Silver Price Forecast – Silver Markets Continue Same Dance FX Empire
Month: June 2021
Reuters/Staff/5-27-2021
“Swiss customs data show exports of 40.2 tonnes of gold worth around $2.5 billion at current prices to China in April — more metal than was sent in the last 14 months combined.”
USAGOLD note: Likely, there is considerable pent-up demand for gold and silver rattling around China’s economy. A similar scenario is developing in India and other Asian markets. Reuters says Chinese demand “has helped fuel” gold’s gains over the $1900 mark.
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Larry, Larry quite contrary
Politico/Alex Thompson, Theodoric Meyer and Victoria Guida/5-28-2021
“Now, the Biden administration is more likely to approvingly blast out an email with the latest Paul Krugman column than the latest Summers one (Krugman, notably, did not outright dismiss inflation fears in his column today). While senior Biden officials like Brian Deese and Gene Sperling are colleagues and friends with Summers, the administration is also chock-full of Summers critics – economists who believe that decades of Democratic economic policy that failed to address wage stagnation, outsourcing and rising inequality led to the rise of Donald Trump.”
USAGOLD note: Summers split with the Biden administration on economic policy is the subject of much interest, but it hasn’t slowed the progress of MMT crowd and ultra-left economic policy. Biden seems all too willing to concede economic policy to that wing of the party and that is good argument for owning gold and silver. A former staffer with Elizabeth Warren tweeted recently: “I can’t remember the last President who so clearly and unequivocally embraced full employment as their economic goal.” The Fed, as far as we can gather, is steadfastly on the same page, despite all the hand-wringing on Wall Street about tapering.
Image: From left – Joe Biden, Barack Obama, Peter Orszag, Rahm Emanuel and Larry Summers at the White House.
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Gold, silver seeing normal, corrective pauses in price uptrends Kitco NEWS
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Bitcoin is substitute for copper, not gold – Goldman’s top commodity analyst Kitco NEWS
Gov. Bill Lee signed legislation last week requiring the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) to examine the feasibility of creating a state depository to secure gold owned by the state and/or citizens.
House Bill 353, introduced by Rep. Bud Hulsey, and Senate Bill 279, introduced by Senator Paul Rose, call for TACIR to report its findings and recommendations to the Speaker of the Senate, the Speaker of the House of Representatives, and the Legislative Librarian no later than January 1, 2022.
Backed by the Sound Money Defense League, HB 353 and SB 279 passed out of both of their committees unanimously, receiving votes of 90-0 and 32-0, respectively.
if Tennessee were to insure state funds against the perils of inflation and financial turmoil through a gold allocation, storage fees would normally be paid to businesses in another state.
By establishing an in-state depository, however, Tennessee could eliminate the risks inherent in using storage provided by Wall Street bullion banks, save money on storage fees, and create jobs by holding its monetary metals inside the Volunteer State.
Tennessee could eventually join Texas as the only other state with an in-state, publicly managed precious metals depository. The involvement of a state government in an otherwise private depository potentially provides a layer of constitutional protection against federal-government aggression, such as the gold expropriation of 1933.
Another reason states are considering the storage of gold bullion within their own borders is concerns about Wall Street financial shenanigans involving the gold market as well as concerns about poor oversight of U.S.-owned gold (which has not undergone a credible audit for decades).
That’s why Congressman Alex Mooney (R-WV) recently introduced the Gold Reserve Transparency Act (H.R. 3526) and has questioned the lack of credible auditing and whether the Federal Reserve Bank and the Department of the Treasury have been pledged, swapped, leased, or otherwise encumbered America’s gold.
Although its depository study bill is a positive step, Tennessee is one of only 10 states that still harshly penalizes citizens through sales taxation when they seek to protect their savings from the ravages of inflation by acquiring gold and silver. For several years, Rep. Hulsey has been a champion for sound money in Tennessee by sponsoring legislation to eliminate these unjust sales tax on gold, silver, platinum, and palladium.
If Tennessee were to pass a law eliminating the sales tax on the purchase of gold and silver and establish and ultimately an in-state gold depository, the state would move from 46th to the top-12 best states in the country, as measured by the Sound Money Index. The Sound Money Index is the first of its kind, ranking all 50 states using twelve indicators to determine which states offer the most pro-sound money environment.
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Hedge Funds Getting Bullish on Gold
The gold market has seen many momentum shifts in recent months. At the end of the day, however, the market really depends on one simple factor: Are the big money inflows trending in a bullish or bearish direction?
Near market lows, speculative interest tends to be heavily on the short (bearish) side. That sets the stage for buying pressure to be released when rallies force short sellers to cover their positions.
As traders shift to taking on more long (bullish) positions, momentum builds for higher prices.
Recent data suggests that hedge funds and large market participants are again ramping up their bullish gold positioning and that could take the yellow metal to previous all-time highs… or beyond.
Hedge funds have increased their bullish bets on gold and do not appear to be afraid of recent talk of Federal Reserve tightening sooner than expected.
Latest data from the Commodity Futures Trading Commission (CFTC) shows that hedge funds increased their speculative net long positions in gold by over 10,000 contracts.
Ray Dalio has placed hugely bullish bets on gold.
Billionaire hedge fund manager Ray Dalio has taken out a sizeable stake in gold, declaring “cash is trash.”
Dalio has also been dabbling in cryptocurrencies. But rival billionaire hedge fund manager Paul Singer calls them “ridiculous,” preferring instead to own tangible alternatives to cash, including gold.
Guggenheim’s CIO Scott Minerdi is eyeing an ultimate price target between $5,000 and $10,000 per ounce. “As money leaves crypto and people are still looking for inflation hedges, gold and silver are going to be much better places to go,” he said recently.
Of course, there are numerous reasons why hedge funds and other big players may want to get their hands on gold bullion. Rising inflation worries, easy monetary policies, and a weaker dollar to name a few.
With the stock market possibly at or near its high, the buying in gold has not been limited to U.S. market participants.
Players in other nations have many of the same concerns, and those concerns may keep gold well supported as it approaches its previous all-time highs.
According to IPE.com, a major Swiss pension fund has also traded in its hedge fund and raw materials holdings for gold.
This trend looks likely to continue, especially if precious metals markets continue to float higher.
Against the current backdrop of rising price pressures and a Fed that is willing to let inflation run hot for a long time, institutional interest in gold is likely to increase further.
Gold started the year around $1,918 per ounce, and a move back above that price could trigger additional buying and momentum upward, according to Blue Line Futures Chief Market Strategist Philip Streible.
The gold market tends to swing based on institutional trading momentum. As the yellow metal demonstrates strength, the amount of longs and size of long positions tends to rise.
The opposite is true for when the metal shows weakness.
The current environment in gold suggests much further upside potential ahead.
Concerns over inflation, central bank policies, and currency weakness may all play a key role in gold’s rise. Additionally, a stock market reversal or period of risk-off trade could itself fuel further buying.
With little to no chart resistance above the market at current levels, the ascent in gold could be steep and could happen quickly. Once the train leaves the station, gold prices may not return to current levels ever again.