Monthly Archives: October 2019
(USAGOLD – 10/18/2019) – Gold continued to drift sideways this morning with not much in the way of news to move it one direction or the other. It is trading at $1493 and level on the day after falling to the $1486 level overnight. Silver is up 5¢ at $17.60 after falling to near $17.40 in overseas trading. The LBMA (London Bullion Market Association) wrapped up its annual meeting in Shenzen, China earlier this week and released its annual consensus forecast on precious metals prices for the upcoming year. Last year, the average prediction from the industry’s biggest players (banks, refiners, traders, miners, etc.) was pretty much on the money, so this year’s estimates will likely be weighed with a greater degree of interest than usual.
–– For gold, the membership predicts $1658 on the average – a more than 11% gain from current pricing should it materialize.
–– For silver, the predicted outcome is even better – $23 or 31% over current pricing. That would put the gold-silver ratio at 72 to one – down considerably from the current ratio of 85 to one.
Let’s hope that the LBMA proves itself to be as accurate in 2020 as it was in 2019.
Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History
Chart of the Day
Chart note: This chart shows U.S. government receipts and expenditures from 1950 to present. Note the growing gap between incoming and outgoing – the difference for the most part filled by additions to the national debt. Given the established trend, that gap in all likelihood would have continued widening without the imposition of the new tax reduction program and simultaneous growth in government spending. With tax reductions now in place, the distance between the two lines is likely to widen even further.
“Jeff Snider is Head of Global Research at Alhambra Investments. He talks with Bob about the recent spike in lending rates in the repo markets, and how the Fed’s attempted solution fails to address the real problem. He then relates the repo problem to the global monetary system, which has suffered from major imbalances going back to 2007 that have yet to be corrected.”
USAGOLD note: Deep insights from Snider on what is going on in the repo market. . . .Quantitative easing was not printing money, he says, but an asset swap and an “unhelpful” one.
“Today, there are no conservative monetary policymakers at the Fed. Since Volcker, the Fed has been run by self-described liberals and conservatives preaching easy money from the same pulpit. Their extraordinary policies of the last 20 years are based almost entirely on creating more debt to support the debt of yesteryear as well as economic and market activity today.”
USAGOLD note: The authors go on to explain how gold differs from debt-based money ending with the observation that there is “no intermediary between it and value.”
USAGOLD note: Sprott’s Peter Grosskpopf says “gold is an insurance asset” and more at the link above.
USAGOLD note: Cashin offers his view on the Fed’s new liquidity operations at the link above.
“The new Brexit pact reached between the European Union and Britain on Thursday will struggle to get through the U.K. Parliament. And for Boris Johnson, the U.K. prime minister, that might not be a terrible outcome.”
USAGOLD note: If you are not completely confused by the Brexit situation, this article will remedy that shortcoming [smile].
“Silver looks stronger than gold, but gold is also looking very solid, from both a fundamental and technical perspective. Whether silver breaks out from the bull wedge now or a bit later really doesn’t matter.”
USAGOLD note: Here is the link to the full article from Stewart Thomson quoted in yesterday’s DMR. . . . .
“The University of Chicago economist was not alone. Up to the eve of the worst crash in 80 years, America’s economic luminaries, including Alan Greenspan, former chairman of the Federal Reserve, and his successor Ben Bernanke insisted there was no cause for alarm. Having failed to foresee the crisis, many badly misread its aftermath.”
USAGOLD note: It is because the experts, including Fed chairmen, get it so wrong so much of the time that prudent investors own gold and silver as hedges and stores of value. Alan Greenspan, for one, recommends gold ownership to protect against oversights and wayward policy measures.
Repost from 10-11-2019
“‘Negative interest rates are crazy. That means money is not worth anything anymore,’ Gruebel said in an interview with Swiss newspaper NZZ am Sonntag. ‘As long as we have negative interest rates, the financial industry will continue to shrink.’”
USAGOLD note: Sometimes the most profound insights are stated simply and directly as is the case with Mr. Gruedbel’s comment. Has there been a better characterization of the situation with negative rates?
