Gold continues retreat; ‘everyone knows they need a safe haven’ – Merryn Somerset Webb in weekend FT

(USAGOLD –1/11/2021) – Gold continued its retreat as a follow-up to Friday’s plunge. The yellow metal is down another $14 at $1838. Silver is down 66¢ at $24.86. The metals’ drop coincides with an across-the-board slide in commodities prices this morning. The dollar is up marginally and U.S. Treasuries, gold’s safe-haven competitor, seem to have stabilized – at least for the moment. For a more detailed assessment of the current market mix, we invite you to scroll further down the page for this past Friday’s Afternoon Update.

MoneyWeek’s Merryn Somerset Webb posted a reminder of gold’s baseline portfolio role in the Financial Times’ over the weekend. “Think of the reasons to hold gold,” she writes. “If inflation is coming (and it probably is) you want to hold a real asset that can hedge against it — one that can’t be inflated away by relentless money creation and currency debasement. That’s particularly the case in an era of very low interest rates. If governments work to keep interest rates lower than inflation in order to reduce the real value of their horrible debt burdens, everyone knows they need a safe haven, but everyone also knows the traditional ones (government bonds) no longer offer that safe haven. That turns us to gold, the one asset that has a 3,000-year record of protecting purchasing power. No wonder the gold price is up around 40 per cent since 2018. I hold a lot of gold for all these reasons.”

Chart of the Day

bar chart showing US Mint sales of gold bullion coins in ounces through 2020Chart courtesy of GoldChartsRUs • • • Click to enlarge

Chart note:  U.S. Mint sales of gold bullion coins posted their best year since 2016 at 1.078 million ounces and the sixth-best year since 2000

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