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Demand For Physical Precious Metals Surge Due To Fears About Disruptions In The Global Supply Chain
Demand For Physical Precious Metals Surge Due To Fears About Disruptions In The Global Supply Chain
According to a precious metals dealer I spoke with, the world out on the street is that demand for gold and silver has recently surged due to investor concerns about a disruption to the Global Supply Chain. We are already seeing a massive slowdown in China’s oil demand as official reports show a 20% reduction in oil consumption.
However, I believe China’s oil demand is much lower than the 20% figure reported by Bloomberg and reposted by Gulfnews.com on Feb. 3rd:
According to the article, China’s total oil demand is approximately 14 million barrels per day (mbd). The IEA, International Energy Agency, in their January 2020 OMR Report reported that China’s total oil demand would reach 14,046,000 mbd in 2020. Using the IEA’s data, here is China’s total oil consumption from 2017-2019, including the forecast for 2020, and the significant drop in demand in February:
The Bloomberg article stated that China’s total oil demand was down approximately 3 mbd by early February. Again, the article was published on Feb. 2nd. For China to cut 20% of its oil consumption… THAT’S A BIG DEAL. But, I think it’s much worse than that. According to the next two charts, one is taken from a new article on Gail Tverberg’s Ourfiniteworld.com website, and the other is from Capital Economics.
The first chart from CapitalEconomics.com shows a huge reduction in China’s Daily Passenger Traffic, including road, railway, freight, and ship:
The RED ARROW indicates when Bloomberg reported the 3 mbd decline in China’s total oil demand. Who knows at what date Bloomberg used to base their figure on 3 mbd drop in oil consumption, but this chart shows that total China daily traffic is down about 80% since January if we go by the right-hand scale. Thus, this chart reveals that China’s daily traffic flow has been down approximately 80% for more than two weeks.
…click on the above link to read the rest of the article…
Peter Schiff on the Ultimate Gold Panel
Peter Schiff on the Ultimate Gold Panel
During the Vancouver Resource Investment Conference, Peter Schiff joined Frank Holmes (US Global), Rick Rule (Sprott US), and Grant Williams (Vulpes Investment Management) on the “Ultimate Gold Panel. Daniela Cambone moderated the discussion.
Gold charted its best year since 2010 last year. The price increased by 18.4% in dollar terms. The yellow metal also reached record highs in every G10 currency except the dollar and the Swiss franc. Can this bull-run can continue into 2020?
Peter noted that he was on a gold panel the year before and he was the only person who thought gold was going to go up. Many were predicting the yellow metal would fall back to $1,000.
I thought that was very improbable. And now you’re throwing around could it go back down to $1,300. Look, it’s possible, but I think it’s highly improbable that that’s going to happen. If gold is broken out and 1,350 was a six-year high that capped every rally, I think we took it out, we’ve never looked back ever since. We now seem to be building support around 1,550, or just under 1,550, which was the high before we had a pullback to around what? 1,450. So, the market looks very strong to me. So, while it’s possible that we could get that large decline, I wouldn’t want to hope for it or bet on it. I think that there’s a lot more upside potential and I think the number that Dalio is talking about, 2,000, not only is that very probable, but depending on the outcome of this election, we could go much higher. I mean, if Bernie Sanders were to be elected president, just imagine what would happen to the price of gold. The very night the results came in.”
…click on the above link to read the rest of the article…
“Gold Will Go To $2,500 Per Ounce” In The Next One to Three Years – Charles Nenner
“Gold Will Go To $2,500 Per Ounce” In The Next One to Three Years – Charles Nenner
◆ “Gold will go to $2,500 per ounce” renowned geopolitical and financial cycle expert Charles Nenner stands by his prediction of record gold prices.
◆ “Cycles show me that gold and silver will be going up for a couple of years. I take profits in a short term top, but … I am in for the long term”... as “they will go much, much higher.”
