Gold steady ahead of Fed meeting results and press conference
Greenlight’s Einhorn sees gold gaining as Fed stays behind the inflation curve

(USAGOLD – 7/28/2021) – Gold is steady ahead of today’s Fed meeting results and Chairman Powell’s press conference. With both bond yields and the dollar gaining ground, Wall Street, it seems, anticipates a slightly hawkish result. The yellow metal is level at $1800. Silver is attempting to regain its footing after yesterday’s steep decline. It is up 7¢ at $24.82. Though most of Wall Street, as reflected in recent financial market pricing, buys into the Fed’s assessment that inflation is a temporary problem, Greenlight Capital’s David Einhorn sees things much differently.

Chairman Powell,” he says in his quarterly client letter released Monday, “is committed to remaining very accommodative for a long time and then only gradually tightening. We believe he will find whatever excuse he needs to do so, no matter what the data shows. The result, we believe, is that inflation won’t be aggressively addressed. So, the risk is to the upside. In our macro book, we hold inflation swaps and gold. The former will benefit from reported inflation being higher than the market expects. The latter should benefit as the market realizes the Fed is behind the curve and has no plans to catch up.”

Chart of the Day

overlay line chart showing the close relationship between growth in ETF gold stockpiles and the price of gold

Chart courtesy of GoldChartsRUs.com • • • Click to enlarge

Chart note: Since the 2000s, there has been a strong relationship between growing gold ETF stockpiles and the price of gold.  The reduction in holdings over the past 18 months reflects declining interest on the part of institutional investors. Some analysts believe institutional and fund participation in the gold market could turn quickly should inflation prove to be persistent or id some other economic and/or financial market uncertainty surfaces.

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Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold pushes higher in quiet summertime trading
Central banks are buying the dip

(USAGOLD – 7/27/2021) – Gold pushed higher in generally quiet summertime trading as the Fed convened, yields continued their descent and the dollar weakened. It is up $7 at $1806. Silver is down 7¢ at $25.20. A Bloomberg report earlier this month on burgeoning official sector gold demand received scant attention among gold analysts. What makes it a matter of better than casual interest, though, is that the central banks appear to be buying the dip in prices this year – a preference that, if it continues, could carry longer-term implications for gold market fundamentals. Most notably, Brazil – the world’s ninth-largest economy – announced purchasing a hefty 41.8 tonnes of the metal last week.

Credit Suisse’s global equity analyst Andrew Garthwaite takes note of the trend in a recent report reviewed at ZeroHedge and offers a glimpse of the rationale behind the purchases. “Gold is a hedge against extreme financial deleveraging,” he says. “The level of government debt, deficit and corporate debt is extreme. We continue to believe that if the TIPS yield gets much above zero, that would start to cause the markets to worry about a debt trap and that in turn could lead to a major risk-off trade. This could then prompt a Fed response driving down real yields (and debasing money).…We think this will also cause central banks to buy more gold (as currencies are being debased). Central banks account for 12% of gold demand. If all central banks had a minimum of 10% in gold, then gold demand would increase 1.6x, on our calculations.”

Chart of the Day

Used car and truck prices
(Percent change from a year ago)
line chart showing used car and truck prices major increase in 2021

Sources: St. Louis Federal Reserve [FRED], U.S. Bureau of Labor Statistics

Chart note: Some have begun monitoring the dizzying rise in the price of used cars and trucks as a bellwether for the overall inflation situation – up over 45% year over year as of the end of June. CNBC recently reported that used car prices and car rentals are “behind the biggest inflation surge since 2008.”

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Gold advances cautiously ahead of this week’s Fed meeting
Fidelity International says gold may be on track to rescale last July’s record highs

(USAGOLD – 7/26/2021) – Gold advanced cautiously in early trading as bond yields dropped, the dollar weakened and the markets prepped for this week’s Fed meeting. It is up $3 at $1806. Silver is up 12¢ at $25.35. Most expect the Fed to remain on the dovish side of the policy ledger this week, particularly with coronavirus making its way back up the list of policy concerns. Fidelity International, the overseas arm of the 75-year old Boston-based investment house, recently joined the ranks of institutions extolling the virtues of gold ownership.

