Gold tracks lower still becalmed by annual summer doldrums
Trades lower for fourth straight day on stronger dollar, resurgent virus cases

(USAGOLD – 7/21/2021) – Gold tracked lower for a fourth straight day today still becalmed by the annual summer doldrums with a stronger dollar and a resurgence globally of coronavirus cases adding to its woes. It is down $11 at $1801. Silver is up 11¢ at $25.11. High Tech Strategist’s Fred Hickey believes the seasonal drag on the precious metals is about to lift. “[S]easonally, gold does best starting right about now,” he says in an interview at The Market NZZ. “One of the main reasons is that demand from China and India is set to improve and continue to do so as the year progresses and seasonal demand kicks back in. These two countries are the primary buyers of real physical gold, accounting for 50% of demand. So the physical demand from China and India normally puts a floor under the gold price, and then Western investors are the ones who will drive the price higher. Recently, we went to severely low levels of institutional interest. The institutions aren’t there, but that’s potential buying demand. That’s why I think there is a good possibility that gold will surge again.”

Chart of the Day

bar chart showing the average annual price of gold 1971 to 2020

Sources:  St. Louis Federal Reserve [FRED], ICE Benchmark Administration • • • Click to enlarge

Chart note: This chart shows the annual average price of gold since 1970. It dispels the notion that gold is somehow volatile or unpredictable and, as a result, unreliable as a long-term portfolio safe haven. On the contrary, it shows gold living up to its reputation as a reliable portfolio safe haven during times of rapidly changing economic circumstances. At the 2020 average price of $1770, gold closed the year 27% higher than 2019’s average price and its highest average annual price on record. 

 

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