Monthly Archives: September 2023

Today’s top gold news and opinion

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9/29/2023

200 Years of Global Gold Production, by Country (ELEMENTS)
Great visual

Talk about striking gold! Britain’s oldest coin hoard is discovered in Buckinghamshire dating back 2,173 years (Dailymail)
Made in 150BC

aXedras and the Royal Canadian Mint collaborate on digitalization of provenance and product integrity (Newswire)
More trends of digitalization of gold

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Daily Gold Market Report

Bribing Senators With Gold Bars 
Not A Joke But A Sign Of The Times

(USAGOLD – 9/27/2023) Gold is experiencing a strong reversal this morning from the low of $1864 yesterday. Gold is trading up at $1875.39, up $10.16. Silver is also positive trading at $23.42, up 79 cents. Treasury yields have taken a breather this morning from their rapid sell off this week.

Rep. Matt Gaetz (R-FL) went viral this week for the following quote on the House of Representatives floor: “We are devaluing American money so rapidly that in America today, you can’t even bribe Democrat senators with cash alone. You need to bring gold bars to get the job done just so the bribes hold value.” This is in reference to corrupt Sen. Bob Menendez (D-NJ). Menendez was just indicted on corruption and bribery charges that included getting caught with a stack of gold bars.

 

Gaetz does a Seinfeld:

 

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Daily Gold Market Report

Central Banks, Gold Accumulation, and the Inflation Charade: Insights from Frank Giustra 
Physical Gold Is Moving East

(USAGOLD – 9/27/2023) After Gold’s ~$20 move down yesterday, the yellow metal still remains under pressure. Gold is down $1.73 to $1873.34. Silver is slightly up 6 cents to $22.60. With the looming government shutdown unresolved and Treasury yields continuing to climb, Gold has yet to find it’s footing. In a recent interview with Daniela Cambone, Frank Giustra offers a critical perspective on the global financial landscape, emphasizing the significance of gold in the current economic scenario. He warns, “The next crash is underway for a specific reason that almost no one is paying attention to.”

Furthermore, Giustra points out the actions of central banks around the world, noting their significant accumulation of gold. He says, “The central banks of the world, including the BRICS countries, have been accumulating gold like crazy over the last 13 years, signaling that something is up.” This accumulation suggests a shift in trust away from traditional fiat currencies. Giustra also criticizes the global approach to inflation, asserting that the efforts to combat it are mere pretense. He firmly believes, “Banks are slowing. Some financial accident is going to happen, and it could end up being a spiral. Pretending they’re going to beat inflation is a charade. They know they can’t.” This sentiment underscores the importance of gold as a hedge against the myriad of economic uncertainties.

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Today’s top gold news and opinion

Recommended Headline News & Opinion
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9/28/2023
Must-watch: Singapore Reserves Revealed  insight into the country’s rainy day fund  (CNA)
Insight into the country’s rainy day fund

Gold hastens retreat on higher-for-longer rate bets (Reuters)
Soft landing?…

Costco is selling gold bars and they are selling out within a few hours (CNBC)
$1.50 Hotdog and an ounce of gold

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Daily Gold Market Report

Gold’s Timeless Value in the Age of Digital Currencies and De-dollarization 
93% Of Monetary Authorities Around The World Are Considering Central Bank Digital Currencies (CBDC)

(USAGOLD – 9/27/2023) Gold and Silver are under continued pressure for a third day in a row this week. Gold is down $9.26 to $1891.39. Silver is down 22 cents to $22.63. An article from Markets Insider highlights that approximately 93% of global central banks are investigating the potential of introducing their own digital currencies. These central bank digital currencies (CBDCs) have the potential to enhance local-currency payments and further the de-dollarization movement, as stated in a research paper by the International Monetary Fund (IMF) staff. China has already launched a digital yuan, and Russia is progressing with plans for a digital version of the ruble. The introduction of CBDCs in dollarized or euroized economies could promote a more significant use of the local currency, making it a more appealing payment method. The Hong Kong Monetary Authority (HKMA) is set to expand its mBridge central bank digital currency (CBDC) initiative in response to the global trend of moving away from transactions in the U.S. dollar. The mBridge project, a collaboration involving multiple central banks and commercial banks, as a pivotal component in HKMA’s future plans. The platform aims to expedite cross-border payments, reduce costs, and enhance transparency.

