Gold breaches $1,300 albeit briefly

Gold Today –New York closed yesterday at $1,288.70. London opened at $1,293.15 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1750 after the yesterday’s $1.1743: €1.

         The Dollar index was weaker at 93.47 after yesterday’s 93.64

         The Yen was stronger at 109.05 after yesterday’s 110.02:$1. 

         The Yuan was weaker at 6.6769 after yesterday’s 6.6713: $1. 

         The Pound Sterling was stronger at $1.2896 after yesterday’s $1.2887: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    18

     2017    8    17           

     2017    8    16

SHAU

SHAU

SHAU

/

277.29

274.83

Trading at 278.0

277.03

274.62

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6769

       $1: 6.6713

       $1: 6.6926     

  /

$1,287.80

$1,272.26

Trading at $1,290.03

$1,286.59

$1,271.28

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $2.00 higher than Shanghai’s close yesterday. Then today sees Shanghai jumping to $1.33 higher than New York’s close before London opened nearly a $3.12 higher than Shanghai, as the dollar continued its fall and real demand for gold was seen.

All three global gold centers continue to react to the falling dollar today. This is about the dollar once again. There appears to be an effort to curb the euro’s rise, with Draghi saying the euro may be overheating.

The market consensus is that the euro could rise above $1.20.If that happens and the gold price reflects such a rise, then we would see a dollar gold price of $1,317, well above long term resistance.

Silver Today –Silver closed at $17.05 yesterday after $16.94 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set today at $1,295.25 from yesterday’s $1,285.90.  The gold price in the euro was set again at €1,102.72 after yesterday’s €1,098.78.

Just before the opening of New York the gold price was trading at $1,296.00 and in the euro at €1,103.82. At the same time, the silver price was trading at $17.22. After New York opened gold briefly breached the $1,300 psychological level before being brought back down the the mid-$1290s again.

Price Drivers

The dollar is falling once more, but not precipitously. It will lead to higher gold prices if it continues. This is being reflected in today’s prices. There is strength to the rise in gold price that we had not seen before in the previous attacks on $1,300. The causes are solid too. These are; an overvaluation of the dollar, a resuscitation of U.S. demand for physical gold, a dearth of sellers of gold, Shanghai’s demand for gold remains strong as it does in London!

While we rarely attribute gold price rises to political stories and the like, we do feel that the disappointment at President Trump’s efforts to bring great economic changes to the U.S. is resulting in bearish sentiment on the dollar, U.S. equities and the future of interest rate rises.

His abrasive attacks, on all fronts, appear to have undermined his hopes of achieving great things. It does look like the government in the U.S. is unable to rule effectively, at the moment, due to partisan infighting and lack of support amongst even the Republican Party. This is supportive of higher gold prices as U.S. institutional investors advocate a 10% – 15% holding in gold.

Gold ETFs – Yesterday there were no purchases or sales into the SPDR gold ETF or the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 795.443 tonnes and at 213.28 tonnes respectively.

Since January 4th 2016, 171.08 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. 

Since January 6th 2017, 9.114 tonnes have been added to the gold ETFs we follow.

Julian D.W. Phillips  – GoldForecaster.com | StockBridge Management Alliance

Gold rises, dollar falls, on FOMC minutes consideration

Gold Today –New York closed yesterday at $1,282.90. London opened at $1,288.10 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1743 after the yesterday’s $1.1725: €1.

         The Dollar index was stronger at 93.64 after yesterday’s 93.89

         The Yen was weaker at 110.02 after yesterday’s 110.86:$1. 

         The Yuan was much stronger at 6.6713 after yesterday’s 6.6926: $1. 

         The Pound Sterling was almost unchanged at $1.2887 after yesterday’s $1.2883: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    17

     2017    8    16           

     2017    8    15

SHAU

SHAU

SHAU

/

274.83

274.93

Trading at 277.2

274.62

274.81

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6713

       $1: 6.6926

       $1: 6.6792     

  /$1,272.26

$1,275.28

Trading at $1,287.38$1,271.28

$1,274.73

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $11.38 higher than Shanghai’s close yesterday. Then today sees Shanghai jumping to $4.48 higher than New York’s close before London opened nearly a $1.00 higher than Shanghai, as the dollar started to resume its fall.

