Central banks have been big buyers of gold for over 10 years. Here is why they do it.

BusinessInsider/Saloni Sardana

cartoon image of gold piggy bank by Ed Stein“GraniteShares’ [Ryan] Giannotto said: ‘Oftentimes, central banks will purchase sovereign bonds or foreign currencies for their balance sheets, but gold is simply an alternative asset to accomplish the same goal – make their currencies credible in the eyes of global markets.'”

USAGOLD note:  Also, gold plays the same role in a central bank’s asset structure that it does in private investment portfolios – as the ultimate store of value and asset of last resort. One aspect of the official sector gold mobilizations often overlooked in the discussion is the repatriation movement.  Those that don’t have it want it. Those that already have it increasingly want it stored inside their own national borders and not on deposit elsewhere.


Repost from 8-16-2020

Posted in Today's top gold news and opinion |

Two giant gold nuggets worth $250,000 found in Australia

CNNTravel/Jack Guy

photograph of a large gold nuggetThe nuggets have been valued at $250,000. The nuggets could fetch up to 30% more than their estimated value by weight if they are sold to a collector, according to the release. “I reckoned we were in for a chance,’ Shannon told Australian breakfast chat show Sunrise. “It was in a bit of virgin ground, which means it’s untouched and hasn’t been mined.’ The pair had been waiting months for a permit that would allow them to start searching for gold in the area, according to the release.”

USAGOLD note:  Nice find …… How do you spend your Saturdays?


Note:  Nugget shown not one of the nuggets found/described in article.


Repost from 8-23-2020

Posted in Today's top gold news and opinion |

A ‘shocking, spectacular and disorderly’ market crash looms, investor warns

MarketWatch/Shawn Lanlois

graphic image of hand holding pin about to prick balloon“As an investor who navigated the historic bubble in Japan decades ago, Parlin said that he’s “experiencing déjà vu” in the current top-heavy climate. ‘Back then, anything with a whiff of exposure to real estate was at the centre of speculation,’ he explained. ‘Now, the hottest sectors in America are nearly all disruptive technologies.'”

USAGOLD note:  Andrew Parlin navigated the stock bubble in Japan decades ago and sees similarities in the current U.S. market. He also caught the attention of Society Generale’s Albert Edwards with his analysis originally published in Financial Times. Two good reasons to pass along MarketWatch’s review of the FT op-ed at the link above.


Repost from 9-8-2020

Posted in Today's top gold news and opinion |

Chinese investors believe in gold

World Gold Council/Staff/September 2020

graphic showing level of interest in gold among Chinese retail investors“China is a market of active retail investors with a strong affinity to gold. And there is a sizable pool of potential new investors. Our unique insights reveal opportunities for the gold investment industry to reach this audience, grab their interest and expand the market.”

USAGOLD note:  This survey is aimed at the gold industry itself as an encouragement to pursue latent gold demand in China, but it carries implications for current and would be Western investors as well. Tapping this huge market could lead to stronger demand, higher prices.  “24% of retail investors,” says the WGC, “have never invested in gold but say they would now consider doing so.”


Graphic image courtesy of World Gold Council


Repost from 9-9-2020

Posted in Today's top gold news and opinion |

No DMR today

We will post an update later if anything of interest develops.

Posted in Today's top gold news and opinion |

Notable Quotable

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“We live in a technological golden age but in a monetary and fiscal dark age. While physicists discover the so-called God particle, governments print and borrow by the trillions. Science and technology may hurtle forward, but money and banking race backward.”