USAGOLD Comment: The move towards CBDCs and de-dollarization signifies a shift in the global financial landscape, the importance of freedom, and gold ownership. As countries look for alternatives to the US dollar, it underscores the value of having diversified assets like gold, which has historically been a store of value and a hedge against economic uncertainties. Gold ownership provides individuals with financial freedom and independence from centralized monetary systems, ensuring that their wealth is preserved regardless of fluctuations in fiat currencies or geopolitical tensions. The exploration of CBDCs by central banks further emphasizes the need for individuals to have control over their assets and the freedom to choose where they store their wealth.

 

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Daily Gold Market Report

Silver’s Ascending Role in the Electrifying Automotive Landscape 
90 Million Ounces Of Silver Absorbed Annually In The Automotive Industry By 2025

(USAGOLD – 9/26/2023) Gold and Silver are under continued pressure this morning. Gold is down $6.19 to $1909.73. Silver is down 8 cents to $23.06. With the continued meltdown in bonds and the looming U.S. government shutdown, most markets – if not all – remain under pressure. A report conducted by Metals Focus delves into the increasing significance of silver in the automotive sector. Silver’s unique properties, including the highest thermal and electrical conductivity of any metal, have made it indispensable in a variety of automotive applications. The ongoing electrification of vehicles, transitioning from traditional ICEs to electric vehicles (EVs) and eventually to autonomous driving, is expected to further boost silver demand. In 2021, 61 million ounces of silver was used for auto manufacturing. By 2025, this figure could approach 90 million ounces.

Furthermore, the report highlights the changing dynamics of the automotive industry, especially in terms of powertrain electrification. Global vehicle production is projected to increase from 74 million units in 2020 to nearly 100 million by 2025. The market share of ICE powertrains is expected to decline from 90% in the previous year to about 70% in the next five years. The transition from combustion engine powertrains to electric powertrains has been gradual to start, but has picked up pace in recent years.  Transportation policies are paving the way for electrification, with a focus on Europe, China, Japan, and the U.S. The global push towards reducing carbon emissions and the increasing commitment of countries to promote battery electric vehicles (BEVs) will have a net positive effect on silver demand, which should bode well for the price of silver as well.
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UAE Emerges as Major Hub for Russian Gold Amid Western Sanctions
From London to the Gulf: The Reshaping of Gold Trade Dynamic

(USAGOLD – 9/25/2023) Gold and Silver open up slightly down from last week’s close. Gold starts off the week at $1924.12 down $1.11 from last weeks close. Silver is trading at $23.47, down 9 cents from last weeks close. The United Arab Emirates (UAE) has emerged as a significant trade center for Russian gold following the imposition of Western sanctions on Russia due to the Ukraine conflict. Following the conflict’s initiation, many global banks, logistics companies, and precious metal refiners ceased handling Russian gold, which was traditionally sent to London, a major gold trading and storage hub. However, Russian gold producers swiftly identified new markets in nations that hadn’t sanctioned Moscow, notably the UAE, Turkey, and China.

For the US market, this shift in Russian gold trade dynamics has implications. The US has cautioned countries, including the UAE and Turkey, that they might lose access to G7 markets if they engage with entities under US sanctions. There’s a potential risk that Russian gold could be melted, recast, and then reintroduced into US and European markets, obscuring its origin. Such a scenario underscores the importance of due diligence for both sovereign and private mints to ensure compliance with sanctions, while this also underlines the importance of choosing a reputable, trusted precious metal firm that knows the source of the metal. Reuters reports, the UAE’s gold industry has been thriving, with the Russian gold imports accounting for merely 10% of its total imports, emphasizing its role as a major bullion and jewelry exporter.
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Daily Gold Market Report

Takeaways From The 35th Denver Gold Forum Americas
Legends In The Mining Industry Discuss Where Gold is Going

(USAGOLD – 9/21/2023) Gold prices recovered some ground on Friday opening up this morning at $1,926.48, up $6.46. Silver is also positive at the open up 29 cents at $23.69. Gold prices appeared set to end the week with minimal fluctuations, despite experiencing a significant sell-off following the Federal Reserve’s policy meeting on Wednesday. The most interesting news this week was an interview out of the Denver Gold Forum.

