Daily Gold Market Report

Gold gets some relief in early Friday trading
‘Short term gyrations do not affect the long-term fundamental picture,’ says EMA

(USAGOLD – 6/18/2021) – Gold is getting some, albeit unconvincing, relief this morning from the sell-off of the past two days. It is up $6 at $1780. Silver is up 19¢ at $26.17. Gold is bucking headwinds beyond the Fed turning suddenly more cautious at its meeting on Wednesday. The annual summer slowdown is in full swing, and next Thursday, we have options expiration. (Gold often, but not always, experiences a sell-off on and around options expiration dates.) With today’s upside taken into account, gold is down about 3% over the past two days, and silver is down a little over 4%. One of the more reasonable assessments we have seen of late on gold’s future prospects comes from Equity Management Academy in an analysis posted at Seeking Alpha posted before the sell-off of the past two days.

“It is a perfect example of buy the rumor, sell the fact,” says EMA. “The bus in the gold market is overcrowded. Every article on the Internet is about this short squeeze mentality and that the US dollar is weakening and doomed. They all scream that gold and silver will rocket up. Even so, gold and silver are down. The market is telling us that the recent rally was in anticipation of all of this inflation news. Now the markets are taking a breather since the news is now out.……Most conservative traders avoid trading around the average price. Wait for the market to reach an extreme above or below the market to trade, when the probabilities are far higher that the trade will revert back to the mean. It is not 100%, but the odds greatly favor such reversions to the mean. We still recommend staying long with your core positions. These short-term gyrations do not affect our long-term fundamental picture that the economic and monetary policy, the debt, interest rates, shortages, and other factors all favor gold and silver increasing in price.”

Chart of the Day

Silver and Copper Prices
(in percent, one year)

overlay line chart showing silver and copper prices over past year in percentChart courtesy of TradingView.com • • • Click to enlarge

Chart note: Copper seems to have garnered its fair share of attention in the fully empowered green technology revolution, but silver – another major beneficiary – is rarely mentioned, even though it has kept pace with copper over the past 12 months and, at times, outperformed it. Copper is up about 57% over the past year, and silver is up about 51%.


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