Gold continues climb, up $62 over the past week

(USAGOLD – 6/6/2019) – Gold’s continued its recent climb after President Trump tweeted dissatisfaction with the progress in immigration talks between the U.S. and Mexico.  Its upward march abruptly halted yesterday when Senate Finance Committee chairman Charles Grassley predicted progress in those talks – giving up $10 of the roughly $15 gain on the day, but still managing to finish in positive territory on the day. It is now trading at $1337 – up $6 from yesterday’s close. Silver is up 15¢ on the day at $14.96. Adding to the general market unease, the president also threatened yesterday to impose tariffs on another $300 billion in Chinese imports.

At $1337 per ounce, gold is up $62 over the past week – a nearly 5% gain.  Though we suspect short-covering as playing a role in the upside of the past few days, it is difficult to determine with complete certainty to what degree it has been a factor. Another important contributor has been strong institutional buying in response to recession concerns and speculation that the Fed will now move to lower rates before the year is out.

“Directly above here lies the 1357.66 major resistance,” says Karen Jones, an analyst at Commerzbank. “This is the 2014-2019 resistance line. We have a myriad of resistance above here that extend to the 1392.55 2014 high and we think it will take several attempts to clear this major resistance. But longer term we continue to view this as a potential major base pattern, which once complete will target nearer 1690.”

Quote of the Day
“Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – William Strauss & Neil Howe, The Fourth Turning [1997]

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.”

 

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