gold marched to higher ground one year after another. As events unfolded, it became increasingly clear that the metal was capable of delivering the goods under disinflationary circumstances as well. The fact of the matter is that during the 2000s – even as the inflation rate hovered in the low single digits (green area on chart] – gold managed to rise from under $300 per ounce in the early 2000s to nearly $1900 per ounce by 2011, a gain of roughly 633%.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

3 reasons the gold rally is unlikely to reverse soon

Barron’s/Evie Liu/6-27-2019

“‘If gold holds above the $1,400/oz trading level over the course of this week, we believe there is a very good chance that this could mark the beginning of a new gold bull market,’ wrote VanEck portfolio manager Joe Foster on Monday. ‘In any case, it appears gold has entered a higher trading range.’ Here are a few reasons the rally is likely to continue.”

USAGOLD note:  The three reasons given might surprise some . .  . particularly the third – “Inflation won’t be low forever.”  Worth the visit at the link above. . . .

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

ECB stands by as Italian bank flounders

CNBC/Ferdinando Giugliano/6-27-2019

“The ECB is wrong to stand on the sidelines; it should demand a fresh review of the bank’s asset quality. Since the establishment of the SSM in 2014 to oversee the euro zone’s banks, it has often waited too long before acting. Better to send in the inspectors now to Carige rather than wait until its losses spiral out of control.”

USAGOLD note:  Another Italian bank on the ropes in an economy that really is not doing all that well at this juncture. . . Italy’s GDP growth rate is barely registering a pulse at this point in time.  In fact, it is now in minus territory (-0.2%). We overlay Germany’s GDP growth rate by way of comparison. Banca Carige might be the tip of the iceberg.

Chart courtesy of

Posted in Today's top gold news and opinion |

China is not budging ahead of Xi-Trump G-20 meeting

CNBC/Evelyn Cheng/6-27-2019

“The Chinese Ministry of Commerce maintained a firm stance against the U.S. during a weekly press conference Thursday, less than two days ahead of a scheduled meeting between the leaders of the two countries. ‘We urge the U.S. to immediately cancel its pressure and sanction measures on Huawei and other Chinese companies, and push for the stable and healthy development of China-U.S. trade relations,’ Gao Feng, spokesman for the Ministry of Commerce, said in Mandarin, according to a CNBC translation.”

USAGOLD note:  Those are some specific and seeming intractable demands. China’s not budging could turn headwinds into tail winds for the gold price. . . . . .

Posted in Today's top gold news and opinion |

Why gold is money

Casey Research/Doug Casey

“There’s nothing magical about gold. It’s just uniquely well-suited among the 98 naturally occurring elements for use as money… in the same way aluminum is good for airplanes or uranium is good for nuclear power.  There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.”

USAGOLD note:  Casey delivers the essential argument for gold as money in the age of paper currency.

Image:  Aristotle as depicted by the German artist Johann Jakob Dorner the Elder (1741-1813)

Repost from 12/5/2019

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

2019 is gold’s year to shine

The Assay/Gavin Wendt

It was only a matter of time before the fragility of the current US political and economic situation was laid bare; a situation that has translated directly into the recovery of the gold price. Speculation around the health of the US bull market, the future path of interest rates, international trade, and the future of Trump himself, have seen gold surge by more than $100/oz since mid-August.

USAGOLD note:  A solid overview on gold for the rest of 2019 –

Repost from 3-6-2019

Posted in Today's top gold news and opinion |

Beijing stockpiles on gold to hedge against potential economic downturn

CNA/Tom McGregor

“A more accurate interpretation is that China, like many other countries, is watching very closely global economic indicators, in anticipation that the global economy may be heading towards gloomier days. As it strives to buffer its people from the harmful effects of a downturn, the Chinese are responding in a routine manner to protect themselves against potential headwinds by making safe investments to protect coffers and shoring up reserves of the US dollar and gold, both of which tend to rise in value when the international economy slows down.”