“Currently trading at almost exactly $1,800 per ounce,” it says in a recent report, “gold has yet to quite rescale the record high levels it saw last July at just over $2,000. In an environment of rising inflation and mounting concerns over the Delta strain, however, it could be on track to do so. Inflation reduces the buying power of paper currencies, including how much gold can be bought for a given amount of paper. Given that gold is in very limited supply and can’t be devalued in the way that paper currencies can, its value should tend to rise as the prices of goods and services increase.”

Chart of the Day

overlay line chart showing the price of gold and real rate of return on the 10-year U.S. Treasury

Sources: St. Louis Federal Reserve [FRED], Federal Reserve Board of Governors, ICE Benchmark Administration

Chart note: As you can see in this chart, declining real rates have had a direct effect on the price of gold, particularly noticeable in the period after the 2007-2008 credit collapse and the pandemic-induced economic crisis that began in early 2020. The inflation-indexed real rate of return on the 10-Year TIPS finished at -0.98% on Friday. With inflation on the rise, the negative real rate of return will accelerate unless the Fed and/or bond market pricing push yields higher at an equivalent rate.

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Gold hovers around $1800 mark in early trading
Though stuck on pause, it is still up 7% from March double bottom

(USAGOLD – 7/23/2021) – Gold hovered around the $1800 mark in early trading as bond yields firmed and the dollar held steady. It is down $6 at $1802. Silver is down 18¢ at $25.30. Though the yellow metal seems stuck on pause in the summer of 2021, it has still managed a respectable gain since logging a double bottom in late March at $1680 and inflation emerged as a major concern in financial markets. It is up 7% since March 30th.* On the other hand, bitcoin, an asset widely touted as gold’s safe-haven competitor, has roughly halved – a development not lost on Sharp Pixley’s Lawrie Williams. (Please see our Charts of the Day below.)

“Gold meanwhile seems to have so far been doing its job of wealth protection in the face of falling values for other asset classes,” he writes in an analysis posted earlier this week, “These include, most notably, bitcoin, which had been heavily touted as a wealth protection alternative to gold, but has been slipping sharply in value over the past couple of months. It would appear to have no substance behind it and some key players in the sector are being beset with some highly adverse publicity and the beginnings of regulatory controls, which don’t bode well for its future. Gold looks to be very much the safer bet for now at least, particularly all the while rising inflation has pushed the real interest rate ever further into negative territory. Negative real rates are very much seen as a positive for gold.”

*Stocks are up 5.2% over the same period.

Charts of the Day

Bitcoin
(Six months)

line chart showing bitcoin's performance over the past six months

Gold
(Six months)

line chart showing gold's performance since logging double bottom in March

Charts courtesy of TradingEconomics.com • • • Click to enlarge

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Gold sells off for fifth straight day as summer market malaise continues
Royal Canadian Mint reports robust demand for bullion coins in first quarter

(USAGOLD – 7/22/2021) – Gold sold off for the fifth straight day in early trading reflecting the general sense of malaise wafting through financial markets this summer. It is down $8 at $1797. Silver is down 19¢ at $25.14. The July slowdown reflects a considerable and perhaps justifiable pause in investor interest coming off the torrid pace in physical metal purchases during the first half of the year. Along these lines, the Royal Canadian Mint reports robust sales of bullion coins in the first quarter of 2021, according to a report published at Wealth Professional Canada.

“Whether it’s inflation fears or investors simply adding diversification to portfolios given the nerve-shredding ride of 2020,” it reads, “Royal Canadian Mint has reported a strong performance in Q1…Revenue from precious metal businesses increased to $852 million in Q1 compared to 2020 Q1 performance of $465.2 million. Gold bullion volumes increased more than 65% quarter over quarter and were 328.5 thousand ounces (Q1 2020 – 198.1 thousand ounces) while silver bullion volumes increased 52% and were 9.9 million ounces (Q1 2020 – 6.6 million ounces).”

