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Posted in Announcements, ClientInsights, Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion | Tagged |

Nobody saw inflation coming in the 1960s, but it could be back

CoinDeslDamanick Dantes

Repost from 3-18-2021

“Everything old is new again, and that includes investor complacency when it comes to inflation. Ian Shepherdson, chief U.S. economist for the forecasting firm Pantheon, thinks that complacency is due to the anemic pace of price increases in recent years. The same thing happened in the early 1960s – just before the double-digit inflation that spilled into the 1970s, he wrote in a report Monday.”

USAGOLD note: Inflation snuck up on the country in the 1960s, then exploded in the 1970s. Gold, after two U.S. dollar devaluations and a decade of runaway inflation, went from $35 to $650 using the London Fix as a reference.

Gold Price
(1965-1980, LBMA)

line chart showing the price of gold from 1965 through 1980

Sources: St. Louis Federal Reserve, ICE Benchmark Administration

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

The Fourth Turning: Why America’s crisis might last until 2030

Hedgeye/Neil Strauss

Repost from 5-4-2021

graphic image of walk in a deep, fearful wood

“To be clear, the road ahead for America will be rough. But I take comfort in the idea that history cycles back and that the past offers us a guide to what we can expect in the future. Like Nature’s four seasons, the cycles of history follow a natural rhythm or pattern. Make no mistake. Winter is coming. How mild or harsh it will be is anyone’s guess but the basic progression is as natural as counting down the days, weeks and months until Spring.”

USAGOLD note:  For those who, like me, buy into the notion of a fourth turning, the problem is to get to the other side of the woods with our assets reasonably intact. Strauss says that we will eventually find our way to a first turning – a time of renewal – but the fourth turning could extend until 2030. Physical gold and silver, as stores of value, have done well in the first stages of the fourth turning which began in 2008.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Goldman sees oil, gold, copper rallying over the next six months

NewsMax/Reuters

Repost from 5-15-2021

graphic image of a sitting bull“Goldman Sachs expects commodities to rally another 13.5% over the next six months on a worldwide reversal of coronavirus curbs, lower interest rates and a weaker dollar, its commodities research team said on Wednesday.”

USAGOLD note: Goldman forecasts a gold price of $2000 during that time period……

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Silver enters acceleration phase

Seeking Alpha/Peter Krauth

Repost from 4-26-2021

Photo stacks of silver bullion coins“Last time the five-year breakeven inflation rate was this high was in 2011 and silver was trading around $48/oz., almost double the current price. With precious metals seen as an efficient hedge against inflation, higher inflation expectations should provide upside for silver.” – Heraeus Precious Metals

USAGOLD note: Krauth interprets the stats in the Silver Institute’s World Silver Survey posted here yesterday, cites the increased premiums on silver bullion coins, and quotes various analysts on silver’s upside potential. We can vouch for supplies being tight and premiums continuing to rise. Volumes at USAGOLD are running consistently on the high side.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Thinking about buying gold and silver?


Gold in six easy lessons

1. Don’t buy it because you need to make money; buy it to protect the money you already have.

2. Don’t look at price as a barrier; look at it as an incentive.

3. Don’t buy the paper pretenders; buy the real thing in the form of coins and bullion.

4. Don’t fall prey to glitzy TV ads; do your due diligence instead.

5. Don’t allow naysayers to divert your interest; allow yourself the right to protect your interests as you see fit.

6. Don’t forget the golden rule: Those who own the gold make the rules!


Looking to prepare your portfolio for whatever uncertainty lies ahead?
DISCOVER THE USAGOLD DIFFERENCE
ORDER DESK: 1-800-869-5115 x100/orderdesk@usagold.com

ORDER GOLD & SILVER ONLINE 24-7

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Posted in ClientInsights, Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion | Tagged |

World Silver Survey 2021

TheSilverInstitute/MetalsFocus

Repost from 4-24-2021

image of silver bars with rising chart trend line in background“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.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Fed regime change – Reagan/Volcker to Biden/Powell

Bloomberg-Financial Advisor/John Authers

Repost from 4-21-2021

 

composite photos Vocker-Reagan-Powell-Biden

“Let’s make a big assumption. We really are in the process of not only a great shift toward reflation, but toward a new inflationary regime. What is this like, how can we tell, and what does the future hold?”

