Gold, silver trade quietly in early days of summer doldrums

(USAGOLD – 6/18/2020) – Gold continues to trade quietly this morning as we move into the early days of the annual summer doldrums. It is level at $1728. Likewise, silver is level on the day at $17.54. Some think the current rangebound trading is an indication of imminent decline while others see it as laying the groundwork for a break to the upside. Gold Newsletter’s Brien Lundin is in the latter grouping.

“The ‘soft patch’ I’d predicted for both gold and silver are still in effect,” he says in a recent reader advisory, “but it’s been more along the lines of extending a consolidation or ‘flag’ pattern.  As readers probably know well, in a bull market (and this is a bull market) this pattern should end with a breakout to the upside. We’ll just have to see what the precipitating event will be and when it will occur. I would have thought it would have come with Monday’s announcement by the Fed that it would begin buying the debt of individual companies. As I noted in yesterday’s Golden Opportunities, the Fed is crossing an important philosophical bridge here — essentially another big step toward total central planning of the economy. Rest assured, more steps are to come.”

Chart of the Day

bar chart showing national debt during 2020

Chart note: The additions to the national debt thus far this year have been nothing short of astonishing – $2.93 trillion since January 1, 2020, and $820 billion over the past 30-days (through June 14 ). One wonders how much debt the U.S. Treasury can place with private and international investors and how much will be financed via the Federal Reserve’s bottomless checkbook.  Though few on Wall Street (or Main Street for that matter) would quarrel with the spending decisions governments have made in recent months, a good many are preparing for the potential consequences – whether those policies succeed or fail. That is where gold might come in handy.

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