Monthly Archives: January 2021

The Great 2021 Squeeze Mania

Credit Bubble Bulletin/Doug Noland/1-29-2021

cartoon of a hedge fund manager on the phone telling a client to buy gold

“Hopefully I’m wrong on this, but most will be losers. Before this is all over, many will blow up their trading accounts and exit the casino in dismay – or worse. Short squeezes always have a pyramid scheme component. It’s musical chairs, and the velocity with which squeeze stocks eventually collapse will be a shock to many. There was outrage Thursday after Robinhood and other online brokers restricted trading in a limited number of stocks. But just wait until this Bubble implodes, and there’s blood in the (Main and Wall) Streets. Trading systems were stressed this week by millions of buy orders. How will the system function under the stress of tens of millions of panicked sell orders? I’ll presume worse than March.”

USAGOLD note 1: Some words of wisdom and highly recommended reading from an old pro in the financial business. Those hoping for a short squeeze in the silver market might be careful what they wish for. It could unleash market forces against which there is little or no defense as Doug Noland outlines above and on which he elaborates in detail at the link.

USAGOLD note 2: Here at USAGOLD, we recommend gold and silver for long-term asset preservation purposes – not speculation. As such, we see physical coins and bullion as the safest and most productive option for the average investor. It is a simple, straightforward philosophy and strategy that has served us well over the years.

Share
Posted in Today's top gold news and opinion |

Is silver the next target for the GameStop traders?

Friday’s silver ETF stockpile gains are an attention grabber.

TheStreet/David Dierking/1-29-2021

“It’s still early message board chatter and there hasn’t been a commitment from the Reddit crowd yet, but silver prices are rising, volumes are increasing and there’s a strong macro argument to be made. Don’t be surprised if this group experiences a wild ride next week.”

USAGOLD note: This positive assessment was published before Friday’s numbers came out on ETF stockpile additions. GoldChartsRUs reports strong buying from silver ETFs to close out the week including a 34.4 million troy ounce stockpile gain for the IShares ETF (SLV) – the group’s most prominent member. As you can see in the chart below (which includes all repositories, mutual funds, and ETFs, including SLV), Friday’s addition is the largest by far over the past year for a single day (and by the way the largest since 2013). We’ve included a table from GCRU that shows a concentration of Friday’s volume in the IShares ETF (SLV). Above and beyond the intentions of the Reddit crowd, Dierking makes the point that silver could be headed for a big year anyway based on the fundamentals. That said, Friday’s stockpile growth is an attention grabber.

chart showing overall ETF silver stockpiles over past 12 months with Friday's large gains

Table showing ETF/Funds daily volumes and totals for silver

Chart and table courtesy of GoldChartsRUs • • • Click to enlarge

Share
Posted in Today's top gold news and opinion |

Silver Series – part three

 

infographic on silver from Visual Capitalist pt 3

 Infographic courtesy of Visual Capitalist/Nicholas LePan • • • Click to enlarge
Visit link for complete infographic

USAGOLD note:  This series offers the reader a solid overview of silver’s fundamentals in a digestible, quick-read format.

Share
Posted in Today's top gold news and opinion |

Gold is entering a new era and a new bull market

King World News/Matthew Piepenburg

graphic image of a gold bull against blue background with arrows pointing higher“Although it’s normal to expect a correction phase within a larger bull market for both silver and gold, the price retracements of late signal a buy opportunity for precious metal investors, not grounds for a bearish panic—unless you’re a gold trader blind to technical buy/sell signals.”

USAGOLD note:  We referenced Piepenburg’s comments in Friday’s DMR and repost them here for those who may have missed it.


Repost from 1-26-2021

Share
Posted in Today's top gold news and opinion |

Why the US dollar’s mini-revival won’t take the wind out of the yuan rally

South China Morning Post/Neal Kimberley

photograph of 100 yuan and $100 bills“Yuan bulls should remain calm. A sinking US dollar might have gained some relief last week on the back of an uptick in yields on the benchmark 10-year US Treasury note, but that respite is likely to prove short-lived. The greenback’s mini-revival rests on weak foundations, and economic circumstances still favour the renminbi.”