James Grant
Grant’s Interest Rate Observer

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Posted in Notable Quotable, Today's top gold news and opinion |

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Posted in Announcements, ClientInsights, Today's top gold news and opinion | Tagged |

Druckenmiller worries about the stock market in an ‘absolute raging mania’

CNBC/Fred Imbert

The stock market is in a mania fueled by the Federal Reserve and investor speculation that will end badly in coming years, longtime hedge fund manager Stanley Druckenmiller told CNBC on Wednesday. ‘Everybody loves a party … but, inevitably, after a big party there’s a hangover,’ the billionaire CEO of the Duquesne Family Office said in a “Squawk Box” interview. ‘Right now, we’re in an absolute raging mania. We’ve got commentators encouraging companies to do stock splits. Companies then go up 50%, 30%, 40% on stock splits. That brings no value, but the stocks go up.’”

photo image of a swarm of gnatsUSAGOLD note:  Druckenmiller’s surprising assessment brought to mind a quote from another stock market speculator who warned off market mania a long time ago:

“Have you ever seen in some wood, on a sunny quiet day, a cloud of flying midges — thousands of them — hovering, apparently motionless, in a sunbeam? …Yes? …Well, did you ever see the whole flight — each mite apparently preserving its distance from all others — suddenly move, say three feet, to one side or the other? Well, what made them do that? A breeze? I said a quiet day. But try to recall — did you ever see them move directly back again in the same unison? Well, what made them do that? Great human mass movements are slower of inception but much more effective.” – Bernard Baruch, Wall Street financier (1870-1965)


Repost from 9-9-2020

Posted in Today's top gold news and opinion |

Deep background on the eastern Mediterranean crisis from Financial Times

Financial Times/David Sheppard, Laura Pitel and Michael Peel

map of the eastern Mediterranean Sea, including Cyprus, Turkey and GreeceClick to enlarge

“Competition over gas discoveries in the eastern Mediterranean has combined with bitter regional rivalries to fuel dangerous tensions between Turkey and its neighbours in recent months. Many fear this could lead to direct military confrontation between Turkey and Greece, as the two Nato members and their allies square up over control of the seas.”

USAGOLD note: You probably have at least seen the headlines on trouble brewing between Turkey and Greece in the waters around Cyprus.  Few though know what’s behind the row and what’s at stake. This FT in-depth article will shed considerable light on the subject for those with an interest.


Repost from 9-9-2020

Posted in Today's top gold news and opinion |

World’s ultra-wealthy go for gold amid stimulus bonanza

Reuters/Brenna Hughes Neghaiwi, and Simon Jessop

photo–1907 high relief reverse United States“As stock markets roar back from the coronavirus-led rout, advisers to the world’s wealthy are urging them to hold more gold, questioning the strength of the rally and the long-term impact of global central banks’ cash splurge.”

USAGOLD note: There was a time when gold was considered a marginal choice on Wall Street. Over the past several years, it has become increasingly mainstream with a good many fund managers and investment advisors consistently touting it as a necessary inclusion in the well-balanced investment portfolio.


Repost from 6-20-2020

Posted in Today's top gold news and opinion |

Fed doesn’t want to ‘run through the bond market like an elephant’ – Chairman Powell

CNBC/Jeff Cox

photo image of elephant - imposing full frontal“It’s out of an excess of caution to preserve these gains for market function by following through,’ Powell said during his semiannual testimony before Congress. ‘I don’t see us wanting to run through the [corporate] bond market like an elephant snuffing out price signals, things like that.’”

USAGOLD note:  The elephant in the room does not want to come off like … well … like the elephant in the room.


Repost from 6-16-2020

Posted in Today's top gold news and opinion |

We’re headed toward stagnation – unless the Fed reins in its money printing

Mises Institute/Frank Shostak

photo of $100 bills rolling off the printing press at the Bureau of Engraving and Printing“According to most experts, when an economy falls into a recession the central bank can pull it out of the slump by pumping money. This way of thinking implies that money pumping can somehow grow the economy. The question is, How is this possible? After all, if money pumping can grow the economy, then why not pump plenty of it to generate massive economic growth? By doing that central banks worldwide could have already created everlasting prosperity on the planet.”

