Gold drops modestly after largest weekly gain since 2008

(USAGOLD –3/30/2020) – Gold dropped modestly in the wake of last week’s big $140 runup – its best weekly performance since 2008.  It is off $8 at $1618 as we begin a new week. Silver is down 43¢ at $14 – a reminder of investors lingering concerns about deflation. Overall financial markets continue to react skittishly to the advancing coronavirus and the severe economic damage it has wrought. Financial Times reports this morning that the already strong demand for physical gold is likely to remain in place with weakening currencies globally and negative real rates of return continuing to dominate investor thinking.

Credit Suisse summons memories of the 2008-2009 financial crisis (See our Chart of the Day below) in a recent update to its gold forecast. “We remain major long term Gold bulls,” says the Swiss bank in an advisory relayed by FX Street, “with the market encouragingly back above its 200-day average having held above key support at $1452/1446. It’s important to note that Real Yields have stopped rising and we still believe a similar dynamic will play out to 2009 when after a sharp initial correction in 2008, gold eventually went on to make new all-time record highs. Resistances above $1700/05 are eventually seen at $1734, the 78.6% retracement of the 2011/15 down move, then the $1796/1803 corrective highs from 2011/12. We still look for new record highs above $1921.”

Chart of the Day

Line chart showing the St. Louis Federal Reserve's Financial Stress Index with even annotationsClick to enlarge.

Chart note:  The red line represents an older version of the St. Louis Fed’s Stress Index, the blue line the latest rendition. As you can see, financial stress has not been this high since the 2008 financial crisis. Keep in mind the high reading is without the impetus of any financial institution or fund of consequence reporting as of this morning serious difficulties and/or requesting a bailout. Note the acceleration in the index after the Bear Stearns and Lehman failures in 2008.

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

Gold takes a breather – TD Securities says $1800 possible ‘in the not too distant future’

(USAGOLD – 3/27/2020) – Gold is taking a breather this morning after its extraordinary performance of the week now coming to a close.  It is down $2 on the day at $1623, but up $122 on the week (+ 8%). Silver is down 10¢ on the day at $14.25, but up $1.74 on the week (+13.8%).  “Normalizing liquidity conditions, negative real rates, low cost of carry and concerns surrounding fiat currency debasement,” says TD Securities’ in a recent report summarized at FXStreet, “likely means price could move toward $1,800/oz in the not too distant future. … A move toward $2,000/oz is also a distinct possibility into 2021, as the global economy normalizes, monetary conditions remain loose while fiscal deficits surge. … Any selloff in the near-term should be considered as temporary and will likely serve as an additional catalyst moving the price toward $1,800 before the yellow metal reaches escape velocity toward a $2-handle.”

The chart below showing yesterday’s jobless claims number is a bit of a stunner ……

Line chart showing the rise in jobless claims yesterday

Chart of the Day

Annotated Gold Chart
2008-2009 – The first years of the financial crisis

annotated line chart showing gold in 2008 before and after quantitative easing announced

Chart courtesy of the St. Louis Federal Reserve [FRED]
Source:  ICE Benchmark Administration (IBA)
Annotations by USAGOLD

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

Gold pushes higher on sobering unemployment number, tight physical supplies

(USAGOLD – 3/26/2020) – Gold pushed higher in early New York trading as the government announced weekly unemployment claims rising to 3.28 million – a sobering number that directly reflects the cumulative effect of the coronavirus on the real economy. It is up $20 at $1632 and up $159 (+11%) on the week. Silver is up 10¢ at $14.52 and up $2.10 (+20%) on the week. In stark contrast to today’s numbers, 281,000 new claimants filed for unemployment last week.

The big story in the gold market itself continues to be the shortage of physical metal caused by the virus, its impact on pricing in the futures market, and, in turn, the knock-on impact in pricing gold coins and bullion at the retail investor level. “[T]he larger spot market in London,” explains Bloomberg in a report this morning, “is dominated by 400-ounce bars of gold, but only 100-ounce and kilobars are deliverable on the Comex contract. Late on Tuesday, after New York futures shot to the highest premium to the spot price in four decades, CME Group said it would launch a new futures contract under which 400-ounce bars would also be deliverable, helping ease tightness.”