Chart of the Day

The inflation-adjusted price of silver
(Based on the Bureau of Labor Consumer Price Index, 1970 to present)

line chart showing the inflation adjusted price of silver 1970 to preset

Chart courtesy of Macrotrends.net 

Chart note:  “If we account for inflation,” writes analyst Peter Krauth in a piece posted in May at the FXEmpire website, “and that’s massively understated ‘official inflation,’ then silver prices peaked at $120 in 1980 and around $57 in 2011. Today’s price near $24 is still well below those levels, suggesting a lot of upside remains ahead. In fact, at $24 today versus the inflation-adjusted $120 in 1980, silver is currently about 80% below that peak.” He believes “$100 silver is well within reach.” (Silver is now trading well over the $26 level.)

 

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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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Gold pushes steadily higher on inflation concerns, renewed safe-haven interest
MunKNEE analyst forecasts strong precious metals showing in the weeks ahead

(USAGOLD – 7/20/2021) – Gold pushed steadily higher in early trading as bond yields continued their sharp descent and the dollar strengthened. It is up $11 at $1825. Silver is down 3¢ $25.21. Gold’s steady recovery from yesterday’s overnight selloff, combined with the steep drop in bond yields, offers a clear signal of renewed investor interest in safe-havens. The prospect of more inflation, according to a brief analysis posted at the MunKNEE website, is one of the key drivers in that push to safety, and, as a result, gold and silver prices are likely to get a healthy boost in the short run.

“…[I]nflation expectations tracked by the New York Fed,” writes Munknees’ Lorimer Wilson, “roughly match the inflation expectations tracked by the University of Michigan’s Survey of Consumers, whose latest reading jumped to 4.6% … With such high inflation expectations, in combination with the 30-day up cycle (July 12th to August 11th) for Silver, [chart analyst] Goldrunner’s fractal work suggests that Silver might start a run up to $34 per troy ounce and perhaps as high as $37/ozt. over the next 30 days. Gold has more overhead resistance but there is little resistance up to the $1,900 area on Gold’s chart so such high inflation expectations could very well see Gold bust up through that red downtrend line pretty easily to perhaps as high as $2,100/ozt.”

Chart of the Day

Personal Consumption Expenditure Price Index (PCE)

bar chart showing the personal consumption expenditures index favored by the Fed as inflation indicator

Sources: St. Louis Federal Reserve [FRED], U.S. Bureau of Economic Analysis

Chart note: Economists are generally surprised at the surge in the PCE index – the inflation measure preferred by Federal Reserve policymakers. The 4.3% gain for May is well above the Fed’s 2% target and the 3.98% gain reported for April. It is the highest monthly print on record (since 1960).

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Gold turns south to start the week as virus numbers surge globally
Lundin sees more volatility ahead for precious metals

(USAGOLD – 7/19/2021) – Gold turned south to begin the week as markets in general posted a strong negative reaction to the resurgent coronavirus numbers globally and worried about their effect on the young and still fragile global recovery. It is down $14 at $1800. Silver is down 43¢ at $25.30. Bond yields, commodities, and global stock indices also declined sharply while the dollar firmed. Like an unexpected storm, volatility is suddenly disrupting what until now has been a typically quiet summer in financial markets.

“Gold, and in truth all the markets,” says Gold Newsletter‘s Brien Lundin in an e-mail update sent out on Friday, “will have to navigate the Fed’s messaging on tapering and rate hikes over the coming months as inflationary pressures prove to be more tenacious than previously predicted. Fed officials, along with Treasury Secretary Janet Yellen and, reportedly, White House economic advisers, are now positioning ‘transitory’ inflation as more along the lines of six months instead of three, and more likely a year or so. I fully expect the message massaging to continue — and create volatility for gold and silver along the way. That said, if we are returning to a more-typical seasonality pattern, then the summer bottom for gold should be occurring right about…now. It would fit my experience of gold putting its summertime lows in the range of mid-July to mid-August, so let’s hope that’s the case this time around.”

Chart of the Day

Gold, silver, Goldman Sachs Commodities Index
(One Year)

overlay line chart showing gold, silver and the Goldman Sachs S&P Commodities Index

Chart courtesy of TradingView.com

Chart note:  Over the past 12 months, gold and silver – both falling within the commodities realm – have underperformed the commodities indices. Other commodities have outperformed the indices – and some by a wide margin. Gold and silver led commodities higher over the last few years, fell back, and some believe are now building momentum to lead again.

