Market Updates

Gold & silver remained range bound this week but not so for shares, which appear to be peaking in stupidity reminiscent of the crypto bubble in 2017-2018. With the All Ords sideways in ounces of gold, it may be prudent to reallocate away from risk assets to gold.

Precious metals spike and dump on Jackson Hole speech and we look at the how and why of gold and silver investing.

Gold failed to hold above US$2,000 but found support above $1,900 and is trading just above the previous all-time high in 2011.

We Are All Gold Bugs Now says Morgan Stanley, worried about inflation. While gold and silver were volatile on profit taking the broader long-term fundamentals remain unchanged and we are confident there are a plethora of investors waiting to buy significant dips.

Another amazing week with gold pushing strongly through $2,000 and silver reaching just shy of $30. Over only 16 trading days the move in gold, as shown in the chart below, is an impressive 14.3% but silver steals the show at 46.7%.

Gold stopped short of hitting $2,000 but with a permanent change to mainstream market attitudes towards precious metals any decent dips in the price will likely be bought.

We focus on silver this week given its massive 17% gain. We expect the market to take a breather back to the mid $21s but in the long-term silver is clearly in a new bull market. We also look at how gold and silver in Australian dollars are less volatile than some blue chip stocks.

The markets are a very dangerous place for savers says Russell Napier with financial repression, US Federal Reserve turning on the liquidity taps and retail rookies running rampant.

A significant week for gold as it broke through the round number $1,800 level, a figure it last saw in 2011, on the back of concerns about a second COVID wave in the US.

Gold posted a massive 28.5% return for the 2019/2020 financial year, with silver a more than respectable 20.1%, but its 45 year compounded per annum return is also impressive.

‎It is now time to leave the stock market party before the bubble blows. Yield breakdown is driving gold says Nick Frappell and professor shows that gold worked to reduce portfolio risk in the 1930s.

Equity prices are insanely disconnected from their underlying fundamentals and in “La la land” according to Crescat Capital. Jeremy Grantham agrees saying that he is increasingly confident that stocks are “the fourth ‘Real McCoy’ bubble of my investment career” and that the recent price action is “crazy stuff”.

Digital Finance Analytics estimates that the percentage of households in mortgage stress reached 37.5%, or 1.42 million households.

Gold recovered this week but looking back a few months it is still bound within a $1,680/$1,750 channel. Silver has had a strong recovery from its COVID bottom in March and is sitting around the mid-$17 as we write, with the gold:silver ratio staying below 100.

Nick Frappell talks about what the EFP is and discusses how it is priced, who trades it and its impact on gold prices in ABC Bullion’s 360 Monthly Review.

Gold continued to pull back in most currencies this week, but managed to remain above US$1,700, mainly on the back of some severe USD weakness. Silver briefly touched above US$18.00 before settling down to $17.70 at time of writing

Is surging private indebtedness creating a society of debt serfs and feudal creditor lords? We explore this question and more in this week’s review of Incrementum’s In Gold We Trust report, which says that the 2020s will be a golden decade.

Platinum was flat this week at USD $835 and Palladium fell back to $1,926, with both metals seeing a profound impact from COVID on both supply and demand.

Gold moved south of USD $1,700, ever so briefly, before rebounding to $1,720 on the back of US GDP Q1 data showing a 5% contraction on an annual basis. Silver also pulled back early in the week before rebounding back above $17.40.

This week, Crispin Odey got a lot of headline coverage, when he said that gold ownership could become illegal if inflation spikes.

AUD strengthened this week to 65.6 US cents, seeing gold in AUD $50 lower than this time last week. Silver pulled back to $26.20 from recent highs above $27.

Officially unemployment only rose slight to 6.2% but we say realistically over 50% of the workforce is on government support.

We also look at trade tensions between China and Australia and how Eastern demand will boost metal prices, as well as the use of the stock market as a store of value.
 
Gold went up to $1,730 this week and the AUD remains strong at 64.5 US cents, preventing us from seeing new highs in AUD terms for now. Silver remains the metal to watch as it creeps 5% higher.

This week Harvard University professor Ken Rogoff called for deeply negative US interest rates; the market agrees with traders betting on negative US rates by early 2021. Freelance CEO said 74% of Australian workforce is now being paid by the government - we discussed how to protect yourself from the money printing necessary to pay for this.

JP Morgan says US money printing may ignite an inflation bomb. This week we also look at China's call for a new super-sovereign currency to counter the US dollar and why Scotiabank closed its bullion trading & leasing business.

Gold edged higher this week to $1,726 and silver is tracking sideways around the USD $15 per ounce level, yet to make up its mind on whether to join gold or remain uncoupled as the AUD/USD trades at 0.635 .

This week we look at the report from the Bank of America revising gold price forecast to $3,000, how Coronavirus has permanently changed investor psychology, and the role gold can play in your portfolio.

Gold advanced to $1,648 this week on US dollar weakness and silver battled with the $15 level after adding around 7% from the start of the week. The USD index retreated, putting the AUD back above 62c seeing gold for local investors pull back to $2,648 and silver $24.25. This week we look at government stimulus to pacify stressed out and scared households, and a close look at price action in silver and clues the market has bottomed.

A bit of a mixed week for the metals, with gold initially falling but recovering back above $1600 and silver to $14.56. The Aussie dropped to 60.5 cents this week helping local prices recover to trade around $2,670 for gold and just over $24 for silver. This week we ponder buy equities on government intervention, or will it be a dead cat bounce?, how much free float is there in the gold market?, and will price increases balance the market, or is gold a Giffen good?.

A good week for the metals with gold staging a recovery above $1,600 and silver outperforming to over $14.50. For Aussie investors, we saw the $A gold price reach a new high of $2,766.95 but our dollar recovering from its lows took some of the shine off local gold prices and they moderated back to $2,655 and silver just under $24. This week we look at when spot and futures price diverge by $100, what is the real price of gold, and preparing for the unforeseeable.

Stock markets have seen the most vicious sell-off since the 1987 “Black Monday” crash and the precious metals were dragged down on liquidating longs. However, with the AUD taking a beating to 62.7 cents gold in AUD terms remains only slightly lower at $2,510 and silver at $25.35.

This week we look at why has gold underperformed given the dramatic stock and bond market movements, the historic gold:silver ratio and what our clients are buying, and diversifying your super with gold.

The metals recovered this week with equity market volatility sending gold to $1,670 and silver $17.45. The Aussie dollar’s recovery cut into local price gains but gold was still up from recent lows to $2,520 and silver to $26.30.

This week we look at how gold and silver brushed off their initial sell off, a contrarian thought: monetary policy is not going to cure COVID-19, corona hitting Australian confidence, and toilet paper inventory, and only five more years and central bank gold stocks back to 1971 “Nixon shock” levels.