Important client note:  Due to our long-standing relationships with key market-makers and our own inventory planning, we are still working from a strong inventory position and are able to deliver most of the standard gold and silver bullion items – American Eagles, Canadian Maple Leafs and Krugerrands.  Even our sources though are strained under the circumstances and our inventory, of course, is finite. We do not know, as a result, how long the supply will hold up.  All deliveries are running on schedule with occasional minor delays due to the order and shipping volume, and we think you will find our pricing as advantageous when compared to most sources.  The one thing we have no control over is rising premiums which, unfortunately, we have no choice but to pass along.  Please contact us to discuss prices and availability. 1-800-869-5115 x 100

Chart of the Day

line chart showing the purchasing power of gold 1800 to present

Chart note: “Gold is a store of value,” says Jan Nieuwenhuijs posting at the VOIMA website. “The media, however, frequently exaggerate short-term swings in the price of gold. This month they first wrote ‘gold lost safe haven status’ when the price declined for a few days, only to report ‘gold gets groove back’ when it was up for half a day. Due to gold’s inherent properties—it’s physical, can’t be printed, has no counterparty risk, etc.—gold has preserved its value like no other currency for thousands of years. Why question its safe-haven status based on short-term volatility? It’s true that from the moment we left the gold standard, gold has become more volatile. Still, in general, its purchasing power has increased ever since.”

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

Gold retreats on relief bill agreement, shortages of physical metal strain gold trading, pricing

(USAGOLD – 3/24/2020) – Gold retreated on international markets overnight reacting to Congress’ expected passage of a $2 trillion public relief bill to address the economic ill-effects of the coronavirus.  It is trading currently on the FOREX platform at $1612 – down $25.**  Silver is down 48¢ at $14.18. While pricing continues to vacillate wildly in the paper gold market, the combination of strong global demand and supply disruptions has translated to shortages and rising premiums on popular coin and bullion items. The transition from plenty to dearth has been abrupt – a reflection of the times.

“First, if you can buy physical gold and silver, do so,” advises Gold Newsletter’s Brien Lundin in a note to his clients headlined Gold Rush. “Yes, you’ll have to pay significant premiums, if you can find anything. And yes, those premiums should decrease if/when the current supply disruptions abate. But gold and silver prices are headed much higher and should well overcome the current premiums. For the record, I’m buying bag silver now at considerable premiums over the spot price, so I’m putting my money where my mouth is on this.”

** As noted in our sidebar, the actual base price of gold used for pricing coins and bullion is $15 higher than the price posted in our menu bar.

Important client note:  Due to our long-standing relationships with key market-makers and our own inventory planning, we are still working from a strong inventory position and are able to deliver most of the standard gold and silver bullion items – American Eagles, Canadian Maple Leafs and Krugerrands.  Even our sources though are strained under the circumstances and our inventory, of course, is finite. We do not know, as a result, how long the supply will hold up.  All deliveries are running on schedule with occasional minor delays due to the order and shipping volume, and we think you will find our pricing as advantageous when compared to most sources.  The one thing we have no control over is rising premiums which, unfortunately, we have no choice but to pass along.  Please contact us to discuss prices and availability. 1-800-869-5115 x 100

Chart of the Day

chart showing SentimenTraders panic button data

Chart courtesy of SentimentTrader-Jason Goepfert

Chart note: “The last time we looked at such stress was in January 2016 but we’re far beyond that now. The indicator incorporates measures which spike higher when uncertainty about the economy, corporate outlooks and stock prices are high, and reach extreme high levels only during times of outright panic. Anything above 3 on the model could be considered ‘panic.’ As a reflection of just how much anxiety is being priced in, on Thursday [3/12/2020] the Panic Button hit a record high of 7.7. Based on preliminary data, it eclipsed that again on Monday.” – SentimenTrader, 3/17/2020

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

Gold surges past $1600 on ‘unlimited QE’ and Washington gridlock

(USAGOLD – 3/24/2020) – Gold rocketed back over the $1600 market this morning in response to the Fed’s aggressive monetary policy and Congress’ inability to agree on a fiscal response to the deepening global pandemic.  Simultaneously, strong, panic-driven demand for coins and bullion continues unabated even as mints and refineries shut down production. In early New York trading, gold is priced at $1602 – up $35 on the day. Silver is up 31¢ at $14.14.