All three global gold centers are reacting to the falling dollar today. What is of great interest is that the concept of Shanghai having a “premium” over London is just about dead. We are seeing a truly global gold price now, both ways. We have no doubt now that global gold prices are here to stay and that the impact of COMEX ‘paper’ gold prices has almost been removed as the significance of New York’s gold prices has diminished, in favour of the global gold price. This is a significant point in the evolution of the gold price!

Silver Today –Silver closed at $16.94 yesterday after $16.71 at New York’s close Tuesday.

LBMA price setting:  The LBMA gold price was set this morning  at $1,285.90 from yesterday’s $1,270.15.  The gold price in the euro was set again at €1,098.78 after yesterday’s €1,084.67.

Just before the opening of New York the gold price was trading at $1,286.50 and in the euro at €1,098.54. At the same time, the silver price was trading at $17.10. 

Price Drivers

The dollar appears to have turned down to resume its fall to lower levels. It has bounced down off overhead resistance. This is now reflected in the exchange rate against the dollar as well as the gold price. Take a look at the gold price in the euro and it shows that gold is €10 higher at the opening, so the gold price is rising against all currencies now.

It was after the Fed Minutes came out that the dollar changed direction. Market hopes that tightening is still on the cards were disappointed.  As we write the dollar is trying to strengthen, but the index remains below 94.

Gold ETFs – Yesterday there were purchases of 4.435 tonnes of gold into the SPDR gold ETF but no change in the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 795.443 tonnes and at 213.28 tonnes respectively.

It does appear that U.S. investors are listening to their peers who are recommending gold to the extent of 10% – 15% of their portfolios as more warnings of toppy markets in U.S. equities become more apparent.

Since January 4th 2016, 171.08 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. 

Since January 6th 2017, 9.114 tonnes have been added to the gold ETFs we follow.

 Julian D.W. Phillips  GoldForecaster.com | StockBridge Management Alliance 

Gold destined to be money

Gold Was Chemically Destined to Be Money All Along

By Frank Holmes – CEO and Chief Investment Officer, U.S Global Investors

By

I think most of you reading this right now are aware that gold is unlike any other metal, certainly any other element. It doesn’t play by the same rules as iron or tin or aluminum, and its value has nothing to do with its utility—or lack thereof. People valued the yellow metal for its beauty and malleability eons before they knew of its usefulness in conducting electricity or its chemical inertness.

That gold is so chemically “boring,” though, is one of the main reasons why it’s so highly valued, even today.

This is the conclusion of Andrea Sella, distinguished professor of chemistry at University College London. In 2013, Sella spoke with Justin Rowlatt of the BBC World Service, walking him through all 118 elements of the periodic table.

Gold, according to Sella, is the best possible candidate for a currency of any value.

As he points out, we can automatically eliminate whole swaths of the periodic table for various reasons. We can cross out gases, halogens and liquids such as helium, fluorine and mercury. No one wants to carry around vials of a colorless gas or, in the case of mercury and bromine, a poisonous substance.

We can then rule out alkaline earth metals such as magnesium and barium for being too reactive and explosive. Carcinogenic, radioactive elements such as uranium and plutonium are too impractical, as are synthetic elements that exist only momentarily in lab experiments—seaborgium and einsteinium, for example.

That leaves us with the 49 transition and post-transition metals: titanium, nickel, tin, lead, aluminum and more.

But many of these pose problems that should immediately exclude them from consideration as a currency. Most are too hard to smelt (titanium), too flimsy for coinage (aluminum), too corrosive (copper) and/or too plentiful (iron).

We are now left with just eight candidates, the noble metals: platinum, palladium, rhodium, iridium, osmium, ruthenium, silver and gold. These are all attractive as currencies, but except for silver and gold, they’re simply too rare.

So: silver and gold.

What gives gold the edge over silver, however, is—once again—its chemical inertness. Unlike its white cousin, gold doesn’t tarnish. It’s nonreactive to air and water. Add to this its softness, and it easily emerges as the perfect currency. Ancient peoples recognized this, and I don’t think anyone now would have any problem coming to the same conclusion either.

gold coins

“I view gold as the primary global currency.”

