Gold, silver greet the new year with big bang rallies

(USAGOLD – 1/4/2021) – Gold and silver greeted the new year with big bang rallies likely to echo in global financial markets. Gold blew past the $1900 barrier to trade at $1943 – up $42 on the day. Silver is up 1.07¢ at $27.54. Analysts attributed the sharp increases to declining real rates of return and building inflation concerns. Too, this morning’s increase follows gold’s best annual gain in a decade at a little over 24%. Silver was up 46% in 2020. (Please see this morning’s Chart of the Day.) The dollar is down sharply against the yuan, yen, and euro this morning, and commodities across the boards are staging a rally.

“Big, fat deficits often beget rising inflation,” writes stock market analyst Eric Fry in an Investor’s Place article, “which usually triggers the gold-buying impulse. That’s because massive government spending always leads to some form of money printing, which is the thing we call inflation. In times past, the U.S. government would be coy about money printing — but no more. These days, the government runs its printing presses in broad daylight, extolls them as sophisticated monetary tactics, and adorns them with elegant names like ‘quantitative easing.'”

Chart of the Day

Gold – Silver – Dow Jones Industrial Average
(Full year, 2020, in percent)

line chart showing final percentage increases for gold, silver and stocks 2020

Chart courtesy of • • • Click to enlarge

Chart note:  We have tracked this series all year and this is the final tally for 2020. Gold was up 24.1%, silver was up 46.3% and stocks were up 6%.

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