Gold pushes higher on sobering unemployment number, tight physical supplies

(USAGOLD – 3/26/2020) – Gold pushed higher in early New York trading as the government announced weekly unemployment claims rising to 3.28 million – a sobering number that directly reflects the cumulative effect of the coronavirus on the real economy. It is up $20 at $1632 and up $159 (+11%) on the week. Silver is up 10¢ at $14.52 and up $2.10 (+20%) on the week. In stark contrast to today’s numbers, 281,000 new claimants filed for unemployment last week.

The big story in the gold market itself continues to be the shortage of physical metal caused by the virus, its impact on pricing in the futures market, and, in turn, the knock-on impact in pricing gold coins and bullion at the retail investor level. “[T]he larger spot market in London,” explains Bloomberg in a report this morning, “is dominated by 400-ounce bars of gold, but only 100-ounce and kilobars are deliverable on the Comex contract. Late on Tuesday, after New York futures shot to the highest premium to the spot price in four decades, CME Group said it would launch a new futures contract under which 400-ounce bars would also be deliverable, helping ease tightness.”

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

line chart showing the purchasing power of gold 1800 to present

Chart note: “Gold is a store of value,” says Jan Nieuwenhuijs posting at the VOIMA website. “The media, however, frequently exaggerate short-term swings in the price of gold. This month they first wrote ‘gold lost safe haven status’ when the price declined for a few days, only to report ‘gold gets groove back’ when it was up for half a day. Due to gold’s inherent properties—it’s physical, can’t be printed, has no counterparty risk, etc.—gold has preserved its value like no other currency for thousands of years. Why question its safe-haven status based on short-term volatility? It’s true that from the moment we left the gold standard, gold has become more volatile. Still, in general, its purchasing power has increased ever since.”

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