USAGOLD note (4/21/2021): Given the growing cadre of analysts agreeing that the Fed and federal government have launched a new era in monetary policy – one that embraces money printing and inflation – we thought it might be productive to revisit this important analysis from Bloomberg’s John Authers posted here originally on March 4th. Below is the original USAGOLD note that accompanied it. We encourage your visit to the link provided above.

USAGOLD note (3/4/2021): We have noted previously that as the current government/central bank policy mix is fully deployed, it might turn out that what the Reagan-Volcker team were to disinflation the Biden-Powell team might be to inflation. Authers explores that possibility in this essay.  In the process, he offers a few deep insights like this one from Alex Lennard of Ruffer LLP. “Volcker said he was going to tame inflation, unemployment be damned. Now it’s the other way around. I don’t think people have quite realized that you’ve had this huge change in the mandate of policymakers.” Although gold does not come up in this piece, Authers has mentioned it in previous writings. He does not come off in any way as an ardent gold advocate, but he does, it is clear, understand its uses in the contemporary portfolio.

“Inflation has no date of beginning. Inflation is the cancer of modern civilization, the leukemia of planning and hope; as with all cancers, no one can say when it begins or how fast it may spread. It is a disease of money, and when money goes, order goes with it. Inflation comes when a government has made too many promises it cannot keep and papers over the shortfall with currency which, ultimately, becomes confetti — and faith is lost.” – Theodore H. White, historian-political journalist,  “America in Search of Itself” (1982) As quoted by Authers at the link above.

As a companion read, we recommend yesterday’s post: Cryptos coming of age may kill bitcoin bubble. The content goes deeper than the headline indicates.

 

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Ned Naylor-Leyland: ‘Disinvesting’ with gold, and why silver is the original decentralised, disruptive money

MoneyWeek/Merryn Somerset Web-interviewer

Repost from 3-9-2021

gold coins against background of bar and line charts stacks

“Merryn Somerset Webb talks to Jupiter’s Ned Naylor-Leyland about why gold is the best way to safely ‘park’ your wealth; why silver is the original form of disruptive decentralised money; and why bitcoin isn’t a long term option.”

USAGOLD note: They talk about gold, interestingly, as the neutral investment that outperforms a good many money managers, hence the reference in the headline to ‘disinvesting’ with gold.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Central Bank of Hungary: ‘Gold is the ultimate store of value.’

Central Banking/Victor Mendex-Barreira interviews Robert Rekasi

Repost from 11-20-2020

Photo of pallettes of gold bars purchased by Hungary's central bank“It was a long-term national and economic policy strategy decision to increase the size of our gold holdings. The decision was driven by stability objectives; there were no investment considerations behind holding gold reserves. In normal circumstances, gold has a confidence-building feature, so it may play a stabilizing role and act as a major line of defense under extreme market conditions, in times of structural changes in the international financial system, or during deep geopolitical crises. The central bank also decided to repatriate overseas gold holdings. Holding precious metals within the country is consistent with international trends, enhances financial stability, and may strengthen market confidence in the Hungarian economy.”

USAGOLD note: Central banks, in short, hold gold for the very same reasons that private individuals do. Rekasi says central banks do not buy gold through ETFs but via over-the-counter transactions or through purchases from domestic producers. In other words, they buy the metal itself (not paper representations) for strategic safe-haven purposes and are not making a price bet. In this interview, Rekasi skillfully outlines the rationale for gold ownership in the context of the contemporary financial environment for individuals, funds and institutions alike.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Rainy day investment

Cartoon image of Dr. Moneywise with umbrella, rain falling“In an economy buffeted by the ups and downs of farming and fishing, the people [of India] are used to buying gold after bumper harvests or fishing seasons and selling it after lean ones.” –– Vivek Kaul, Live Mint

Dr. MoneyWise says:  “It’s all very simple.  Own gold for a rainy day.  Use it if and when that day arrives.”