Although the Denver Gold Forum is a predominately a gold mining conference, Danelle Cambone, from Stansberry Research, interviewed Pierre Lassonde, Frank Giustra and Robert Friedland for the Ultimate Gold Panel. The three main takeaways from this profound interview were:
1. Gold’s position in the global market, as its value has increased in various currencies worldwide including Japan, China, Turkey, Argentina, and Saudi Arabia, to name a few.
2. China’s role in the gold market, with the potential to become the dominant market in the future, leading to significant fluctuations in gold prices.
3. The digital transformation and the future of currency, including Central Bank Digital Currencies (CBDCs) and a digital gold currency that would exist outside the traditional banking system, providing users with a sense of security and autonomy.

USAGOLD Comment: The interview underscores the complexities of the global financial system, the evolving role of gold, and the potential shifts in global monetary dynamics. The panelists highlight the importance of understanding these changes and being prepared for the future implications they might have on investments and the broader economic landscape.

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Daily Gold Market Report

Fed Held Rates Unchanged (As Expected) – Neutral
Gold Rallied Up To Near $1950 Intraday Before Fading

(USAGOLD – 9/21/2023) After touching $1950 yesterday intraday and closing around $1930, Gold opened lower still today at $1916, down $14. Silver opens at $22.95, down 28 cents. The fed funds rate was kept unchanged in a range of 5.25%-5.5% on Wednesday after the central bank raised rates in July by 0.25%. The newly published dot plot suggests the Fed will likely raise rates by 0.25% one more time this year, and plans to hold interest rates at their historically high levels for longer than previously anticipated (indicating no rate cuts until at-least Q3 of 2024).

USAGOLD Comment:  The Fed has telegraphed it’s intention to keep rates higher for longer, likely until some disruption/crisis in the economy forces them to pivot.  With ongoing union strikes, oil prices spiking, continued international conflict, commercial real estate cracks, student loan payments resuming, historically massive Treasury issuance, and liquidity depletion in real economy, (somewhat miraculously), we have yet to see such a break.  Gold has held up quite well thus far during this Fed tightening cycle, despite persistent dollar strength and the highest Fed Funds rates in two decades (influences that have historically had a strongly adverse impact on prices) – all of which bodes well for the yellow metal when (notif’) the Fed is eventually forced to pivot.
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Daily Gold Market Report

Enhanced Transparency In The Gold Supply Chain 
Major Step In The Digitalisation Of Gold 

(USAGOLD – 9/20/2023) Gold prices were trading slightly higher on Wednesday after rising for four straight sessions as investors await an interest-rate decision from the Federal Reserve. Gold is trading at $1,932.36, up a dollar, and Silver is trading at $23.32, up 12 cents. The Federal Reserve is expected to pause its interest-rate hikes Wednesday while leaving the door open for another increase as early as November.

In other news this week, All 33 World Gold Council members with operating mines, who collectively produce c.1,300 tonnes of gold per annum, have committed to publishing the names and locations of their refining partners on at least an annual basis, to include all operations where the primary revenue comes from the production of gold. David Tait, CEO of the World Gold Council, commented: “I am delighted that our members have committed to lead the way in transparency. Pursuing enhanced supply chain transparency is good for the companies who produce, the communities who benefit from employment, training and skills, and investors and consumers, who can be assured their gold has been responsibly produced and responsibly traded. The responsible gold mining industry should be rightly proud of the positive impact they have on the communities and countries where gold is mined.”

The Gold Bar Integrity Platform, an initiative started by the World Gold Council and LBMA, will provide the gold industry with a robust and verifiable ledger of responsibly mined gold, which will create significant opportunities for new product development and increase gold’s attractiveness as a trusted asset class for existing and new investors.

