Monthly Archives: October 2023

Today’s top gold news and opinion

10/17/2023

Weak Chinese EV demand drives down battery metal prices (FT)
Irrational exuberance..

Home Sales on Track for Slowest Year Since Housing Bust (WSJ)
Highest mortgage rates in 23 years are dragging down home sales

Australia open to idea of CBDC as future of money  (CoinTelegraph)
“A Tokenised Future for the Australian Financial System”

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Daily Gold Market Report

Global Gold ETFs Witness Accelerated Outflows
Asia Bucks the Trend

(USAGOLD – 10/17/2023) Gold is renewing it’s positive trend this morning, and has posted +5% return year to date. On the day, gold is trading at $1923.38, up $3.18. Silver is trading at $22.65, up 5 cents. Silver currently has a -5.60% return year to date. The World Gold Council reports accelerated outflows observed in global gold ETFs during September 2023, marking a four-month declining streak, predominantly led by funds in North America and Europe. Investors’ expectations of enduring higher rates drove disinvestments in western markets, contrasting with the continued inflows in Asia, especially in China due to various factors including promotional efforts by fund providers​.

The long-term trend shows a significant decrease in global gold ETFs’ holdings, hitting the lowest since March 2020. The disinvestment is more pronounced in low-cost gold ETFs, with a notable outflow in September. Concurrently, trading volumes exhibited a mild recovery, and the fluctuation in gold futures trading was noted, influenced by unseen volatilities in the Shanghai-London gold price premium​.
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Today’s top gold news and opinion

10/16/2023

Newcrest Shareholders Approve Newmont’s $15 Billion Takeover (Bloomberg)
Gold sector’s largest-ever deal

It’s official: The era of China’s global dominance is over (Buisness Insider)
End of an era?

Want a Discount? Pay in Cash.  (WSJ)
Is a 3% cash discount enough to make people ditch credit cards and payment apps?

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Daily Gold Market Report

Rise of the East
Expanding Gold Trading Infrastructure and Central Bank Acquisitions

(USAGOLD – 10/16/2023) Gold opens the week by giving back a portion of the significant gains it posted last week. Gold headed into the weekend up over $60/ounce on Friday alone, and is currently trading at $1916.81, down -$14.21 on the day. Silver is trading at $22.64, down 8 cents. With no significant news emerging from the Middle East over the weekend, and numerous countries advocating for peace, both the global community and the gold market have experienced a collective sigh of relief.

Ronni Stoeferle, managing partner of Incrementum AG, highlights in a newly published article a trend of increasing gold flow towards the East, driven by economic, demographic, and military shifts on the global stage. Central banks in the East are among the major buyers of gold, with China leading, reflecting a continuation of gold acquisition trends witnessed in 2022. The BRICS nations, particularly Russia, India, and China, are notable buyers, which coincides with a reduced holding in US Treasuries, making gold a more appealing reserve asset. Furthermore, infrastructure for gold trading is expanding in the East, with China and Russia spearheading collaborations to link their gold markets, aiming to establish a robust gold trading infrastructure independent of Western trading centers.

 

 

USAGOLD Comment: The shifting gold dynamics underscore a transition in global economic power, which will affect the valuation and global market position of gold. We are here to help USAGOLD investors fine tune their strategies, taking into account the growing Eastern markets’ influence on gold demand and pricing, to ensure they navigate the evolving landscape adeptly.

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Today’s top gold news and opinion

10/13/2023

US inflation higher than expected in September (FT)
Will the Fed raise again?

US Treasury Debt Dynamics ‘Very Unfavorable,’ IMF Official Says (Bloomberg)
US on an ‘unsustainable’ fiscal path with big deficits

Social Security Benefits Will Rise 3.2% In 2024, While Top Tax Jumps 5.2%  (Forbes)
Small boost compared to the 8.7% cost-of-living adjustment (COLA) for 2023

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Daily Gold Market Report

Lights, Camera, Gold
Unearthing Gold’s Upcoming Epoch

(USAGOLD – 10/13/2023) Gold is up strong this morning, posting a 2.41% gain, +$44.95/ounce at $1913.85 per ounce. Silver is trading at $22.53, up 71 cents.  Gold’s sharp move higher is linked to Israel telling the UN to evacuate residents of North Gaza within the next 24 hours.

