Earlier this week, the World Gold Council released its informative and eminently readable mid-year outlook for gold.
Looking at the first half of 2021, the WGC found that “strong consumer demand recovery and [2nd quarter] gold ETF inflows were not enough to offset heavy [1st quarter] outflows.”
Looking ahead to the rest of the year, the WGC sees interest rates, inflation, devaluing of fiat currencies and higher exposure to risk assets combining “to prompt strategic investors to add gold to their [portfolios].”
That, in turn, will put upward pressure on gold prices in the second half of 2021, especially when assuming expectations for underperforming economies in the U.S. and elsewhere (the WGC doesn’t forecast prices of gold).
By Dave Allen for Discount Gold & Silver
Earlier this week, the World Gold Council released its informative and eminently readable mid-year outlook for gold.
Looking at the first half of 2021, the WGC found that “strong consumer demand recovery and [2nd quarter] gold ETF inflows were not enough to offset heavy [1st quarter] outflows.”
Looking ahead to the rest of the year, the WGC sees interest rates, inflation, devaluing of fiat currencies and higher exposure to risk assets combining “to prompt strategic investors to add gold to their [portfolios].”
That, in turn, will put upward pressure on gold prices in the second half of 2021, especially when assuming expectations for underperforming economies in the U.S. and elsewhere (the WGC doesn’t forecast prices of gold).
A Quick Look Back at the First Half of the Year
Demand. According to the WGC’s analysis, gold demand (excluding Over the Counter) for the 2nd quarter was about the same as a year prior — at 955.1 tons.
That’s a decrease of about 1% from the 1st quarter, taking 1st half demand to 1,833.1 tons — down 10% year-over-year.
Supply. The global supply of gold in the 2nd quarter was 13% higher than in 2020; the 1st half was 4% higher.
Price. The U.S. dollar gold price averaged $1,816.50 an ounce during the 2nd quarter, 6% higher than in 2020.
During the April-June period, the price gained 4.3%, thanks to support from ETF inflows and net long positioning by traders.
Bars & coins. Notably, bar and coin investment saw its 4th consecutive quarter of strong annualized gains.
Second quarter demand totaled 244 tons, producing a 1st half total of 594 tons — a 56% increase, the strongest since 2013 (see chart).
Thailand was the largest contributor to this growth after switching from net negative investment in Q2 2020 to modest positive investment.
ETFs. Modest 2nd inflows into gold-backed ETFs, at nearly 41 tons, only partially offset the heavy outflows from the 1st quarter. Thus, ETFs had 1st half net outflows of 129 tons — the first time that happened since 2014.
Inflows were concentrated in Western markets, with U.S., Germany and France investors contributing to double-digit growth in holdings.
Central banks. Central bank buying continued unabashed in the 2nd quarter. Global gold reserves grew by just shy of 200 tons, which resulted net buying in the 1st half to 333 tons.
That’s 39% higher than its 5-year average and 29% above the 10-year average.
Large-scale purchases by Thailand, Hungary and Brazil drove this growth in global gold reserves.
Jewelry. Second quarter jewelry demand, at almost 391 tons, continued to rebound from 2020’s softness, although it ...
There is no economy. There is however, trillions in Fed/Government money keeping the plates in the air. So let’s talk about inflation, the so called economy, and what’s really going on.
The imminent return of the federal government’s debt ceiling is causing agita among money-market traders once again.
Conventional wisdom holds that the risk that Uncle Sam might default by missing a payment on a bill or two is next to nothing.
Nevertheless, investors are wondering if and how the Treasury can slash its giant cash pile to the level the department has indicated would be consistent with its policies and the 2019 act that suspended the limit.
And they’re concerned about the impact that any such moves could have on short-term funding markets, which underpin much of the global financial architecture.
Why would someone pay me for that type of information? Well, the NASDAQ was in a bubble like we’d never seen. And Companies took advantage of that bubble by splitting their stock, thus making it cheaper for more masses to enter, and the stock would zoom back up. But traders often saw that the minute a split was announced, it would start climbing higher. They wanted in quickly and cell phones weren’t that popular yet. Hence the pager.
If you want to know why prices at your local gas station are so much higher these days than before the pandemic, you only have to look at the number of oil rigs that are up and running off U.S. shores.
We know that the demand for oil has been rising as consumers emerge from Covid hibernation and businesses try to remake themselves to supply them.
However, oil companies are dragging their feet on ramping up production, new data from Baker Hughes showed last week. And when production doesn't keep up with demand, it drives prices higher.
So, this weekend we mentioned some of the ills facing us and they’re aplenty for sure. We know they’re coming at us with Central bank digital currency. We know the BIS, IMF, and regional central banks are all in on it and can’t wait.
We write mainly about economic factors in these letters. But in reality, one can never ignore all the other factors that make up economic reality. For instance Political decisions weigh on economic factors. Global partnerships, alliances, wars, trade embargo’s, sanctions, you name it. It all adds up to actually influence your money, your investing and your way of life.
Control. The elitists worship it. They get a form of sexual gratification from it. And boy does it show. From the censorship on social media, where the President of The United States was banned, to the lock downs, the masks, the no travel rules, the shutting down of businesses to you name it.
Yesterday, the U.S. Supreme Court took two steps backwards in the fight for fair and transparent elections — and in the process struck one more blow to our fragile and vulnerable representative democracy.
Friday’s article blog pointed out that in 2018, only 43% of companies in the S&P 500 Index incurred any expenses for research and development.
And just 38, or 7.6%, of companies accounted for 75% of the R&D spending of all 500 companies in the index.
So, I asked, where’s all the corporate cash been going?
Stock buybacks and dividend payments are on the verge of gushing out of Wall Street banks’ faucets and breaking through the proverbial dam.
Just six months ago, participants in a monthly survey conducted by too-big-to-fail Deutsche Bank were asked, “[What] do you think are the biggest risks to global financial markets in 2021?”
What’s it all mean? Are we at an inflection point in market land now, and the big bull market is over? Probably not just yet. That said, Quad hangovers can indeed extend several days, as traders reposition and rethink their futures roll outs. But make no mistake, the Fed’s statements, along with Bullard’s opinion, has changed the narrative some. We might see a much more volatile next two weeks as they try and square up all of this. Caution is warranted.
Flying below the radar across the country, under the shadow of the better-known student loan crisis, colleges and universities have been having trouble paying their bills.
Axios’ Kate Marino believes there’s a reckoning coming in higher education — especially for smaller, private liberal arts schools — that’s been years in the making.
Over in Russia they’ve asked all foreign migrant workers to return home by June 15th. Why would they do that? Russia has a labor shortage to begin with, so they use Asian’s to bolster the workforce. Why send them home?
The US has requested that Americans living in Russia should come home. When? By June 15th if possible. Why? Why kick out the migrant workers and why have US Citizens come back? Why will Visa’s to Russia not be given out any more?
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