Month: September 2020

Bloomberg/John Authers/9-23-2020

“Recent speculation is that the Fed may not print money and cut rates with quite the gay abandon that had been assumed. This may or may not be good news for the U.S. economy, but it raises real yields and for investors in gold and in risk assets, who might benefit from currency debasement, it is definitely bad news.”

USAGOLD note:  It also may or may not be true. Given the Fed’s well-established penchant for securing the stock and bond markets and gearing monetary policy to that end, it is difficult to believe that, when push comes to shove, it is going to act any differently in the future than it has in the past. More than anything, the Fed does not want to send the wrong signal and upset the precarious balance it has already achieved. From that perspective, one could go so far as to say that a falling gold price might signal precisely the sorts of things the Fed is trying to avoid.

The post From correcting excess to questioning the basic assumptions underpinning the stock market rally first appeared on Today’s top gold news and opinion.

Seeking Alpha/Austrolib/9-24-2020

“In real terms though, there will almost certainly be no decline in the price of sound money. Meaning versus production-weighted real assets, the GSCI Commodity Index, gold will likely skyrocket again as it did during the deflationary panics of 2008 and March 2020, because gold tends to fall much less in dollar terms than other commodities during these periods. Meanwhile, the dollar price will inevitably catch up as it always does after the money supply skyrockets once again. For all these reasons, this ongoing correction in gold could be the final opportunity to buy below $2,000. Once we cross that threshold a second time, we will likely never see anything below $2,000 gold again, and it will be off to the races.”

USAGOLD note:  An interesting read at the link …… His three immediate reasons why we may never see gold under $2000 again are a bit off the beaten track but certainly well worth your consideration.

The post Three reasons why this gold correction could be the last below 00 first appeared on Today’s top gold news and opinion.

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The post https://www.usagold.com/cpmforum/2020/09/305673/ first appeared on Today’s top gold news and opinion.

Financial Times/Robin Wigglesworth

“The US government bond market is akin to the investment world’s bomb shelter, a safe space where everyone can seek refuge when the rest of the financial system is exploding. In March, the bomb shelter itself started to rumble ominously.”

USAGOLD note:  Wigglesworth quotes the head of one big hedge fund as saying “the moral hazard is massive … The brittleness [basis trades] create is a massive problem.” Basis trades, according to Wigglesworth, utilize high speed electronic trading to exploit tiny price differences between T-bonds and Treasury futures and require “massive dollops of leverage to turn small discrepancies into healthy, consistent profits.” And massive leverage, as we all know, raises the prospect of systemic risks that fall upon the central bank to mitigate when things go massively wrong. Wigglesworth raises questions and offers considerable detail at the link above.

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Repost from 9-23-2020

The post Fed must act to avoid repeat of Treasury market’s brush with disaster first appeared on Today’s top gold news and opinion.

On furlough, Britons reinvigorate the age-old quest for gold  Baltimore Sun

Stocks, gold price bounce back; buy or sell now? Gary Wagner answers  Kitco NEWS

Gold Price Halts Slide, Silver Bounces, as Comex Speculators Grow Bearish Bets Ahead of Trump-Biden Debate | Gold News  BullionVault

Is this the end of consolidation phase for gold price?  Kitco NEWS