The new World Gold Council documentary film titled “Gold: A Journey With Idris Elba” , delves into the intricate dynamics of the gold market, emphasizing its historical significance, current market trends, and expert predictions for the future. Renowned economists and financial analysts discuss the potential impacts of global economic shifts, central bank policies, and geopolitical tensions on gold prices. For gold investors, this video is a must-watch this weekend as it offers a comprehensive understanding of the factors that could influence gold’s value in the coming years, equipping them with insights to make informed investment decisions.

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Today’s top gold news and opinion

10/12/2023

The Case for Gold in Defined Contribution Asset Allocations (World Gold Council)
Portfolios of equities and bonds has come under increasing pressure

ExxonMobil agrees to buy shale group Pioneer in $59.5bn deal (FT)
Biggest acquisition since it was formed through the merger of Exxon and Mobil in 1999

Argentina’s Black Market Peso Rate Tops 1,000 Per Dollar  (Bloomberg)
Was near half that level in July…

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Daily Gold Market Report

Poland Outpaces China in Gold Purchases
Aims for 20% Reserve Increase

(USAGOLD – 10/12/2023) Gold continues a good week, adding to it’s gains this morning, up $9.20 from yesterday’s close at $1883.56 per ounce. Silver is trading at $22.11, up 7 cents. In recent data from the World Gold Council (WGC), as of October 4, Poland surpassed other nations in the second quarter by acquiring 48.41 tonnes of gold, while China bought 45.1 tonnes. Records from September reveal that Poland has increased its gold reserves by 85.7 tonnes since April. Adam Glapinski, the President of the National Bank of Poland, emphasized Poland’s commitment to further gold purchases, expressing an ambition to elevate gold’s share in its reserves from the present 11.2% to 20%.

USAGOLD Comment: Sovereign gold acquisitions like these underscore the growing desire by nations to bolster reserves with real assets. China is expected, but Poland is a bit of surprise.  Their aggressive acquisition reinforces the role gold’s value and stability plays in a portfolio (whether an individual or a nation), also signaling a broader trend of hedging against economic uncertainties and diversifying away from traditional fiat currencies, namely the dollar.  Something individual investors should continue to monitor and take note…

 

World Gold Council Q2 2023

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Daily Gold Market Report

“Gold is not just a metal; it’s a statement on the global economy.”
Paul Tudor Jones Delves Into The Weak U.S. Fiscal Position

(USAGOLD – 10/11/2023) Gold continues to climb higher today, up $12.32 from yesterday’s close at $1872.72 per ounce. Silver is trading at $22.05, up 21 cents. Paul Tudor Jones (PTJ), a renowned hedge fund manager, was interviewed yesterday on CNBC’s “Squawk Box” and discussed the importance of adaptability and flexibility in the world of trading. Here are some notable quotes from the interview:

“It’s a really challenging time to want to be an equity investor and in U.S. stocks right now. You’ve got the geopolitical uncertainty… the United States is probably in its weakest fiscal position since certainly World War II with debt-to-GDP at 122%.”

“As interest costs go up in the United States, you get in this vicious circle, where higher interest rates cause higher funding costs, cause higher debt issuance, which cause further bond liquidation, which cause higher rates, which put us in an untenable fiscal position.”

“The bond market, simply through supply and demand, is going to deliver more rate hikes, because we don’t have a clearing price yet for long-term debt. So those rate hikes are probably going to tip us into recession.”

USAGOLD Comment: PTJ is a legendary macro trader who’s interviews are sheer excellence.  On the topic of gold, he mentions, “I believe gold’s value will continue to rise as more people recognize its importance in the financial system.”
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Today’s top gold news and opinion

10/11/2023

Chinese Gold Versus World Market Surges Again After Holiday Week (Bloomberg)
Second-highest premium on record compared to the international benchmark

U.S. banks need TARP 2.0: A trapped asset relief program (American Banker)
Privatize profits and socialize losses

Consumers starting to buckle for first time in a decade, former Walmart U.S. CEO Bill Simon warns  (CNBC)
Lag effects becoming realized…

