It’s been a tough week for gold and silver and a record week for stocks because of — you guessed it — optimism about a trade deal. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the news of the week. Along the way, he also compares fickle investors obsessed with the latest trade war headline to a delusional sports fan who can only fixate on his team’s most recent game.
Silver investment in three major categories is up so far this year, according to a report highlighted in the latest edition of Silver News.
Silver held in ETFs hit an all-time high this year. Year-on-year through mid-August, 736.9 million ounces of metal were held in silver-backed ETFs. Meanwhile, global mint silver bullion coin sales rose 30% year-on-year through July.
Last week, the Federal Reserve cut interest rates for the third time. And the Fed isn’t alone. A majority of the world’s central banks have slashed rates this year. A World Gold Council report says this new regime of easy monetary policy will likely push bond yields down even lower, making gold a more attractive portfolio diversifier.
As negative yielding debt increases alongside stock-to-yield valuations to all-time highs, gold may become an attractive and more effective diversifier than bonds, justifying a higher portfolio allocation than historical performance suggests.”
As expected, the Federal Reserve cut rates for the third time this year. We’re now down to 1.5%. The Fed hinted that cuts are likely on pause for now. But should we believe it? Was this the end of a mid-cycle adjustment? Or should we expect more moves by the central bank? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down rate cut 3.0 and what it could mean for the precious metals markets.
Last Tuesday, the S&P 500 made a record high as markets anticipated another Fed rate cut. Some analysts say the big risk is that we’re seeing a boost in asset prices but no real uptick in the actual economy. Peter Schiff appeared on RT Boom Bust to talk about it. He said investors buying onto all of this Wall Street hype are in for a painful awakening.
Everybody is talking about the possibility of a trade deal.
Well, maybe not everybody. In this episode of the Friday Gold Wrap, host Mike Maharrey rehashes his standard trade war observations and then moves on to bigger news – Jerome Powell’s announcement that the Fed is resuming QE. Of course, Powell didn’t exactly say that. In fact, he tried to say the opposite in a statement that Mike describes as “word salad.” In this episode, Mike breaks down what’s going on with the Fed and why it matters a lot more than the possibility of a trade deal. He also covers some important gold-specific news that came out this week.
The unicorns are dying.
Markets seemed to really wake up to the plight of the unicorn when WeWork aborted its much-anticipated IPO, but the air started coming out of the unicorn bubble long before WeWork’s IPO demise.
Unicorns are privately held companies valued over $1 billion. Companies like Lyft, Chewie, Uber and WeWork were the darlings of WallStreet. Their IPOs were much-anticipated by investors. They are also the poster children for easy-money induced market mania, and their IPOs were crucial for maintaining the bubble.
ETF gold holding reached all-time highs in September.
Globally, gold-backed ETFs added 75.2 tons of metal to their holdings last month, according to the most recent data released by the World Gold Council. That brought total gold holdings to 2,808 tons, eclipsing the previous record set back in 2012 when the price of gold was near $1,700 per ounce.
Interest in silver investment has increased significantly in recent months. According to a report commissioned by the Silver Institute and put together by Metals Focus, silver investment has increased across a range of available instruments including physical metal, exchange-traded products (ETP) and in the futures markets.
Increased market volatility, a return to easy-money policies by central banks, geopolitical uncertainty and deteriorating economic conditions have spurred investment in safe-haven assets including silver. The silver price began the year at $15.44 per ounce. As of the end of September, the white metal was up 11%. Silver posted a yearly high of $19.30 on Sept. 4, a level not seen since 2016.
It was a bumpy ride in the markets this week. Right now, volatility is the name of the game – in both stocks and precious metals. People are getting nervous out there with some pretty grim economic data this week stirring up recession fears. Meanwhile, the US government just keeps spending money it doesn’t have. Host Mike Maharrey talks about all of this and more in this week’s episode of the Friday Gold Wrap podcast.