Gold investment demand is soaring in the wake of the COVID-19 stock panic! Investors are rushing back into gold to diversify after seeing mind-boggling central-bank money printing and government spending. Since that epic monetary inflation won’t be unwound, and investors were radically underinvested in gold before the panic, this trend is likely to persist for years. It will catapult gold and its miners’ stocks far higher. Full Story
It’s a good Friday because I get to start my weekend work earlier. Many people temporarily have no weekends because they are huddled at home as one day bleeds into the next amid the global pandemic. Monday is Thursday is Saturday. Good Friday is Halloween is Festivus. Full Story
Today the bulls did it again. This market remains deeply entrenched in denial, soaring even as unemployment soars higher toward the grand summits of the Great Depression and with certain knowledge that many jobs will not return. Full Story
Wild price action and unprecedented interventions once again characterized this holiday-shortened trading week. Oil prices whipsawed lower Thursday on concerns about expected oil production cuts from Russia and Saudi Arabia. But the general trend for most other assets, including metals and equities, was up – way up. Full Story
In a recent essay published at Project Syndicate, Harvard economics professor Kenneth Rogoff sets an ominous tone. Humanity, he says “is facing something akin to alien invasion” – an apt analogy, we thought. “With each passing day,” he goes on, “the 2008 global financial crisis increasingly looks like a mere dry run for today’s economic catastrophe. The short-term collapse in global output now underway already seems likely to rival or exceed that of any recession in the last 150 years.” Full Story
Can the U.S. economy actually be turned on and off like a light switch? What are the implications for investors if it can't? The shutdown of much of the American economy in response to the COVID-19 pandemic has already created what is by far the single largest increase in unemployment in U.S. history in such a short period of time. Full Story
The plandemic was [conveniently or coincidentally, take your pick?] "dropped" because we are on an exponential, vertical growth curve for money which had to be created – due to the magic of compounding - before we ever had a "virus". Full Story
Back at the 2008 crash low in the HUI there was a reversal pattern, that is pretty rare, which helped confirm that very important low. If you ever wondered what the 2007 – 2008 top looked like and the decline that followed to the 2008 crash low this daily chart for the HUI paints the Chartology I posted at the tent, in real time, as the impulse move to the downside took place. Full Story
Last month I predicted that at least $10 trillion would be spent to mitigate the economic impact of this virus, and it appears as though we’re already there, with much more to go. And this is all before considering monetary stimulus in the form of near-zero rates and quantitative easing (QE).
The U.S. economy is being flooded with excess money and liquidity right now. Compared to the same period a year ago, M2 money supply––which includes not just cash but also savings deposits, money market funds and other “near” money––has increased some 12 percent, the most in more than 10 years.
The coronavirus is blamed for weak global demand and damaged supply chains. The Fed is worried. But central banking is part of the problem. Central banks created bubbles, and those bubbles crashed in 2000, 2008, and 2020. Full Story
By its close yesterday, the market provided exactly the example of the head slamming I said bulls were going to get in the article I was writing all day yesterday because the “Stock Market Bulls are Delusional in Face of Great Depression.” Full Story
There truly are strange things occurring in gold and silver, things I not only have never observed previously, but also nearly impossible to explain in rational terms. The two main things most strange are the extremely wide discounts of spot gold and silver to the most active COMEX futures months and the sudden large inflow of physical gold deposited in the COMEX gold warehouses. There is little question in my mind that the two strange occurrences are very much related, although it has taken me a bit of time to come up with an explanation. Full Story
The bulls’ rampage uphill for a 1600-point gain came inspite of the President of the United States, who loves this stock market like it is his own child, warning the whole nation that the next two weeks will be hell weeks for the US because the number of new cases and deaths will accelerate upward hand-in-hand. The market bulls chose to listen to a glint of relief from New York’s one-time drop in deaths over the president’s alert that the entire nation over the next two weeks would see higher death counts.