USAGOLD note:  Many FOREX analysts see the yuan as lead dog in the currency race …… Neal Kimberley is an experienced market analyst having worked for many years as a trader at major banks in London.  He is now a market analyst at Thomson Reuters.


Repost from 1-26-2021

Share
Posted in Today's top gold news and opinion |

Jamie Dimon on U.S Treasurys: I wouldn’t touch them with a 10-foot pole.”

CNBC/Hugh Son and Dawn Giel

graphic image depicting plummeting yields

“The yield on the 10-year Treasury was last at just 0.9% and has stayed below 1% since breaking below that threshold during the March pandemic collapse in stocks. Since bond prices must move inversely to yields, people like Dimon see little room for Treasurys to rally with rates already at such low levels.”

USAGOLD note:  Difficult to understand why anyone would buy a yield instrument that simply does not yield a thing after inflation – except of course if you were speculating rates might go even lower. The last safe haven left standing in the zero rate environment looks to be gold – the one asset that is not simultaneously someone else’s liability.


Repost from 12-10-2020

Share
Posted in Today's top gold news and opinion |

Fred Hickey interview: ‘What are we trying to do here? Protect ourselves against debasement.’

The Grant Williams Podcast/Interview of Fred Hickey

graphic image of gold flagsUSAGOLD note: Grant Williams and Bill Fleckenstein interview a newsletter writer we have featured here on occasion, Fred Hickey (The High Tech Strategist). The interview includes his controversial, and persuasive position on bitcoin (which is not favorable). He also spends a great deal of time on the gold market including what is behind the “perverse” sell-off of the past several months. We think you will draw much wisdom from this interview. “It looks like a perfect environment for gold,” Hickey says. “What are we trying to do here? Protect ourselves against debasement.”


Repost from 12-7-2020

Share
Posted in Today's top gold news and opinion |

Gold and the Fed in 2021

SeekingAlpha/Craig Hemke

graphic image of a wizard in silouette“The internationally-recognized price of gold (and silver) is NOT based upon any sort of physical metal transaction. That’s so 1960s. Instead, the price is determined through the trading of digital derivative futures contracts in New York and unallocated forwards in London. So the only way price rises is when demand for these derivatives outstrips the supply. The big rally last summer was a period of Bank reluctance to add derivative supply, and price soared. Since then, Banks have felt more comfortable adding supply and prices have been driven consistently lower.”

USAGOLD note:  Craig Hemke raises a question we get often at USAGOLD: With gold demand running high (as it is now) why isn’t the price going up? For more on this subject, do not overlook the link to the 1974 communique on U.S. Treasury gold sales and the creation of “a sizable futures market” which came shortly thereafter. We referenced this article in this morning’s DMR and repost it here for those who may have missed it.


Repost from 1-25-2021

Share
Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Short and Sweet

The story of the year in financial markets

cartoon showing a smoldering economic skyline 'but we are safer now, right?'

“One could be excused for wondering if gold can maintain its pace,” writes Jeff Clark in a Strategic Wealth article, “but how many of the risks that pushed it higher in the first place are gone? Check out the risks that remain around the world and see if it’s really time to reduce exposure – or instead make sure one has enough ounces.” These days, the name of the game is maintaining wealth under extraordinarily difficult economic circumstances. The Stein cartoon above is from another time but it still resonates today.

An argument can be made that the difficulty we’ve encountered has yet to manifest itself entirely on Wall Street and in other financial centers. On the other hand, it has certainly begun to manifest itself in the gold market. “I think [gold] is the story of the year in financial markets,” said Sprott’s Peter Grosskopf in a recent Financial Times article. “Gold has finally come on to Main Street as an asset people actually need to have.”


Ready to make the story of the year part of your investment holdings?
DISCOVER THE USAGOLD DIFFERENCE
ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

ORDER GOLD & SILVER ONLINE 24-7

Share
Posted in Short and Sweet, Today's top gold news and opinion | Tagged |

Time to look again at the financial system’s dangerous faultlines

Financial Times/Paul Tucker

“Last March and April, the fabric of our financial system was stretched almost beyond endurance. Only intervention from the north Atlantic central banks seems to have averted some kind of disaster triggered by markets grasping the pandemic was serious.”