MarketWatch’s Myra Saefong said it all in one short paragraph in her afternoon market windup yesterday. “Gold futures,” she wrote, “rallied on Monday, sending prices up by more than $80 an ounce, or 5.6%. That marked the biggest daily dollar climb for the most-active contract, based on records dating back to 1984, and largest one-day percentage rise since March 2009, according to Dow Jones Market Data. Weakness in the dollar, which dropped in the wake of the Federal Reserve’s decision to purchase an unlimited amount of Treasurys and securities to support the financial market, provided a boost for the precious metal.”

The chart below shows gold’s two-day, now nearly $150 surge over the $1600 mark:

Line chart on gold showing push back about $1600

Chart courtesy of

Table of the Day

table gold production by country 2019

Chart note: Russia is set to overtake China as the world’s top gold producer by the year 2029. “The ongoing and expanding US sanctions on Russia,” writes Marley Arnoldi at Mining Weekly, “are expected to paradoxically support gold production in Russia in the short term, says Fitch, adding that the rising risk of Russian State banks being frozen out of dealing in dollar-denominated assets altogether, as bilateral relations remain strained, is pushing the Russian central bank to increase its holdings of gold.” In short, even as Russia rises to the top, most of its production will be kept within its borders as a monetary reserve asset. With the gold price rising consistently over the past few years, this strategy has proven to be a successful one for Russia’s central bank and its national balance sheet.

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

Gold regains the momentum as Fed announces ‘unlimited QE’ and Congress stalls on $2 trillion relief bill

(USAGOLD – 3/23/2020) – Gold regained upside momentum in early U.S. trading as authorities globally scrambled to contain the virus pandemic with draconian stay-at-home measures, stark warnings, massive bailout packages and unprecedented monetary stimulus. The Federal Reserve, according to a Bloomberg report this morning, announced it will unleash “unlimited QE” – essentially throwing everything including the kitchen sink at the developing economic shutdown.  Also fueling gold’s upside, the U.S. Congress put a hold on a $2 trillion national relief bill as talks stalled between Democrats and Republicans – a failure not likely to play well in financial markets. Gold is up $20 at $1519. Silver is up 23¢ at $12.86.

Sharps Pixley’s Ross Norman offered a few words of wisdom and encouragement over the weekend we thought worth passing along. “By my estimation,” he says, “gold is weighing up the longer term outlook for the US dollar, equities and perhaps most importantly treasuries – with half an eye on inflation. Fear is rarely a good motivation for buying gold as it seems we seem to become inured to the idea of being scared quite quickly – we get bored with it – so in our household Mrs Norman has simply banned discussions about CoronaVirus… and quite right too. Worry about what you can change. If it doesn’t sound too pompous, I see gold as the ‘grown up’ in the ‘financial’ room. The weather is inclement and has turned against us … but soon enough the sun will come out again.”

Cartoon of a ship named economy making its way through a minefield of coronavirusCartoon courtesy of Michael P. Ramirez

Chart[s] of the Day

Gold and silver past 12 months
(Percentage gain or loss)

Line chart showing gold's performance over past 12 months
Gold and silver year to date
(Percentage gain or loss)

Line chart showing gold and silver's performances year to date

Chart note:  For the record after the tumultuous past ten days, gold is up 14.2% year over year and down 1.2% year-to-date. Silver is down 29.23% year-to-date and 18.31% over the past 12 months. Global demand for both metals, according to press reports at the end of last week, has soared at the lower prices outpacing the production capacity of national mints and depleting retailer inventories.

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

Gold reverses to upside as governments, central banks battle coronavirus

(USAGOLD – 3/20/2020) – Gold reversed to the upside in overseas markets and early U.S. trading as governments ordered their citizens to hunker down, central banks from the smallest to the largest went on money printing sprees, and the Federal Reserve opened the dollar floodgates to global economies (on top of the massive liquidity measures it has taken domestically) – all in response to the still rapidly advancing coronavirus and the fear it has induced. If all of that weren’t enough, CNBC ran a headline article this morning warning “the upcoming job losses will be unlike anything the U.S. has ever seen.” Yellow metal is up $24 at $1495 this morning.  White metal is up 39¢ at $12.54.  On the week, gold is down $33 (-2.2%).  Silver is down $2.14 (-15%).