Ready to make that rainy day investment?
DISCOVER THE USAGOLD DIFFERENCE
ORDER DESK:1-800-869-5115 x100/orderdesk@usagold.com

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Posted in Dr. Moneywise, Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion | Tagged |

Singer warns of trouble, eager to say ‘told you so’

Bloomberg/Katia Porzecanski and Nishant Kumar

Repost from 3-1-2021

graphic image of billionaire investors stacking bars of gold in a large vaultImage courtesy of VisiualCapitalist.com

“Offering a curmudgeonly riposte to today’s raucous financial markets, the 76-year-old billionaire said in a letter to clients of his $42 billion Elliott Management Corp. that a ‘flamboyant line-up’ of excesses will come back to haunt investors. To Singer, who has long warned of an ugly end to the Federal Reserve’s easy-money policies, it’s all just a bit too much.”

USAGOLD note:  Singer has long been a proponent of gold ownership. This article reports that Elliott (Singer’s investment fund) made money thanks to “a combination of portfolio-protection trades related to interest rates and gold, together with our core activities.” Given the billionaire’s mindset, we highly doubt he has given up on gold in this latest downtrend.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Roubini advocates gold as hedge against potential market correction

KitcoNews/Video Interview of Noriel Roubini

Repost from 5-12-2021

photo image of gold bars with colorful chart in background

“Valuations in risk assets continue to climb, which only strengthens the argument for rotating capital into defensive assets, such as gold, ahead of a potential market correction, said economist Nouriel Roubini, CEO of Roubini Macro Associate and professor at the NYU Stern School of Business.”

USAGOLD note: Roubini has skirted the issue of gold consistently over the years while citing at the same time very good reasons for owning it. In this interview, he finally advocates, for the first time to our knowledge, private ownership of gold. It is also interesting to note that Roubini sees bitcoin as more an adjunct to the stock market and a speculation rather than a digital alternative to gold and a true store of value. His evidence of that notion is that cryptocurrency tends to lose value faster than the general stock market during risk-off episodes. With recent stock market weakness due to inflation concerns, it will be interesting to see how cryptocurrencies respond if the situation evolves to full risk-off.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

The summer of inflation

Financial Times/Colby Smith and Tommy Stubbington

Repost from 5-17-2021

cartoon of a parliament of crows awaiting an opporunity to pounce

“It’s always been right to be sceptical when someone says ‘this is the year that inflation comes back’. But for the first time you can say this time is different. The pandemic might be the systemic earthquake that changes the inflation outlook we have been used to for the past 30 years.” –  Jim Leaviss, M&G Investments

graphic image of a book and reading glasses A Good Weekend ReadUSAGOLD note: Are we approaching the summer of our discontent? This FT Big Read says the world has gone on an explosive borrowing binge, with the U.S. having “gone the furthest.” In short, we very well could be in for some unforeseen consequences in the investment realm. If that be the case, how well we prepared this spring could turn out to be crucial. Franklin Templeton’s chief investment officer Sonal Desai is quoted as saying: “There is an entire generation of traders who have grown up investing in the post-global financial crisis world of no inflation. People shouldn’t underestimate how uncertain things will look if we are entering a new paradigm.” This opinion piece will serve as a good starting point for those looking to dig a little deeper into the potential fallout from a new inflation-based paradigm. It does not diminish or gloss over the role being played by the free-spending Biden administration nudged along by a compliant Fed.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Rare gold silver ratio cross suggests imminent breakout in silver

Seeking Alpha/Austrolib

Repost from 5-14-2021

graphic representation of an angry silver bull“Gold bugs know gold bottomed at $1,673 on March 8, but what has gone unnoticed is a key technical cross in the gold to silver ratio on the same day. On March 8, the 50WMA crossed below the 200WMA in the gold to silver ratio for only the 4th time in 31 years. Every time this has happened since 1993, silver went on a huge run. This next one could be the biggest of all since 1980.”

