Gold finds some signs of support just below the $1800 level, Lundin sees silver market clamor as a cloud with a silver lining

(USAGOLD – 2/5/2021) – Gold found some signs of support at just below the $1800 level in overnight trading as the dollar weakened marginally and commodities in general firmed. The jobs report came in below the consensus expectation giving the metals an additional boost. Gold is up $11 at $!807. Silver is up 30¢ at $26.73. If this pricing holds, gold will have finished a tumultuous week down 2.25% after all is said and done, and silver down 1.3%. Gold Newsletter‘s Brien Lundin sees the silver market clamor of the past week – please excuse the expression – as a cloud with a silver lining. “All along,” he says, “I expressed worries that an exogenous buying event that caused a spike in gold and silver, followed by the inevitable correction, could derail the longer-term bull run that I’m expecting. As it turned out, the event lasted only two trading sessions (so far), and seems to have done little damage to the long-term prospects for the metals. If anything, it’s been a net positive as it has exposed untold new investors to the powerfully bullish story for gold and silver.”

Chart of the Day

Overlay chart showing the decline in purchasing power of the dollar since 1970 and the price of gold

Sources: St. Louis Federal Reserve [FRED] Bureau of Labor Statistics, ICE Benchmark Administration

Chart note: Since 1971 and global departure from the gold standard, the U.S. dollar’s decline has gone unchecked. The 1971 dollar is worth just 15¢ today, or put another way, what might have cost $1,000 in 1971 costs $6,670 today. Since the founding of the Federal Reserve in 1913, the dollar has been in constant decline with the exception of the 1930s depression years. It is now worth 5¢ when the rise in consumer prices is taken into account. The price of gold, as you can see, has responded accordingly living up to its reputation as the ultimate long-term store of value.

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