Gold pushes tentatively over $1400 mark in early trading – ‘a dramatic change in sentiment’

(USAGOLD – 6/24/2019) – Gold pushed tentatively over the $1400 mark in overnight trading and managed to hold that position in early U.S trading.  It is now priced at $1407 and up $7 on the day – nice, neat symmetry at an important number.  Silver is level on the day at $15.35.  Though gold has led the way since this uptrend began at the end of May with a 10% gain, silver has shown itself to be a reluctant, but reasonably productive participant – up 6.4% over the same period. Now at a near record almost 93 to one ratio to gold, some will see in that number the potential for a technical re-balancing of the price relationship between the two precious metals.

A headline to an article in this morning’s Wall Street Journal signals that an important psychological shift may be gaining a foothold in financial markets – Bond-Yield Fall Signals Unease. “An aging population means lower potential growth. That, in turn, boosts savings and depresses investment. Central banks struggle because they can’t really control these factors, and in a way, they can make it worse,” explains Silvia Dall’Angelo of Hermes Investment Management in that article. Adrian Day, president of Annapolis, Maryland-based Adrian Day Asset Management is more direct and matter of fact in his assessment. “There has been a dramatic change in sentiment,” he told Bloomberg on Friday in an article on gold’s breakout.

Quote of the Day
“Financialization is the smiley-face perversion of Smith’s invisible hand and Schumpeter’s creative destruction. It is a profoundly repressive political equilibrium that masks itself in the common knowledge of ‘yay, capitalism!’. Financialization is a global phenomenon. In China, it’s transmitted through the real estate market. In the US, it’s transmitted through the stock market. Financialization is the zombification of an economy and the oligarchification of a society.” – Ben Hunt, Epsilon Theory

Chart of the Day

Chart note: “The figure,” say the authors of this study published by the St. Louis Federal Reserve, “shows that the uncertainty shocks that hit the economy in the fourth quarter of 2018 and in the first quarter of 2019 (January) have been the largest during our sample period. Based on the framework we use, this finding has potentially ominous implications for the U.S. economy.”  A fitting chart as we weigh the effects of a possible breakdown in trade talks between the United States and China, an imminent recession and a rapidly changing approach to monetary policy at the Federal Reserve.

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