Gold retreats on relief bill agreement, shortages of physical metal strain gold trading, pricing
(USAGOLD – 3/24/2020) – Gold retreated on international markets overnight reacting to Congress’ expected passage of a $2 trillion public relief bill to address the economic ill-effects of the coronavirus. It is trading currently on the FOREX platform at $1612 – down $25.** Silver is down 48¢ at $14.18. While pricing continues to vacillate wildly in the paper gold market, the combination of strong global demand and supply disruptions has translated to shortages and rising premiums on popular coin and bullion items. The transition from plenty to dearth has been abrupt – a reflection of the times.
“First, if you can buy physical gold and silver, do so,” advises Gold Newsletter’s Brien Lundin in a note to his clients headlined Gold Rush. “Yes, you’ll have to pay significant premiums, if you can find anything. And yes, those premiums should decrease if/when the current supply disruptions abate. But gold and silver prices are headed much higher and should well overcome the current premiums. For the record, I’m buying bag silver now at considerable premiums over the spot price, so I’m putting my money where my mouth is on this.”
** As noted in our sidebar, the actual base price of gold used for pricing coins and bullion is $15 higher than the price posted in our menu bar.
Important client note: Due to our long-standing relationships with key market-makers and our own inventory planning, we are still working from a strong inventory position and are able to deliver most of the standard gold and silver bullion items – American Eagles, Canadian Maple Leafs and Krugerrands. Even our sources though are strained under the circumstances and our inventory, of course, is finite. We do not know, as a result, how long the supply will hold up. All deliveries are running on schedule with occasional minor delays due to the order and shipping volume, and we think you will find our pricing as advantageous when compared to most sources. The one thing we have no control over is rising premiums which, unfortunately, we have no choice but to pass along. Please contact us to discuss prices and availability. 1-800-869-5115 x 100
Chart of the Day
Chart courtesy of SentimentTrader-Jason Goepfert
Chart note: “The last time we looked at such stress was in January 2016 but we’re far beyond that now. The indicator incorporates measures which spike higher when uncertainty about the economy, corporate outlooks and stock prices are high, and reach extreme high levels only during times of outright panic. Anything above 3 on the model could be considered ‘panic.’ As a reflection of just how much anxiety is being priced in, on Thursday [3/12/2020] the Panic Button hit a record high of 7.7. Based on preliminary data, it eclipsed that again on Monday.” – SentimenTrader, 3/17/2020