Gold holdings in gold-backed ETFs rose for the second straight month and turned positive for the year in November.
According to a report by the World Gold Council, 21.2 tons of gold, valued at about $804 million, flowed into ETFs last month. Total global holding rose to 2,365 tons.
The stock market got a nice bump on Monday with the news that there was a “truce” in the trade war. That lasted all of one day. The markets tanked on Tuesday as investors realized the “truce” really didn’t mean anything. The Dow Jones plunged 799 points, a 3.1% drop. The S&P 500 declined 3.2%, while the Nasdaq was down 3.8%. As one news outlet put it, “investors are quickly realizing that the US-China trade war is not over. The tariffs already put in place remain. And new tariffs could be implemented if the two sides fail to make progress.”
Well, yeah. Duh.
In his latest podcast, Peter Schiff said he wasn’t surprised at all by the drop.
Yesterday was another bad Monday on Wall Street. The Dow Jones dropped nearly 400 points and the NASDAQ fell deeper into “correction territory,” dropping another 3%. All five “FAANG” stocks closed in bear territory. These are the tech stocks that have propelled the long bull market. The NASDAQ is down 12.5% this quarter.
Apple’s announcement that it plans to cut production weighed heavily on the markets, along with another sign of trouble in the housing market — a big drop in homebuilder sentiment.
Peter said homebuilder sentiment is the first sign that the confidence bubble has popped.
Pres. Trump has spent a lot of time sniping at Jerome Powell and the Federal Reserve in recent weeks. As we put it last week, Powell has become the president’s favorite scapegoat as he tries to deflect blame for the tanking stock market. But in a recent appearance on The Closing Bell, Peter Schiff said there will be plenty of blame to go around when the next crash grips America. And this one will make 2008 look like the roaring ’20s.
On Oct. 10, the IMF released its Global Financial Stability report, highlighting increased levels of risk revealed by a number of global metrics. Just after the report was released, stocks in the US, Europe and Asia lost 4%, 3% and 4% respectively over three days.
As a recent investment update released by the World Gold Council points out, although stocks rebounded and regained some of those losses, the IMF report and subsequent market pullback “underline the relevance of holding gold in the near and long term.”
After hitting their highest level in 15 months in August, analysts expect Indian gold imports to continue climbing in the fourth quarter.
When looking at the gold market, it’s easy to get caught up in the daily price fluctuations or the most recent headlines on the financial channels and forget about long-term market dynamics. Gold, after all, is generally more of a long-term investment that has historically served as a hedge against economic turmoil and protected investors against fiat currency devaluation – otherwise known as inflation.
The World Gold Council recently released its Gold 2048 report providing in-depth analysis of how the gold market will potentially evolve over the next 30 years. In general, things look pretty bullish for the yellow metal if you consider a longer view.
The World Gold Council described overall demand for gold as “soft” in its Global Demand Trends Q1 2018 report. Global demand was down 7% year-on-year.
The WGC said the drop was primarily due to weak investment demand. Investors added to their holdings of gold coins and bars, as well as gold-backed ETFs, but at a slower pace than Q1 2017.
There were some bright spots in the report. Gold demand in the technology sector marked its sixth consecutive quarterly gain. Jewelry demand held steady. And not all investors are spurning the yellow metal.