Monthly Archives: November 2019
“More than two-thirds of retail investors believe that gold is a good safeguard against inflation and currency fluctuations. Almost as many (65%) believe it won’t lose its value over the long-term and report that it makes them feel secure (62%). It is no surprise then, that with so much global economic uncertainty, 61% of retail investors trust gold more than fiat currencies. Because of this, gold is typically used as a strategic asset by retail investors, with the majority using it either to protect their wealth or to generate returns over the long-term.”
USAGOLD note: Some surprising and very positive findings from the World Gold Council on the global public’s affinity for gold – a survey of 18,000 investors worldwide.
Repost from 11-14-2019
Will 2019 be the year of the big breakout for gold?
“In each of the last three years, gold has gotten off to a strong start only to fizzle as the year moved along. Will 2019 be the year gold finally breaks the pattern? A good many investors, fund managers and analysts think that 2019 might very well be the year when gold breaks the restraints and pushes to higher ground. One of those is Carter Worth of Cornerstone Macro in New York who CNBC’s Melissa Lee refers to as “the chart master.” In a recent interview with Lee, Worth referred to a rendition of the long-term chart below saying that there is “a well-defined set-up and a lot of tension.” He says that combination is going to resolve to the upside – “a breakout to all-time highs.” With respect to gold’s relationship to the dollar, Worth says “Gold’s got its own momentum now. . .It is all setting-up for higher gold prices and trouble for equities, trouble for the economy.”
Repost from 6-5-2019 (!)
“Worse, if Trump gets wind of the fact that China is ignoring him, or even has the perception Beijing is working against him politically, it must surely raise the risk of higher US tariffs–at least on 15 December–rather than the risk-on imminent decrease so many have said so loudly for oh-so long.”
USAGOLD note: This opinion piece from Rabobank’s Michael Every elaborates on a theme mentioned in yesterday’s DMR – China’s ‘talk but wait’ strategy as reported by CNBC’s Eunice Yoon.
Repost from 11-20-2019
“This is the cave in which inflation hides … our Fiat Lifestyle, where we simply declare into existence the manner in which we deserve to live. Declared into existence exactly like everything else in the Fiat World. Pulled into the present from our future selves and our children. Without a second thought.”
USAGOLD note: Quite a statement from Ben Hunt as part of a short article you really should not pass by – even if it is a bit unsettling.
Repost from 3-14-2019
“‘I think we’ll continue doing that because of what we see in which direction the crisis in the world is moving,’ Vucic told reporters in Belgrade on Tuesday. He cited slowing growth in the euro area, Serbia’s top trading partner and main sources of investment.”
USAGOLD note: Though a minor player in the official sector dash for the gold, Vucic’s rationale echoes that of the rest of the group.
Repost from 11-19-2019
“As America’s fiscal deficit nears $1 trillion for the first time since the financial crisis, the House Budget Committee held a hearing on Wednesday seeking answers to a crucial question: Does it pose a clear and present danger to the economy?”
USAGOLD note: Of course not. ‘Deficits don’t matter,’ in case you may have forgotten.
Repost from 11-2019
(USAGOLD – 11/27/2019) – Gold was unable to sustain yesterday’s upward trend in slow, pre-holiday trading this morning. The metal is down $6 at $1455. Silver is down 10¢ at $16.99. The trade issue continues to trump all others when it comes to the precious metals at present. Some though are beginning to factor-in the Fed’s liquidity injections as more than something temporary – an assessment that invokes memories of the post-2008 run to record prices. Along these lines, Gold Newsletter’s Brien Lundin offers this assessment for gold going into the end of 2019 and the beginning of 2020:
“My view is that once the market truly appreciates that this is not a temporary program and is in fact a return to massive QE, the price of gold will soar. And that’s going to happen in the new year. In the meantime, gold remains in the tug-of-war between the buyers and sellers. Any significant sell-off brings physical buyers into the market in size. And any price advance brings the sellers, confident in gold’s seasonality, in to stymie the rally. So, once again, I expect gold (and silver) to trade sideways to down going into roughly mid-December, with the beginnings of a rally showing in the latter half of the month.”
Chart of the Day
Gold Annual Returns
(Year over year for the same month, interactive chart)
Chart note: Thus far in 2019, gold is turning in the best performance year over year for the same month since 2012. For November thus far, it is up 19% from a year earlier.
“Despite two decades of anti-US rhetoric from Venezuela’s ruling socialist party and concerted efforts to move the economy’s axis away from the US and towards China and Russia, the dollar is increasingly part of the fabric of Venezuelan life.”
USAGOLD note: Gold is a popular holding as well, and with the inflation rate running at 39,113.80% annuallized (according to TradingEconomics), it is not difficult to understand why. As the chart shows, Venezuela should count its lucky stars. The current inflation rate is down from 350,555% in February.
Chart courtesy of TradingEconomics.com
(USAGOLD – 11/26/2019) – Gold staged an unexpected late morning rally as “aggressive counter-trend buyers,” according to James Hyerczyk posting at FX Empire, “came in to defend the recent bottom at $1446.20. The headlines are saying that doubts over a U.S.-China trade deal drove investors into gold, but I suspect thin pre-holiday trading conditions had a lot to do with the powerful reversal.” It is up $8 at $1462 per ounce. Silver is up 25¢ at $17.10 – a 1.5% gain on the day. Michael Matousek, head trader at U.S. Global Investors, gave the trade talks more weight in the price reversal. “The talk on the streets,” he told Reuters, “is that the phase one deal is going to be a non-event. People believe that there would be a deal but very little substance in it.”
