Author Archives: News
“German private households hold more than 6 percent of the world’s gold reserves, the equivalent of 616 billion euros at last count. The share of gold bars and gold coins in this gold ownership is estimated at 41.7 percent. Total: 5,194 tons. In the 2019 study, it was still 55 percent or 4,925 tons.”
USAGOLD note: The German peoples’ interest in gold is not a new story. The fact that they own over 9000 tonnes of the metal – and over 40% is in the form of coins and bullion – will catch a good many by surprise.
“The hedge-fund selling was most concentrated in the communications-services and information-technology sectors, according to the BofA data — i.e., the tech winners that have thrived during the COVID-19 pandemic. Who’s buying? Retail clients were the only group to buy U.S. equities for the third week in a row and have been net buyers for 10 straight weeks, per Bank of America.”
USAGOLD note: So, which is the smart money?
“The Mint increased its revenue by 74% in 2020 as a result of exceptionally strong global market demand for bullion…Consolidated revenue increased to $2,527.6 million in 2020 (2019 – $1,453.4 million). Gold bullion volumes increased more than 100% year over year and were 982.8 thousand ounces (2019 – 483.0 thousand ounces) while silver bullion volumes were 29.5 million ounces (2019 – 22.8 million ounces).”
USAGOLD note: Even we were surprised a the strength of Royal Canadian Mint bullion sales for last year. It is not often that we see volume increases of that magnitude in the gold market. RCM silver bullion sales were up almost 30% – a notable increase in its own right.
Repost from 4-29-2021
“Jewellery demand of 477.4t was 52% higher y-o-y . The value of jewellery spending – US$27.5 billion (bn) – was the highest for a first quarter since Q1 2013. Bar and coin investment of 339.5t (+36% y-o-y) was buoyed by bargain-hunting, as well as by expectations of building inflationary pressures. Growth in consumer demand was offset by strong outflows from gold-backed ETFs (gold ETFs), which lost 177.9 in Q1 as higher interest rates and a downward price trend weighed on investor sentiment.”
USAGOLD note: We cited this report in yesterday’s DMR and repost the link here for those who may have missed it. Central banks were also a positive force in the market purchasing 95.5 tonnes of gold in the first quarter. All in all, WGC reports some pretty good numbers coming out of global lockdowns and a general remission in business activity in that demand during first quarters is typically “muted.” Outflows from ETFs were a drag on the price as professional investors cut back their positions.
“Gold-silver alloys are useful catalysts for degrading environmental pollutants, facilitating the production of plastics and chemicals, and killing bacteria on surfaces, among other applications. In nanoparticle form, these alloys could be useful as optical sensors or to catalyze hydrogen evolution reactions. But there’s an issue: the silver doesn’t always stay put.”
USAGOLD note: Though most of the world has difficulty working together on technologies, gold and silver have proven themselves to be agreeable partners, according to this study conducted by Rice University chemists.
Repost from 4-29-2021
“Treasure hunters are planning to dig up what they say could be 48 crates of Nazi gold worth nearly half a billion pounds at a palace used by Hitler’s SS as a brothel. The dig, which starts next week, is hoped to uncover 10 tonnes of gold along with other valuables in the grounds of the 18th century palace in the village of Minkowskie in southern Poland. The treasure was stolen on the orders of SS boss Heinrich Himmler towards the end of WWII to set up a Fourth Reich.”
USAGOLD note: Curious tale with plenty of photo imagery from the period and now about a tainted treasure worth over a half-billion dollars.
Repost from 3-18-2021
“Consumers are Googling ‘inflation’ more often than at any time since at least 2008, setting financial markets up for a volatile reaction to a Federal Reserve that is likely to sound unperturbed by the specter of rising prices.”
USAGOLD note: Chairman Powell did indeed make an effort Wednesday to tone down concerns about inflation or better put reassure markets that the Fed would not overreact to any future reports of inflation materializing in the economy. In our view, investors have not gone all-in on inflation – not by any stretch. They are simply blending it into the analysis as a possibility. At the same time, as the uptick in Google searches indicates, the sudden price increases at the gas pump and grocery checkout counter are getting consumers’ attention.
“The U.S. trade deficit is on track to set another annual record in 2021 and is likely to remain extremely high until the global economy recovers. How come? The strong rebound in the U.S. economy, driven in large part by massive federal stimulus, has boosted demand for imports.”
USAGOLD note: Rising import prices are likely to feed through to the producer and consumer price indices and it won’t be long until commentators are using phrases like “self-perpetuating inflation cycle” …… Something not mentioned in this article that might be an exacerbating factor in the rising trade balance is the price of oil, up 33% year to date.
Sources: St. Louis Federal Reserve, U.S. Census Bureau, U.S. Bureau of Economic Analysis
“The Treasury market’s inflation bulls seem to have gotten a green light from Federal Reserve Chair Jerome Powell to double down on wagers that price pressures will only intensify in the months ahead.”
USAGOLD note: It is looking increasingly like the Biden-Powell tandem are taking a “damn-the-torpedoes-full-speed-head approach to fiscal and monetary policy. If this report is correct in its assumptions, the markets are increasingly interpreting it as the Fed giving a green light to inflation and all-in support of the bond market which translates to level to lower yields on Treasuries.
“‘It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,’ Yellen said during an economic seminar presented by The Atlantic. ‘Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates.'”
USAGOLD note: Wait a minute. Isn’t it the Fed’s job to remove the punch bowl? …… Treasury Secretary Yellen’s comments were instrumental in gold’s sudden drop. With all that the Fed has put into keeping expectations on tapering and interest rates tamped down, Chairman Powell might be a bit confused by the Treasury Secretary’s sudden encroachment on his territory.
