Author Archives: News

Shanghai Gold Exchange has become the largest physical gold exchange in the world

SMM News/10-16-2019

“Established less than 20 years ago, the Shanghai Gold Exchange has become the world’s largest physical gold exchange. Debbie Carlson (Debbie Carlson), senior editor of the firm, said in an article on Wednesday that China had become one of the world’s largest gold markets after New York and London, with a growing number of international investors looking to enter the Chinese market.”

USAGOLD note:  The gold market is alive and well in Shanghai. This article provides a quick update.

Posted in Today's top gold news and opinion |

Silver glitters in India as record prices dull gold’s luster

INDIA WATCH

Bloomberg/Swansy Alfonso

“Imports of the poor man’s gold jumped 72% from a year earlier to 543.21 tons in August, according to the latest available data from India’s trade ministry.”

USAGOLD note:  We find reports of demand growth for silver like this one intriguing. If there is a migration of cultural interest to silver, it could stretch available supply and act as a foundational element in future pricing.


Repost from 10-13-2019

Posted in Today's top gold news and opinion |

In planning for next U.S. recession, economists say, don’t fret about debt

Reuters/Howard Schneider

“Economists are divided about when the next U.S. recession will arrive, but they largely agree on this: the country will need to fight it with a massive fiscal program, and be ready to swallow deficits that may eclipse the trillion-dollar shortfall run by the Trump administration this year.”

USAGOLD note:  Nice to know that the economists in attendance were all on the same page about infrastructure spending even if it was written in a lot of red ink. . . . . The real question is how far the federal government will go over that $1 trillion deficit, i.e., if $1.5 to $1.75 trillion is a more realistic target zone.

Repost from 10-13-2019

Posted in Today's top gold news and opinion |

Brexit pact faces steep odds in the U.K. Parliament — and Johnson might not mind failure

MarketWatch/Steve Goldstein/10-17-2019

“The new Brexit pact reached between the European Union and Britain on Thursday will struggle to get through the U.K. Parliament. And for Boris Johnson, the U.K. prime minister, that might not be a terrible outcome.”

USAGOLD note:  If you are not completely confused by the Brexit situation, this article will remedy that shortcoming [smile].

Posted in Today's top gold news and opinion |

Soaring gold prices put Indian buyers off ahead of Diwali

INDIA UPDATE

Bloomberg/Swansy Afonso

“India’s festival of lights is bringing little cheer to jewelers in the world’s second-biggest gold consumer.”

USAGOLD note:  We see these stories from time to time talking about dwindling demand in India based on anecdotal evidence.  When the hard numbers come out they tell a different story.  Demand for gold remains strong in India mostly because the currency is losing its purchasing power while the gold price continues to rise in rupee terms.


Repost from 10-10-2019

Posted in Today's top gold news and opinion |

The Bank of England’s golden evolution

Alchemist/Ruth Crowell/Q4-2019

“Today (a sunny day in early September 2019), we hold around 400,000 gold bars in our vaults, currently worth approximately £200 billion, making up 15% of official declared gold reserves globally. We are the largest gold custodian in the UK – we hold over 65% of the gold in London.”

USAGOLD note:  For those with an interest in the central role the Bank of England plays in the upper stratosphere of the gold market.

Posted in Today's top gold news and opinion |

Russia looks at alternatives to dollar for energy transactions

Financial Times/Max Seddon and Henry Foy/10-12-2019

“Russia is exploring currency settlements in euros and roubles for its vast energy exports in an attempt to avoid the dollar and insulate Moscow from the US-led global financial system.”

USAGOLD note:  Russia’s move to replace the dollar in its reserves is the known part of this story.  The unknown is how successful it will be in persuading corporations and countries to settle oil transactions in roubles.

Posted in Today's top gold news and opinion |

Bank of China executive joins London Bullion Market Association board

Reuters/Peter Hobson/10-13-2019

“The London Bullion Market Association (LBMA) said on Monday a senior executive at Bank of China would join its board.”

USAGOLD note:  The presence of Chinese banks at the London gold fix and as members of the LBMA is a foundational element in the modern gold market.  China, after all, is the largest single source of demand for the physical (not paper) metal.  If an LBMA member, including major commercial banks, central banks and funds want to sell, China can (and likely will) enter its bid. For more detailed information, please see below.

Posted in Today's top gold news and opinion |

Investors are loading up on cash. That’s not a good sign.

MarketWatch/Andrea Riquier/10-12-2019

“It’s possible some investors are waiting for a good time to pounce on beaten-down stocks, but not likely . . .”