In his Seeking Alpha column yesterday, market analyst Clif Droke explained the psychology in the gold market during times of economic and financial stress. “When gold falls along with everything else in a selling panic,” he writes under the headline Gold Still Enjoys A Relative Strength Advantage, “the selling pressure on gold tends to be short-lived. Once investors regain their wits and realize that they threw the proverbial ‘baby out with the bathwater,’ they typically return to buying gold as safety demand is always highest in the wake of a financial market crash.”

Chart of the Day

line chart on the US Dollar Index showing last night's abrupt turnaroundChart courtesy of

Chart note:  The U.S. dollar abruptly reversed course in overnight trading on news of the California shutdown and growing fears of a recession.  Gold responded with an equally abrupt turn to the upside. Previous to the turnaround, a strong V-shaped rebound had surprised investors and analysts and contributed to gold’s weakness over the past several days.

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

Relentless paper selling drives gold price lower as coins and bullion disappear into private hoards

(USAGOLD – 3/19/2020) – An unusually demonstrative full-banner headline in this morning’s Financial Times says it all: Fear grips global markets as faith in interventions runs out …… Ignoring all else, the relentless selling of paper gold drove prices below the $1500 mark overnight to $1472 – down $27 from yesterday’s close.  Silver is down another 32¢ at $11.96.

To a large extent, gold’s performance over the past ten days is a reflection of the deflationary scare roiling financial markets.  As we mentioned in this report on Tuesday, the gloomy situation in financial markets and the global economy offers reasons to buy gold not sell it. The paper selling, however, continues unabated even as the premium on physical metal begins to climb and coins and bullion worldwide disappear into private hoards.

“Volatility remains the dominant scenario on markets with gold proving no exception,” says Carlo Alberto De Casa, chief analyst at ActivTrades, in a report published at Bloomberg. “We are seeing a positive (direct) correlation between stock markets and gold, which should not be a big surprise as every time there is a sharp market fall, many traders are using gold as their cash machine in order to keep other positions open that are being hit by margin calls.”

Chart of the Day

bar chart showing gold's real rate of return 2000 to present

Chart note: Since the turn of the new century, gold has consistently provided a real rate of return on investment when measured against inflation. In fact, it provided a real rate of return in thirteen of the nineteen years represented on the chart. That performance reinforces the metal’s historic reputation as the ultimate long-term store of value and protector of wealth.

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

Gold seesaws as investors worry about stimulus failure, take advantage of lower pricing to stockpile both metals

(USAGOLD – 3/18/2020) – Gold returned to the $1550 level yesterday during U.S. trading hours then gave most of it back in the overnight market as the potential for stimulus failure began to dominate investor thinking. It is now priced at $1501 – down $36 on the day.  Silver is down 58¢ at $12.22.

Gold Newsletter‘s Brien Lundin struck a positive note on gold in a client advisory yesterday. “Unlike the 2008 financial crisis,” he says, “where we were uncertain how long the turmoil would last and even if the global financial system would survive, we know that this crisis has an expiration date on it. It could be as little as three or four weeks, or as much as three or four months. It will end. And when the first light appears at the end of the tunnel, we’ll see today’s fear rapidly transform into greed. Investors will jump at the bargains in the broader markets and they will buy gold hand over fist in light of the rapid growth in the deficit and debt and the ongoing QE policies.”

Investor note:  Wholesalers are reporting rising premiums and the potential for supply bottlenecks on both gold and silver coins and bullion. At USAGOLD, we have had an influx of business over the past week with buyers taking advantage of lower pricing to stockpile both metals.

Chart of the Day

chart showing the investor cycle of emotionsClick to enlarge ••••••• Chart courtesy of OptionAlpha

Chart note:  The cycle of investor emotions……

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

Gold opens down after volatile trading session yesterday; Authers, Dalio offer food for thought

(USAGOLD – 3/17/2020) – After a day of extreme volatility in which the price swung in a $100 range between $1550 and $1450, gold settled roughly midway in that range at $1513. This morning it opened down about $22 at $1485 as speculators continued selling gold to meet margin calls in other financial markets. Silver is down 63¢ at $12.43 after trading as low as $12.10 in the overnight market.

