Gold has gone through some wild mood swings this week. It plunged back below $1,400 per ounce on Monday only to rally and climb back above that key level on Tuesday. What’s driving these fluctuations? And what should investors be focusing on? Mike Maharrey talks about it in this week’s Friday Gold wrap. He also touches on some positive signs in the silver market, the global movement toward de-dollarization, and he remembers a friend of liberty who passed away this week.
The total amount of negatively-yielding debt globally surged to more than $13 trillion for the first time ever late last month.
The amount of negative-yielding bonds has grown precipitously since the Federal Reserve did a monetary policy 180 with the Powell Pause earlier this year. The European Central Bank poured fuel on the fire last month when it hinted at new rate cuts or even another round of quantitative easing. Since then, Austria, Sweden and France joined other countries with 10-year bond yields below zero. Meanwhile, Japanese and German rates plunged to all-time lows.
The Dow Jones just had its best June since 1938. Overall, stocks were up around 7% last month. It was also the best first half for stocks in 22 years.
Meanwhile, gold gained about 8% on the month. As Peter pointed out in his latest podcast, while stocks had significant gains in dollar terms, they actually lost value in terms of real money.
And as Peter also pointed out, when you look at the recent stock market gains, you have to put them into context.
And just like that, gold was over $1,400. Just a couple of weeks ago, we were talking about how gold was struggling to crack through the key $1,300 level. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the main drivers behind the gold market right now, including the trade war and central bank mechanizations. He also covers some supply and demand fundamentals.
The Federal Reserve held its June Open Market Committee Meeting this week and it looks like Powell and company are fresh out of patience. In fact, that word didn’t come up once. And while the Fed held pat on interest rates, for now, virtually everybody is betting on a rate cut in the near future. This has caused gold to surge to prices not seen in nearly six years. Meanwhile, American consumers are still running up debt and the Chinese are shedding it. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about it.
Do millennials get gold?
If you embrace the stereotypes, you may think not. After all, millennials have both feet firmly planted in the digital world. Gold is pretty “old-fashioned.” You might assume they would be far more interested in cryptocurrencies. Or perhaps you just figure millennials aren’t investing at all.
But as it turns out, the millennial generation seems to be just as interested in gold as their parents.
Back in December, Peter Schiff said the Federal Reserve’s was about to do the last rate hike of the cycle. He went further and said the “Powell Pause” wouldn’t be enough and the next step would be rate cuts and another round of quantitative easing. Fast forward to today and nearly everybody expects that the Fed will cut rates at least once this year.
Jim Grant appeared on CNBC Markets Now on June 17 and shocked the panel when he said he thinks the Fed will actually cut rates during this week’s meeting. Most analysts expect the central bank to hold pat during this meeting and then possibly cut in July.
Whether or not he’s right about the timing, Grant offers a good explanation as to why the Fed will cut and the likely results. He says the central bank is pursuing a dual mandate of arsonist and fireman.
Gold has crashed through another key resistance level and is on track for its fourth consecutive weekly gain. What is driving gold into the spotlight? Host Mike Maharrey talks about it in this week’s episode of the Friday Gold Wrap podcast. He also raises an important question – what is all this going to look like when the recession really takes hold?
The following is a market update as it related to precious metals prepared by SchiffGold intern commodities analyst Jason Mezhibovsky and SchiffGold News managing editor Mike Maharrey.
Most mainstream analysts believe we remain in the midst of the longest bull market in history. If you consider the post-crisis S&P 500 low of March 9, 2009, as the beginning of this bull run, then it’s well over a decade long.
Peter Schiff believes the bull market actually ended last fall. He predicted that the December rate hike would be the last. Turns out he was correct in that prediction.