Silver price surges above $27: what’s next? [Video] FXStreet
Month: August 2020
Silver Price Forecast – Silver Markets Launch Even Higher FX Empire
Bloomberg/Ranjeetha Pakiam/8-3-2020
“Investors are so concerned about the global outlook that worldwide holdings in gold-backed exchange-traded funds now stand behind only the official U.S. reserves of bullion after they surpassed Germany’s holdings.”
USAGOLD note: As reported here Monday, one of the more important gold stories over the past several months has to do with pension funds, insurance companies, and private wealth specialists queuing up to purchase the yellow metal. Even more important, perhaps, is the interest taken by sovereign wealth funds because of their ability to deploy significant concentrations of capital without a lot of rigmarole. These market sectors join the already strong interest from hedge funds and financial institution trading desks.
Chart courtesy of GoldChartsRUs.com
FXStreet/Miles Ruttan/8-4-2020
“As long as US treasuries are trading with negative real yields, gold should have a permanent bid under it. This means dips are likely to be bought into aggressively by investors, especially since the Fed’s Chair Jerome Powell has even stated the Fed isn’t even ‘thinking about thinking about raising rates…’ My guess would be that we have a while to go before gold loses its luster. The same goes for silver … which has a long way to go if it is to match the length of previous bull markets.”
USAGOLD note: A very clearly presented argument for gold’s upside based on a long term central bank bias toward negative real rates.
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National Review/Brien Reidl
“The unlikelihood of a quick economic recovery and the additional relief legislation sure to come out of Congress should together push the deficit to roughly $4 trillion in 2020 and ensure that it averages $2 trillion annually over the rest of the decade. As a result, the national debt held by the public — $17 trillion earlier this year — is projected to reach a staggering $41 trillion by 2030, even before accounting for any additional pandemic-relief measures or the expensive proposals that Democrats are salivating to enact if they sweep the White House and Congress this November.”
USAGOLD note: When you find yourself in a very deep hole in the new normal, the only option is to keep digging … … until the walls collapse. The answer to the question posed above? The Federal Reserve, of course. It has already, according to Reidl, “monetized more than half of the new pandemic-related debt.” With the rest of the world worried about financing its own debt, the options are likely to be limited and that, when all is said and done, is perhaps the most basic reason why gold has behaved as it has since March of this year.
Cartoon courtesy of MichaelPRamirez.com
Repost from 7-31-2020
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It is time to abandon dollar hegemony
Foreign Affairs/Simon Tilford and Hand Kundnani/
“In the 1960s, French Finance Minister Valéry Giscard d’Estaing complained that the dominance of the U.S. dollar gave the United States an ‘exorbitant privilege’ to borrow cheaply from the rest of the world and live beyond its means. U.S. allies and adversaries alike have often echoed the gripe since. But the exorbitant privilege also entails exorbitant burdens that weigh on U.S. trade competitiveness and employment and that are likely to grow heavier and more destabilizing as the United States’ share of the global economy shrinks.”
USAGOLD note: Please take note that this article appears in the most recent edition of Foreign Affairs journal, a publication of the highly influential Council on Foreign Relations. Its findings are in line with the Trump administration’s call for a weaker dollar and the Fed’s ongoing stimulus program which has done a great deal to move the project along.
Repost from 7-30-2020
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ETF gold holdings surge
SPDR Gold Shares, an ETF that owns physical bullion rather than financial derivatives, has become one of the world’s biggest hoards of gold, surpassing even the holdings of some central banks.Investors have scrambled to buy the precious metal and pushed it to record highs. Gold’s price passed $2,000 as it is widely viewed as insurance against accelerating price rises.
The size of the fund’s holdings — which are held in HSBC’s London vaults — has climbed to 1,258 tons. On Monday and Tuesday alone, it added another 15 tons, roughly five times as much as Michael Caine’s bank robbers lifted in The Italian Job, based on the $4m value of the gold taken in the 1969 film.
The ETF is a partnership between State Street, a big Boston bank, and the World Gold Council, a trade body for the industry. It has posted a 33% return this year, which helped lift its value to more than $80 billion.
The gold rally continued late on Tuesday as the metal’s price passed $2,000 a troy ounce for the first time ever. The size of the fund’s holdings are equal to a quarter of all the gold held at Fort Knox, more than the gold reserves of the Bank of Japan, the Bank of England or the Reserve Bank of India, and not far from China’s 1,948 tons of the precious metal, according to data from the WGC.
Nevada Gold Mines suspends permitting for mine expansion, plans to conduct further environmental studies The Nevada Independent
- Gold just hit $2,000 an ounce — but that’s not necessarily a good sign NBC News
- Gold Price: $2,000 Smashed, Is $2,500 Next Stop? What Is The Biggest Risk For Gold This Week? Forbes
- Gold price rises above $2000 for first time BBC News
- After Covid-19, just how high will prices go in the 2020 gold rush? The Guardian
- Gold logs fresh record high near $2,050 MarketWatch
- View Full Coverage on Google News