USAGOLD  note:  An unusual technical analysis yields strong results for future silver pricing that “could easily bring a combination of 1980 price inflationary and 2011 low-dollar-index factors pushing silver much higher past nominal highs of $50 this time.” The full analysis is worth a look at the link.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold’s massive, bullish cup and handle pattern

Gold Eagle/Robert McHugh,Ph.D.

Repost from 5-12-2021

“Gold has formed and nearly completed a Massive Cup and Handle Bullish pattern that started at its September 2011 peak and has continued through now, May 10, 2021. This ten-year pattern is nearly complete. This pattern has a minimum projected upside price target of $3,000. Gold closed Friday, May 7 at $1,831. This pattern is forecasting a nearly 1,200 point, 64 percent, rise from current levels – at least.”

USAGOLD note:   “A cup and handle price pattern on a security’s price chart,” says Investopedia, “is a technical indicator that resembles a cup with a handle, where the cup is in the shape of a ‘u’ and the handle has a slight downward drift. The cup and handle is considered a bullish signal, with the right-hand side of the pattern typically experiencing lower trading volume.”

Gold cup and handle formation

linechart showing gold cup and handle technical formation bullish bias

Chart courtesy of TradingView.com
Notation by USAGOLD after McHugh’s original as presented in the article linked above

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Druckenmiller: Dollar could lose global reserve status

CNBC/Jeff Cox

Repost from 5-15-2021

ramirez cartoon other people's money dropped from Air Force One

Cartoon courtesy of MichaelPRamirez.com

“If we’re going to monetize our debt and we’re going to enable more and more of this spending, that’s why I’m worried now for the first time that within 15 years we lose reserve currency status and of course all the unbelievable benefits that have accrued with it.” – Stanley Druckenmiller

USAGOLD note: Druckenmiller offers a reminder of what’s at stake in the monetary regime structured by Biden-Powell-Yellen – the three amigos of easy money. The Ramirez cartoon is an effective representation of what is happening in Washington these days.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Investors bet billions that metals bull run isn’t stopping

Bloomberg/Mark Burton

Repost from 5-12-2021

chalboard showing inflation pattern as chart with symbols for various currencies“A year into the red-hot bull run in industrial metals that’s lifted copper to record highs, investors are still piling in, staking billions of dollars that it won’t run out of steam any time soon.”

USAGOLD note:  All of this has to do with institutional investors (primarily) organizing their books on inflation expectations – which, if yesterday’s FRBNY survey of inflation expectations is any indicator, is perfectly justified. That survey showed the expectation that inflation would be 3.4% this time next year – and perhaps even that is on the low side. We suspect that the run to commodities will continue.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

The real driver for higher gold prices

graphic image showing a sharp second leg to double dip recessionPalisades Gold Radio/Interview of Lyn Alden

Repost from 5-6-2021

USAGOLD note: We see Lyn Alden as a bright light among young market commentators and post this interview as an example of her insight and analytical skills. Our readers are likely to appreciate her no-nonsense, down-to-earth approach. She thinks that real yields are the strongest indicator of where gold is headed and tells why in this interview.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Why Billionaire Sam Zell bought gold for the first time

Bloomberg/Video Interview

Repost from 5-6-2021

graphic image of billionaire investors stacking bars of gold in a large vault

“Billionaire Sam Zell says concerns over U.S. inflation and the dollar have led to his purchase of gold as a hedge for the first time last year. ‘When you see the debasement of the currency, you say, what am I going to hold on to?’ Zell says in an interview on ‘Balance of Power.'”

USAGOLD note: Billionaires own gold for the same reasons the rest of us do: It is the portfolio’s go-to guy when the chips are down.


Image courtesy of VisualCapitalist.com

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Wall Street pros from Goldman to JPMorgan on new inflation era

Bloomberg/Anchalee Worrachette

Repost from 3-24-2021

cartoon image of gold piggy bank by Ed Stein

“It’s the invisible force rocking Wall Street: An inflation revival for the post-lockdown era that could change everything in the world of cross-asset investing. As America’s dalliance with run-it-hot economics sends market-derived price expectations to the highest in more than a decade, Bloomberg solicited the views of top money managers on their make-or-break hedging strategies ahead.”