◆ How much higher could gold go in the longer term? “I made the calculation that if the system breaks down and we have to go back to the gold standard, then gold would be around $60,000 per ounce” according to Nenner
◆ “The problem is it can go to $1,890 and then suddenly to $1,470, and they get afraid and sell out and no more long term investment. . . . If you are strong enough, let it go to $2,500, but never get weak even if it goes down. Be a long term investor. . . .$2,500 gold could take three years.”
◆ The cycle says we are at the top in stocks globally and while stocks could go 3% or 4% higher or we could have a 40% or 50% correction or indeed a crash
Watch interview here
The Amazing Untold Facts About Gold & Silver Investing
The Amazing Untold Facts About Gold & Silver Investing
The majority of precious metals investors do not understand the important fundamental factor to acquire and hold gold and silver. While most precious metals analysts promote investing in gold and silver due to the highly leveraged money supply, debt, and derivatives, they fail to warn about the “Energy Impact Factor.”
In my newest video update, The Amazing Untold Facts About Gold & Silver Investing, I discuss why energy is the primary driver of the economy and will be the leading force pushing the value of gold and silver to new highs. Analysts suggesting that the value of gold should be based on the debt backing all the outstanding Federal Reserve Notes do not account for the ENERGY that allows the money supply to function.
Furthermore, most precious metals analysts do not explain how the cost to produce gold and silver is directly tied to their current market value and ratio. In the video, I discuss that Barrick Gold consumes 52 times more diesel (gasoline and fuel oil) to produce an ounce of gold than Pan American Silver does to supply an ounce of silver.
Moreover, I show just how little silver is held by Central Banks versus gold. In the video, I stated that the Central banks held 100 times more gold (value) than silver. However, I failed to add one more ZERO. Actually, the Central Banks hold 1,000 times the value of gold than silver. This, along with the fact that there aren’t that much more above-ground investment silver stocks in the world as there is gold, will make SILVER the GO TO ASSET in the future.
…click on the above link to read the rest of the article…
Gold Just Broke Through A Key Level
Gold Just Broke Through A Key Level
For the first time in more than six years, gold broke through a key level. Gold surged on Friday due to the geopolitical tensions stemming from the Middle East after the U.S. took out Iran’s top military leader. During early trading in the early Asian markets, the gold price continued even higher, reaching $1,579.
This morning, gold is trading at the $1,575 level. It will be interesting to see if gold closes at the end of the day near its high or a low. The key resistance level is $1,550, which gold surpassed by $25. Here is gold’s monthly chart below (each candlestick represents one month of trading).
If you look at the “Larger View” insert, I have superimposed the candlestick breaking through the Key level. Unfortunately, Stockcharts.com does not provide a live chart for the metals or commodities. We have to wait until the close of trading to see the new candlestick price level. I find this quite odd because they recently added “Live” Crypto Trading charts for Bitcoin and several others.
Regardless, the Gold price finally broke through this level, and for it to remain in a bullish trend in the monthly chart below, it will have to close above the $1,550 (actually $1,560) level by the end of January. If we look at the next chart, the gold price surpassed the high of $1,566 in September:
According to Kitco.com, as of 9:43 am EST, the gold price reached a high of $1,577 and is currently trading at $1,573. And, if we look at the weekly gold chart, we can clearly see gold breaking through the $1,550 level:
…click on the above link to read the rest of the article…
Gold’s outlook for 2020
Gold’s outlook for 2020
This article is an overview of the economic conditions that will drive the gold price in 2020 and beyond. The turn of the credit cycle, the effect on government deficits and how they are to be financed are addressed.
In the absence of foreign demand for new US Treasuries and of a rise in the savings rate the US budget deficit can only be financed by monetary inflation. This is bound to lead to higher bond yields as the dollar’s falling purchasing power accelerates due to the sheer quantity of new dollars entering circulation. The relationship between rising bond yields and the gold price is also discussed.
