Author: Gold News Club

BMG Group Inc./Nick Barisheff/5-5-2020

“Many investors and financial advisors may be surprised to learn that owning shares in a gold ETF is not the same as owning physical gold. As one of the largest ETFs, GLD states in its prospectus: ‘…designed to track the price of gold.’ Is it wise to choose convenience over holding physical gold? Since their introduction in 2003, gold-backed ETFs have transformed the gold investment market into an illusion, diverting attention from ownership of physical gold. This is like a magician that has you focused on a distraction while they perform a trick.”

USAGOLD note:  Barisheff adds his voice in a unique way to the chorus of gold ETF naysayers ……

Financial Sense/FS Staff/5-5-2020

“Depression is something different. A depression is a shock that creates scars that linger for years. And depression is different than a recession because while a depression is a recession, a depression invokes a secular change in people’s behavior. So how they approach savings, how they approach spending, how they approach indebtedness, how they approach, in this case, where we’re going to work, how we’re going to travel. I think that in both the context of the personal sector and the business sector, it’s going to be a big shift on how we create savings in cash and liquidity. It’s phenomenal to me that liquidity became almost a dirty nine letter word going into this—nobody had any.”

USAGOLD note: One of the themes developing among top economic thinkers is that we are rolling into new paradigm that will create changes in investor psychology that few can predict or define at this point in time.  One of those changes, as Rosenberg suggests, could very well be a return to saving – saving for a rainy day or saving just to know you have capital put away that can be tapped if events warrant. Given the circumstances, saving gold for the long run, in our view (and we admit to a bias), is likely to return to prominence.  Rosenberg advocates gold ownership.  In fact, earlier in the year he predicted gold would surge to $3000.

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Bloomberg/Mohammed El-Erian

“Main Street is dealing with historic collapses in employment (30 million workers have applied for jobless claims in just six weeks) and economic activity (a 4.8% contraction in gross domestic product at an annualized pace in the first quarter with a further 30% to 40% decline in the cards for this quarter). Wages are falling for many of those still lucky enough to have jobs. The pain and suffering associated with all this is visible not only in the long lines outside food banks around the country but also in reports of mounting domestic violence and mental anxiety. Yet Wall Street is coming off the best month for stocks in 33 years.”

USAGOLD note: According to El-Erian all is not well at the corner of Wall Street and Main – Anytown USA ………

Repost from 5-5-2020

Seeking Alpha/Equity Management Academy

“I am surprised by the overwhelming bear camp that appears to still be in the gold market. You have to understand the difference between the physical and paper markets. The two are separate. The paper market is the futures market and is based on contracts for 100 ounces of gold, supposedly. If you want to buy physical gold, you can use the futures market to enter a position, lock in a price, put down the deposit and get it delivered when the contract expires. That has been the normal delivery process for physical gold in using the futures markets to exercise for delivery.:”

“The physical gold market, however, has now completely separated itself from the paper market. There are a large number of open interest positions in gold, which are looking to take delivery of physical gold through the futures market. COMEX is in a jam because the number looking to take delivery are at record numbers, so they are scrambling to find the gold to meet their obligations. The rumor is out there, you can Google it, that the COMEX potentially could default on some of these gold futures contracts if they can’t find enough gold or can’t negotiate cash settlements. The problem is that everyone in the world wants to buy physical gold.”

USAGOLD note:  A reminder of the problem at the commodities exchange that could become top of the list again in June when contract owners begin to make known their intentions on delivery.  Ordinary investors wishing to avoid the pricing and premium chaos that accompanied the same event in April might want to consider solidifying their own delivery intentions before the problem is once again headline material. If you would like to learn more about the potential problems, we invite you to call our Order Desk to discuss the situation. 1-800-869-5115 x100.

Repost from 5-5-2020