USAGOLD note: Most of the inflation-proofing strategies outlined by analysts from some of Wall Street’s most prestigious firms include real assets, gold, commodities, et al.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Silver and gold price breakout to accelerate in an abnormal way – Michael Oliver

YouTube/Michael Oliver

Repost from 3-25-2021

“We added in late 2018 to our bullish view and then the price broke out. If you look at a gold chart to go back several years you’ll see this big basing action where gold labored with all of its highs being about $1350. It couldn’t get through there. Multiple rallies failed and in 2019 it finally punched through. Silver did the same thing in July of last year. Now these are fresh massive base breakouts. We’re talking bases that go back years…You don’t punch through something like that and then say ‘Oh. It’s all over. I’m going back down again.’ This is a huge base for gold, a huge base for silver, and we think the bull trend is likely to extend for a couple more years at least and probably extend in a way that is not normal.”

USAGOLD note:  We are always interested in Michael Oliver’s current thinking on the precious metals markets. We agree with this profile of Oliver posted by one of the viewers: “Mr. Oliver is one of the very best analysts out there, most are not worth anything, but a very few like him are quite worth listening to. He also isn’t afraid to take a stand and place his bets on his opinions, unlike just about every newsletter guy out there!” He says the upside moves in gold and silver will be “far more accelerated, far more dramatic” than they were in the 1970s.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Metals research firm says investors will hoard gold in record amounts in 2021

Reuters/Peter Hobson

Repost from 10-24-2020

gold coins against background of bar and line charts stacks

“Demand for gold from jewellers and central banks will remain sharply lower in 2021 than before coronavirus, but investors will keep prices high by stockpiling record amounts of bullion, Refinitiv Metals Research said.”

USAGOLD note: As the saying goes, there is no rush like a gold rush and Refinitiv thinks one is brewing for 2021. It sees investor demand for coins and bars swinging from a 6% decline in 2020 to a 13% gain in 2021. And if a blue wave rolls into Washington DC that 13% predicted increase might be seen as modest. Refinitiv is one of the top research firms in the field of precious metals.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold Demand Trends – Q1 2021

World Gold Council/Staff

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.

stacked bar chart showing retail investment demand by category year by year
Chart courtesy of the World Gold Council

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

‘You’ve got to be in these precious metals’: Mark Mobius names his top commodity investments

CNBC/Natasha Turak

Repost from 3-19-2021

photo image of stacks of gold and silver coins

“Mobius, the longtime executive chairman of Templeton Emerging Markets Group and founder of Mobius Capital Partners, says he views these particular metals as a form of ‘currency,’ and outlined just how much of your portfolio should be allocated to them in an exclusive interview with CNBC Pro Talks on Wednesday.”

USAGOLD  note:  Mobius goes on to name gold and silver as topping his list of commodity investments saying he is a “big fan of these precious metals.”

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Yield curve controls ‘will likely send gold soaring to new highs’

Seeking Alpha/Austrolib

Repost from 3-18-2021

“In order to embark on yield curve control in the first place, the Fed will first have to allow primary dealer banks in the US Treasury market to continue to expand their balance sheets. It has until March 31 to get this done, or there could be serious trouble in the Treasury markets. Both JPMorgan (JPM) and the Securities Industry and Financial Markets Association – SIFMA – have made it very clear that without regulatory relief by the end of the month, primary dealers in US Treasuries may not be able to continue serving as market makers in the world’s benchmark interest rate market.”

USAGOLD note: This article is for the market watchers looking for a deeper understanding of what’s going on with major Wall Street players in the bond and gold markets. The long-term association between the real rate of return on Treasuries and the gold price is shown in the chart below. Gold rises as the real rates fall and falls when real rates rise. At present, as Austrolib points out, the Fed appears poised to control yields as signs of inflation begin to show up in the economy.

overlay chart showing 10Year TIPS real return and gold 2000-2021
Sources:  St. Louis Federal Reserve, Federal Reserve Board of Governors, ICE Benchmark Administration

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Chief Citi equity strategist sees ‘worrisome parallels’ to 1999

Financial Times/Tobias Levkovich

Repost from 4-26-2021

“The last time we saw such an upbeat zeitgeist that did not coincide with an immediate equity market correction was in 1999 when the dotcom bubble was in full bloom.”