Repost from 10-7-2019
“To me, these apparent contradictions in communication mean that the Federal Reserve is looking to prevent a financial asset meltdown while at the same time trying to avoid a higher concentration of risk. It may be, again, trying to manage the waves in the tsunami.”
USAGOLD note: It is impossible to manage a tsunami. When the warning goes up, the residents head for higher ground.
Repost from 10-11-2019
Charles DeGaulle’s ‘Criterion’ speech
Given the increasing frequency and severity of international currency imbroglios and one emerging nation-state after another falling into monetary disrepair, it is not difficult to visualize more and more of these states looking to gold as a matter of national defense. One recalls Charles DeGaulle’s famous criterion speech on gold in this context. Though such a holding would not cure internal problems derived from excessive debt and the debasement of their own currencies, it would offer something of a shield for all nation-states against the devaluation/revaluation policies of other nation-states, just as it does for private investors who take the same course of action.
“Following a strong first eight months of the year, the precious-metals complex may be in the process of offering investors one final chance to enter on attractive terms before lurking systemic risks erupt into breakaway price action.”
USAGOLD note: Hathaway goes on the list seven warnings investors should consider. He says that “We would guess another four to six weeks before an important bottom. However, we suggest that investors keep their eye on the big picture and take advantage of any possible near-term weakness to build exposure. This is a dip that needs to be bought.” Highly recommended. . . . . .
Image courtesy of Visual Capitalist
Respost from 10/7/2019
(USAGOLD – 10/17/2019) – Gold is level on the day in quiet trading at $1490. Silver is faring slightly better – up 14¢ at $17.54. With little in the way of news this morning beyond the latest Brexit machinations (and accompanying uncertainties), the gold market seems content to remain in its present range. Brexit aside, the gold market seems to be responding most directly at this point in time to the ebb and flow of trade negotiations between the United States and China now temporarily on hold. Secondarily, though, the market has in the back of its mind the problems associated with the supply-demand mismatch in the repo market. That market’s elevated needs over the past two days point to a problem that might have deeper roots than originally believed.
Quote of the Day
“Again, the primary driver of gold isn’t the direction of the dollar but the direction of real interest rates. . . The year-over-year change in core CPI increased 2.4% in August, which was the highest level in a year. All the while the US 10-year Note yield was crashing from nearly 3% to 1.6% over the past 12 months. Therefore, real yields have been crashing as gold has been rising.” – Michael Pento, Pento Portfolio Strategies
Chart of the Day
Chart note: Since the turn of the new century, gold consistently provided a real rate of return on investment when measured against inflation. In fact, it provided a real rate of return in twelve of the nineteen years represented on the chart. The period was one of subdued inflation. Gold’s performance, as a result, took many analysts and professional money managers by surprise and altered the perception among money managers that the precious metal is solely an inflation hedge.
USAGOLD note: Oxford University’s George Magnus offers a detailed and insightful assessment on the status of U.S.-China trade talks for those who like to dig a bit below the surface.
“Yesterday, the International Monetary Fund (IMF) released their updated World Economic Outlook. And, if investors were looking for any seeds of optimism, may I suggest reading The Art of Happiness by the Dalai Lama instead?”
USAGOLD note: Gopaul says the global response to all the bad news has been increased demand for gold . . . . .
Chart courtesy of the World Gold Council
“No one dares to look at the facts—or if they do, they dismiss them. Denial is a powerful force. The fact is that monetary policy is running on empty, at least in the Eurozone, and governments can provide only limited fiscal stimulus. We’ve reached the end. There’s nothing left to do than prepare for the crisis and wait. And, to be very afraid.”
USAGOLD note: A simultaneously dire and persuasive forecast from economist Tuomas Malinen, chief economist at GnS Economics and Adjunct Professor of Economics at the University of Helsinki.
“Shiller notes that these narratives follow ‘epidemic curves’ similar to outbreaks of infectious diseases. They tend to be bell-shaped: They have an initial ‘contagion’ period where the outbreak occurs, then peaks, then declines.”
