Gold retreats on modest profit taking; James Dines proclaims ‘This is it’

(USAGOLD – 7/11/2019) – Gold retreated this morning in what appears to be modest profit-taking after yesterday’s solid $23 run-up. It is down $6 on the day at $1416.  Silver is down 9¢ at $15.21. Gold pushed higher yesterday when it became clear from chairman Powell’s opening statement that the Federal Reserve was moving toward closer alignment with the White House on interest rates and dollar policy. In a note reported by Bloomberg last night, Vanguard Markets’ Stephen Innes summed up what that public crystallization of the Fed’s position might mean for gold:

“Although there will be a few bumps on the way given the level of skepticism in the first gold rally cycle, we think there will be an even greater rush for gold in the coming weeks and months. So gold prices could stay on an upward path as central banks pivot to an easing stance, the U.S. dollar turns gradually weaker with a more dovish Fed and the burden of harmful yielding debt rises.”

For some of you the name James Dines might ring a bell.  Touted as the “original gold bug” for his recommendation to buy gold in the late 1960s, he told Outsider Club‘s Nick Hodge that that big money is rotating out of FAANG technology stocks and into safe havens including gold. Hodge says he has never heard the veteran market analyst more decisive about a gold bull market. “This is it,” says Dines.

Quote of the Day
“Rather than let the market adjust itself, government typically starts the process all over again with a new and larger ‘stimulus package.’ The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression. This is why I predict the Greater Depression will be … well … greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.” – Doug Casey, International Man

Chart of the Day

Chart note: This chart compares price appreciation for gold and the dollar index. Gold has consistently outperformed the dollar in twelve of the last eighteen years – a formidable record. Even if one were to add in average yields on dollar-based investments, gold still comes out the clear winner in those twelve years. Gold had an off-year in 2018 – down 1% while the dollar was up almost 7%. So far in 2019, though, gold has returned to form with an 11.1% thus far this year (through July 10, 2019).

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