USAGOLD note: The NASDAQ 100 peaked in 2000 at 5000. By January 1, 2001 it stood at 2500 – a 50% decline. It finally bottomed in 2002 at just over 1000 – an 80% decline from the top. If the current NASDAQ 100 were to experience a similar decline today, it would go from the current index value of 14,000 to 2,800. Citi’s Levkovich notes that at the present “vulnerabilities exist and therefore chasing the rally does not appear to be prudent now.” The 1999 sell-off was not a storybook crash that began with a big bang. It began with a thud and then unfolded over a grueling two-year period. It did not revisit the previous high for fifteen years (February 2015).

NASDAQ 100 dot-com bust
(1994 -2005)

area chart depicting the 2000-2002 crash in the NASDAQ

Chart courtesy of WikimediaCommons • • • Click to enlarge

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Tremendous potential for gold in 2021

Singapore Bullion Market Association/April 2021

graphicimage of gold coins and charts superimposed“There is tremendous potential for gold to grow further, particularly among institutional investors. There are many that are not invested in gold, and the World Gold Council is doing a lot to promote its benefits.” – John Reade, chief market strategist, World Gold Council

USAGOLD note: Reade also pointed out that gold will find a market among those looking to hedge risk and that it is not losing market share to cryptocurrencies as is so often claimed.

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Beyond CPI: Gold as a strategic inflation hedge

World Gold Council/Staff/April 2021

overlay line chart showing gold and M1 money supply drawn in log scale 1970 to present

Sources: St. Louis Federal Reserve, Federal Reserve Board of Governors, ICE Benchmark Administration
Click to enlarge

“A broader metric than CPI may be more adequate to measure true inflation. [I]f we use a broader measure than CP the evidence suggests a stronger and more consistent relationship [between gold and inflation]. This has two important implications: gold is a global asset and a hedge against not just the price of goods and services but also the erosion of purchasing power in general – be that against property, collectibles, or financial assets that are excluded from CPI indices. It is also a hedge against the debasement of a currency should the value of that currency be slowly eaten away as supply is increased…Money supply is closely linked to nominal GPD growth and may reflect this important consumption dynamic as well as the inflation dynamic.”

USAGOLD note: We cited this report in yesterday’s DMR and repost it here for those who may have missed it. All in all, we see this approach as rather ingenious. With inflationary concerns moving to the forefront, a handful of analysts have made strained attempts to show that gold is not truly an inflation hedge – an endeavor that generally requires the manipulation of timelines and statistics to make the point. The World Gold Council takes an approach in this study that uniquely circumvents the issue by acknowledging the post-2008 era of quantitative easing. The chart above illustrates the point the World Gold Council makes in the snippet above. It is drawn to log scale and, as a result, provides a truer representation of monetary growth and its relationship to the gold price.

 

 

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Why Italy’s central bank holds gold bullion

Banca d’Italia/Statement/Undated

Repost from 12-11-2020

‘Gold is an excellent hedge against adversity. Its price tends to rise when operators perceive the level of risk to be high, for instance during military escalation or, more often, financial crisis, when financial instruments, especially high risk ones like shares, plummet in value but gold tends to rise in price. Incorporating gold into a financial portfolio is a way of hedging against high-risk scenarios, however unlikely.”

USAGOLD note:  Why do central banks hold gold? By and large, they hold it for the same reasons you and I do. Bank of Italy’s clearly stated rationale is worth a full review at the link ……

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Fred Hickey interview: ‘What are we trying to do here? Protect ourselves against debasement.’