USAGOLD note:  The article goes on to say that there is $3.4 trillion now sitting in money market funds – a 14% gain so far this year. Odd that money markets would be a beneficiary of capital flows at a time when interest rates are declining (not rising).  Investors, it seems, are heading for the safety of the sidelines.  Gold, though not mentioned, has also been a beneficiary of the trend in capital flows.

Image courtesy of the World Gold Council

Posted in Today's top gold news and opinion |

Wall Street has doubts after partial trade deal: ‘I don’t think this gets us to Christmas’

CNBC/Bob Pisani/10-12-2019

“Investors cheer a partial trade deal with China but soon realize there is no clear timeline for removing existing tariffs.”

USAGOLD note:  Once again, the initial reaction might not have been the true reaction.  The Dow Jones lost 200 points of its gain yesterday in the last half hour of trading after being up as much as 500. Simultaneously, gold retraced much of its losses yesterday finishing down $5.50 on the day at $1489 after falling as low as $1475.

Posted in Today's top gold news and opinion |

The return of hyperinflation in Zimbabwe

Mises Institute/Pavel Mordasov/10-9-2019

“It has been over a decade since Zimbabwe was ravished by one of history’s worst experiences in hyperinflation, reaching 79,600,000,000 percent as prices doubled approximately every 24.7 hours in November of 2008. Today under new leadership, it seems as though the government of Zimbabwe has failed to learn from its previous mistakes in what policy to ascribe to as it enters into another period of tumultuous times and economic hardship for its citizens as hyperinflation has entered the picture again.”

USAGOLD note:  The price of wheelbarrows in Harare is reportedly on the rise . . . .

Posted in Today's top gold news and opinion |

Wall Street, Main Street bullish on gold prices

Kitco/Neils Christiansen/10-4-2019

“For many analysts, gold’s ability to recoup a 2% loss at the start of the week and regain what became a critical psychological level is a sign of strong resilience in the marketplace. Many analysts have noted that growing recession fears and financial market uncertainty continue to support gold prices in the near term.”

USAGOLD note:  71% of market professionals and 65% of Main Street respondents are bullish. . .Wall Street is actually more bullish than Main Street.


Repost from 10-7-2019

Posted in Today's top gold news and opinion |

Germany repatriates about half of its gold reserves

But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.” – Reuters, 2-9-2017

“Germany has a stronger relationship with gold than most nations. The country’s experience with hyperinflation between 1919 and 1923, during the years of the Weimar Republic, is ingrained in the national consciousness. Gold, above all, stands for stability” – Financial Times, 11-10-2017

Germany completed its scheduled transfer of national gold reserves from the New York Fed and the Bank of France in 2017.  It will now leave 1236 tonnes at the New York Fed and another 432 tonnes in London.  The remainder of its 3378-tonne national holding will be stored in Frankfurt. The repatriation transfers to Frankfurt were completed three years ahead of schedule.

With respect to the gold left at the Fed, Bundesbank’s Carl-Ludwig Thiele told reporters: “We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.”

Thiele’s confidence in the Federal Reserve brings to mind an old story about Germany’s relationship with the Federal Reserve and the storage of its gold reserves. When Hjalmar Schacht, head of Germany’s central bank in the 1920s, visited the New York Fed he asked to see Germany’s gold stored in its vaults.

“Strong**,” wrote Schacht in a 1955 autobiography, “was proud to be able to show us the vaults which were situated in the deepest cellar of the building and remarked: ‘Now, Herr Schacht, you shall see where the Reichsbank gold is kept.’ ” Storage staff went off to retrieve the gold.  “At length,” Schacht goes on, “we were told: ‘Mr. Strong, we can’t find the Reichsbank gold.’”  To which Schacht replied: “Never mind; I believe you when you say the gold is there. Even if it weren’t you are good for its replacement.” One need presume that nearly 100 years later, the level of trust conveyed by Schacht remains in place.

It is unlikely that Germany would depart the euro anytime soon and back a new Deutschmark with gold.  Having an asset set aside, though, that is detached from erratic national currencies in this day and age is a wise move for the prudent nation-state – just as it is for the prudent private investor.

–– USAGOLD


** New York Fed president at the time, Benjamin Strong

Repost from 2/10/2017, updated October, 2019. The Financial Times article linked at the top of the page tells the fascinating inside story of Germany’s gold repatriation.

Posted in MK, RepostKeepers, Today's top gold news and opinion |

A $40 billion pile of leveraged loans is battered by big losses

Bloomberg/Katherine Doherty/10-9-2019

“Barely noticed in a corner of the financial markets, leveraged loans originally worth about $40 billion are staging their own private meltdown.Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.”

USAGOLD note:  Another one of those quiet debt problems festering in the background. . . . .