Those are the words of former Fed Chairman Alan Greenspan, speaking to the World Gold Council for the 2017 winter edition of its Gold Investor publication.

“It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.”

Right now, for the first time in human history, world currencies are free-floating, meaning they’re not backed by anything tangible.

It’s largely because of this that world debt has been allowed to soar to astronomical highs in recent years, threatening the stability of the global economy. As we’ve seen in Zimbabwe, Venezuela and elsewhere, a nation’s currency can rapidly lose its value and become worthless. Families and individuals who didn’t have a portion of their wealth stored in a real asset such as gold lost everything.

This is why I always recommend a 10 percent weighting in gold, with 5 percent in physical gold (coins, bars and jewelry) and the other 5 percent in high-quality gold stocks, mutual funds and ETFs.

Stronger dollar still impacting dollar gold price

Gold Today –New York closed yesterday at $1,279.70. London opened at $1,270.00 today. 

Overall the dollar was stronger against global currencies, early today. Before London’s opening:

         The $: € was stronger at $1.1725 after the yesterday’s $1.1740: €1.

         The Dollar index was stronger at 93.89 after yesterday’s 93.73

         The Yen was weaker at 110.86 after yesterday’s 110.33:$1. 

         The Yuan was much weaker at 6.6926 after yesterday’s 6.6792: $1. 

         The Pound Sterling was weaker at $1.2883 after yesterday’s $1.2957: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    16

     2017    8    15           

     2017    8    14

SHAU

SHAU

SHAU

/

274.93

276.93

Trading at 275.0

274.81

276.79

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6926

       $1: 6.6792

       $1: 6.6691     

  /

$1,275.28

$1,286.55

Trading at $1,273.05

$1,274.73

$1,285.90

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $5.00 higher than Shanghai’s close yesterday. Then today sees Shanghai dropping the gold price once again just before London opened, which lead to London’s prices being lower for the same reason as yesterday, as the dollar continued higher, in its falling pattern.

Shanghai continues to lead the way down, but following a stronger dollar as it adjusts to dollar gold prices.

Silver Today –Silver closed at $16.71 yesterday after $17.07 at New York’s close Monday.

LBMA price setting:  The LBMA gold price was set this morning at $1,270.15 from yesterday’s $1,274.60.  The gold price in the euro was set again at €1,084.67 after yesterday’s €1,084.67.

Just before the opening of New York the gold price was trading at $1,270.00 and in the euro at €1,085.84. At the same time, the silver price was trading at $16.71. 

Price Drivers

The dollar continues to rise taking gold prices in the dollar down. You will note that the euro gold price is barely changing, showing that this is not gold’s trading pattern, simply adjustments to the gold prices as currency exchange rates change.

The Fed Minutes are due out today, which the press is saying will impact on gold. It will be a factor no doubt, but the U.S. data of late and since the last meeting has been disappointing. Indeed, it is becoming clear based on the data that inflation falling is a deep worry. We read the indications, post the FOMC meeting as indicative of no rate hike but there is a possibility that the Fed’s Balance very slow decrease may still be on the cards. However, we do not think that this is sufficient to be a negative factor on the global gold price. Yes, it may slow U.S. demand until more negative data on inflation comes out, but it will have little to any impact on global gold demand.  

India With no duties being applied to gold jewelry exported from India the opportunity to export it, eventually to reach countries like Thailand, has seen a lot of gold coins and medallions leave the country [15% of all jewelry exported is in this form]. This has been then, exported from Thailand back to India duty free because of the Trade Agreement with Thailand. The government of India has banned exports of gold of a carat level above 22 carats.

This would make it more difficult to establish the value of the gold, but we suspect the canny Indian  gold dealers would have little difficulty in maintaining this trade, with a little bit of refining brought in. And that need not be that expensive! Such is the gold trade in India.

Gold ETFs – Yesterday there were no purchases or sales into or from the SPDR gold ETF or the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 791.008 tonnes and at 213.28 tonnes respectively.

Since January 4th 2016, 166.645 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. 

Since January 6th 2017, 4.679 tonnes have been added to the gold ETFs we follow..