USAGOLD note:  China’s official sector gold acquisitions are nothing new.  They have been going on for over a decade and for the reasons the author mentions.  We continue to believe that the announcements of increases to their gold reserves of late are after the fact.  At some point, China will reveal its real gold reserve number and it will likely jolt the market.  The roughly 15 tonne additions per month now being announced, we believe, are just the tip of the iceberg.

Chart courtesy of

Repost from 6-15-2019

Posted in Today's top gold news and opinion |

The Federal Reserve has another option besides rate cuts to battle a slowdown

CNBC/Fred Imbert

“’It would be harder for the Fed to explain why they were cutting rates and letting the balance sheet continue to run-off,’ said Joseph Kalish, chief global macro strategist at Ned Davis Research, in a note. ‘That would be like pressing on the gas and the brakes at the same time.’”

USAGOLD note:  As you can see in the chart below, the Fed has reduced its balance sheet somewhat, but not by a large degree.  So far it has sold off roughly $525 billion of a nearly $4.2 trillion portfolio since the beginning of 2018 – a reduction of about 12.5%. Taking its foot off the brake, however, could have a psychological impact on both the gold and stock markets . . .

Repost from 6-23-2019

Posted in Today's top gold news and opinion |

Gold falls back to just above the $1400 level, looking for support

(USAGOLD – 6/27/2019) – For the second time in two days, gold has fallen near the $1400 mark. Whether or not support will hold at that level is the question of the day. It is now trading at $1402 – down $9.50 on the day.  Silver is trading at $15.24 – down 7¢ on the day. Financial markets, in general, look restrained this morning pending the outcome of the Trump-Xi meeting on Saturday coupled with the arrival of the annual summer doldrums.

With the assortment of issues preying on investor psychology, though, 2019 might be one of those years when we bypass the annual slowdown. “Gold trading usually gives pundits, dealers and investors a break at some point over the summer,” observes Adrian Ash at BullionVault. “But like 2007, 2008, 2009, 2011 and 2016…this year is proving no time to take your eye off the market. And if 2019 is going to see an old skool summer lull in gold trading, it won’t feel much like a discount up at these prices.”

Overall a potential global recession and attendant looser monetary policies might be an even greater and enduring influence at this juncture than seasonal market considerations. The Sino-American trade war figures largely in that discussion. Expectations linger that barring a surprise the two parties will likely agree on little more than to keep talking.  Come Monday, should that assessment become reality, we could be looking at a completely different gold market from the one we see today.

Quote of the Day
“It took the United States 193 years to accumulate its first trillion dollars of federal debt—the gross debt, as it’s called. We will add that much in the current fiscal year alone. All told, the government owes $21.5 trillion, give or take a few careless tens of billions—that works out to $65,885 for each American. It’s the ease of borrowing that drives the growth in federal IOUs. The remote political cause of this predicament is the ideology of statism. In Washington, this takes the form of tax and tax, spend and spend, elect and elect; on Wall Street, it’s found in too-big-to-fail, a virtually socialized mortgage market, and an overreaching, manipulative central bank.” – James Grant, Time To Worry, The Weekly Standard;  (Also see Grant’s Interest Rate Observer)

Chart of the Day

Chart note:  This chart depicts U.S. government receipts and expenditures from 1950 to present.  Note the growing gap between incoming and outgoing – the difference for the most part filled by additions to the national debt.  Given the established trend, that gap in all likelihood would have continued widening without the imposition of the new tax reduction program and simultaneous growth in government spending.  With tax reductions now in place, the distance between the two lines is likely to widen even further.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Trump’s not wrong about the dollar

Bloomberg/John Authers/6-26-2019

“However, moves in the price of gold suggest that there are downward pressures on the dollar this time. Unlike previous periods when rates declined, this has one has been accompanied by surging demand for gold, pushing prices to the highest in the more than six years . . . What does this tell us? BCA Research highlights the importance of the bond/gold price ratio, which has sharply declined, implying further weakness for the dollar lies ahead . . .”