It may turn out that the recent extraordinary events on Comex, with the expansion of open interest failing to suppress the gold price, are an early recognition in some quarters of the US Government’s debt trap.
The strains leading to a crisis for fiat currencies are emerging into plain sight.
Introduction
In 2019, priced in dollars gold rose 18.3% and silver by 15.1%. Or rather, and this is the more relevant way of putting it, priced in gold the dollar fell 15.5% and in silver 13%. This is because the story of 2019, as it will be in 2020, was of the re-emergence of fiat currency debasement. Particularly in the last quarter, the Fed began aggressively injecting new money into a surprisingly illiquid banking system through repurchase agreements, whereby banks’ reserves at the Fed are credited with cash loaned in return for T-bills and coupon-bearing Treasuries as collateral. Furthermore, the ECB restarted quantitative easing in November, and the Bank of Japan stands ready to ease policy further “if the momentum towards its 2% inflation target comes under threat” (Kuroda – 26 December).
…click on the above link to read the rest of the article…
Taking the Hard Way Out
TAKING THE HARD WAY OUT
“You don’t make mistakes when you don’t have money. When you have too much money, you will make a lot of mistakes.”
– Jack Ma, founder of Alibaba, the Amazon of China
“My view is simple and starts with the observation that gold is a lot like religion. No one can prove that God exists…or that God doesn’t exist…Well, that’s exactly the way I think it is with gold. Either you’re a believer or you’re not.”
– Howard Marks, founder of OakMark, whose newsletter Warren Buffett reads “religiously”
“Because of Paul Volcker, our financial system is safer and stronger. I’ll remember Paul for his consummate wisdom, untethered honesty, and a level of dignity that matched his towering stature.”
– Barack Obama
“Every penny of QE undertaken by the Fed that cannot be unwound is monetized debt.”
– CNBC regular and former senior advisor to the president of the Dallas Fed, Danielle DiMartino Booth
______________________________________________________________________________________________________
SUMMARY
- Interest rates and inflation couldn’t be more different today than they were in the 1970s.
- One of the shocking surprises of the last decade is that despite ultra-low, zero, or, even, negative interest rates inflation has generally fallen rather than risen.
- Yet, when it comes to asset prices (US stocks, global bonds, and real estate), it has been a completely different story.
- One asset class that hasn’t risen as swiftly as others is gold and other precious metals.
- This underperformance has caused most American investors—be they retail or institutional—to give up on precious metals as an essential asset class.
- However, John Hathaway, who is considered to be the “Warren Buffett of the precious metals space,” is much more bullish given all of the macro-economic factors at play.
- In the short-term, John and top economist David Rosenberg anticipate we could have a recession in 2020.
…click on the above link to read the rest of the article…
A Trend Worth Considering – The Price of Gold Since 1971
A Trend Worth Considering – The Price of Gold Since 1971
As we approach the end of 2019, gold is on track for a healthy yearly gain. To date, the yellow metal is up over 16% on the year.
It’s always interesting talking about gains in the price of gold because when you get down to it, it all depends on when you got into the market. If you bought an ounce of gold on Jan. 1 of this year and sold it this morning, you’d have pocketed around $208 (less any taxes and fees). But if you bought your gold at the peak price this year and sold it this morning, you’d be out about $68.
So, when we say gold is up or down, you always have to ask a second question: since when? The price can be simultaneously up and down at the same moment depending on the answer to that question.
I occasionally get comments on articles posted on the SchiffGold Facebook page by people complaining that they’ve lost a lot of money in gold because they bought when the market was at its absolute peak in 2011 and the yellow metal nearly hit $1,900. I can certainly understand their frustration, but I don’t buy their argument that their experience proves gold is a bad investment. While eight years seems like a long time, it’s not in the big scheme of things.
As I said, where you begin when you talk about a trend is key. Plucking an arbitrary date out of thin air doesn’t necessarily tell us a whole lot. It’s important to begin at a key moment in history.