We keep coming back in our own thinking to Bloomberg columnist John Authers’ comments of a few days ago: “On the face of it, sales of haven assets imply that some big players must be in trouble. That means they are willing to resort to selling anything they can, particularly if it realizes a profit. Rumors are rife. But if a large leveraged institution is in trouble, it could take the market mess to a new and far more dangerous level. If it is an unlevered sovereign wealth fund, that’s still alarming.”

Bridgewater Securities’ Ray Dalio registers similar concerns in a Linkedin analysis published yesterday. “Contrary to popular thinking,” he says, “the markets will have a bigger effect on the economy than the economy will have on the markets. For that reason, calculating who is in what positions and figuring out what they will need to do because they are in those positions (e.g., cut expenses, sell assets, etc.) is most important.”

These are reasons to buy gold, not sell it. Too, one would think that further selling would be limited to the number of profitable account positions still on the books.

Chart of the Day

Bar chart showing gold ETF holdings past 30 days

Chart courtesy of Gold Charts R Us

Chart note: Gold ETF’s – where funds and institutions go to buy and sell physical metal – do not appear to be the source of the liquidations driving down the gold price. That pretty much leaves the paper gold market the primary culprit, i.e., leveraged speculators selling either through the commodities exchanges or the London over the counter market. One would think, as mentioned above, that further selling would be limited to the number of profitable account positions still on the books. 

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

Gold, silver drop sharply in general financial meltdown

(USAGOLD – 3/16/2020) –  Gold and silver dropped sharply in overnight and early U.S. trading despite, or possibly because of, the Fed’s launching a $700 billion quantitative easing program and cutting interest rates by another half-point to counter the economic threats posed by the coronavirus.  Gold is trading at $1475 – down $55 on the day. Silver is down $2.10 at $13.53.

The metal has been pushed steadily lower over the past week by the deflationary scare rolling through financial markets even as safe-haven buyers accumulate the metal in physical form to hedge heightened risks in the financial system – a set of circumstances reminiscent of the 2008-2009 market dynamics. That deflationary scare has roiled stock, bond and currency markets across the globe today. Central banks and governments are scrambling to combat a general financial meltdown.

“Gold is being hit again with liquidation as the markets meltdown,” said veteran market analyst Adrian Day in Andrew Sykora’s Kitco column last Friday. “In these market panics, it is a source of liquidity. But once the panic liquidation subsides, even if the broad markets do not recover, gold will resume its role as a hedge and move up.”

Chart of the Day

line chart showing growth in Fed balance sheet since September 2019

USAGOLD note:  The growth in the Fed’s balance sheet since last September has been remarkable. Yesterday, however, the Fed outdid itself announcing the launch of a massive $700 billion round of quantitative easing.  Like previous iterations of quantitative easing, It will purchase U.S. Treasuries across the spectrum maturities and mortgage-backed securities. This massive injection of liquidity, intended to counter the economic damage wrought by the coronavirus, will take the Fed’s balance sheet well-past the old high of $4.5 trillion to nearly $5 trillion.

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

Gold plummets in overnight trading

No DMR today (Friday, 3-13-2020).

(USAGOLD – 3/12/2020) – Gold plummeted in overnight trading as markets attempted to digest a run of bad news on the virus and its effect on business and financial markets. It is down $30 this morning at $1614.  Silver is down 70¢ at $16.15.  Some are blaming the sell-off in gold on further position liquidations to meet margin calls in other markets. At the same time, ETF stockpiling of the physical metal has accelerated over the past few days – a sign that funds and institutions have anointed the yellow metal a chosen refuge from collapsing stock markets even as the price has dropped.

“Investor appetite for gold, a classic haven asset, has surged amid the coronavirus-led stock market sell-off and monetary easing by the global central banks,” reports FXStreet this morning. “Holdings in gold-backed exchange-traded funds (ETFs) surged by 55 tons in the previous three days, or 1.8 million ounces, accounting for almost a third of year-to-date inflows, according to a preliminary tally by Bloomberg. Notably, inflows into ETFs this year are already more than half of 2019’s total.”

Chart of the Day

overly chart showing gold, stocks and the dollar ytd 2020Chart courtesy of

Chart note:  Gold is up over 6% year to date even with its selloff this morning (7am MT) taken into account. The dollar is roughly level and the Dow Jones Industrial Average is down almost 17.5%. Gold still enjoys the benefit of safe-haven capital flows, as reported above. The dichotomy between physical demand and the price generated in the paper gold market, however, continues.