USAGOLD note:  The most important lesson from that brush with disaster is that the financial authorities did not even bother to disclose to the public (and the investment community) just how dangerous the situation had become until months after the fact. It was labeled, you might recall, a “liquidity problem” that the Fed was addressing – no need to worry. Such circumstances argue strongly for having a hedge in place at all times just in case the wheels actually do come off. Those who are all in, that is, lacking the benefit of a hedge, are the most vulnerable, and that observation does not come just from us, but from a long list of notable investment gurus cited regularly on this page. Paul Tucker is chair of the Systemic Risk Council. His article is worth a visit at the link above.


Repost from 1-25-2021

Share
Posted in Today's top gold news and opinion |

Gold, silver turn to the upside; bullion coin premiums once again on the rise as supply tightens

(USAGOLD – 1/29/2021) – Gold looked to be tracking toward breaking even on the month in early trading. It is up $25 at $1870. Silver is up a robust 90¢ at $27.48 – a level that if sustained would put it up around 4.5% for January. Though gold has struggled to regain the momentum in terms of pricing in international markets to start the year, demand for physical metal at retail dealers is firmly on the rise. On the other hand, silver has posted a strong January both in terms of physical demand and pricing in international markets.

“The lesson here,” writes Brien Lundin in this month’s Gold Newsletter, “is that we’ll see times when gold is buffeted by rogue waves in the flow of economic data. And when those days come, we need to remember that the tide is actually flowing powerfully in gold’s favor. In truth, it’s the interplay between the bond market’s reaction to potential inflation and the actual inflation data that will create the wiggles in gold’s uptrend. Rather than get shaken out by these market fluctuations, we need to hold steady…or even look at these as buying opportunities. Because if anything, the fundamentals for gold have only turned more positive in recent days.”

Important client note: Gold and silver bullion coin premiums are once again on the rise. Increased demand throughout January is being exacerbated by tightening supplies and delayed releases of new coinage from sovereign mints. The Royal Canadian Mint is still reporting a several week delay on shipping any of its 2021 product – with no concrete availability date yet announced – and the U.S. Mint has returned to allocation, reducing and limiting the number of coins being released to the dealer network on a weekly basis. The imbalance between supply and demand has already pushed wholesale premiums roughly .75% higher on gold bullion coins and approximately +2.5% on silver bullion coins since the start of the year. At this juncture, the consensus in the industry is if gold prices remain at the lower end of their range against a backdrop of continued fiscal and monetary support from both the government and Federal Reserve, demand is likely to continue at high levels, and premium pressure unlikely to abate anytime soon.

Chart of the Day

Euro Area Central Bank Balance Sheetbar chart showing the euro areas central bank balance sheet

Japan Central Bank Balance Sheetbar chart showing Japan's central bank balance sheet growth 2000-2020

United States Central Bank Balance Sheetbar chart showing growth in the United States central bank balance sheet 2000 to 2020

China Central Bank Balance Sheetbar chart showing growth in China's central bank balance sheet 2000 to 2020

Source: tradingeconomics.com

Chart note:  For the record, the charts on quantitative easing in various economies from 2000 to 2020. The most notable feature for Europe, Japan, and the United States is the pandemic-related surge in 2020. China is lagging on a relative basis, which might be one reason why the Chinese yuan has been in an upswing over the past several months.

Share
Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Notable Quotable

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”

Ernest Hemingway
 Notes on the Next War: A Serious Topical Letter 
Esquire magazine
September 1935

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Share
Posted in Notable Quotable, Today's top gold news and opinion | Tagged |

Silver Series – part two

screnshot of silver infographic from Visual Capitalist

 Infographic courtesy of Visual Capitalist/Nicholas LePan • • • Click to enlarge
Visit link for complete infographic

USAGOLD note:  This series offers the reader a solid overview of silver’s fundamentals in a digestible, quick-read format.

Share
Posted in Today's top gold news and opinion |

US carrier group enters South China Sea amid Taiwan tensions

Reuters/Staff

“A U.S. aircraft carrier group led by the USS Theodore Roosevelt has entered the South China Sea to promote ‘freedom of the seas’, the U.S. military said on Sunday, at a time when tensions between China and Taiwan have raised concern in Washington.”