The Grant Williams Podcast/Interview of Fred Hickey

Repost from 12-7-2020

graphic image of gold flagsUSAGOLD note: Grant Williams and Bill Fleckenstein interview a newsletter writer we have featured here on occasion, Fred Hickey (The High Tech Strategist). The interview includes his controversial, and persuasive position on bitcoin (which is not favorable). He also spends a great deal of time on the gold market including what is behind the “perverse” sell-off of the past several months. We think you will draw much wisdom from this interview. “It looks like a perfect environment for gold,” Hickey says. “What are we trying to do here? Protect ourselves against debasement.”

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Keep 10-15% of assets in physical gold, avoid Bitcoin: Mark Mobius

The Economic Times/Staff

Repost from 4-19-2021

graphic image of group of green flags“However, gold at this level sounds like a good investment. In fact, I have added some gold to my own portfolio because I think it has reached a sort of turning point where we are going to see a recovery in gold prices. But even if you are not following gold on a day-to-day basis, from a long-term point of view, you are better off with 10% or 15% of assets in physical gold.”

USAGOLD note: The highly respected Mr. Mobius weighs in on the gold-bitcoin debate…… He turned bullish on gold a couple of years ago recommending it as a holding during numerous media interviews. Needless to say, those following his advice thus far have been greatly rewarded.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Case for holding gold – the Lombard Odier view

WealthBriefing/Stephand Monier

Repost from 7-22-2020

graphic image of gold king chess piece“At these levels, why own gold in a portfolio? The combination of low-to-negative government bond yields plus a weakening US dollar, and, most importantly, massive central bank accommodation, supports financial demand. This relationship between gold and real yields has held for the last decade and recent central bank interventions have reinforced the case for holding gold as a portfolio diversification tool. In addition, as investors consider the pandemic’s longer-term implications, they are likely to look harder at their exposure to sovereign debt and the solvency of indebted governments. This further increases the attractiveness of gold, which, even if it produces no income and is costly to store, carries no credit risk.”

USAGOLD note:  Lombard Odier, founded in 1796, is a private Swiss banking firm that manages about $250 billion in assets for private individuals and other institutions.  It is now recommending gold ownership to its clientele.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold prices have been struggling, but the path of least resistance is up

MarketWatch/Mark Hurlbert

Repost from 4-6-2021

graphic image of hour glass with gold dust running through it“Gold has continued to struggle over the last couple of months, and the gold timers have responded by becoming more pessimistic and dejected than they already were then [two months ago]. That leads contrarians to be even more confident than they were in early February that gold’s path of least resistance is up.”

USAGOLD note: Hurlbert includes his own chart on gold sentiment in this article. Worth a visit, particularly if you are a contrarian investor looking for for an entry signal.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold is getting that inflation feeling again

Bloomberg/John Authers/3-31-2021

photo image of stack of American gold eagle coins

“For those who think that the bond market has given us a head fake, and that yields will consolidate or even fall over the next few months and years, gold looks like an interesting way to play that. If the inflation scare takes greater hold and 10-year real yields rise, gold looks at risk of a true bear market. But, as in August, nothing matters more than how the economy emerges from the pandemic and the resulting effect on bond yields.”

graphic image of a book and reading glasses A Good Weekend ReadUSAGOLD note: It isn’t yields alone we should be monitoring but the real yield – that is the yield after inflation is taken into account. At the moment, the real yield on the 10-year Treasury is running in the negative. (Please see chart below.) That should be good for gold. The mystery is why the opposite has occurred since early January. Certainly, real yields are in a minor uptick at the moment, but the overall trend is unambiguously to the downside. Thus far, we have not seen a good explanation for gold’s price behavior since early January. Analysts, though, might be looking in the wrong place. Gold’s slide might have occurred for the most simplistic and straightforward of reasons. It might be correcting naturally from overbought conditions at the end of a two-year, 70% price run-up (from $1195 to over $2035). A correction back below $1700, or even lower, is not unreasonable in that context.

overlay chart showing the real rate of return on 10-year Treasuries and the price of gold since 2000

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

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold, commodities and reflation

World Gold Council/Johan Palmberg

Repost from 3-25-2021

“A commodity rally began in Q2 of 2020, sharply on the heels of the COVID-19-driven broad market sell-off. It started with metals, followed by energy, and, by the summer, agricultural commodities had joined in. Investors have waited more than a decade for this type of commodities rally but perhaps their patience is about to be rewarded. The recent market moves – between August 2020 and February 2021 – now rank in the top 5% of six-month moves since 1971 and, with a 30-year low as a base, this suggests they could have further to go.”