USAGOLD note: Authers goes on to lay out his and BCA Research’s detailed argument along these lines. “Gold,” he concludes, “would be a direct way to profit from a weakening dollar.”

Posted in Today's top gold news and opinion |

Trump says Fed should have Draghi as chief instead of Powell

Bloomberg/Rich Miller/6-26-2019

“President Donald Trump said the U.S. should have Mario Draghi, president of the European Central Bank, at the helm of its monetary policy — ‘instead of our Fed person’ — and reiterated that he has the right to demote or fire Federal Reserve Chairman Jerome Powell. ‘Nobody ever heard of him before, and now I made him and he wants to show how tough he is,’ Trump said Wednesday of Powell, speaking in an interview on Fox Business Network. ‘OK, let him show how tough he is. He’s not doing a good job.’”

USAGOLD note:  If all of this were not deadly serious, it might be mildly entertaining. . . . .Would anyone like to venture a guess as to what might happen to the price of gold if Powell were fired?

Posted in Today's top gold news and opinion |

Neutron star collision billions of years ago put gold and silver in all of us

Columbia News/Carla Cantor

“This single cosmic event, close to our solar system, gave birth to 0.3 percent of the Earth’s heaviest elements, including gold, platinum and uranium. ‘This means that in each of us we would find an eyelash worth of these elements, mostly in the form of iodine, which is essential to life,’ [Astrophysicist Imre] Bartos said.”

USAGOLD note:  And economists wonder why humanity has a dogged attachment to the barbarous relic. . . . .Was it Carl Sagan who used to say that “we are made of star stuff”?

Repost from 5-9-2019

Posted in Today's top gold news and opinion |

Why the odds of a recession in the next year are even higher than you think

Real Investment Advice/Jesse Colombo

“The moral of the story is that nobody should be complacent in these times when recession risk is so high, especially because the coming recession is likely to set off a global cluster bomb of dangerous bubbles and debt. The current probability of a recession is the same as it was during the Big Short heyday of 2007 when subprime was blowing up – just let that sink in for a minute. Do you think ‘this time will be different’? How can it be different when we didn’t learn from our mistakes and have continued binging on debt and inflating new bubbles?! Anyone who believes that ‘this time will be different’ is seriously delusional and will be taught a very tough lesson in the not-too-distant future.”

USAGOLD note: Smart money is already moving in the direction of safe havens for exactly the reasons Colombo outlines in this warning.

Repost from 6-21-2019

Posted in Today's top gold news and opinion |

Rejoicing central banker capitulation

Credit Bubble Bulletin/Doug Noland

“Capitalism is in clear and present danger. This sounds extreme – unless you’ve followed the trajectory of developments over the years. How are capitalistic systems to operate with central banks abrogating adjustments and corrections both for market and economic systems? It takes a tremendous amount of wishful thinking to believe that today’s markets will effectively allocate real and financial resources. Sound analysis also points to only more precarious imbalances and maladjustment on a global basis. And with global fragilities increasingly conspicuous, it’s reached the perilous point where markets believe central banks will preemptively flood the global system with liquidity to forestall ‘risk off’ in the markets and recession globally.”

USAGOLD note:  Sounds like moral hazard in the extreme . . . Some post-FOMC meeting thoughts from Doug Noland.

Repost 6-26-2019

Posted in Today's top gold news and opinion |

Gold trends lower on Fed signals, traders and investors continue to buy the dips

(USAGOLD – 6/26/2019) – Gold continued to trend lower overnight and into the New York open on profit-taking and signals from Fed chairman Powell yesterday that any interest rate cut at its July meeting would be modest. Though some gold traders and investors are taking profits, others continue to buy the dips. As a result, gold is down $7 in today’s early going at $1411 after being down as much as $16 in overnight trading. Silver is level at $15.32. Gold hit six-year highs in yesterday’s overnight trading at $1437 per ounce. Goldman Sachs revamped its forecast for gold yesterday projecting a $1475 average price over the next twelve months.  It says $1600 is possible if slow growth hampers developed market economies.