USAGOLD note: Not exactly sure how Shiller’s observations play out in the actual day-to-day functioning of the markets, but, all in all, the lengthy article linked above provides much to think about. “Short cut rules, that might work in the short term,” says the Nobel-prize winner, “are often bad for the long term” – an argument, in our view, for a sound and prudent philosophy coupled with diversification.
“The next push in gold prices will come from retail investors as risks remain skewed to the upside, according to Standard Chartered Bank.
USAGOLD note: We mentioned this article reflecting Suki Cooper’s latest thinking in yesterday’s DMR. Ranjeetha Pakiam does a stellar job reporting on the gold market for Bloomberg.
“I’m not expecting any of this to go away in the years ahead.” – James Bullard, President, St. Louis Federal Reserve Bank
USAGOLD note: A candid assessment of the trade situation from an important voting member of the FOMC. . . . . . Seen as an interest-rate dove,Bullard argued for a half-point cut at the last meeting of the committee.
“[W]e are seeing echoes of the 1920s and 1930s in today’s politics because we echo the economics of the 1920s and 1930s. We had a debt-driven Gilded Age boom prior to 2008 analogous to the Roaring 20s – and then a colossal bust, analogous to 1929. Since then we have failed to work out how to deal with the debt overhang, or to co-ordinate a global recovery between countries (so all boats rise) and within countries (so all boats rise, not just yachts).”
USAGOLD note: Michael Every echoes Ray Dalio’s disconcerting comparison of the 1930s to the present, as well as Harry Dent’s immediately below.
Repost from 10-10-2019
USAGOLD note: Harry Dent does not mince words in this interview. He calls what’s headed our way “the crash of a lifetime” – similar to the 1930s. 2020 is the year the bubble peaks, he says.
Repost from 10-10-2019
“And what about the possible impact of a positive G20 and momentum toward a U.S./China trade deal? Stocks, no surprise, are readily excitable. For global safe haven bonds, however, it’s of little consequence. How can this be? Because even a trade deal would at this point have minimal impact on what has become deep and rapidly worsening structural impairment. Trade deal or not, Chinese exports to the U.S. will decline, right along with capital investment. Even with a deal, the Chinese financial system faces the consequences of years of rapid expansion as economic prospects deteriorate. Sure, 6% growth as far as the eye can see. That implies a further surge in consumer debt and even more dangerous mortgage finance and apartment Bubbles. Unparalleled overcapacity and maladjustment.”
USAGOLD note: For Noland, it’s all about China’s internal economy rhyming with the U.S.-based sub-prime debacle of 2007-2008. . . “China’s crisis clock,” he says, “began ticking no later than with last month’s takeover of Baoshang Bank.”
Repost from 6-30-2019
Recent Better Business Bureau Client Review
I made my first purchase of gold about 5 years ago and it was with USAGOLD. They answered all my questions and allowed me to buy a larger amount than they usually allow for a first time buyer. They trusted me and it worked out fine for both parties. Their BBB rating was a big factor in me trusting them. Other firms looked pretty sketchy and I didn’t want to spend that much money on a shaky firm. Since then I have purchased coins quite a few times from USAGOLD and have never been disappointed with the quality of the coins. The whole staff is very professional and courteous and are not pushy at all. They treat you as a friend, not a number. They remember me as soon as I tell them my name. That is a nice feeling. I will continue to buy from them and I highly recommend them.
38 45 48 53 five star reviews. Zero complaints.
A+ rating. Accredited since 1991.
USAGOLD Recommendation: The precious metals industry is unique in the financial industry in that it is not subject to oversight or regulation by third-party government entities like the SEC or CFTC. As such, marketplace forums and feedback sites often serve as a replacement for investors attempting due diligence. While several options can be found, by far the most impartial and least susceptible to vested influence is the Better Business Bureau. When looking at a company’s BBB profile, don’t focus solely on the rating. To be honest, pretty much everybody has an ‘A’ or ‘A+’ rating. What is far more important to assess is the number and nature of complaints, number and caliber of positive and negative reviews, longevity with the BBB, as well as the number of ‘stars’ given a company through the actual customer review system.
