Gold finds itself in peculiar position

(USAGOLD – 2/14/2020) – As we close out the week, gold finds itself in the peculiar situation of being pushed both higher and lower by the coronavirus.  On the one hand, Chinese and other Asian jewelry demand have dropped sharply according to reports as buyers stay home for obvious reasons.  On the other hand, safe-haven demand for coins and bullion is on the rise, not just in China but in other parts of Asia and the rest of the world (including ETF demand).  Adding to the confusion, the US dollar has joined gold and US Treasuries as beneficiaries of what is dubbed the ‘fear trade.’  The result has been to keep gold in a pricing limbo. On Monday, it closed trading at $1572.  As we post this report, it is trading at $1576 and level on the day.  Silver has suffered a similar fate having started the week at $17.72 and trading now at $17.70.

Chart of the Day

Chart showing silver's seasonal trends based on five-year average pricingChart courtesy of Gold Charts R Us

Chart note:  Traditionally, as you can see, silver begins a seasonal uptrend roughly in mid-December and continues through mid-summer.  Whether or not that will be the case in 2020 remains to be seen, but we are off to a strong start. Too, there is more than enough uncertainty on the global economy’s plate to elevate the possibility. 

Note:  Offered with the usual caveat that past performance is no guarantee of future results.

 

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