Gold seesaws around the $1500 mark; a new and important gold market dynamic

(USAGOLD – 9/13/2019) – Gold continued to see-saw around the $1500 mark this morning following yesterday’s volatile performance.  It is now up $3 on the day at $1501.  Silver is level at $18.07. As was the case yesterday, gold gained ground during European trading hours. It then gave up some of those gains early in the U.S. trading session. Gold demand in Europe has been strong in the wake of the ECB’s decision to lower rates and relaunch its sovereign debt-buying program.

Competitive devaluations, along with trade and ‘de-dollarization’ concerns, continue to fuel institutional investor thinking and encourage physical gold demand. “Another element lending support to the gold price this time around,” says Sharps Pixley‘s Lawrie Williams, “is that some big names in the institutional sector, like Ray Dalio, have been singing gold’s praises which should mean there is good institutional support this time around. Indeed the recent downwards moves in precious metals prices look very much like overdue corrections, from which prices will likely recover and go on to new highs.” Funds, institutions and central banks are three players largely absent in previous bull market rallies going all the way back to the early 1970s – a circumstance that introduces a new and important dynamic to present-day gold market analysis.

Quote of the Day
“My time horizon is that I usually measure moves like these in terms of decades. So let’s look at it like this: The first move, the first leg, in gold took it from $250 per ounce to $1900. . .We’ve now been in a correction that has taken gold from $1900 back to where we are today. You could easily see gold fall a couple of hundred dollars before you see it go up a couple of thousand dollars, but each move has been a decade or more which means that when gold embarks upon its next move, I believe that you will see that long wave will take gold relatively quickly to the $3000 to $5000 target that I believe is fundamentally justified based on the facts we have today.” – Thomas Kaplan, The Electrum Group (Bloomberg interview, 5/29/2019 – Gold was trading just below $1300 per ounce at the time.)

Chart of the Day

image of Pew Research poll on what the public sees for the future over the next 30 years

Published with permission of Pew Research Center

 

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