Daily gold and silver price history
1968 to present
Our Daily Gold and Silver Price History pages are among the heaviest traffic pages at the USAGOLD website. The archived data is licensed from the ICE Benchmark Administration and the London Bullion Market Association and Netdania Creations and run from 1968 to present. FOREX prices for the day are posted as a live feed and then frozen at the end of each trading day. These pages are frequented by data gatherers of all descriptions from professors and their students to market professionals and investors – all interested in gold’s price performance both over the long run and within specific time constraints for their own research purposes.
Daily Gold and Silver Price History is another of the quiet pages at USAGOLD that garners significant global interest particularly when the market is moving or breaking news warrants more than average interest. We also invite you to return here regularly – to this Live Daily Newsletter page – for up-to-the-minute gold market news, opinion, and analysis as it happens.
We invite your visit. We encourage your bookmark.
Daily gold and silver price history pages
Make the Libra as good as gold
“Your consultants, like most economists today, will be vociferously opposed to the yellow metal, burdened as they are by ignorance and countless myths and superstitions. This widely shared skepticism will actually be an advantage, as it will keep away well-capitalized imitators.”
USAGOLD note: Advice delivered with tongue firmly in cheek . . .
Repost from 6-29-2019
“India’s festival of lights is bringing little cheer to jewelers in the world’s second-biggest gold consumer.”
USAGOLD note: We see these stories from time to time talking about dwindling demand in India based on anecdotal evidence. When the hard numbers come out they tell a different story. Demand for gold remains strong in India mostly because the currency is losing its purchasing power while the gold price continues to rise in rupee terms.
Repost from 10-10-2019
“The US dollar has long towered over global markets and finance. But cracks are starting to appear in the edifice.”
USAGOLD note: Gold is mentioned as one of the alternatives central banks are deploying to counter over-reliance on the dollar.
Repost from 10-10-2019
(USAGOLD – 10/16/2019) – Gold continued to track south in overnight trading at one point hitting the $1477 mark before suddenly bolting to the upside at the start of COMEX trading. It is now trading at $1490 – up $8 on the day. Silver is priced at $17.42 and level on the day. At the moment, we see nothing in the news significant enough to explain the sudden turnaround with the exception, perhaps, of news out of Europe that the Brexit talks have taken a unsettling turn for the worse. Volatile trading in the British pound, now on the downside, confirms a gloomy outlook – at least for the moment. ZeroHedge reports another possibility for gold’s surge this morning – a surprise oversubscription for available Fed advanced repo funds by about $5 billion ($80.35 billion subscribed, $75 billion offered).
Stewart Thomson takes a philosophical approach to gold’s pricing over the past several days. “It’s been my firm contention,” he says in an article posted at 321Gold, “that rather than roar higher or melt lower, gold is poised to consolidate with sideway action. The $1465 support zone is acting like a sponge more than a trampoline or trap door, and that’s positive. While the Western fear trade gets the most attention from gold market fundamentalists, it’s like the hare while the love trade is the turtle. In the long term, it could be the love trade that drives and sustains gold at prices that currently seem almost unimaginable.”
Quote of the Day
“My next argument for central banks holding gold is that a country’s reserves should be diversified to minimise risk. Research shows that gold is an ideal portfolio diversifier. When I was given the Brunei fund to manage, I had to go on a crash course because I knew nothing about gold management. I took much expert advice and even commissioned, at great expense, advisers to give me an idea of how much gold should be in a portfolio. The boffins who deal with those matters believe that, over a long term, the ideal gold holding in a major portfolio is about 20 per cent. That is because gold is an ideal diversifier as its returns are what is technically known as “negatively correlated”, which means that they operate in a counter-cyclical manner. When bonds and equities fall in price, gold tends to go up.” – Sir Peter Tapsell, speech before Parliament, June 1999
Chart of the Day
Chart courtesy of Animated Stats
Chart note: Fascinating to watch. It takes about four minutes.
“Today (a sunny day in early September 2019), we hold around 400,000 gold bars in our vaults, currently worth approximately £200 billion, making up 15% of official declared gold reserves globally. We are the largest gold custodian in the UK – we hold over 65% of the gold in London.”
USAGOLD note: For those with an interest in the central role the Bank of England plays in the upper stratosphere of the gold market.