The day's price movements

[pmbug]

...
Hedge fund luminaries including Paul Singer, David Einhorn, and Crispin Odey are among those bullish on gold, according to recent letters to investors. So are large asset managers like Blackrock Inc. and Newton Investment Management.

“Gold is the only escape from global monetising,” Odey wrote. Gold futures were the third-largest position held by his flagship Odey European Inc. fund at the end of March. “In the short term, the money will be made on the inflation bet.”

The logic is simple: the massive expansion of central bank balance sheets around the world must eventually dilute the value of their currencies -- most importantly the dollar -- leading to inflation of hard assets like gold. The price of the metal has already risen sharply this year, touching a seven-year high of $1,751.69 an ounce on Friday. But some believe it has much further to go.

“In recent months, gold has gone up in price to some degree, but we think that it is one of the most undervalued investable assets existing today,” Singer’s Elliott Management Corp. wrote in a letter to investors in April. He argued that low interest rates, mine disruptions and “fanatical debasement of money by all of the world’s central banks” would lead gold to rise to “literally multiples of its current price”.
...

https://www.bloomberg.com/news/arti...-are-lining-up-behind-gold-again?srnd=premium

If they are putting their (managed) money where their mouths are, it's going to push gold higher.

 

[pmbug]

... silver's Friday rally picked up new momentum after the release of the Federal Reserve's industrial production data for April. The report showed that industrial production dropped 11.2% last month, the most significant drop in the report's century-old history.

One of the report's components showed that mining output, including gold and silver production, dropped 11.2%, the sharpest monthly decline in history.

"Nobody really talks about the mining numbers in this report, but someone was obviously watching it," said Streible. "The data points to tightening physical supply. Silver prices are going higher because the market is getting a lift from all different angles."

With silver prices back over $17 an ounce ounces, Ole Hansen, head of commodity strategy at Saxo Bank, said that the next critical resistance level to watch is $17.50 an ounce.
...

More: https://www.kitco.com/news/2020-05-17/Supply-crunch-pushing-silver-price-to-3-month-high.html

 

[rblong2us]

An article I read from Tom Dyson caught my eye. Two years ago, Tom sold everything he had and invested all his money in gold......

https://www.rogueeconomics.com/bill-bonner-diary/why-gold-is-your-best-bet/

The Ultimate Barometer

The Dow-to-Gold ratio is the ultimate barometer of systemic “health.”

It tracks the 30 Dow Jones stocks, as priced in gold. And it tells us the best time to buy gold… and the best time to buy stocks.

You buy stocks when they are cheap relative to gold. That is, when the Dow-to-Gold ratio is below 5 (when it takes five ounces of gold or less to buy the entire Dow).

You sell stocks when they become expensive – when the Dow-to-Gold ratio rises above 15 (when it takes 15 ounces of gold or more to buy the entire Dow). So you sit in gold until stocks become cheap again (in gold terms).

Over the last 120 years, whenever the system “reset,” the ratio went below 5. Stocks were cheap, relative to gold.

On the flip side, when things were ripping – as they were in the late 1990s, for example – the ratio got as high as 41. Stocks were expensive, relative to gold.

And the thing about this barometer is that once it begins a trend, it tends to stay in that trend for many years.

It’s all in this chart of the Dow-to-Gold ratio from 1900 to 2020…

 

[pmbug]

I posted a note about a Bloomberg news report a while back where the author talked about the S&P500 measured in terms of gold:

https://www.pmbug.com/forum/f4/our-monetary-system-insane-3888/index2.html#post34775

Similar idea.

 

[pmbug]

Gold prices are likely to reach $2,000 an ounce in 12 months on the back of low real interest rates and concerns over currency debasement, even as developed markets emerge from COVID-19 lockdowns, lifting risk-on sentiment, according to a note Friday from Goldman Sachs.

The investment bank raised its 12-month forecast on gold to $2,000 an ounce, from $1,800. It also lifted its three-month view to $1,800 from $1,600 and its six-month forecast to $1,900 from $1,650.
...

Goldman raises 12-month gold forecast by 11% to $2,000 an ounce

Gold prices are likely to reach $2,000 an ounce in 12 months on the back of low real interest rates and concerns over currency debasement, even as developed...

www.marketwatch.com

Say what you will about GS, Wall Street listens to them...

 

[rblong2us]

Its worrying when the big boyz talk gold up

 

[pmbug]

As central banks pump trillions into the world economy, investors are setting their sights on what could be the next big thing in global monetary policy: yield curve control.

The strategy, which involves using bond purchases to pin down yields on certain maturities to a specific target, was once deemed an extreme and unusual measure, only deployed by the Bank of Japan four years ago after it became clear that a two-decade deflationary spiral wasn’t going away.

No longer. This year, the Reserve Bank of Australia adopted its own version. And despite officials’ attempts to cool it, speculation is rife that the U.S. Federal Reserve and Bank of England will follow later this year.

Should yield curve control go global, it would cement markets’ perception of central banks as the buyers of last resort, boosting risk appetite, lowering volatility and intensifying a broader hunt for yield. While money managers caution that such an environment could fuel reckless investment already stoked by a flood of fiscal and monetary stimulus, they nonetheless see benefits rippling across credit, equities, gold and emerging markets.

