Month: August 2020

BNN Bloomberg/Jack Farchy and Phoebe Sedgman/7-31-2020

“Traders on the main gold futures exchange in New York have issued the largest daily delivery notice on record. In the latest sign of how the market’s norms have been upended by the price disconnect that struck in March, traders on Thursday declared their intent to deliver 3.27 million ounces of gold against the August Comex contract, the largest daily notice in bourse data going back to 1994.”

Chart note:  This report includes a telling chart.  By taking delivery, large scale investors are simply using the COMEX as a source for physical bullion – something that has never happened before to the degree it is happening now. The distortions in March broke a downtrend at $1470. From there it has been more or less a straight shot to Friday’s close at the $1979 level.  August deliveries are roughly double the declarations last March.

Real Investment Advice/Michael Lebowitz and Jack Scott/7-29-2020

“Unknowingly, most investors are managing their wealth amid a dense fog manufactured by central banks. The confounding signals and lack of visibility emanating from equities, bonds, the dollar, precious metals, and other markets are baffling. In many cases, they are contradictory. Most troubling, they threaten our financial well-being. To make things tougher, many of these markets sit near critical technical levels. Breakouts through or bounces off of those levels may pose significant implications for the economy and markets. In this piece, we shine our fog lights on markets to expose these faulty signals and hidden risks.”

USAGOLD note:  Intriguing discussion that will be of interest among those who share Lebowitz and Scott’s observation that “[g]auges to help manage risk are obscured and disfigured. Even more confusing, some signals are contradictory to each other.”

Financial Times/Harry Dempsey and Hudson Lockett/7-31-2020

“The US dollar has tumbled the most in a decade this month, propelling sterling and the euro higher amid questions over the recovery of the world’s biggest economy and growing political uncertainty.”

USAGOLD note:  The sharp downward spiral in the dollar is one of the primary drivers for gold’s bull market. Earlier in the year the two were rising together as investors sought safe haven protection from the economic ill effects of the coronavirus.  Since late May, gold has headed up, though, while the dollalr has headed down. The chart shows the performance of the U.S. Dollar Index year to date through July 31.

Cartoon courtesy of MichaelPRamirez.com