USAGOLD note:  Some simple, straightforward logic and a point well-taken from Applied Austrian School Economics’ Frank Shostak ……  It is the adverse consequences to putting on the monetary brakes that worries the Fed, the White House and Wall Street and that is the main motivation for keeping the monetary printing presses rolling. Shostak recommends the opposite, but few believe that will happen anytime soon.


Repost from 9-9-2020

Posted in Today's top gold news and opinion |

Short and Sweet

Yap stone money inflation

photo of yap stone money in various sizes
Monetarily speaking, everything progressed smoothly on the island of Yap where large stones weighing hundreds of pounds were transported around to serve as money. That is until something unforeseen happened to the value of the money. For centuries, the stones served in exchange because there wasn’t much of this type of rock on Yap itself. The depreciation of the stone money began when an enterprising Western businessman realized he could produce stone money cheaply and in copious quantities on a neighboring island and transport it to Yap, where it could be used to procure goods in demand elsewhere. In other words, this oceanic cousin of John Law printed Yap stone money to buy his wares at what might be called a “favorable” discount. By this process, the yap stone money was debased until it became worthless. Little did the citizens of Yap know that they were deprived of their wealth, and their money destroyed, by the process of monetary inflation.


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Posted in Short and Sweet, Today's top gold news and opinion | Tagged |

The dominance of the US dollar is called into question

WorldFinance/Charlotte Gifford

graphic image of stacks of hundred dollar bills“Only once before has a dominant currency been unseated, when the dollar took over from sterling. Such a dramatic shift in the global geopolitical order is unlike to arrive any time soon; in fact, for now, the pandemic will strengthen the currency’s dominance. But the weakening of the dollar suggests that this geopolitical order is nonetheless beginning to fray at the edges. The US should treat it as a warning. By relinquishing global leadership and damaging the credibility of its own institutions, the US risks forfeiting its “exorbitant privilege” once and for all.”

USAGOLD note: As in Hemingway’s The Sun Also Rises:  “How did you go bankrupt?  Two ways.  Gradually, then suddenly.” So it can happen with a reserve currency.


Repost from 9-9-2020

Posted in Today's top gold news and opinion |

Gold pushes higher ahead of Fed meeting; CNBC survey reveals high Wall Street expectations for stimulus measures

(USAGOLD –9/15/2020) – Gold continued to push higher in the wake of Treasury Secretary Mnuchin’s cautioning of the Fed and Congress that “now is not the time to worry about shrinking the deficit and the Federal Reserve’s balance sheet.” Mnuchin’s unusual appeal comes ahead of the Fed’s meeting and press conference tomorrow and amidst the ongoing wrangle in Congress over a fiscal spending package. Wall Street, for its part, expects trillions more in stimulus from the Fed and Congress, according to a CNBC survey released this morning. Those expectations look like they might be spilling over to the precious metals markets. Gold is up $11 in today’s early going at $1971. Silver is up 38¢ at $27.60.

“What we are witnessing,” writes economist and fund manager Daniel Lacalle in an essay at the Mises Institute website, “is a generalized fiat currency debasement through extreme monetary policy. That is the reason why gold and silver continue to rise despite hopes of an economic recovery that seems to be stalling. The US Dollar will likely remain the most demanded fiat currency, but the excessive monetary stimulus will ultimately damage the confidence in most fiat currencies.”

Chart of the Day

bar chart showing additions to the national debt with Q2 being off the chart

Chart note:  The addition to the national debt through the first two quarters of this year is a record-breaker – over $3.2 trillion – the result of plummeting revenue and soaring expenditures.