Quote of the Day
“The ‘threat’ is best seen through the emergence of exchange-traded funds (ETFs), which allow investors to get a proxy physical gold exposure through an investment via their stockbroker. In truth, these products are, in many cases, more expensive than trading and storing physical gold (especially for larger investors with a long-term investment time frame), have less trading flexibility, and are less secure than owning real physical gold.” – Jordan Eliseo, ABC Bullion/Australia

Chart of the Day

Chart note: “Central bank net purchases reached 651.5t in 2018, 74% higher year over year,” says the World Gold Council in its year-end gold demand report. “This is the highest level of annual net purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record. These institutions now hold nearly 34,000 tonnes of gold. Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets.”

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Trump drags dollar to center stage at G-20 as trade war heats up

Bloomberg/Katherine Greifeld/6-25-2019

“President Donald Trump believes the dollar is too strong, a senior administration official said Tuesday. Last week, Trump accused Europe and China of weakening their currencies to gain a competitive advantage. Wall Street banks are even starting to ponder the risk that the U.S. could seek to drive the dollar lower. And with Democratic presidential candidate Elizabeth Warren proposing ‘actively managing’ the currency, its value promises to be a topic deep into the election cycle.”

USAGOLD note:  Push all else aside, this might be the big story going into the G-20 summit and the one situation upon which all else – including trade negotiations – hinges. Needless to say a concerted policy to weaken the dollar is likely to strengthen gold. . . . . . . .

Posted in Today's top gold news and opinion |

Powell’s Fed sees lower long-run rates as growth dims

Bloomberg/Steve Matthews/6-25-2019

“‘This is really important,’ said Torsten Slok, chief economist at Deutsche Bank Securities, who expects a rate cut in July. ‘For many years, the Fed has been arguing that monetary policy was easy and accommodative and supporting growth and inflation. After a decade of easy monetary policy, the Fed has decided that policy is no longer stimulative.’”

USAGOLD note:  Fed chairman Powell adds fuel to the fire underlying gold’s rise over the past three weeks in a question and answer session at the Council on Foreign Relations.

Posted in Today's top gold news and opinion |

Gold investors have been waiting a long time for this breakout moment and it’s happening

CNBC/Maggie Fitzgerald/6-25-2019

“‘Bigger picture though, given the magnitude of the base, which has taken six years to form, we suspect we could even see a retest of the $1,921 record high,’ David Sneddon, global head of technical analysis at Credit Suisse, said in a note to clients Monday.”

USAGOLD note:  This article goes on to say that gold is Morgan Stanley’s number one commodity pick based on the “uncertain macro-economic outlook.”

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Iran says latest sanctions ‘block diplomacy forever’

Financial Times/Monavar Khalaj, Aime Williams and Andrew England/6-25-2019

“Iranian president Hassan Rouhani branded Trump administration officials as ‘liars’ and ‘confused’ as Tehran lashed out at Washington’s move to impose sanctions on the Islamic republic’s supreme leader and top diplomat.”

USAGOLD note:  The markets have not fully digested at this early hour the potential effects of this latest turn of the screw in the Persian Gulf. . . .

Posted in Today's top gold news and opinion |

Putin’s big bet on gold is paying off

BloombergOpinion/Leonid Bershidsky/6-24-2019

“For years, Russia has been the world’s biggest sovereign gold bug: Even while gold prices were in the doldrums, it doggedly kept increasing its reserves. Now that gold is at the highest level since 2013, the tactic appears to be paying off.”