…click on the above link to read the rest of the article…
Gold & Silver Extend Gains On Lagarde’s “Inflation Is Coming” Comments
Gold & Silver Extend Gains On Lagarde’s “Inflation Is Coming” Comments
With the dollar sliding, and following yesterday’s dovish market reaction to The Fed, ECB’s Lagarde comments on inflation (increasing its expectations for 2020 and said that Q4 2022 inflation will be at 1.7%) and noting labor costs pressures have strengthened.
Over the medium term, the inflation rate will increase, Lagarde said, adding that “the direction [rising] of inflation is good.”
Additionally, she noted The ECB’s highly accommodative stance will continue for a prolonged period until inflation rises, and said thatincoming economic and survey data point to some stabilization in the slowdown of economic growth in the euro area.
Gold and silver have erased all the post-Payrolls losses…
Ukraine’s IMF Gold and the Gold Carry Trade
Ukraine’s IMF Gold and the Gold Carry Trade
Important Tools for the Monetary Cartel
Let’s first consider a typical International Monetary Fund (IMF) loan to a sovereign in trouble, and then examine a typical gold carry trade transaction to support a sovereign arms deal. The intent is to demonstrate the importance of physical sovereign gold holdings in all forms of international trade.
Semi-failed and failed states can only exist by dealing in hard assets of real intrinsic value just as Syria, Venezuela, Iran, and Ukraine have done… and the most liquid of those hard assets is their physical gold.
Central Banks always work with the Security State apparatus when dealing with failed states and recall that the US Central Intelligence Agency funded al Qaeda and funded the war in Syria for example. Just about anything can be made to happen with funding when that funding is based on real resources. One of the most important of those resources is physical gold.
IMF Cartel Example: Ukraine
The IMF’s 2014 aid to Ukraine is based on a unique history however all IMF ‘aid’ packages are in some sense unique. Since we are highlighting the largely hitherto concealed importance of real physical gold in geo-political calculations and operations, Ukraine provides a relevant and timely example of how the banking Cartel operates with gold and may highlight that importance.
According to the 2018 Independent Transparency Index, Ukraine ranks as one of the most corrupt nations in the world. Ukraine ranks 120th out of 180 countries where the 180th – Somalia – is the most corrupt. But all nations need funding whether corrupt or not, and Ukraine defaulted on its IMF debt in 2001 and then again in 2009 when distribution of an existing IMF loan to Ukraine was frozen.
…click on the above link to read the rest of the article…
German Central Bank: Gold Is the Bedrock of Stability for the International Monetary System
German Central Bank: Gold Is the Bedrock of Stability for the International Monetary System
European central banks are slowly preparing for plan B: gold.
It was long believed in the gold space that Western central banks are against gold, but things have changed, for quite some years now. Instead of discouraging people from buying gold, or convincing them that gold is an irrelevant asset, many of these central banks are increasingly honest about the true properties of this monetary metal. Stating that gold is the ultimate store of value, that it preserves its purchasing power through time and is a global means of payment. Such statements, combined with actions that will be discussed below, reveal that more and more central banks are preparing for plan B.
The Bundesbank (the German central bank) published a book last year named Germany’s Gold. In the introduction, written by the President of the Bundesbank Jens Weidmann, the view of this bank leaves no room for interpretation. Weidmann writes (emphasis mine):
Ask anyone in Germany what they associate with gold and, more often than not, they will say that it is synonymous with enduring value and economic prosperity.
Ask us at the Bundesbank what our gold holdings mean for us and we will tell you that, first and foremost, they make up a very large share of Germany’s reserve assets … [and they] are a major anchor underpinning confidence in the intrinsic value of the Bundesbank’s balance sheet.
The Bundesbank produced this publication to give a detailed account, the first of its kind, of how gold has grown in importance over the course of history, first as medium of payment, later as the bedrock of stability for the international monetary system.
…click on the above link to read the rest of the article…