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

NEWS &VIEWS
Forecasts, Commentary & Analysis on the Economy and Precious Metals
Celebrating our 46th year in the gold business

SPECIAL REPORT


Hedging the decline and fall of a currency
The baseline case for gold
hasn’t changed much in 1700 years

cover of the novel The Burning Stone by Jack Whyte

Book Review 

“We sometimes forget that inflation is a process rather than an event. One of the better-known examples of that axiom is the nearly two centuries-long debasement of Rome’s silver denarius – an inflationary episode Jack Whyte, a writer of historical fiction, skillfully addresses in his latest novel, The Burning Stone ……

Over the long run, gold in the modern era has maintained its purchasing power as it did in Roman times, while the dollar, like the denarius, has been steadily debased. So it is by the circuitous route just taken, you now know how Jack Whyte’s depiction of the Roman inflation in The Burning Stone reinforces the argument for gold ownership today.  It also explains why we went to the trouble of presenting a review of this intriguing book in our monthly newsletter.”

March 2020 edition of our monthly newsletter

We think you will appreciate this  News & Views Special Report given recent events!


If you think you could benefit from a concise review of the latest news, analysis and opinion on the gold market from a variety of expert sources, then News & Views is the newsletter for you. Since the early 1990s, we have offered it free-of-charge as a monthly service to our regular clientele and as an incentive to prospective clients at no obligation. By subscribing, you will automatically receive future editions and occasional in-depth Special Reports by e-mail.

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Posted in Announcements, Today's top gold news and opinion | Tagged |

OPINION – Barrick Gold: It’s a trap

Seeking Alpha/The Value Trend

“Barrick Gold Corporation has made headline news due to its becoming the latest holding in Berkshire Hathaway’s portfolio. This has made many reconsider the role of gold and the importance of gaining exposure to the yellow metal as part of a well-balanced portfolio. Nonetheless, I believe there are many reasons to stay away from gold miners, and instead of buying gold outright.”

USAGOLD note:  Some interesting footnotes to Berkshire Hathaway’s purchase of Barrick Gold Corporation shares ……

overlay chart showing the permormance of gold bullion versus gold miners over the past 20 yearsChart courtesy of Seeking Alpha • • • Source: BMG Group • • • Click to enlarge


Repost from 9-8-2020

Posted in Today's top gold news and opinion |

‘Slipping into madness’: The comparisons to the 1920s and 1930s are just uncanny

NamelyLiberty/Michael Every-Rabobank

1932 image of farm being engulfed by dust storm“[W]e are seeing echoes of the 1920s and 1930s in today’s politics because we echo the economics of the 1920s and 1930s. We had a debt-driven Gilded Age boom prior to 2008 analogous to the Roaring 20s – and then a colossal bust, analogous to 1929. Since then we have failed to work out how to deal with the debt overhang, or to co-ordinate a global recovery between countries (so all boats rise) and within countries (so all boats rise, not just yachts).”

USAGOLD note:  Michael Every echoes Ray Dalio’s disconcerting comparison of the 1930s to the present.


Repost from 10-10-2019

Posted in Today's top gold news and opinion |

How this crisis differs from the 2008-2009 crisis

Mises Insttitute/Arkadiusz Sieroń

graphic image showing 2008 versus 2020“Therefore, although in the short term the disinflation scenario seems more likely, in the long run the risk of stagflation increases, especially with too-fast credit growth and excessive debt monetization (the government may be tempted to get out of its large public debt through high inflation, which lowers real interest rates). The possibility that the [coronavirus] will be more inflationary than the GFC [Global Financial Crisis of 2008) should be acknowledged by economists, policymakers, and investors.”

USAGOLD note:  Important distinctions between the two crises are made at the link above ……


Repost from 5-12-2020

Posted in Today's top gold news and opinion |

Fire is the test of gold

Seeking Alpha/Talley Leger – Invesco

photo–stack of American Gold Eagle gold bullion coins“In a physical sense, gold is a tangible and quantifiable substance, given its limited supply on planet Earth. Gold is so rare, in fact, that estimates suggest the entire global stock of gold would fit into two to three Olympic-sized swimming pools.1 Just like any other asset, however, its value can be influenced by forces other than mining and production, including human emotions.”

USAGOLD note:  More of Invesco’s rationale for gold ownership at the link – a solid overview for newcomers to the market.


Repost from 9-8-2020

Posted in Today's top gold news and opinion |