USAGOLD note:  With everything else going on, most have forgotten that we still live in a world rife with geopolitical tensions including those involving the United States, China, and Taiwan. The presence of the USS Theodore Roosevelt in the South China Sea sends a message and elevates tensions.


Image source: https://upload.wikimedia.org/wikipedia/commons/d/de/South_China_Sea_claims_map.jpg


Repost from 1-25-2021

Share
Posted in Today's top gold news and opinion |

Deficit spending is expected to skyrocket in 2021

Rogue Economics/Bill Bonner


“And it’s still too early to know if the downward trend in yields has come to an end.But just to be clear about it, rising yields in an economy with $80 trillion of debt is a sign of impending doom. It becomes ever more expensive to finance and refinance the debt… requiring more and more infusions of fake money. The locomotive goes faster and faster… until it flies off the tracks.”

USAGOLD note:  Bill Bonner reminds us of some down-to-earth realities about to impose themselves on the American economy ……


Repost from 1-25-2021

Share
Posted in Today's top gold news and opinion |

Gold coins stolen from Reichsbank in early 1940s found buried under tree near Luxembourg

War History Online/Craig Bowman

“He found 10 gold coins in an envelope embossed with a Nazi swastika and eagle. The word ‘Reichsbank’ ‘was inscribed on the envelope. He found the envelope in a hole one meter deep. He immediately informed authorities of his find. Experts then unearthed an additional 207 coins. The experts believe that the coins are of French, Belgian, Italian and Austro-Hungarian origins.”

USAGOLD note: This story will likely generate interest among our clientele many of whom own examples of the very same items found buried under the tree near Luxembourg.


Image: Historic European gold coins


Repost from 10-4-2020

Share
Posted in Today's top gold news and opinion |

Outrageous predictions: The future is now

Saxo Bank/Steen Jacobsen

artist rendering of a man chasing a shooting star“While these predictions do not constitute Saxo’s official market forecasts for 2021, they represent a warning against the potential misallocation of risk among investors who might typically assign just a one percent chance of these events materializing.  It’s an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year’s unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus.”

USAGOLD note: Economic surrealism for the new year as seen through the eyes of analysts at the Netherland’s Saxo Bank …… an entertaining read. Many of you will find the forecast for silver particularly agreeable – a sizzling, jolt turbocharges the price higher.


Repost from 12-9-2020

Share
Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Billionaire investor: Enjoy the bull market while it lasts

MarketWatch/Shawn Langlois

graphic image showing a stack of gold coins on printout of charts

“Whenever you bought into the market when it was selling at the present multiple of, say, 22 times or higher, you’ve never really made any serious money one year, three years, five years out. I think that’s what we’re looking at.” – Leon Cooperman

USAGOLD note:  As the late, great Richard Russell (Dow Theory Letter) used to say: “Trees don’t grow to the sky, and liquidity doesn’t expand forever.” Here’s another bit of wisdom from Russell: “[i]f all goes wrong, gold is real, time-tested wealth. Gold stands alone as money outside the central bank system. If the Federal Reserve was abolished tomorrow and the U.S. was to renege on all its debt — gold would still be money.”  (Kitco,3/10/2006) That was roughly 18 months before the first signs of the oncoming credit breakdown emerged. The gold price was $540 per ounce.


Repost from 1-22-2021

Share
Posted in Today's top gold news and opinion |

Baupost’s Seth Klarman compares investors to ‘frogs in boiling water’

Financial Times/Ortenca Aliaj and Eric Platt

graphic image showing sun moon cycle - icon“Seth Klarman, the founder of hedge fund Baupost Group, has told clients central bank policies and government stimulus have convinced investors that risk ‘has simply vanished’, leaving the market unable to fulfil its role as a price discovery mechanism. The private letter to investors in his fund, seen by the Financial Times, amounts to a damning critique of market behaviour by one of the world’s foremost value investors.”

USAGOLD note:  Nobody will be able to claim, as was the case in 2008, that they did not see it coming. We have had plenty of warning and it has not been across the fence in the backyard alone. It comes from many of the most respected minds in the financial game, including Baupost’s Seth Klarman.


Repost from 1-22-2021

Share
Posted in Today's top gold news and opinion |

No Daily Gold Market Report today.
We may post an update later if anything of interest develops.


 

Share
Posted in Today's top gold news and opinion |