USAGOLD note: The World Gold Council’s Palmberg offers solid statistical evidence and charts to back up claims from several top-notch analysts that we have entered a secular bull market in commodities. He says that gold’s “underperformance” thus far is consistent with other episodes of reflation in that a strong rise in the price of gold preceded the commodities runups. In past episodes, he says, gold has played catch up with commodities in the second or third year of the uptrend.

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

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold goes out of style

The Felder Report/Jesse Felder

Repost from 3-25-2021

photo stack of modern gold bullion coins

“Recently, nominal interest rates have been rising faster than inflation creating a headwind for the gold price. However, there is good reason to believe that this trend could soon shift and become a strong tailwind for the gold price again. The rise in rates has already been dramatic and there is reason to believe it may be nearer to its end than its beginning. At the same time, inflation appears to be on the verge of picking up once again. If so, real rates will fall and gold will likely resume its uptrend.”

USAGOLD note: This insightful short analysis from Jesse Felder is the perfect accompaniment to the post immediately below. Even if bond yields rise, a rising inflation rate could drive considerable safe-haven demand in gold’s direction. It is difficult to believe, it requires saying, that the items pictured above are going to go out of style any time soon – not as long as the federal government is running deficits to the moon and the Federal Reserve is printing money to cover them. The chart below comparing the real rate of return on the 10-year Treasury to the price of gold since 2000 clearly shows the relationship Felder discusses in his analysis. As you can see, the turn higher over the last few months in real rates is a small blip when compared to the dominant trend.

overlay chart showing the real rate of return on 10-year Treasuries and the price of gold since 2000

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

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Goldman Sachs says commodities rally is ‘the beginnning of a new structural bull market’

TheInvestmentOfficer/Larry Light

Repost from 3-23-2021

graphic image of an arrow of circles signifying cycles“Dare anyone say we’re at the outset of another commodities super-cycle? Well, at least the outlook in this area is darn good. Already, the S&P GSCI commodities index is up 76% over the past 12 months and 16% thus far in 2021.”

USAGOLD note:  The latest from Goldman’s Jeff Currie on the commodities super cycle ……

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Gold and U.S. dollar hegemony

YahooFinance!/Kelsey Williams/3-19-2021

Ed Stein cartoon graphic of gold bar flying a dollar kite“The possibility of gold reasserting itself as the international medium of exchange continues to increase; but, a lot more bad stuff has to happen before we get to that point. Also, governments around the world have too much at stake to capitulate when it comes to ceasing to issue ‘funny money’. For the time being, let’s focus on things as they are.”

USAGOLD note: I have always put considerations of some sort of great reset on the back burner as pretty much a waste of time. If gold is going to be used in the international monetary system as something other than an alternative reserve asset – which is the way things are headed – it is going to take an agreement on how to value it and how much of it each nation-state is going to own. That discussion – let alone an agreement – is a long way away, so focusing on things as they are seems a much more practical undertaking. Williams offers some solid background thinking on the relationship between currencies and gold – with the dollar as the centerpiece.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Silver Institute forecasts 11% increase in silver demand in 2021 – over one billion ounces

The Silver Institute

Repost from 3-2-2021

image of silver bars with rising chart trend line in background

“Going forward, the outlook for the silver price in 2021 remains exceptionally encouraging, with the annual average price projected to rise by 46 percent to a seven-year high of $30.00. Given silver’s smaller market and the increased price volatility this can generate, we expect silver to comfortably outperform gold this year.”

USAGOLD note:  We referenced this Silver Insitute report in Friday’s DMR and repost it here for those who may have missed it.  We include an interesting chart with that report which you might want to take a look at.

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Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |