Monthly Archives: December 2019
Wishing all a happy, healthy
and prosperous New Year!
(USAGOLD AFTERNOON UPDATE – 12/31/2019) – Gold and silver finished strong for 2019 posting the best year for both metals since 2010 and adding to the New Year’s Eve cheer for precious metals owners. Gold ended the year at $1521 – up 18.5%. Silver ended the year at $17.89 – up 15.9%. The Dow Jones Industrial Average, by way of comparison, was up 22% on the year.
“The disintegration of US-China relations may be the most important economic event of our times. . .”
USAGOLD note: Over the course of the past year, we brought Rana Foroohar’s work to your attention, particularly a mention or two of gold including one notable column in which she registered her expectation that gold’s bull market was likely to continue. Here she offers her take on the “decoupling” between the United States and China that she sees as developing into a technological cold war.
Repost from 12-23-2019
The Exter Inverted Pyramid of Global Liquidity
“[Exter’s Inverted] Pyramid stands upon its apex of gold, which has no counter-party risk nor credit risk and is very liquid. As you work higher into the pyramid, the assets get progressively less creditworthy and less liquid. . .[In a financial crisis] this bloated structure pancakes back down upon itself in a flight to safety. The riskier, upper parts of the inverted pyramid become less liquid (harder to sell), and – if they can be sold at all – change hands at markedly lower prices as the once continuous flow of credit that had levitated those prices dries up.” – Lewis Johnson, Capital Wealth Advisor’s Lewis Johnson
In short, what Lewis Johnson outlines is the bottom-line rationale for diversifying one’s portfolio with gold. For a more detailed analysis of Exter’s Inverted Pyramid, we invite you to visit the May edition of News & Views, our monthly newsletter.
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“Warren Buffett’s most famous quote has to be: ‘Be fearful when others are greedy and greedy when others are fearful.’ But how do we know when others are fearful or greedy?”
USAGOLD note: Felder makes a couple of very interesting charts available at the link above. . . .
Repost from 12-23-2019
“Unlike the gold bugs, I’m not a broken record. And unlike the barbarous relic brigade, I recognise gold’s importance in the modern world. Atlas Pulse analyses the gold price and outlines the bull/bear regime with the reasons why. It is an evidence-based approach with an enviable track record. I tell it how I see it and find the air-punching narratives tedious. You won’t find one here.”
USAGOLD note: We referenced this report in yesterday’s DMR and call attention to it again here for those who may have missed it. Morris comes to some interesting conclusions as to where gold is headed in the years to come. . . .all presented with a clear rationale at the link above.
Repost from 12-17-2019
“The big trend shall be a return to the commodity markets as inflationary pressures finally return, given the expansionary policies presently being followed by the leading and the second-tier central banks.”
USAGOLD note: Gartman says he is retiring from the newsletter-writing business, but not before recommending gold play a prominent role in the portfolio for the next decade. He joins a number of analysts warning of inflation’s return as the new decade unfolds.
Repost from 12-24-2019
“Gold is positioned to remain an indispensable component of the portfolio in the future, as it lets the investor navigate stressful passages in the market with relative ease.”
USAGOLD note: Stoferle reviews the factors that accrued as positive for gold in 2019 – the very same factors, he says, that will “remain in 2020”.
Repost from 12-24-2019
“‘I am bullish on gold. I am not saying that gold is not going to go down because it is going to fluctuate, but people should have at least 10 percent of their portfolio in physical gold,’ he said.”
USAGOLD note: Mobius sticks with his 10% recommendation and his bullish call on the yellow metal.
Repost from 11-26-2019
“Fifty-five percent of more than 3,400 high net worth investors surveyed by UBS expect a significant drop in the markets at some point in 2020. Amid intensifying geopolitical risks, the super rich have increased their cash holding to 25% of their average assets, the survey showed.
USAGOLD note: We have alluded a few times to reports of significant capital movement into money market funds over the past few weeks and the latest issue of News & Views we show the correlation between MZM money supply growth and the price of gold with a comment. In the post immediately below Mark Mobius raises the issue as well.
