No DMR today (2/11/2021). However, we may update later in the day at the Top Gold News & Opinion page if anything of interest develops. Report below is from yesterday.
Gold extends gains for fourth straight day, ‘economic uncertainty will be abundant over the coming years’
(USAGOLD –2/10/2021) – Gold extended gains for the fourth straight day as financial markets pondered inflation possibilities, the implications of the $1.9 trillion stimulus package, and what the Senate impeachment trial really means for the rest of the country. It is up $15 at $1856. Silver is up 19¢ at $27.56. Over the past few years, we have commented consistently on the changing philosophical guard in the investment business from one that shunned gold to one that now greets it with open arms. A report posted yesterday at the NorthernMiner website offers a solid overview of the trend, but there was one comment we found particularly illuminating. It came from James Davis, chief investment officer for OPTrust – one of Canada’s largest pension funds.
The fund began investing in gold in 2019 and increased its allocation in 2020 to “protect the plan from macroeconomic risks such as inflation or stagflation.” Davis explained the fund’s interest in gold as not being pandemic related. “There are certain types of economic environments,” he says, “that are more challenging for defined benefit pension plans, and investing in gold can help to mitigate some of those challenges…With uncertainties in the economic environment that we feel will be there for the next several years, we’re not anticipating reducing our gold exposure. In that kind of environment where we anticipate economic uncertainty [will be] abundant over the coming years, and probably the coming decade, owning gold will add to the resilience of the portfolio.”
Chart of the Day
(10-year chart through January 2021)
Sources: St. Louis Federal Reserve, ICE Benchmark Administration
Chart note: As shown in this chart, investors who purchased gold anytime over the past decade, except for those who purchased at the absolute top in 2011, could have sold it at a profit in January 2021 – in many instances at a significant profit.