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Gold takes a southerly turn in early U.S. trading
Wisdom Tree sees inflation as ‘far from transitory’

(USAGOLD – 7/16/2021) – Gold took a southerly turn in early U.S. trading despite yesterday’s comments from Treasury Secretary Yellen that we are “likely to see several more months of rapid inflation.” It is down $8 at $1823. Silver is down 24¢ at $26.16. Belying the annual summer slowdown, gold is up 2.75% in the month of July, mostly in response to elevated inflation concerns. Silver is level on the month thus far. Yellen’s comments – along with the Fed chair’s stay the course testimony before Congress this week – are likely to raise suspicions on Wall Street that inflation will be more of a problem than the Fed had anticipated. Wisdom Tree, the Ireland-based investment firm, sees it as “far from transitory.”

“While we believe that inflation will ease a little in the short-term after the enormous base-effect from ultra-low energy prices last year pass,” writes Nitesh Shah, the firm’s director of research in an in-depth review published recently, “we believe that inflation is far from transitory. Looking at the detail behind the CP readings, inflation seems to be broad-based. The scale of monetary growth, combined with the pent-up demand for many goods and services will be a recipe for continued price inflation even after the extraordinary base effects pass. Inflation may very well rise again after the base effects are behind us. Broad commodities and gold are likely to be essential assets to protect your portfolio against inflation.”

Chart of the Day

Gold-Dow Jones Industrial Average
(50-year performance, in percent)

overlay line chart showing the 50-year performances of gold and stocks at the fifty-year anniversary of the fiat money system

Chart courtesy of TradingEconomics.com • • • Click to enlarge

Chart note: As we approach the fiftieth anniversary of the fiat money system’s introduction on August 15, 1971, we thought it would be interesting to take a snapshot of gold and stocks’ performances over the period. Many will be surprised to learn that gold has outperformed stocks since 1971 – up 4498% to stocks 3733%. (All data as of 6/18/2021)

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Gold consolidates yesterday’s gains
Inflation numbers ‘lifting gold’s appeal’

(USAGOLD – 7/15/2021) – Gold is consolidating yesterday’s gains as bond yield tracked lower, the dollar gained marginally, and jobless claims came in as expected. It is down $2 at $1827. Silver is down 2¢ at $26.29. Media reports largely credited this week’s consumer and producer price reports for gold’s sharp advance yesterday. Reuters reported the inflation numbers as “lifting gold’s appeal.”

“The value of gold is constant,” writes analyst Kelsey Williams in a report posted at Gold Eagle. “Its price changes according to changes in actual purchasing power of the US dollar. Higher gold prices usually come after longer periods of time when the cumulative effects of previous inflation become more apparent. If you want to know and understand what is happening to gold’s price, then you need to know and understand what is happening to the US dollar. Changes in the price of gold do not tell us anything about gold. They tell us what is happening to the US dollar.”

Chart of the Day

Purchasing power of the U.S. dollar
(1913-present)

Line chart showing the purchasing power of the dollar 1913 present

Source: St. Louis Federal Reserve [FRED], U.S. Bureau of Labor Statistics • • • Click to enlarge

Chart note: Since 1913, the U.S. dollar has lost almost 96% of its purchasing power. Since 1971 and the introduction of the fiat money system, it has lost 85% of its purchasing power. Since 2008 during a period of relative price stability, it still lost over 22% of its purchasing power. 

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Gold drives deeper into the $1800s on inflation push
Delayed reaction to yesterday’s CPI report reinforced by this morning’s wake up call

(USAGOLD – 7/14/2021) – In a delayed reaction to yesterday’s consumer price report and reinforced by this morning wholesale prices wake-up call*, gold drove deeper into the $1800s. A weaker bond market and dollar provided additional impetus to the charge higher, as did a statement this morning from Fed chair Powell during Congressional testimony that the Fed would not alter its ultra-easy monetary policy anytime soon. The yellow metal is up $19 at $1828. Silver is up 34¢ at $26.38. TD Securities’ commodities’ analyst Bart Malek is among the group that believes the forces that drove gold over the $1900 mark are still at work in the market though “the path to new highs is almost never a smooth one.”