“It depends on the form and the price but broadly speaking it’s the green light to carry on with the QE trade -- buy everything regardless of valuation,” said James Athey, who manages $3.1 billion at Aberdeen Standard Investments in London.
...

A ‘Buy Everything’ Rally Beckons in World of Yield Curve Control

www.bloomberg.com

Waves of (free) funny money going to lift all boats, but not necessarily in unison. Insiders, family and friends will have opportunity to buy low and sell high. Everyone else just hangs on to their liferafts.

 

[pmbug]

Gold above 1800 today. If it sticks at closing gold will likely have some legs to climb higher. Silver also heading higher.

 

[pmbug]

Gold seems to have breeched $1800 for good, but it's not rising like some analysts predicted it would. Seems to be a slow fight.

On the other hand, silver looks to be making larger moves. I wonder if it's going to return to the $40s again...

 

[rblong2us]

I like slow n steady, hopefully keeps the 'Barstool Daves' away
And silver was going to outperform gold big time ........... ever since eerrr it fell massively in 2012

I'm currently only 40% down on my silver and a mere 80% up on that proper shiny stuff, with all the experts now predicting a POG of $2000 .......
Time to sell one and buy the other ?

 

[rblong2us]

Heh, new all time high in £ sterling this morning
might sell an ounce or two for current project funding

and a slow but steady crawl back to breakeven on the silver

 

[rblong2us]

And another milestone -
I generally use the Bullionvault chart

Gold Price Chart, Live Spot Gold Rates, Gold Price Per Ounce/Gram | BullionVault

Live Gold Price Charts for International Markets. View Spot Gold, Silver and Platinum Prices for USD Dollar, GBP Pounds, and EUR Euro.

www.bullionvault.com

because I can float between currencies and change the chart duration from 20 years to a few minutes.
Anyway this morning the gold price in $US is above the all time high of $1837 on the 25 July 2011 and currently hovvering around $1860
I prefer the Bullionvault prices as they reflect actual trades that I could have been a part of, while the official ATH seemed to be a very short duration spike.

 

[rblong2us]

YAY ! 1901

Is 'Barstool Dave' on board yet ?

 

[pmbug]

I think he only goes ballin with stonks.

 

[rblong2us]

spike to $1943 at the open
Got to expect some serious pushback this week but lookin good

 

[pmbug]

Yeah, looks like that upside breakout has finally started. We've had several trading days in a row with strong movement now. I don't recall what the next resistance level is supposed to be, but there will be another ceiling. There always is.

 

[pmbug]

...
“Looking at open interest in the futures markets, there does not seem to be excessive speculative positioning. This suggests physical buying and exchange traded funds are currently the key factors driving the price, which means a break above $2,000 will likely lead to increased speculative positioning that could push prices even higher,” said Hussein Sayed, chief market strategist at FXTM in a report Monday.

Analysts at Commerzbank also said that gold has plenty of upside when looking at speculative interest.

“The fact that the rise in the gold price has been hardly driven by speculation at all argues against any excessive correction,” the analysts said in a report Monday. “Net long positions held by speculative financial investors increased only slightly in the last reporting week, and still remain significantly short of their early-March level.”
...

Hedge funds continue to bet on gold, prices have room to move higher

www.kitco.com

 

[rblong2us]

In the small wee hours of last nightI found myself a bit too awake. I poked my phone to get a time check and as the last thing I had looked at was the Bullionvault chart, suddenly I was looking at a chart showing that POG was up around $40 in the previous hour at just below $1980 and something seemed to be going on, then as I watched it for a couple of minutes it dropped almost instantaneously a similar amount ..... and 4 hours later I note another near vertical $30 drop
WTF is really going on in the background ?
Is it possible that someone raided the bid stack in the small wee hours when the world is mainly asleep, a reverse of the process of dumping large numbers of futures when theres no one bidding and the controllers were watching, poised and ready ?
It would seem to indicate that they were anticipating this and are still able to control price, so the question then might become, why are they allowing it to rise and how far will they let it rise ?

$70 straight down in 4 hours and all theyve achieved is approximately -$10 from last nights close ......... fascinating
And pretty much the exact same deal for Silver !

And kinda obvious that there are attempts to control the market.
If they investigate last night, it will be those bidding the price up that will be targeted for 'legal' action.

 

[pmbug]

The metals had a huge jump last night after NY trading had closed. As I said in another thread, I don't think the Fed will allow the metals to signal too much strength. Don't want Joe public to pay attention to them.

 

[pmbug]

GoldMan Sach's recent report questioning the dollar and highlighting gold is getting a lot of media play. Bloomberg Opinion piece here promoting their recommendation to buy gold:

In the past decade, a traditional 60/40 portfolio of stocks and bonds, as represented by the S&P 500 index and long-term government bonds, was a winner. But with U.S. bond yields moving toward zero or even negative territory, it may be time to rethink that mix. One thought: How about swapping out some bonds for gold?
...

Gold Can Do What Bonds Can’t in a Superlow-Rate World

With central banks propping up debt markets to boost the economy, look elsewhere for diversification.

www.bloomberg.com