As you know, the performance of gold responds to the interaction of demand and supply, which, in turn, is influenced by the interplay of four key drivers:
By Dave Allen for Discount Gold & Silver
The New York spot price of gold increased 24.6% last year, while the spot price of silver was up a whopping 47.5% — outperforming all major assets except the tech-laden NASDAQ.
Comparatively, U.S. stocks, as measured by the S&P 500, rose 15.6% in 2020 — roughly more than one-third and two-thirds lower than the increases in gold and silver, respectively.
The precious metal’s performance was driven in a broad sense by a combination of three primary factors:
High volatility with a resulting flight from risk, prolonged low interest rates, and positive price momentum – especially during late spring and summer.
Gold, in particular, also had one of the lowest drawdowns during the year, thus helping investors limit losses and manage that volatility risk in their portfolios.
ALL-TIME PRICE HIT IN AUGUST
In its 2021 outlook released this week, the World Gold Council reminds us that by early August, gold reached an historical high of US$2,067 as well as record highs in all other major currencies.
While gold subsequently consolidated below that high, it remained comfortably above its average daily price of $1,828 for almost all of the 2nd half of 2020 — finishing the year at just shy of $1,894 an ounce.
Interestingly, the WGC says that gold’s performance in the 3rd and 4th quarters seemed to be linked more to physical investment demand — whether in the form of gold ETFs or coins and bars — rather than through the more speculative futures market.
For example, net long positioning reached an all-time high of 1,209 tons in early in the year, but ended the year almost 300 tons, or 30%, below this level.
The WGC believes that was due to the “dislocation that COMEX futures experienced in March [compared] to the spot gold price.” That made it more expensive for investors to hold futures compared to alternatives.
The WGC concludes that investors’ preference for physical and related gold products last year suggests that “gold was used by many as a strategic asset rather than purely a tactical play.”
THAT DEBT THING
Many market observers, including us, are concerned about the growing risks resulting from expanding budget deficits and the national debt.
Rising debt — government and corporate alike — combined with the ultra-low interest rate environment and growing money supply, signals heavier inflationary pressures ahead. And that’s good for gold.
This concern is being accentuated by central banks like the Fed and European Central Bank signaling greater tolerance of inflation being above their traditional targets for a longer period of time.
As you know, gold has traditionally performed well amid stock market p...
All day every day, all we hear about is Bitcoin, and how exciting it is. How more and more people are adopting it. Well, as I wrote a few weeks ago, I missed the whole boat on Bitcoin. The idea of it being anonymous was attractive, but the idea that I couldn’t hold it in my hand, had to rely on “wallets” with passwords, and the fact that I think they can indeed shut it off if they want, told me, I didn’t need it.
As 2020 came to a brutal end, an unequal K-shaped recovery was interrupted as the pandemic raged on while the government belatedly enacted an incomplete stimulus/relief package.
Well, don’t look now, but meaningful, relevant inflation is already upon us — and has been for some time — not just here in the U.S., but all around the world.
It shouldn’t come as a surprise either. After all, it’s the Fed’s explicit goal. And what else would you expect when the nation’s money supply (M-2) has grown by 410% since 2000 — and $3.7 trillion, or 24%, in 2020 alone?
The topic I would rather talk about is the situation that’s taking place in Georgia with the Senate race, and then of course whatever madness is going to happen on Wednesday. But, since we don’t know the outcome to either, I’d like to just take a minute and chat about Bitcoin for a minute.
So I shall celebrate this Birthday with prayer and meditation. I will come back from the daily grind to contemplate my reason for being here and what ever job I should be doing while I am. I don’t have all the answers, but I have to believe in something. I shall believe in a God, and that when this body of meat and bones runs its course, I hope I am accepted as one of his.
Call me silly, but if I was being ousted from a job, where crap like that was taking place, I’d be all about finding a way to persecute the person that assigned that error rate.
So, we’ll see how this all shakes out. I still suggest that some rocky times are ahead.
However, according to the Fed's December 10th H.4.1 report, almost 9 months after the CARES Act became law, Treasury has handed off to the Fed only $114 billion of the authorized $454 billion total.
Sorry to burst your bubble, but the media is not your friend. The media is the friend of Globalists. The Friend of communists and socialists.
Basically what I’m trying to say is that I don’t take hardly anything at face value. In the stock market, just listening to some talking head on TV will wipe out your account in a heartbeat. Getting tips from the kid at McDonalds only works in market manias. I don’t believe earnings releases, nor Government economic reports. Hell our own Feds say they can’t see any inflation, meanwhile the paper towels that used to be 12.50 for a case are now 24. I guess Fed’s don’t buy paper towels.
This has NOTHING to do with electing Biden or heels up Harris. They’re simply puppets for the New World Order folks, the UN folks, the “Great Reset” folks. This is all about getting Trump out of their sandbox. Trump’s most prescient statement was when he uttered “They’re not after me, they’re after you, I’m just in the way.” And that’s exactly right.
We know the biggest problem driving the price of gold is the ever-burgeoning stack of public debt, which the folks at ValueWalk believe could be exacerbated by inflation next year.
They recently reported Noble Gold founder and CEO Collin Plume's observation that central banks will have to bear to brunt of "government generosity."
Today I’m going to talk about “weekly” options. Are they good, bad or indifferent? Let’s chat.
The key to gap opens, is to be IN the stock and reap the benefits of the gap. Consider the following “facts”.
I realize that I’m not making points with many of the Democrats that simply enjoy investing and trading. I’ve stated my case about Trump for weeks, suggesting that he’s not Presidential, a bit Egocentric, brash, etc. I’ve also suggested that I was awful tired of his “greatest economy ever” baloney, since the economy has been propped up since 2008 with round after round of QE, and zero bound rates.
Yet I also feel that “Orange man” is the only thing keeping us from becoming a U.N. ruled, socialist outpost for the globalist elites. In other words, if your idea of utopia is the USSR of the 50’s or Venezuela of the 2020’s, then for sure, Biden/Harris are the puppets to bring that about. But if you’d like to try and hold up as a sovereign nation, Trump is our only chance.