Posted in Today's top gold news and opinion |

‘You don’t do these things prior to negotiations,’ ex-diplomat says of US actions against China

CNBC/Yen Nee Lee/10-9-2019

“The latest U.S. actions against Chinese officials and companies don’t ‘set a good tone’ for an upcoming high-level trade talk, a former American ambassador to China said Wednesday.”

USAGOLD note:  As some have pointed out, the closer we get to election day the more distant seem the chances of a resolution to the U.S.-China trade dispute.  A breakdown in talks set to begin Thursday could have a disastrous effect on global financial markets.

Posted in Today's top gold news and opinion |

Chinese people are buying gold, taking money out of banks and stock market

Epoch Times/Olivia Li

“Chinese people are starting to feel the pressure of economic slowdown. As China’s yuan continues to devalue, and several small and medium-sized banks have filed for bankruptcy recently, many Chinese choose to buy gold or take their money out of the bank, to protect their assets.”

USAGOLD note:  In several past posts, we have raised the possibility of ramped-up demand in China based on a depreciating currency and problems in its banking system. The cultural attachment to gold always permanently represents latent demand quickly triggered at the first signs of problems in the economy or financial system, cleverly illustrated in the Ed Stein cartoon below.


Repost from 7-5-2019

Posted in Today's top gold news and opinion |

Gold-backed ETFs holdings hit record highs in September

World Gold Council/10-8-2019

“In September, global gold-backed ETFs and similar products had US$3.9bn of net inflows across all regions, increasing their collective gold holdings by 75.2 tonnes(t) to 2,808t, the highest levels of all time. Holdings surpassed late 2012 levels, at which time the gold price was near US$1,700/oz, 18% higher than current levels.”

USAGOLD note:  ETFs, as we mention frequently here, is the preferred vehicle among funds and institutions.

Posted in Today's top gold news and opinion |

Powell says the Fed will start expanding its balance sheet ‘soon’ in response to funding issues

CNBC/Jeff Cox/10-8-2019

“‘This is not QE. In no sense is this QE,’ he said in a question and answer session after the speech.”

CNBC note:  If it walks like a duck, talks like duck. . . .Then it cannot be QE.

Posted in Today's top gold news and opinion |

Stocks on track for worst start to a quarter since 2008 financial crisis as recession fears accelerate

MarketWatch/Mark DeCambre/10-2-2019

“Already considered an unusually volatile period for the stock market, which has logged historically ugly October declines in 1929, 1987 and 2008, worries about geopolitics and growing signs of domestic and international economic weakness have fueled bearish bets and sent stock-market optimists, at least momentarily, scurrying for cover in assets perceived as safe.”

USAGOLD note:  For the stock market, October can be the cruellest month. The Dow Jones Industrial Average dropped over 900 points in the first two days of the month.


Repost from 10-2-2019

Posted in Today's top gold news and opinion |

Too big to lend? JPMorgan’s cash tweaks take toll on U.S. repo

Reuters/David Henry

“JPMorgan Chase & Co has become so big that some rival banks and analysts say changes to its $2.7 trillion balance sheet were a factor in a spike last month in the U.S. ‘repo’ market, which is crucial to many borrowers.”

USAGOLD note:  Much conjecture has surrounded the Fed repo market cash injections as to who or what might have been the cause of the sudden drought.  None of that speculation mentioned J.P. Morgan.  Now we learn, through this Reuters article, that a shift in strategy at JPM was responsible “for about a third of the drop in all banking reserves at the Fed during the period.”  That said, JPM’s involvement might still be just another piece in a multi-dimensional puzzle yet to be completed.


Repost from 10-2-2019

Posted in Today's top gold news and opinion |

Are bonds so expensive that you buy gold? Hedge funds think so

Bloomberg/Ruth Carson and Adam Haigh

“The debate on how low bond yields can go is hotting up as the relentless rally in global fixed-income markets shows no signs of slowing amid increased concern about an economic downturn. That’s sparked a conundrum for macro funds hunting for yield and returns. Enter gold, which has risen 18% this year — well ahead of fellow havens such as the yen, Swiss franc and Treasuries.”

USAGOLD note:  Gold – The once and future king of the safe havens. . . . . .


Repost from 8-15-2019

Image courtesy of VisualCapitalist

 

Posted in Today's top gold news and opinion |

Former central bankers attack ECB’s monetary policy

Financial Times/Martin Arnold/10-4-2019

“A group of former senior European central bankers has published a memo attacking the loose monetary policy of the European Central Bank, which they argued was “based on the wrong diagnosis” and risks eroding its independence.

USAGOLD note:  By and large, central bankers from southern EU countries like what Draghi and the ECB have done, the north does not.

