Gold charges ahead in Asia – now at $1315
(USAGOLD – 6/3/2019) – Gold charged ahead in overnight markets to $1318, but lost some of that momentum in early New York trading. It is now trading at $1315 – a $9.50 gain from Friday’s close and $32 higher since the trade-war-inspired reversal that began last Thursday. Silver is up 20¢ at $14.76. Gold’s move to the upside comes as investors begin to factor in the full import of the trade wars. Both Morgan Stanley and JP Morgan alerted their clients this morning that a US-China trade deal is unlikely at the G-20 summit later this month. A sharp drop in the 10-year yield offers a further indication of capital flows in the direction of safe-haven assets and growing unease about a settlement in either of the trade wars – China and Mexico – occurring anytime soon.
Stay tuned. We will update later in the day if circumstances warrant. . . . . . .
In an article published at Seeking Alpha, commodities analyst Andrew Hecht offers some perspective on our favorite precious metal. “Gold has not traded below $1000 per ounce in a decade since 2009,” he says. “The price has not been below the December 2015 low and level of critical technical support at $1046.20 since 2010. At the $1305 level at the end of May, gold is still over three times the price it traded over my career. It is over four times the price that the Bank of England and the UK government thought was a good level to sell half their reserves at the turn of the century. . . . On a short-term basis, gold has been failing on rally attempts since February 2019. However, as a barometer of fear and uncertainty in markets across all asset classes, gold could be in a position to surprise on the upside over the coming months given the current state of the world.”
Quote of the Day
“I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.” – John Maynard Keynes, 1946
Chart of the Day
Chart courtesy of the World Gold Council
Chart note: “Gold is a liquid asset,” says the World Gold Council, “ranking at levels comparable to many global stock markets as well as currency spreads. Its liquidity is often sourced during periods of stress in the markets, one of its appealing qualities.”