“Despite the recent selloff,” he writes in an analysis posted in the Singapore Bullion Market Association’s quarterly review, “we judge that the Fed’s continued emphasis on its full employment mandate should see gold recover most of its recent losses. The relatively new flexible average inflation targeting policy framework and the implied willingness to overshoot inflation targets for a period, should the output gap remain wide, are just a few reasons why very easy monetary conditions are likely to persist well into 2023. In this context, the US central bank should keep real interest rate environment highly accommodative across the yield curve for a prolonged period, which is gold and precious metal complex supportive.”

*The Labor Department reported this morning that producer prices rose 6.6% over the past year.

Chart of the Day

Gold-Silver Ratio
(1970 to June 2021)

line chart showing the gold silver ratio from 1970 through June 2021

Chart courtesy of Macrotrends.net • • • Click to enlarge

Chart note: The current ratio is 67 to 1 at present. Investors have been moving into physical silver consistently over the past several months, and that is why premiums on silver bullion coins have remained high. In a recent Casey Research publication, analyst Kris Sayce says, “The gold/silver ratio is a popular indicator among gold and silver investors…According to Medieval Monetary Problems: Bimetallism and Bullionism, published in 1983, the historical ratio (pre-20th century) varied between 9:1 and 14:1. That means one ounce of gold would be worth anywhere between nine and 14 ounces of silver.” At 67 to 1, there is considerable distance between the current ratio and the long-term historical norm.

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Gold inches higher as inflation surges
Holmes points to golden cross chart event as bullish indicator for yellow metal

(USAGOLD – 7/13/2021) – Gold inched higher this morning after the Labor Department reported a 5.4% surge in inflation – well above expectations in the 4.9% range and the 4.8% inflation expectations figure released just yesterday. It is up $3 at $1811.50. Silver is down 13¢ at $26.30. Tomorrow the Labor Department releases its producer price report and Fed chair Powell will begin a two-day appearance before Congress. Not even a less than encouraging inflation report seems enough, at this juncture, to shake the precious metals out of their summer lethargy. Analyst Frank Holmes, though, remains optimistic.

“Gold,” he says in an article posted at Investing.com, “notched its third straight week of higher prices as the yield on the 10-year Treasury dipped below 1.3% for the first time since February. The highly transmissible Delta variant was also ruled the most dominant strain of coronavirus in the U.S., threatening economic growth and raising uncertainty about the next interest rate hike. Against this backdrop, the yellow metal is now flashing a golden cross, meaning the 50-day moving average is trading above the 200-day moving average. (Please see our Chart of the Day below.) In the past, this has been a bullish indicator for gold prices, which are still off some 12% from their all-time highs set last summer. In the short to medium term, it appears as if gold demand will continue to be driven by central bank policy, which should remain accommodative even as inflation fears increase.”

Chart of the Day

Gold Price
(Gold price, 50-day and 200-day moving averages)
Overlay chart showing the 50-day and 200-day averages crossing – a bulliish indicator

Chart courtesy of BarChart.com • • • Click to enlarge

Chart note: Please see Frank Holmes’ comments in today’s DMR above.

 

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Gold opens weeks lower as caution reigns in financial markets
Wall Street braces for a busy week ahead

(USAGOLD – 7/12/2021) – Gold pushed lower as caution reigned in financial markets. Wall Street has a busy week ahead of it with consumer prices due on Tuesday, producer prices on Wednesday, a flood of Treasury note and bond sales (about $107 billion) early in the week, and Fed Chairman Powell’s Congressional testimony on tap for Wednesday and Thursday. Gold is down $8 at $1802. Silver is down 15¢ at $26. Last week we characterized the summer slowdown as a time when seasoned gold and silver investors like to add to their holdings. Claudio Grass, the Swiss-based precious metals consultant, sees the summer of 2021 as especially opportune.

“Therefore, looking at the bigger picture, the fundamentals and the investment case for precious metals remains solid,” he writes in an advisory posted at GoldEagle. “If anything, the recent developments on the pandemic front and the noticeable uptick in inflation data have further strengthened the outlook for gold and silver. And while summer generally tends to be a quieter time for precious metals, this summer in particular appears to offer a very attractive buying opportunity, one that perhaps might not appear again for quite some time. The current price levels, provide excellent entry points for both gold and silver, as well as a great chance to build up one’s existing positions.”

