Daily Gold Market Report
(USAGOLD – 3/8/2021) – Gold tumbled further in overnight trading posting its 17th red session out of 26 since the beginning of February. It is down $10 at $1692. Silver is down 11¢ at $25.22 after climbing back near the $26 mark in overnight trading. The downside came as Treasury yields continued to climb and the Biden stimulus package took a major step toward passage by clearing the Senate. The bill now goes back to the House for final approval. Over the weekend, Moody’s Analytics’ economist Mark Zandi and historian Niall Ferguson issued notable inflation warnings with Zandi saying in a CNBC interview that Wall Street is “significantly underestimating” its return over the next decade. Investors, befuddled by the incongruity between the dangers lurking in financial markets and declining precious metals prices, continued to buy the correction as they have since the beginning of the year. Meanwhile, in the paper gold market where the price is determined, the software-driven selling continues.
For those hoping to find a silver lining in the dark cloud hanging over the precious metals market the past several weeks, Ross Norman of MD Metals Daily offers some consolation:
“[O]f course it’s not all about bonds. The dollar has been on a rampage with the USDX at the highest for nearly a year. Late last year you would have struggled to find a dollar bull and so universal was the dislike that the short dollar trade was arguably the most crowded. As a contrarian it worried me then… and it has come to pass. The market has inflicted the largest amount of damage on the greatest number of participants and the short covering rally in the dollar has piled pain on top of misery for gold bugs. Again … for fundamental reasons, the wrong outcome. So where does that leave us … ? Well firstly at current levels gold looks to be an absolute steal. If you didn’t get the memo about the beginning of a new gold bull run in Q3 2018 then this is your last call.”
Norman has finished high or won the annual LBMA price forecasting contest (including last year’s) so often that one is forced to pay attention. In December, he predicted an average price of $2025 for 2021. “We still hold that view,” he says, adding that the year will be “a game of two halves.”
Chart of the Day
Chart courtesy of TradingView.com • • • Click to enlarge
Chart note: Many of our readers will be surprised to learn that out of the three investments tracked regularly on this page, it was not the Dow Jones Industrial Average that turned in the best performance over the past 12 months but silver – and by a wide margin. Stocks are up 32% since last year this time. Silver is up 48.5%, and gold trailed the field at a gain of little over 1%.
Market Data by TradingView Delayed data except FOREX
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