Posted in Today's top gold news and opinion |

China is reportedly reluctant to agree to a broad US trade deal with talks set to restart

Bloomberg/Shawn Donnan and Jenny Leonard/10-6-2019

“Chinese officials suggest a broad pact is off the table.  U.S. president still suggests any deal has to be ‘100% for us.'”

USAGOLD note:  Negotiations are scheduled to begin this week. The president of the United States faces impeachment.  China’s premier faces the chaos of Hong Kong.  Neither side appears to be in a conciliatory mood.

Posted in Today's top gold news and opinion |

Fed has the tools to combat next recession, Bernanke says

MarketWatch/Greg Robb

“All is not lost, according to Ben Bernanke, who led the Fed through the aftermath of the Great Recession. During a panel discussion hosted by the Brookings Institution, he estimated the Fed’s so-called unconventional policies, if used wisely, are the equivalent of 3 percentage point of interest rate cuts.”

USAGOLD note: Wall Street can now sleep at night assuming it can block out the constant hum of the printing press running in the background.  For details, please visit the link.


Repost from 10-3-2019

Posted in Today's top gold news and opinion |

Top twenty countries in the world by foreign exchange and gold reserves

AnimatedStats/YouTube video/9-11-2019

USAGOLD note:  Fascinating to watch.  It takes about four minutes.

Posted in Today's top gold news and opinion |

U.S. wins $7.5 Billion sanctions against EU in WTO aircraft fight

Bloomberg/Bryce Baschuk/10-2-2019

“The World Trade Organization gave President Donald Trump the go-ahead to impose tariffs on as much as $7.5 billion worth of European exports annually in retaliation for illegal government aid to Airbus SE. The award is the largest in WTO history — nearly twice as large as the previous record of $4.04 billion set in 2002.”

USAGOLD note:  The markets are likely to take note not just of the direct implications of this ruling with respect to the EU and Airbus, but the indirect as well – including its public relations value. The Trump administration is likely to build on the WTO ruling as justification for criticism in other areas of the import-export mix including, at some point, the big one – automobiles.


LATE BREAKING:
Politico/Doug Palmer and Jakob Hanke/10-2-2019/Cheese, Scotch and coffee: A big win for Trump on tariffs
CNBC/Yen Nee Lee/10-2-2019/US-EU trade fight could drag on after ‘big victory’ at the WTO, says ex-Trump official

Posted in Today's top gold news and opinion |

The secretive gold deal keeping Venezuela afloat

Bloomberg/Video/10-1-2019

“Bloomberg investigates how an unexpected diplomatic friendship between Venezuela and Turkey grew into a financial lifeline for Maduro – allowing him to sell off the country’s gold reserves and keep his regime in power.”

USAGOLD note:  What happens when well runs dry? An estimated 80 tonnes of gold are left in Venzuela’s treasury, according to this Bloomberg report. Deep background for those wondering what has kept the Madura regime afloat.

Posted in Today's top gold news and opinion |

Dimon echoes Trump on China but sees no trade deal before 2020

Bloomberg/Josh Wingrove

“U.S.-China trade needs to be ‘closer to reciprocal in a way that’s good for everybody. I hope we get there. I don’t expect it to happen before the election to tell you the truth, but I hope after that we have a fair trade deal,’ Dimon said in reference to the U.S.’s 2020 presidential election.”

USAGOLD note: Dimon offers what many will see as a realistic assessment of the possibility for a trade agreement before the 2020 election, as well as an accurate reflection of the consensus on Wall Street regarding the upcoming negotiations.


Repost from 9-26-2019

Posted in Today's top gold news and opinion |

France’s Société Générale chief rejects call for ECB to buy bank bonds

Financial Times/David Keohane

“Société Générale’s chief executive has dismissed calls for the European Central Bank to buy bank bonds, arguing it would support failing rivals and prevent consolidation.”

USAGOLD note:  Societe Generale’s Frederick Oudea makes a case for allowing creative destruction to do its work. I recall the quote from John Maynard Keynes (pictured) made late in life (1946):  “I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”


Repost from 10-7-2019

Posted in Today's top gold news and opinion |

Mohammed bin Salman warns of skyrocketing oil prices

Financial Times/James Politi and Andrew England/9-30-2019

“’If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests. Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes,’ Prince Mohammed said in an interview with CBS on Sunday evening.”

USAGOLD note:  At the risk of sounding overly pessimistic, what Saudi Arabia’s king outlines is pretty much a ‘no win situation’ for the MidEast and those who dependent upon it as a source of crude oil. The takeaway here is that we should probably prepare for oil prices to reach “unimaginably high numbers.”

Posted in Today's top gold news and opinion |