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

Gold pushes higher as Asian and European investors buy the dip

(USAGOLD – 3/11/2020) –  Asian and European gold investors bought the dip in overnight markets following yesterday’s correction to below the $1650 mark. Financial markets, in general, continue to reflect investors’ deepening concern over deflation and negative real rates. Volatility is high. Gold is up $16 on the day thus far at $1668 and regaining more than half of yesterday’s loss.  Silver is up 8¢ at $17.04.

Volatility in the paper gold market has both its virtues and its failings. One of the virtues is to present buying opportunities for those looking to accumulate the physical metal. In yesterday’s DMR, we featured a chart on the average price of gold annually since 1970 showing the relative stability in the price of gold year-to-year despite the occasional day-to-day volatility. That historical stability adds to the metal’s appeal as a long-term portfolio holding particularly during periods of negative real rates of return.

“The rate cut should further support gold investment demand,” says the World Gold Council’s Juan Carlos Artigas in a recently published report, “even if consumer demand softens. In fact, our research suggests that the gold price has historically increased by twice its long-term average in periods of negative interest rates, such as the one we are currently in. To that extent, investors may consider replacing part of their bond exposure with gold to help more effectively hedge stock market risk.” [Emphasis added.] In short, professional money managers buy gold when real rates turn negative – a circumstance that could increase demand for physical metal and give additional impetus to the developing buy the dip mentality.

Table courtesy of the World Gold Council – Click to enlarge

Chart of the Day

overlay chart showing surge in MZM relative to gold change in dollars

Chart note: Here is an update on a chart we have been monitoring over the past several weeks. It conveys a compelling message at this point in time – the developing correlation between gold and money supply growth as represented by MZM.  We have not focused on this relationship in years. The upward trajectory in MZM, a broad money supply measure, began in May and has been relentless ever since.  To what we owe this unexpected phenomenon remains to be determined, but our guess is that it has to do with both declining rates and commercial banks’ deployment of excess reserves.  Whether or not it will result in price inflation down the road (the Fed’s fervent wish) remains an open question, but, at the very least, we can say that money supply growth is showing some signs of life.

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

Gold takes a breather after the drama of past several days

(USAGOLD – 3/10/2020) – Gold took a breather this morning after the drama of the past several days including its attempt yesterday to breach the $1700 milestone.  It is down $2.50 at $1664. Silver bounced marginally higher – up 14¢ at $17.06.  “If there was ever any doubt that gold’s primary function is as a safety hedge against geopolitical and economic uncertainty,” says Clif Droke in his Seeking Alpha column, “the events of the last two weeks should satisfy even the most stubborn skeptic…[N]ow that market participants have had a chance to weigh the latest developments pertaining to the coronavirus – as well as the all-important interest rate outlook – it’s clear that the bulls still have control over gold’s intermediate-term (3-6 month) trend.”

Chart of the Day

Bar cjhart show gold's annual average price since 1970

Chart note: This long-term chart on the annual average price of gold since 1970 dispels the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as a reliable portfolio safe haven during times of rapidly changing economic circumstances.  The strong showing for 2019 is worth noting with the average price at $1392 per ounce.  Gold is trading at $1664 this morning – up 19.5% from 2019’s average price.

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

Full blown deflation scare rattles markets, gold hits $1700 then retreats

(USAGOLD – 3/9/2020) – A full-blown deflation scare rattled financial markets globally last night driving gold to $1700 temporarily before it thought better of it and retreated to price levels at the end of last week.  It is now trading at $1679.50 – up $6 and one of the few assets posting a gain this morning.  Silver is down 53¢ at $16.83 – fully reflecting the turn toward a deflationary bias. Stocks plunged 1300 points in overnight markets, the bond yield went below one-half percent, and commodities sank across the boards.  The culprit in all of this? Oil and the breakdown in talks to limit production between Saudi Arabia and Russia. Saudi Arabia responded yesterday with an announcement it would ramp up production and drop prices –  “a scorched earth policy” as one analyst quoted at CNBC put it. The price of oil promptly plunged. As we post this report, It is down almost 25% from Friday’s pricing.

