Author: Gold News Club

Linked-in/Ross Norman/5-12-2020

“But then we saw the growth of the internet, and the access we gained to the futures exchanges through this new route changed the way we trade, with the Comex gold contract leading the pack. Traders could suddenly trade with the entire world, irrespective of credit lines or bilateral agreements. Liquidity was plentiful and the tools it brought to help the traders were game changing. Running your order book electronically meant traders could be more efficient and this grew the ways we traded even further. Plug your Comex feed into your own software and it would send, or stream, prices to your customers over in house trading platforms which would automatically hedge itself with futures. Progress in the last two decades has been unprecedented.”

USAGOLD note:  Ross Norman draws on his many years of experience in the gold business to offer solid background on how the contemporary gold market works – COMEX, the London trade, etc.  If you are interested in the internal workings of the international gold market, this article is a good place to begin your journey.  He finishes with his take on what happened last month when “all hell broke loose.”

House Speaker Nancy Pelosi unveiled a more than $3 trillion coronavirus aid package Tuesday, which would be the fifth this year.  The House is expected to vote on it Friday, but Senate Majority Leader Mitch McConnell says there is no “urgency.”  The package is an 1,800-page document, which offers something for everyone.

To say that it is a “sweeping effort” is putting it mildly.  It contains $1 trillion for states, cities, and tribal governments, plus “hazard pay” for essential workers and a new round of $1,200 cash payments to individuals with up to $6,000 per household.

The popular Payroll Protection Program, which has been boosted in past bills, would see another $10 billion to ensure under-served businesses and nonprofit organizations have access to grants through a disaster loan program.

For hospitals and other health care providers, there’s a $100 billion infusion to help cover costs and additional help for hospitals serving low-income communities.

There’s another $600 million to tackle the issue of rapid spread of the virus in state and federal prisons, along with $600 million in help to local police departments for salaries and equipment

The bill would continue, through January, the $600-per-week boost to unemployment benefits. It adds a 15% increase for food stamps, new subsidies for laid-off workers to pay health insurance premiums and a special “Obamacare” sign-up period. For businesses, it provides an employee retention tax credit.

And, there’s a $25 billion bailout of  the Post Office.

Tugging at heart strings, Pelosi noted, “There are those who said, ‘Let’s just pause,’” she said. “Hunger doesn’t take a pause. Rent doesn’t take a pause. Bills don’t take a pause.”

The package is a partisan offering with no real input from Republicans, who would prefer to assess the impact of the earlier $4 trillion expenditures before approving still more monetary outlays.

However, the political peril of doing nothing during an election year could prove challenging.  Already 30 million Americans are unemployed; and if there’s another flareup of coronavirus outbreaks, Pelosi and her legions will play the blame game.  Although some GOP senators flatly reject the House bill, if the economy doesn’t return to some form of normalcy, they may pay the price come the November elections.

I don’t think that gold and silver have even begun to react to this year’s $4 trillion deficit spending, much less $7 trillion if Pelosi gets her way.

1. Gold and U.S. equities de-couple with stocks selling off, and gold moving higher  Kitco NEWS
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3. Gold price today: Yellow metal slips; deploy buy on dips for a target above Rs 46,000  Moneycontrol.com
4. Gold inches higher on U.S. stimulus talks; jobs data awaited  Nasdaq
5. Gold Holds Onto Safe-Haven Hat as Powell Warns About U.S. Economy  Euronews
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