That’s absurd. It’s irrational. It’s denial. It’s unbridled greed. Full Story
Arbitrage SHOULD close this gap and SHOULD have kept it from opening in the first place. What is that? Theoretically, a party SHOULD be able to buy 100 ounces at spot and at the same time sell a futures contract. At settlement, this trade would eventually pocket that $38 spread for a cool $3800 profit. That SHOULD be an easy, riskless trade, and the result SHOULD be a narrowing of the spread back to near zero.
However, the spread persists. Oh sure, it collapsed early last week from $70 on March 24 back to zero on March 31—likely due to that arbitrage as the Apr20 moved into delivery. But now here we are again with the same spread blowing out to $70 once more. No doubt SOME arbitrage is what has since pulled it back to under $40, but THE PRIMARY QUESTION is WHY does this condition persist? Full Story
We see a positive, though fairly weak, correlation between gold (the red line in the first chart) and the US debt-to-GDP ratio (the blue line) from 1970 until 2008. A significant aberration occurs during the 1980-81 recession, when GDP falls and the debt rises, reflected in the blue line reaching close to 5%. This is also a bullish period for gold, with the gold price change in dollars per ounce reaching $400/oz in 1981, or as shown in the gold price chart, nearly $700/oz. Full Story
As a child, I used to get quite excited at the prospect of having my English "Gran" read me the Hans Christian Andersen book "The Emperor's New Clothes." I found the tale fiendishly amusing, as the charlatan tailor uses lethal doses of flattery and mystery to beguile the poor sovereign into really believing that he is wearing the finest robes ever woven. Full Story
Is this an “all clear” signal for gold stocks and silver too? Well, physical metal dealers in Singapore report that silver bullion demand is currently bigger than demand for gold! Breakout enthusiasts can buy silver now. Value investors already bought when gold traded at $1450 and silver was $12. Full Story
Shutting down a mine, even temporarily, is a major endeavor incomparable to something like idling a factory or closing a chain of retail stores. Putting an operation on ‘care and maintenance’ involves a number of practical measures to ensure the safe storage of ore stockpiles and tailings dams, disposal of scrap and waste materials, slope and bench stability, groundwater management, and keeping the site secure, just to name a few. Full Story
London Bullion Market Association (LBMA) officials have loudly proclaimed there are plenty of gold bars in LBMA and COMEX vaults to meet surging demand from buyers. Unfortunately for them, confidence is particularly fragile these days and cracks are starting to appear. Which is why anxious officials there issued not one, but two memos last week in an attempt to reassure traders. Full Story
The best performing precious metal for the week was gold, off only 0.45 percent. The yellow metal is continuing its strong showing. Gold futures had its sixth straight quarterly gain in the first three months of this year – the longest stretch of gains since 2011. Bullion rose 4.8 percent in the first quarter. Full Story
The gold directly possessed and controlled by the Chinese government is surely greater than what the government has reported.
We know this because China has reported its gold reserves at irregular intervals with big jumps in reserves between intervals. That metal was not acquired all at once but over time during which there were no public updates to reserve totals.
We also know that other countries sometimes have held gold in accounts not reported to the International Monetary Fund. Saudi Arabia got caught doing this in 2010.. Full Story
“Bad money drives out good money.” When Gresham put forth this proposition, sovereigns were diluting gold and silver coins with metals of lesser value yet the diluted coins were given the same value for legal tender purposes as the more pure coins. Gresham observed that the more pure coins would be hoarded and the lesser value coins would be used for trade.
Sound familiar? Go find pre-1964 dimes, quarters and half-dollars and try to buy them for their legal tender value. Pre-1964 silver coinage contains 90% silver. Post-1964 silver coins are made from nickel and copper. No one who holds pre-1964 coins would use them for their face value. They have disappeared from circulation. The melt-value of the silver in a 1963 quarter currently is $2.60. Full Story
The stock market wafted last week into a psychologically surreal zone somewhere between terror and, if not greed, then at least jittery optimism. How can stocks rally at all when no one can predict whether the deadly spread of coronoavirus is about to overwhelm America as it did Italy? The economic picture remains just as murky, since odds the global economy will fall into a full-blown depression are no worse than 50-50 right now. Full Story
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