Chart of the Day

Bar chart showing gold's annual returns since 2000 including year end 2019

Chart note:  Gold has produced positive returns in 16 of the last 19 years.  Its average annual return compounded since 2001 is 9.38%.  In 2019, it rose 18.3% – its best annual gain since 2010. A $100,000 investment in gold in January 2001 would have been worth about $565,000 at the end of 2019, and almost $625,000 at the end of trading yesterday.  Gold has been a solid investment over the past two decades.

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

Gold up $7 on the day, 5.8% on the week, 10.2% year to date and 31.3% over the past 12 months

(USAGOLD – 3/6/2020) – Gold reached highs near the $1690 mark in the overnight market then gave back some of those gains after trading opened in the United States.  It is now trading at $1682 – up $7 on the day. Silver is down 12¢ at $17.41. The yield on 10-year Treasuries went below .7% in overnight trading – a record low and further evidence of the massive market interest in safe havens. Gold is up 5.8% on the week and 10.2% on the year thus far.  It is up 31.3% over the past 12 months.

“Gold is doing super well even with the dollar unchanged over the past 14 months or so,” says Double Line’s Jeffry Gundlach in a CNBC Halftime Report interview, “and gold is at a record high in terms of the euro and many other currencies, and I feel it is almost a certainty that gold is going to go to an all-time high versus the dollar as well. Gold is performing well and the miners haven’t done well at all. . . . I think you have to look at alternative assets to financial assets in this type of environment and gold is the anti-dollar play that I think will continue to be profitable.”

Up until now, funds and institutions have led the dash for gold, but U.S. Mint sales of silver American Eagles thus far in March indicate a stirring of the long-dormant interest in precious metals among individual private investors.  It sold 750,000 of the popular one-ounce silver coins in the first five days of March compared to 650,000 pieces sold in all of February.

Chart of the Day

Overlay chart showing percentage gain in gold and USD Index over past yearChart courtesy of

Chart note:  This overlay chart illustrates the point Double Line’s Jeffrey Gundlach makes in today’s report. It charts the percentage gains in the dollar and the U.S. Dollar Index over the past 12 months.  Gold is up 30.43% and the Index is up .61%.

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

Gold pushes resolutely higher on litany of interrelated concerns

(USAGOLD – 3/5/2020) – Gold pushed resolutely higher this morning transcending the $1650 mark to trade at $1658 – up $21 on the day.  Silver is up 14¢ on the day at $17.32.  A litany of interrelated concerns continues to drive interest in gold with COVID-19, recession worries and the implications of the Fed’s emergency half-point rate cut topping the list. Also pushing prices this morning, the Fed repo market offer was oversubscribed yesterday indicating strong liquidity needs among financial institutions. Stocks are down nearly 800 points at the open and the 10-year Treasury yield dropped below 1%.

“We have seen seven emergency cuts before and gold has rallied on 26% on average during the first two years follow each of those events,” Ryan Giannotto, director of research at GraniteShares, told Kitco News in an interview yesterday. “It would be very unwise to rule out a move to $2,000 by the end of the year. . . Last year you could have sold all your bonds, put that money into gold and you would have seen better risk-adjusted returns in your portfolio. We have to stop seeing gold as a mythical investment and look at it as a mathematical asset.”

With that in mind, we invite you to review our Chart of the Day – gold’s real rate of return year by year since 2000.

Chart of the Day

Barchartshowinggoldrealrateofreturn 2000-2019

Sources: Bureau of Labor Statistics [BLS], International Benchmark Administration [IBA]

Chart note: At a time when investors have to go out on a limb to find real returns, gold has been a stellar performer. In fact, it has provided a real rate of return in twelve of the nineteen years represented on the chart. The period was one of subdued inflation. Gold’s performance, as a result, took many analysts and professional money managers by surprise and altered the perception that the precious metal is solely an inflation hedge. In 2019, gold posted its highest real rate of return since 2010 – 12.65% and it is off to good start in 2020.

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

Gold pulls back modestly from yesterday’s strong gains

(USAGOLD – 3/4/2020) –  Gold pulled back modestly from yesterday’s strong gains inspired by the Fed’s aggressive half-point rate cut.  It is trading at $1642 – down $4 on the day.  Silver is down 13¢ at $17.16.  The cut played to mixed reviews on Wall Street. Some lauded it as appropriate and needed. Others saw it as a futile gesture. The stock market itself read it as an admission that something might be seriously wrong with the global economy and promptly dropped nearly 800 points. Gold, as might be expected, reacted positively with a more than $50 gain in yesterday’s hectic trading. “Echoes of the financial crisis,” as Financial Times put it in an editorial this morning, “are not reassuring.”

