Precious metals continue rapid ascent. Gold up 2.25% on week; silver – 3.8%.

(USAGOLD –  4/16/2021) – Precious metals continued their rapid ascent this morning influenced principally by inflation and real rate concerns. Short covering off gold’s late-March double bottom might also be playing a role in the current rally. Gold is up $18.50 at $1784 in today’s early going and up 2.25% on the week. Silver is up 39¢ on the day at $26.30 and up 3.8% on the week. Yields have turned marginally higher following a sharp mid-week decline and the dollar is down. Financial analyst Dan Amoss believes real yields are destined to sink deeply into the negative – a trend that will push gold to new record highs.

“If we see several months of 3% to 4% CPI, and the 30-Year Treasury yield stays near 2%,” he says in an article published at the Daily Reckoning website, “then real yields will be in lower territory than they have been since the late 1970s. When the red line in the chart rises, the blue line tends to do the same, which means higher year-over-year gains for gold. What might this look like by late 2021? Real yields are likely to fall below -1% in the months ahead. That could coincide with gold rising to the $2,300 range by July (a 30% gain from the $1,800 level of July 2020). This isn’t an explicit forecast; it’s meant to illustrate what sort of explosive rally in gold is possible in this macro environment of wild deficits and money printing.”

Chart of the Day

(50-year, in percent)

line chart showing percentage rise in the price of gold 1971 to present

Dow Jones Industrial Average
(50-year, in percent)

line chart showing the percentage in the DJIA from 1971 to present

Charts courtesy of • • • Click to enlarge

Chart note: As we approach the fiftieth anniversary of the fiat money system’s introduction on August 15, 1971, we thought it would be interesting to take a snapshot of gold and stocks’ performances over the period. Many will be surprised to learn that gold has outperformed stocks since 1971 – up 4821% to stocks 3490%. (All data of 12/14/2020)

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