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Daily Gold Market Report

US Deficit Concerns and the Growing Role of Leveraged Hedge Funds
Seabridge Gold Sheds Light on Gold’s Economic Significance

(USAGOLD – 10/10/2023) Gold has shed some of it’s gains from yesterday’s close. Gold is trading at $1853.65, down $7.76. Silver is trading at $21.72, down 16 cents. Seabridge Gold’s “Gold Market Update” from October 2, 2023, highlights the intricate relationship between gold prices and confidence in the U.S. dollar, which is closely tied to trust in the Federal Reserve’s management of inflation and interest rates. The prevailing belief in the Fed’s control over these economic factors might be misplaced, especially with signs of rising inflation due to underinvestment in commodities, increasing energy and food prices, and growing wage settlements in unionized sectors.

The escalating U.S. deficit is currently at 8% of GDP. The recent Treasury funding schedule indicates an urgent need to raise an additional $1.5 trillion by year’s end. Because Treasuries are considered the highest quality collateral, the prime brokerage divisions of major Wall Street banks take on significant leverage, sometimes up to 500 times, posing systemic risks that could lead to financial turmoil reminiscent of past episodes like the Long-Term Capital Management failure in 1998.
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Today’s top gold news and opinion

10/10/2023

Americans Are Still Spending Like There’s No Tomorrow (WSJ)
Concerts, trips and designer handbags are taking priority over saving for a home or rainy day..

Israel’s central bank sells $30 billion in foreign reserves after shekel slides to seven-year low (CBNC)
The shekel had already weakened by 10% so far in 2023

Gold Holds Gains as Markets Mull Rate Pause, Middle East Crisis  (Bloomberg)
Precious metal may have already seen its quarterly low

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Daily Gold Market Report

Navigating Market Uncertainties
The Protective Shield of Gold in Turbulent Times

(USAGOLD – 10/9/2023)

Gold opened higher this morning after a weekend that saw a marked increase in geopolitical turmoil in the Middle East.  It is up $12, trading at $1845 and change. Silver is up 8 cents at $21.65.

The Israeli government formally declared war Sunday and the WSJ is reporting that Iran helped plot the attack on Israel. This was a truly horrific weekend of events. Described as the ‘worst attack on Israel since the Yom Kippur War’ (1973), this escalation of geopolitical tensions has been reflected in the gold price this morning. “This is a good example of why people need gold in their portfolios. It is a perfect hedge against international turmoil,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

USAGOLD Comment:  It was only about a week ago that the true ‘non-event’ of the US Government averting a shut down was seen as a yet another net negative for the gold market, prompting a slide from the mid $1800’s all the way to support around $1815.  The Israel/Hamas conflict, for the moment, and understandably, is taking center stage in the news cycle.  But not to be overlooked is the absolute carnage in the US Bond market, the continued explosion of US government debt, and the stark reality that interest payments on that debt have now officially surpassed defense spending and are only accelerating.  International conflict does often lead to increased gold demand – sometimes only temporarily, sometimes for sustained periods – but our focus remains on the underlying economic fundamentals, which are ultimately the true long term drivers of investment demand in precious metals.  Much to cover this week…stay tuned…

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Today’s top gold news and opinion

10/9/2023

America is now paying more in interest on its record $33 trillion debt than on national defense (Yahoo)
Who holds the IOUs..

Wall Street Isn’t Sure It Can Handle All of Washington’s Bonds (WSJ)
Testing the bond market..

Attack on Israel likely to boost appeal of gold, safe-haven assets  (Reuters)
Hedge against international turmoil

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Today’s top gold news and opinion

10/6/2023

Treasury rout bolsters view that Fed will call time on rate rises (FT)
Market odds of another increase by year-end drop to 30%

How a CBDC Created Chaos and Poverty in Nigeria (Mises)
A failed experiment..

Flexport Plans to Lay Off 30% of Workforce  (WSJ)
Global shipping demand is declining

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Daily Gold Market Report

Golden Spotlight
Costco’s Gold Bar Sales Catapulted into Media Limelight

(USAGOLD – 10/6/2023) Gold continues to hover around it’s support of $1820. Gold is currently trading at $1,822.37, up $2.07. Silver is trading at $21.38, up 41 cents. Costco, not usually known for selling precious metals, experienced a significant demand for its 1-ounce gold bars, which were sold exclusively online and often sold out within a few hours of being listed. This sale sparked interest among Costco members, with the CFO mentioning in an earnings call that these bars typically get sold out faster than some of the common items like discounted laundry detergent.

