Gold jumps in Asia on Hong Kong concerns, Argentina default threat

(USAGOLD – 8/13/2019) – After pushing again over the $1500 mark to begin the week, gold gathered pace in Asia overnight reaching a high of $1533. It is now trading at $1522 in early U.S. trading – up $10 on the day.  Silver is up sharply at $17.37 – a 27¢ gain.  At the current price, gold is up about $26 (or +1.7%) from Friday’s close. Silver is up 50¢ (or +3%). Escalating street violence and the threat of military intervention in Hong Kong were primary influences in last night’s price action. A new political and economic crisis in Argentina suddenly resurrected the threat of default and added to financial markets’ general unease.

In a report featured at Zero Hedge this morning, Morgan Stanley’s chief equity strategist, Michael Wilson, identifies that general unease as part of larger erosion in market sentiment. “[L]ate 2017/early 2018 was the euphoric top for this cycle and do not expect…individual investor sentiment to return to euphoric levels for a sustained period of time before the end of this cycle.” He concludes that “this trend is consistent with the persistently negative sentiment seen during the bear markets of 2008-2009 and 2015-2016 and helps to reinforce our view that we have been in a rolling bear market since early 2018.”

Quote of the Day
“When President Nixon closed the gold window at the U.S. Treasury on August 15, 1971, he told several whoppers. He said it was to ‘defend the dollar against the speculators.’ He also said the action would, ‘suspend temporarily, the convertibility of the dollar into gold.’ Furthermore, he told Americans that, ‘your dollar will be worth just as much tomorrow as it is today.’ Nixon’s actions came on the heels of 60-years of gradual steps to remove gold’s backing of the dollar. In effect, $1 today has the same buying power that $0.16 had when Nixon took these ‘temporary’ actions. Over this same period, the U.S. national debt has run up from about $398 billion to over $21 trillion, and the economy has been utterly warped.”  – M.N. Gordon, Economic Prism

Chart of the Day

Chart note: Cause and effect in one simple, straightforward chart – purchasing power of the dollar and the price of gold.

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