Just a few weeks ago, the mainstream was worried about economic growth. Now, all of a sudden, the mainstream is bullish about economic growth. It seems like the high from the Fed’s monetary heroin has fully taken hold. And it’s not just in the US.
In this episode of the Friday Gold Wrap, host Mike Maharrey talks about how central bank monetary policy and government economic stimulus is impacting economies. It’s fun being high … until you’re dead. He also covers some interesting developments in the gold market.
The amount of gold held by Europe-based ETFs hit a record high in the first quarter of 2019, according to a report by the World Gold Council.
European funds now hold 1,121.4 tons of gold.
The WGC pinpoints three primary drivers of European gold investment.
Gold has been rangebound for months, gyrating up and down around the $1,300 mark. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about this “wash, rinse, repeat” cycle we’re seeing in the precious metals markets and then pivots into a discussion of some more fundamental dynamics. Mike touches on the financial condition of the US federal government, surging central bank demand for gold and the positive dynamics he’s seeing in the silver market.
Silver demand was up 4% and hit a three-year high in 2018, according to the 2019 World Silver Survey released by the Silver Institute this week.
Physical demand for silver came in at over 1 billion ounces last year.
Meanwhile, silver mine production fell for the third straight year, dropping 2% in 2018 to 855.7 million ounces.
Total gold holdings in ETFs grew marginally in March, resuming an upward trend that started last fall. Total holdings of the yellow metal globally rose 3 tons, with increases seen in every region, according to the most recent data released by the World Gold Council.
ETFs worldwide currently hold 2,483 tons of gold valued at approximately $103 billion.
In this week’s Friday Gold Wrap, Mike Maharrey covers some more bad signs in the economy, including rising oil prices, an unexpected drop in retail sales and a surge in negative-yielding government bonds. At best, it looks like the economy is slowing down. Or it could be the prelude to the next crisis. This raises an important question: who’s going to save us? Mike suggests we probably shouldn’t be counting on the politicians or the central bankers.
The conventional wisdom is that demand for gold and silver has been somewhat tepid over the last couple of years. In fact, global gold demand grew by about 4% in 2018 and was in line with the five-year average. Much of that growth was due to a surged in demand through the fourth quarter as stock markets tanked, and concerns about debt and the global economy grew.
We tend to be pretty short-sighted when we look at market trends. Most investors focus on the day-to-day gyrations. As a result, we often completely miss significant long-term trends. For instance, investment demand for gold and silver has increased dramatically in the decade since the financial crisis.
The federal government set an all-time record budget deficit in February. And this is with a Republican in the White House. The GOP is supposed to be the fiscally responsible party. In this episode of the Friday Gold Wrap, host Mike Maharrey offers some interesting analysis that reveals spending money in Washington DC is really a bipartisan sport. He also talks about Thursday’s selloff in gold and silver, explains why dollar strength is something of an illusion and illustrates how the way “the market” thinks is often pretty dumb.
The Fed wrapped up another FOMC meeting this week and came out even more dovish than expected. Rate hikes are off the table in 2019 and the central bank now only expects one hike in 2020. In his episode of the Friday Gold Wrap, host Mike Maharrey talks about the meeting and the dirty little secret Reuters let slip out. The goal here is to get you to spend more money and keep the bubble full of air. As Mike put it, “The Fed is trying to feed the debt monster and it wants you to pick up the tab.” He also covered the meeting’s impact on the markets and the latest in political theater.
Federal Reserve Chairman Jerome Powell appeared on 60 Minutes last Sunday to reassure us that the US economy is great. There’s nothing to worry about. So, why the sudden reversal in Fed monetary policy? According to Powell, the central bank is just worried about slowing global growth. But as Mike Maharrey discusses in this week’s Friday Gold Wrap, it’s pretty clear the real problems are right here in the good ol’ US of A. Mike also covers the latest in precious metals news, with a focus on silver.