Repost from 11-13-2019
“[W]e think that the US Dollar has begun a major decline phase, which will likely take us into the 2021 time-frame. Moreover, with the metals currently setting up for what can be a multi-year rally as well (as I discussed in my prior metals articles), this is one commonly held correlation belief that seems to be supported by the underlying charts we track.”
USAGOLD note: Avi Gilbert bases his analysis on Elliot Wave Theory and now thinks the cycle is turning in gold’s favor and against the dollar. For the full analysis, we recommend a visit to the link.
Repost from 12-24-2019
“Inside bars in gold tend to be leading indicators of trend changes, so even if gold doesn’t best November’s high, that it didn’t violate November’s low is a positive sign. It indicates that the recent lows are likely to hold, and traders are getting comfortable taking gold higher after more consolidation.”
USAGOLD note: Beyond speculation on what might be going at year end in the gold market, Luongo offers a detailed opinion on where the yellow metal might be headed in the first part of 2020.
USAGOLD note: In this video interview, Alphabook’s chief economic advisor Martin Malone ties gold’s year-end push above $1500 to central bank creation of liquidity and balance sheet growth.
“So we will just keep pumping and we will just keep pumping and we will just keep pumping . . . there is no logic to any of this except to chase the gilded lily.” – Peter Toogood, the Embark Group
USAGOLD note: At some point, one would think, reason and common sense will prevail, not necessarily at the Fed (although that too could happen), but where it really matters – in the financial markets. Toogood is very convincing in this too-short video.
Repost from 12-18-2019
“Elderly savers are also victims of global government and corporate debt worship. Their savings account income has been wiped out by government and central bank obsession with QE and negative rates. They get to wave The government is makin’ me great!’ flags in the air, but when all the flag-waving is done, they have no income to put food on their table.”
USAGOLD note: This is one of the great tragedies of our times. An individual who worked hard and built-up a healthy nest egg for retirement – even a seven-figure nest egg – in many cases cannot draw from it even a poverty-level income (based on an average one-year CD rate of around 2%).
Repost from 12-19-2019
Recent Better Business Bureau Client Review
“I purchased gold coins from USAGOLD in 2004 and 2008. Both purchases went without a hitch. I appreciate the fact that in 2019 the same account representative is still available to update me from time to time on the status of gold market and the latest buy/sell opportunities.”
38 45 48 58 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.
“Like old soldiers, old beliefs never die. In the financial world, one of the many old beliefs that clings to life despite a pile of conflicting evidence is the one about gold being primarily a hedge against, or a play on, so-called ‘CPI inflation.'”
USAGOLD note: Saville goes on to make the point that gold was an excellent hedge in 2001 and 2008 when inflation was notably absent from the economic mix. He drives home the same point we made in the series: “Gold as the portfolio choice for all seasons“.
Repost from 12-16-2019
“Unfortunately, I believe most investors who are Trump fans have become over-obsessed with the relatively minor but media-promoted gains in the US stock market, and they are missing out.“
USAGOLD note: Stewart Thomson features the Christmas Rally in gold and silver in his latest missive at the link above.
USAGOLD Market Update (12-26-2019): Gold and silver are striving to put an exclamation point at the end of a very good year for precious metals in 2019. At $1509, gold is up 17.7% on the year. At $18.03, silver is up 16.8% on the year. The oft-forecasted Christmas Rally is occurring as many expected, but surprisingly it has been in precious metals thus far not stocks. If we were to attribute the year-end boost to one thing in particular, it would be the Fed’s ongoing liquidity operations which more and more are beginning to look like something other than a temporary fix. Another factor, as one analyst points out in the Bloomberg article linked above, is that traders are acting on “an assumption that bulls will buy in the New Year, so the market is trying to position ahead of time.”
“Now we face an even bigger challenge [than algorithmic trading] — machine learning. This technology, centred on computer models that can learn from experience, poses serious challenges and requires a global response.”
USAGOLD note: It’s not like there is a scarcity of threats for investors to monitor with respect to computerized trading systems. This article, in essence, serves as warning from the chairman of the UK-based Fixed Income, Currencies and Commodities Markets Standards Board that machines can run amuck, i.e. fall victim to the HAL Syndrome. If you have never heard of “machine learning” perhaps the time has to come to get a basic education at the link above.