Gold typically struggles to find it’s way into the mainstream media, especially any kind of reports on the sale of physical bars and coins specifically.  The news surrounding Cosco’s release of Pamp brand name one ounce gold bars, and the magnitude to which it was covered across multiple media outlets, can only be seen as a net positive for the physical gold market.  Though we’d argue that Costco’s price isn’t consistent with it’s overall model of deeply discounted goods (at USAGOLD we would price these same bars – and any COMEX approved name bar for that matter – for about 1% less on average than Costo’s reported sales price), the rapid sales at Costco underscore the mainstream appeal of physical gold ownership amongst US-based investors. Costco’s decision to sell gold bars only further enhances the accessibility and awareness of owning physical gold to the general public, while bringing greater visibility to gold’s timeless role as a portfolio hedge.  And when paired with the already record high demand for physical gold seen over the past several years, contributes to a net positive outlook overall for the physical gold market, and by default, the price of gold itself.
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Daily Gold Market Report

Unsustainability of Rapid Debt Increase
Gold’s Protective Role

(USAGOLD – 10/5/2023) Gold is down from yesterday’s close. Gold is currently trading at $1815.62, down $5.74. Silver is trading lower at $20.93, down 7 cents. The US’s debt spike by $300 billion within 5 days is alarming. Two weeks prior, the total US debt reached the $33 trillion mark, a historic first. This rapid rise suggests an imbalance between expenditure and revenue, potentially shaking investor trust in US securities. As confidence wanes, borrowing costs could soar, and the government’s ability to manage economic downturns may be hampered due to a significant chunk of its revenues being tied up in debt servicing. The Fiscal Responsibility Act of 2023 was signed into law in June which eliminated the debt ceiling through January 1, 2025. At the current quarterly debt issuance pace, the US is projected to reach $40 trillion in total debt by the close of 2025.

USAGOLD Comment: In times of fiscal instability, gold shines as a steadfast asset. Unlike fiat currencies, which can be devalued when governments overspend, gold’s intrinsic value remains. As traditional assets wobble during debt crises, investors often flock to gold, seeing it as a bulwark against wealth erosion and financial turbulence.
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Today’s top gold news and opinion

10/5/2023

The congressional push to create $650 billion (Axios)
$650 billion in Special Drawing Rights (SDRs)

Long Bonds’ Historic 46% Meltdown Rivals Burst of Dot-Com Bubble (Bloomberg)
Duration exposure fuels painful losses

Mortgage demand drops to the lowest level since 1996, as interest rates head toward 8%  (CNBC)
Refis are down too..

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Today’s top gold news and opinion

10/4/2023

3.5-Day Workweek? (Forbes)
Jamie Dimon Predicts AI Could Make It Happen

Gold Glitters In China’s Financial Storm (Forbes)
Sales of bars and coins are up 30% compared to last year

If The Bond Markets Aren’t Scaring You Yet, They Should Be  (Politico)
Yield-mageddon in the US 

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Daily Gold Market Report

Gold Has Consistently Outperformed The S&P 2 to 1 This Century
The Coming Golden Reset

(USAGOLD – 10/4/2023) Gold is slightly up from yesterday’s close but remains flat for the week. Gold is currently trading at $1825.83, up $2.81. Silver is at $21.22, up 5 cents. In a recent interview Frank Holmes, Chief Investment Officer at U.S. Global Investors, delves into the prospective trajectory of gold prices amidst the prevailing economic landscape. He underscores the economic challenges being faced, such as significant layoffs, downturns in manufacturing, car sales, and housing. These factors collectively bolster the argument for gold as a prudent investment at this juncture. “Gold has outperformed the S&P 2 to 1 this century since governments have been practicing with the G20 modern monetary theory,” he says.

Furthermore, the interview broaches the topic of China’s growing influence and the apprehensions surrounding its rhetoric on global investments. Concluding his insights, Holmes says, “I think when rates are going to peak next quarter, and we got an election year next year and when rates start falling, gold will be $2,300.”
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