USAGOLD note: An interesting short study on Russia’s reserve deployment strategy in which gold plays a central role.  Most of the gold going into Russia’s coffers comes from domestic production.  Russia is the third largest producer behind China and Australia.  The United States is fourth.  Russia at last count has just over 1800 tonnes of gold in reserve – the seventh largest stockpile in the world. It has added just under 600 tonnes since 2015 for a 48% gain.

Posted in Today's top gold news and opinion |

Ask the Governor about the future of money

Bank of England/Mark Carney

“For example, EMEs’ share of global activity is now 60%, but their share of global financial assets lags behind at around one-third. And half of international trade is currently invoiced in US dollars, even though the US has a much lower 10% share of international trade. As the world re-orders, this disconnect between the real and financial is likely to reduce, and in the process other reserve currencies may emerge. In the first instance, I would expect these will be existing national currencies, such as the RMB. However, history suggests these transitions will not happen overnight. The US economy overtook Britain’s in the second half of the 19th century, but it took until the 1920s before it became a dominant currency in international trade.”

USAGOLD note:  Remarkably candid and detailed assessment from the Governor of the Bank of England throughout this Q&A with the public.  He covers a wide-range of topics and states what he has to say without the usual central bank-speak we get as a matter of course. His comments on China’s yuan though will take many by surprise. He does not see much of future for cryptocurrencies, at one point stating that they “currently are not promising even as a form of money let alone as a global currency.” In response to a question about banking the IMF’s SDR with gold, he makes the following comment:

“It would be undesirable to base the value of a global currency on gold. Under the Bretton Woods system – the international system of linking exchange rates to the US dollar which was pegged to gold existing from 1944 to 1971 – there was a fundamental tension in that the global supply of gold did not grow in line with the global demand for money. This tension peaked in the early 1970s and the system collapsed. Since then, major economies have moved towards a system of floating exchange rates, and the basis for the SDR’s valuation has also been switched from gold to the more stable arrangement of valuation based on a basket of currencies.”

Such thinking underscores the flaw in the SDR as a store of value, and why it will never replace gold as the primary asset of last resort on central bank balance sheets.  The great mistake made by the Bank of England, or better put the British government, was to encourage and sponsor the sale of a good portion of UK’s gold reserve at the turn of the century.  In the throes of Brexit, there are many within Britain, no doubt, who would rather see that gold sitting on the BoE’s balance sheet rather than someone else’s.

Repost from 1-11-2019

Posted in Today's top gold news and opinion |

Fed’s Clarida says case for easing monetary policy has risen

Bloomberg/Rich Miller and Steve Matthews

“Clarida’s comments largely reinforced remarks Wednesday by Chairman Jerome Powell after Fed officials left interest rates on hold while saying uncertainty over their outlook had increased. That was widely interpreted as opening the door to an interest-rate cut as early as the Fed’s next gathering, in late July.”

USAGOLD note:  Two  very important dots on the dot-plot chart, it would seem, anticipating lower rates come July. (Clarida is vice chairman of the Fed. Powell, of course, is chairman.) . . . . . .The bond market has already dropped rates on its own by .75% to .9, so it will be interesting to see how the Fed responds come July.

Repost from 6-21-2019

Posted in Today's top gold news and opinion |

Wealthy Americans say financial worries hurt their mental health

Bloomberg/Lananh Nguyen

“Even relatively wealthy Americans are so worried about their finances that it’s affecting their mental and physical health. That’s one of the findings in a Bank of America Corp. survey of more than 1,000 people in the U.S. who have enough investable money to qualify as “mass affluent.” Financial concerns affected the mental health of 59% of respondents, while 56% said their physical health has been hurt.”

USAGOLD note:  One wonders how many among that 59% are properly diversified – and by that we mean with gold as part of the portfolio mix. (Too many see diversification as the proper mix between stocks and bonds.)  Want less stress – or no stress?  Diversify and let others fret.

Image by TheVisualCapitalist/Jeff Desjardins

Repost from 6-17-2019

Posted in Today's top gold news and opinion |