Chart of the Day

Gold price
(March 2021 to present)

line chart showing gold's March double bottom to present 2021

Chart courtesy of TradingView.com • • • Click to enlarge

Chart note: Gold is up 6.5% from the double bottom logged in March of this year. As mentioned above, Swiss analyst Claudio Grass sees the setback since early June, when it traded at the $1900 level, as creating “a very attractive buying opportunity.”

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Gold drifts sideways in early trading
Goldman sees “material upside” for gold based on “undervaluation and low allocation”

(USAGOLD – 7/9/21) – Gold drifted sideways in early trading as bond yields inched higher and the dollar lost ground. It is down $1 on the day at $1803. Silver is up 6¢ at $26.05. In general, financial markets reflect a cautious tone with mixed economic results surfacing in China, Europe, and the United States over the past few days – signs of sluggishness combined with rising inflation. Goldman Sachs says that the gold market currently might be sending a false signal on what is occurring in the global economy.

“As a result of the liquidation, gold is now again pricing a Goldilocks scenario of moderate inflation and continued global recovery and is thus trading at a large discount to the current real rate,” it says in a paper authored by Mikhail Sprogis, the firm’s vice president for commodities research. “We estimate that the current gold price is consistent with a real rate of 0.1% vs. the -0.87% that is currently priced by the market…In a scenario where the global economic recovery does not play out as expected or inflation begins to move materially above expectations. We see material upside to gold given its undervaluation and low allocation from the investment community. Therefore, we think that gold may be a good strategic purchase here for portfolio managers looking to hedge against tail risks of macro volatility.” Sprogis says the recent upside move in gold is just the beginning and sticks with the firm’s forecast of $2000 gold in 2021.

(Source: Yahoo!News/Brian Sozzi/7-7-2021/Gold prices steamrolling toward $2000)

Chart of the Day

Central banks gold reserves survey
(Expected change in gold reserves next 12 months)

graphic from World Gold Council illustrating central bank intentions with respect for gold in 2021

Graphic courtesy of World Gold Council • • • Click to enlarge

Chart note: “Central banks,” says the World Gold Council, “continue to be positive on gold, with roughly the same number of central banks expected to buy gold compared to last year. Gold’s performance during periods of crisis has risen to become the top reason for central banks to hold gold.” I can remember a time – way back when – when nearly every mainstream media report on gold, particularly when the price was declining, included the reference “due to the threat of central bank gold sales.” According to this survey from the World Gold Council, 21% of the world’s central banks intend to add gold to their reserves this year and 68% intend hold on to what they’ve got.

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Gold climbs for seventh straight day
But still stuck in the annual summer doldrums

(USAGOLD – 7/8/21) – Gold climbed for the seventh straight day in overseas trading as the bond market strengthened, the dollar lost ground and capital shifted in the direction of safe-havens. It is up $13 at $1818.50. Silver is down 6¢ at $26.15. As mentioned yesterday, gold has fallen into an odd pattern of late in which it posts strong gains overnight only to give back roughly half those gains during U.S. trading hours. Yesterday’s trading was no exception. Though gold has been in a firming trend over the past several days, it is still down from the year’s high at over $1900 posted in late May – part and parcel of being stuck in the annual summer doldrums. (Please see our Chart of the Day immediately below.)

“Gold, silver, and their miners’ stocks suffer their weakest seasonals of the year in early summers,” writes analyst Adam Hamilton in a recent Seeking Alpha report. “With traders’ attention normally diverted to vacations and summer fun, interest in and demand for precious metals usually wane. Without outsized investment demand, gold tends to drift sideways dragging silver and miners’ stocks with it. Long feared as the summer doldrums, they’ve really moderated in recent years…June and early July, in particular, have often proven desolate sentiment wastelands for precious metals, devoid of recurring seasonal demand surges. Unlike most of the rest of the year, the summer months simply lack any major income-cycle or cultural drivers of outsized gold investment demand. Yet three recent summers have been big exceptions to these decades-old seasonals, and 2021’s could still prove another.”

Chart of the Day

Line chart showing the seasonal trend for gold 10 year average

Chart courtesy of GoldChartsRUs • • • Click to enlarge

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