“The quite sharp drop early this month was on heavy volume, and the feeble rally of the past week or so looks like a countertrend rally—a bear flag—that will lead to another sharp down-leg very soon. This will break gold out of the channel shown and take the price to our downside objective in the $1,380–$1400 area.”
USAGOLD note: Clive’s gotten it right thus far in this downside break. He says this healthy correction “would clean out the excess spec longs and set up gold for another major run.” He also called gold’s move to the upside that preceded the correction we are now experiencing. If he’s right, it could present an excellent buying opportunity for the longer-term investor.
“Clearly the senators have the guts to show that for them it is not all about money. However, for the momo (momentum) crowd in the stock market, it is all about money, and they dislike the senators’ decision. Let’s explore this issue more with the help of a chart.”
USAGOLD note: This is how a trade war morphs to Cold War. Press reports this morning Indicate China having a strong negative reaction to the Hong Kong Rights and Democracy Act.
Repost from 11-21-2019
“Sized the same as the conventional Jinsei Game, the new version features a board and car-shaped pieces all made of pure gold. Miniature buildings and the roulette on the board are made of platinum, with sliver used to make pins depicting human characters.”
USAGOLD note: The total gold weight of the game set is 12.4 kilograms which puts it at a value of just under $600,000 (USD) not including, of course, the artisanal premium.
Repost from 11-20-2019
What money ought to be
“Oresme wrote that it is ‘disgraceful and everywhere foreign to the nobility of a prince to prohibit the circulation of good money in his country, and, for the sake of gain, to order and even compel his subjects to use his own which is poorer, as if to say that good is bad and his bad is good.’ He was flexible in case of emergencies, such as during periods of war, or to pay ransoms with ‘bad’ or debased money, or to help liberate a kidnapped king. But the bishop added, ‘If the community should in any way make such an alteration, the money ought to be restored to its proper basis as soon as possible, and the making of gain in that way should cease.’” – Alejandro Chaufen, Forbes
Dr. MoneyWise says. . . This essay cites notables on the subject of money – Aristotle, Thomas Aquinas and Copernicus – to name a few. All had similar views. It talks about what money ought to be, the right and wrong of it, and ends up with a couple words on Bitcoin – caveat emptor.
“My base scenario for 2020 is that the US economy muddles along, Trump doesn’t launch any more significant tariff taxes, and the Fed is likely to step in and keep the stock market boats afloat if they start sinking again. My base scenario sees gold and related items again outperform all other major asset classes in 2020, but with the bull wedge pattern on the weekly chart becoming more of a gentle reactive drift.”
USAGOLD note: The latest from Stewart Thomson at the 321gold website. . . . . .
Repost from 11-21-2019
“’When ‘market geniuses, who retrofit their analysis to price action, start trashing Buffett for lagging in this silly Tweet-driven, Fed induced MoMo [or momentum-driven] market it is usually a signal a big bubble is about to burst,’ [Global Market Monitor’s Gary] Evans explained in a recent blog post.”
USAGOLD note: Buffett’s large cash position doesn’t do anything but sit there and look at him. Didn’t someone once say something like that about gold? Well . . . at any rate, there’s a time and place for everything.
Repost from 11-19-2019
(USAGOLD – 11/26/2019) – Gold fell off at the COMEX open after getting as high as $1459 in overnight trading. It is now trading at $1455 – up $1 on the day. Silver is faring slightly better – up 9¢ on the day at $16.95. Investors appear to be in ‘wait and see’ mode as news is mixed on both the recession and trade talk fronts and U.S. markets begin the wind down in advance of the Thanksgiving holiday. Saxo Bank’s commodity strategist Ole Hansen summed up the current market mood in a Reuters report this morning. “We are stuck in a relatively tight range between $1,450 and $1,475,” he said, “and are basically just awaiting further developments (in trade talks). There is some fatigue in the market. Yes, they (the U.S. and China) are talking, and yes, they are trying to give a positive spin to it, but we’re still missing the actual deal.”
Chart of the Day
Table and graphic image courtesy of the World Gold Council
“‘The gold symbolizes the strength of the country, [central bank Governor] Glapinski told reporters on Monday. Poland could generate ‘multi-billion’ profits if it sold its holdings but has no plans to do so, he said.”
USAGOLD note: News from Poland that coincides nicely with the J
“. . . Mr. Jansen, a former manager in the metal industry, has been forced to reappraise his plans after receiving notice from his retirement scheme, one of the Netherland’s biggest industry-sector funds, of plans to cut his pension by up to 10 percent. Understandably, the news has hit like a sledgehammer.
USAGOLD note: The pension crisis finds its roots in very low to negative yields. Though this opinion piece focuses on pensions as ground zero, even those with fairly significant net worth (but not receiving pension benefits) are negatively impacted by the lack of yield on their savings. We recall ECB president Christine Lagarde’s recent statement: “Would we not be in a situation today with much higher unemployment and a far lower growth rate, and isn’t it true that ultimately we have done the right thing to act in favour of jobs and of growth rather than the protection of savers?” . . . . . For central banks, we would gather from that, it is a matter of picking one’s poison.
Repost from 10-19-2019
“In less than a year, we have witnessed an unprecedented monetary policy rollercoaster by the Federal Reserve, which began with a momentous U-turn in the central bank’s guidance in January, and has continued to escalate ever since. It is easy to forget that less than a year ago, all official statements and market expectations were aligned with sustained tightening . . . “
USAGOLD note: Claudio Grass goes on to offer a detailed overview of the rapid evolution of Fed policy from tight to loose . . . .”Sure sounds like QE.”
Repost from 11-20-2019