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Daily Gold Market Report

Record $121 Per Troy Ounce Gap Between Shanghai Spot Price and London’s 
 China Imported 900 Tonnes of Gold So Far This Year, Highest In Five Years 
(USAGOLD – 9/18/2023) Gold and silver both posted modest gains yesterday after the open, with gold up $10 and silver 25 cents on the day.  Today, both open flat with gold currently trading at $1,934.40, up 56 cents and silver up 6 cents at $23.30.  As we await the Fed’s decision tomorrow, China’s central bank, the People’s Bank of China (PBOC), has lifted temporary curbs on gold imports that were initially imposed in August to support the renminbi (yuan), after gold prices reached record spreads of $121 per troy ounce between the Shanghai Exchange and the London Bullion Market Exchange. The spread subsequently narrowed to $76 after the PBOC relaxed import restrictions on gold.  In August, quotas for international gold imports by banks in China were reduced and halted to curb purchases intended to hedge against a weakening domestic currency, but unintentionally caused gold prices within the country to spike dramatically. The renminbi had been in a steady decline against the US dollar, reaching its lowest point in 16 years, prompting the central bank’s measures to try to stabilize the currency.
Source FT
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Daily Gold Market Report

Does Physical Gold Provide a Hedge Against Recessions?
Horstmeyer Ran The Numbers, Fed Policy Update This Week

(USAGOLD – 9/18/2023) Gold and Silver opened up flat this morning, with Gold at $1,923.87, down 3 cents, and Silver at $23.03, with no change. Gold’s stubborn range bound trading continues to persist due to the ongoing battle between the Federal Reserve’s hawkish monetary policy stance and the looming threat of a potential recession, competing forces that remain the central focus in the broader market. This week, while the Federal Reserve commands the majority of the spotlight, investors will also closely monitor monetary policy announcements from the Bank of England, the Bank of Japan, and the Swiss National Bank. Investors have been closely monitoring gold demand in Japan due to a weakening yen, which has led to a surge in domestic interest in the precious metal. Currently, gold is trading at nearly historic levels against the yen, surpassing ¥284,000, and premiums for physical bullion are also maintaining their all-time highs.

Derek Horstmeyer, a professor of finance at George Mason University, recently compiled the data on all commodity mutual funds and ETFs going back 25 years.  He noted: “Gold is the only commodity (of the eight categories we tested) that had a positive average return during recessions, both in terms of the fund tracking the commodity and the actual commodity itself. For all other types of commodities tested, returns for both types of investment were negative during economic downturns,” he stated in a WSJ article.
USAGOLD Comment: The data displays that over the past 25 years, gold has performed better than all commodities during a recession (with continued performance in the time periods that follow).  Of added note is that physical gold also outperformed the gold ETF during the same episodes, which is likely attributed to premium spikes on physical metals during periods of heightened demand (as is currently being observed in Japan, for example).
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In Loving Memory of Michael J. Kosares: A 50-Year Legacy of Gold Advocacy

It is with great sadness and a heavy heart that I share that my father, Michael J. Kosares, owner and founder of USAGOLD, passed away last Thursday (September 7, 2023) after a multi-year battle with cancer.  He was 75 years old.  After fifty years of dedication and devotion to the precious metals business, my father only hung-up his hat just a few weeks ago when he was physically no longer able to work.

Despite countless professional accolades over the course of his storied career, he was never one to boast, nor one to seek out acknowledgement or praise. For him, true success came in a well written article – one he deemed ‘had what it took’ to make a lasting impact, not necessarily just for our company, but for our industry as a whole, for our colleagues, for our clients, for our subscribers and site visitors, and for really anyone and everyone who took an interest in precious metals and encountered his work.  He was an unwavering and tireless advocate for gold and silver ownership throughout his career, educating generations of investors on the merits of owning physical metals as a means to preserve and protect their wealth during turbulent economic times.  From his hardcopy newsletter, ‘News & Views’, to three editions of his educational treatise, ‘The ABC’s of Gold Investing,’ to volumes of original content delivered via our website over the past 25 years, he spent five decades on the vanguard of gold market news, analysis, and commentary.  A truly gifted writer, he made economics accessible, displaying again and again a remarkable ability to simplify even the most complex subjects for his readers.  He would take on vast and complicated financial topics, distill them down to the salient points, weave in an interesting history lesson, and top it all off with a bit of clever humor – leaving his readers not only informed and enlightened, but truly entertained.

To say he will be missed is certainly an understatement.  To answer ‘was his career a success?’, look no further than the countless individuals who know his name, have been inspired by his work and have benefitted from his wisdom.  He leaves behind an exemplary legacy, and one I am deeply honored to carry forward.

Jonathan Kosares
COO/Owner – USAGOLD
[email protected]

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