Daily Gold Market Report

Gold and silver rocket higher in an extension of yesterday’s surprise rally
Gold up almost 4% on the week, silver over 6%

(USAGOLD – 5/7/2021) – Precious metals rocketed higher in an extension of yesterday’s surprise technical rally as an equally surprising April payrolls report fell radically short of estimates. Gold is up $24 at $1841. Silver is up 22¢ at $27.60. Bond yields and the dollar dropped sharply in response to the payrolls report. On the week, gold is up almost 4% and silver over 6% – their best week in six months. Like a good many gold market experts, Gold Newsletter‘s Brien Lundin was surprised by yesterday’s sharp rally past the $1800 barrier.

“Digging a bit deeper,” he writes in an e-mail client note, “the move in the metals was coincidental with legs down in the Dollar Index and the 10-Year Treasury yield, but the question remains as to what sparked those declines. Regardless, the moves in the metals outpaced the corresponding moves in the dollar and yields. As others have commented, gold was helped by its rocket shot through the $1,800 ceiling, a move that undoubtedly sparked some buy-stops and throttled up the engine. As I’ve been noting, gold has been helped by a notable lack of bullish sentiment, even by the die-hard gold bugs. In this kind of environment in which sellers have been exhausted, new rallies are often born.”

Chart of the Day

Gold price performance in top global currencies
(Since May 2015)

overlay line chart showing appreciation in gold in major currencies over the past five years

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

Chart note: The collapse of fiat currencies’ purchasing power, writes market commentator Alasdair Macleod in a detailed analysis posted at Gold Eagle, “is unlikely to echo the great European inflations of the 1920s, because to a large degree commerce subsisted on the alternative of gold-backed dollars, instead of local currencies. Today, the collapse of the dollar will mean there is unlikely to be any alternative currency available, because they are all tied to the dollar.” Gold’s strong, synchronous performance in the world’s top currencies over the past five years supports Macleod’s point. It is up 52.84% in U.S. dollars, 76.4% in India rupee, 70.1% in British pounds, 58.8% in Chinese yuan, 41.9% in European euros, and 39% in Japanese yen. In the event of a global breakdown in fiat currencies, concludes Macleod, “anyone who does not plan to get hold of some physical gold and silver with a high degree of urgency could end up sinking with nothing but valueless fiat currencies.”


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