The one mission the cut did accomplish, after all is said and done, is send a clear and unambiguous message that the Fed remains ready, willing and able to accommodate the markets with timely doses of easy money if and when the economy falters.  “This is where we are headed,” says Russel Napier, author of the cult classic, Anatomy of the Bear, in an interview with Bloomberg’s John Authers, “and helicopter money must come with financial repression – something I have written a 60-page tome on for clients. I cannot go through all those arguments, but gold is the stand-out asset class in a financial repression. So in the world of finance Covid-19 will be remembered not for the damage it did, but for the new form of cure it unleashed – particularly in Europe but also probably in Japan. Gold benefits from this shift for a very long time indeed.”

 The Authers-Napier interview is highly recommended.

Chart of the Day

Line chart showing two distinct eras for pre and post 1971

Chart note: We have had quite a few new visitors over the past few weeks who are looking into gold for the first time, and this chart more than any other, we feel, is central to understanding why gold continues to make sense as a long-term portfolio holding. When the United States abandoned the gold standard in 1971 and freed currencies to float against one another, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold backed the dollar, and the era from 1971 to present when it did not. Gold has had its ups and downs since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard.

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

Gold pushes back over $1600

(USAGOLD – 3/3/2020) –  Gold pushed back over the $1600 mark this morning in what looks like a response to oversold conditions and continued demand globally from safe-haven investors. It is up $12 on the day at $1604.  Silver is level at $16.82. A bland, non-committal statement from G-7 on the coronavirus crisis contributed to gold’s upside in the early going.

CNBC passes along a few comments this morning from Goldman Sachs commodities analyst Jeff Currie. “While so much about the current environment remains unclear,” he says, “there’s one thing that isn’t: gold, which—unlike people and our economies—is immune to the virus.” Gold, he says, “has outperformed other safe-haven assets like the Japanese Yen or Swiss Franc, a trend we see continuing as long as uncertainty around the full impact of COVID-19 remains.”

Gold has also outperformed stocks by a significant margin thus far this year as shown in the chart immediately below.  It is up 4.8% on the year while stocks are down 7.5% even after yesterday’s sharp move to the upside – a 12.3% swing.

Chart of the Day

overlay line chart showing gold silver and DJIA year to date

Chart note:  As of this morning, gold is up 4.8% year to date.  Silver is down 6.7% and the Dow Jones Industrial Average is down 7.5%. Even after Friday’s steep decline, gold is still up on the year and holding its own under trying circumstances for financial markets.

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

Gold retrieves part of Friday’s losses in erratic trading to start the week

(USAGOLD – 3/2/2019) – Gold retrieved a small portion of Friday’s $60 price drop in erratic trading to start the week. It is up $14 at $1600 after trading as high as $1610 in the overnight market. Silver is up 9¢ at $16.76. The markets are in quandary as to where to go next as recession concerns combine with mixed signals on both containment of COVID-19 and government/central bank action to blunt their near-term effect. “Now apparently the everything bubble for risk assets is in danger of deflating,” says Guggenheim Investments’ Scott Minerd in a client note. “The coronavirus is showing us the unpredictable path that an exogenous force can play in interrupting an economy that is already exhibiting many late-cycle symptoms. And it is far from over.”

Technical analysts are likely to take note of gold’s bounce to the upside after Friday’s steep slide.  As we mentioned in a post note Friday:  “The selloff in stocks is related to fears of a global virus contagion and an oncoming recession. The selloff in gold is related to speculators greening up to meet margin calls in the stock market. Of the two, which seems to be a temporary phenomenon and which the more permanent? Logic and common sense will ultimately prevail – particularly if the developing sentiment about the economy sticks and central banks move to blunt the first stages of a recession.”

Chart of the Day

Overlay ong-term chart of rising gold and falling purchasing power of dollar since 1970

Chart courtesy of the St. Louis Federal Reserve [FRED] / Source:  ICE Benchmark Administration Limited (IBA)

Chart note: Cause and effect in one simple, straightforward chart – the purchasing power of the dollar and the price of gold since 1971.

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