 Julian D.W. Phillips – GoldForecaster.com | StockBridge Management Alliance 

North Korea tensions diminish: dollar rises, gold falls

Gold Today –New York closed yesterday at $1,282.00. London opened at $1,272.75 today. 

Overall the dollar was stronger against global currencies, early today. Before London’s opening:

         The $: € was stronger at $1.1740 after the yesterday’s $1.1799: €1.

         The Dollar index was stronger at 93.73 after yesterday’s 93.33

         The Yen was weaker at 110.33 after yesterday’s 109.76:$1. 

         The Yuan was weaker at 6.6792 after yesterday’s 6.6691: $1. 

         The Pound Sterling was weaker at $1.2957 after yesterday’s $1.2995: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    15

     2017    8    14           

     2017    8    11

SHAU

SHAU

SHAU

/

276.93

277.06

Trading at 275.4

276.79

276.86

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6792

       $1: 6.6691

       $1: 6.6672     

  /

$1,286.55

$1,287.26

Trading at $1,277.47

$1,285.90

$1,286.32

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.] 

New York closed $4.53 higher than Shanghai’s close yesterday. Then today sees Shanghai dropping the gold price just before London opened, which lead to London’s prices being lower as the dollar corrected higher, in its falling patter. Shanghai is leading the way down, but following a stronger dollar as it adjusts to dollar gold prices.

Silver Today –Silver closed at $17.07 yesterday after $17.06 at New York’s close Friday.

LBMA price setting:  The LBMA gold price was set this morning at $1,274.60 from yesterday’s $1,281.10.  The gold price in the euro was set at €1,084.67 after yesterday’s €1,085.869.

Just before the opening of New York the gold price was trading at $1,273.00 and in the euro at €1,084.65. At the same time, the silver price was trading at $16.80. 

Price Drivers

All told, this was simply a day when the gold price barely moved in the euro but fell in the dollar as the dollar corrected higher before its next downward turn.

Now we have something definitive, but we are suspicious of the statement, “Kim Jong Un, the leader of North Korea, said he would wait to see what the US does next before he decides whether or not to fire a missile towards Guam, according to state media. Today’s statement from North Korea, coming after more conciliatory tone from the US administration yesterday, has de-escalated the threat of conflict and reassure investors after a nervous few days. But how long will this last? Putting oneself in his shoes with his posture that he is the one threatened by the U.S. [which is why he is waiting for the U.S. to act], we see he may have kept his defensive posture. This does not mean he will not fire more missiles and confirm North Korea has a nuclear bomb! The question now becomes, “Will President Trump attack if the tests continue, which we expect them to?” We see therefore, at best, that the threat has been postponed for an undetermined period of time. This postpones the North Korean situation as a factor in the gold price.

Meanwhile, the gold price has fallen in dollar terms in line with the rise of the dollar. We confirm the dollar remains in a bear market, so we expect this correction to be followed by a continuation of its fall to new lows. This will drive gold higher in dollar terms.

Gold ETFs – Yesterday there were purchases of 4.139 tonnes into the SPDR gold ETF but no change in the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 791.008 tonnes and at 213.28 tonnes respectively. While these purchases were substantial, they had no effect on the gold price. They would have to be persistent or larger than this.

 Julian D.W. Phillips   GoldForecaster.com | StockBridge Management Alliance 

Hot bull market in metals developing?

Is this the start of a hot new metals bull market?

By Frank Holmes – CEO and Chief Investment Officer, U.S. Global Investors

Aluminum metals

Major U.S. indices slid for a second straight week as President Donald Trump and North Korea both escalated their saber-rattling, with Kim Jong-un explicitly targeting Guam, home to a number of American military bases, and Trump tweeting Friday that “Military solutions are now fully in place, locked and loaded.” The S&P 500 Index fell 1.5 percent on Thursday, its largest one-day decline since May. Military stocks, however, were up, led by Raytheon, Lockheed Martin and Northrop Grumman.

As expected, the Fear Trade boosted gold on safe haven demand. The yellow metal finished the week just under $1,300, a level we haven’t seen since November 2016. Last week, Ray Dalio, founder of Bridgewater Associates, the largest hedge fund in the world, said it was time for investors to put between 5 and 10 percent of their portfolio in gold as a precaution against global and domestic geopolitical risks. The threat of nuclear war is at the top of everyone’s mind, but Dalio reminds us that our indecisive Congress could very well fail to agree on raising the debt ceiling next month, meaning a “good” government shutdown, as Trump once put it, would follow.