“A global bond retreat resumed on Thursday despite Fed chair Jay Powell’s insistence that the US central bank has no plans to wind down its bond-buying efforts any time soon, with many investors betting yields will top their March highs in the coming months as prices fall.”
USAGOLD note: The Fed, it has become obvious, is fighting headwinds to keep rates down. A surprise surge in inflation could make things substantially worse for both the Fed and bond market – whereupon, from the investor’s point of view, gold might appear to be the last safe haven standing.
Repost from 4-28-2021
USAGOLD note: The part of this report that gives one pause is that the slowdown in population growth is not the direct result of the pandemic (the knee jerk reaction), but the result of an aging population, an immigration slow-down, and most notably “the scars of the Great Recession more than a decade ago, which led many young adults to delay marriage and families.” And here we are amidst another major slowdown, worse for Main Street than 2008 ……
Repost from 4-26-2021
“Central bank demand for gold has increased substantially since the Global Financial Crisis and emerging markets have been among the most active purchasers. In our view, the rationale behind this is clear. Emerging market countries can face challenges around currency instability and capital flight. Substantial gold reserves foster economic confidence, enhance currency stability and create a more attractive environment for foreign investment. Many emerging market central banks accrue gold via the international market but a growing number have been able to bolster their reserve assets with domestically mined gold, often purchased from ASGM [artisanal and small-scale gold mining] operations.”
USAGOLD note: An informative look at an often-forgotten niche in the gold business – an industry that employs 20 million people worldwide, according to the World Gold Council.
Repost from 4-28-2021
“A crop rally in the U.S. is threatening to make essential food commodities dramatically more expensive, and the costs could soon spill over onto grocery store shelves.”
USAGOLD note: More evidence of inflation……Please see the note accompanying the post immediately below. Gone are the days when oranges were 1¢ each and a grapefruit cost 5¢ – as shown in this photograph from 1942. A six pound sack of potatoes was going for 23¢ and a four pounds of Delicious apples were 25¢.
Repost from 4-26-2021
“C-suite executives are letting it be known that inflation is a real threat to profits this year, despite a barrage of macroeconomic forecasters saying any increases in commodities such as oil is transitory.”
USAGOLD note: There are two considerations with respect to this report worth contemplating. First, it gives us an inkling of how inflation can eat into profits and affect stock prices. Second, it provides more anecdotal evidence of inflation building in the economy that could show up in producer and consumer price reports in the near future. The inflation genie is beginning to rise from the bottle……
Repost from 2-9-2021
“The labyrinthine alleyways and carved wooden roofs of the Dubai Gold Souk haven’t changed much in the last century, aside from some modernization. What has changed is its size and scope. Over the years, the souk has expanded from around 400 square meters to a vast powerhouse more than two kilometers wide and three kilometers in length. More than 700 merchants now ply their trade here, primarily in the Gold Souk or in the Meena Bazaar, just across the Creek. Many shops around here have been in family hands for decades.”
USAGOLD note: Several years ago a client told of his visit to Dubai’s gold souk and being surprised at the number of merchants who had the USAGOLD website on screen as they went about their daily business. We still get considerable traffic daily from India and the Middle East. Visits from India rank number two. The United Arab Emirates (Dubai) is number seven.
Repost from 4-25-2021
“This week, the Bloomberg Agriculture Spot Index — which tracks key farm products — surged the most in almost nine years, driven by a rally in crop futures. With global food prices already at the highest since mid-2014, this latest jump is being closely watched because staple crops are a ubiquitous influence on grocery shelves — from bread and pizza dough to meat and even soda.”
USAGOLD note: If true, it could be the first rumblings of inflation hitting Main Street …… The Fed’s 2% line in the sand could go vertical quickly and without warning.
Repost from 4-24-2021
“Americans are growing more concerned about rising costs and are consistently boosting their inflation expectations, new data show. A new survey from CivicScience shows 87% of those surveyed in a representative sample of U.S. adults say they are at least “somewhat concerned” about the increasing cost of household expenses (all numbers are rounded to the nearest percentage point).”
USAGOLD note: That 87% is split between 46% “very concerned” about inflation and 41% “somewhat concerned”. We haven’t gotten to the point yet where consumers en masses are buying now in order to keep from having to pay more later, but that could happen overnight, especially with all the pent-up savings rattling around the monetary system.
Repost from 4-24-2021
“This [the impact of the pandemic] resulted in the largest silver market surplus since at least 2010, the earliest year for which Metals Focus tracks data. One notable exception was physical investment. A growing appetite for safe haven assets and, initially, the strength of the gold price all boosted investors’ appetite for silver bars and coins last year, culminating in an 8% rise overall. Investment in other arenas also experienced a vintage year in 2020, with record inflows into silver ETPs and, at times, also exceptionally strong OTC buying. Negative real interest rates and yields for the US dollar, as well as 30 most other major currencies, were arguably the single most important factor 60 driving investors towards precious metals last year.”
USAGOLD note: Annually, the report linked above provides a comprehensive look at the supply and demand picture for silver. It predicts 26% growth in investment demand for 2021 as investors continue to take metal out of the market against 8% gains respectively in mine production and recycling.
Repost from 4-24-2021
“Switzerland in March recorded its biggest monthly gold exports in ten months as shipments to India leaped to their highest since 2013, underlining a revival in Asian bullion demand, Swiss customs data showed on Thursday. Switzerland is the world’s biggest gold refining centre and transit hub. Its numbers provide an insight into market trends.”
USAGOLD note 1: We’ve noted the revival of the West to East gold pipeline in recent weeks. A weak rupiah, India’s currency, is adding to investor demand.
USAGOLD note 2 (4-29-2021): Things are likely to change again with the pandemic unfortunately running nearly out of control in India.