Dalio’s not the only one recommending gold right now. Speaking to CNBC last week, commodities expert Dennis Gartman, editor and publisher of the widely-read Gartman Letter, said that he believed “gold is about to break out on the upside strongly” in response to geopolitical risks and inflationary pressures. Gartman thinks investors should have between 10 and 15 percent of their portfolio in gold.

Government shutdowns haven’t always been harmful to the stock market—during the last one, in October 2013, stocks actually gained about 3 percent—but I agree that it might be prudent right now for investors to de-risk and ensure their portfolios include safe haven assets such as gold and municipal bonds. Dalio and Gartman’s allocation percentages mirror my own. For years, I’ve recommended a 10 percent weighting in gold, with 5 percent in bullion and 5 percent in high-quality gold stocks, mutual funds and ETFs.

Analysts Bullish on Metals and Commodities

Weaker US Dollar helped commodities beat the market in july

click to enlarge

Like stocks, the U.S. dollar continued its slide last week. This has lent support not just to gold but also commodities, specifically industrial metals. The Bloomberg Commodity Index actually beat the market in July, the first time it’s done so this year.

If we look at the index’s constituents, we find that six metals—aluminum, copper, zinc, gold, silver and nickel—have been the top drivers of performance this year, thanks to a weaker dollar, China’s commitment to rein in oversupply and heightened demand. According to Bloomberg, an index of these six raw metals has jumped to its highest in more than two years.

Some market observers believe this is only the beginning. Guy Wolf, an analyst with Marex Spectron Group, told Bloomberg that he doesn’t “see anything” to make him doubt the firm’s belief that metals “are now in a bull market.”

“As people start to realize that the reasons for prices going up are robust and sustainable, that’s going to bring more money into the market,” Wolf added.

This bullish sentiment is shared by Mike McGlone, senior commodities analyst with Bloomberg Intelligence, who writes that commodities’ strong performance in July  “could be the beginning of a trend.”

“Supported by demand exceeding supply, on the back of multiple years of declining prices, a peaking dollar should mark an inflection point for sustained commodity recovery,” McGlone says.

I can’t say whether we might eventually see the highs of the commodities supercycle in the 2000s, but this news is certainly constructive.

Aluminum Liftoff

The top performer right now is aluminum, up more than 20 percent year-to-date. Last week it breached $2,000 a tonne for the first time since December 2014 and is currently trading strongly above its 50-day and 200-day moving averages.

US ISM non-manufacturing PMI sinks to 11 month low in july
click to enlarge

Demand for aluminum is growing in the automotive and packaging industries, its two key markets. With consumers and governments demanding better fuel efficiency, automakers are increasingly turning to aluminum, which is around 40 percent lighter than steel. According to Ducker Worldwide, a market research firm, the amount of aluminum used to build each new vehicle will double between the early 2010s and 2025, eventually reaching 500 pounds. That’s up from only 100 pounds per vehicle, which was the case in the 1970s. Airline manufacturers such as Boeing and Airbus are also expected to increase demand for the lightweight metal.

Supply-side conditions are also improving. Prices have struggled in recent years as China—which accounts for roughly 40 percent of world output—flooded the market with cheap, and often illegal, metal. Recently, however, the Asian giant has called for dramatic capacity cuts in a number of provinces. By the end of 2017, an estimated 4 million metric tons of capacity will have closed, or one-tenth of the country’s total annual output, according to MetalMiner.

Also supporting prices is the Commerce Department’s decision last week to slap duties on aluminum coming into the U.S. from a number of Chinese producers that were found to be heavily subsidized by the Chinese government.

The Virginia-based Aluminum Association applauded the decision, saying that its members “are very pleased with the Commerce Department’s finding and we greatly appreciate Secretary [Wilbur] Ross’s leadership in enforcing U.S. trade laws to combat unfair practices.”

The aluminum industry, the trade group says, supports more than 20,000 American jobs, both directly and indirectly, and accounts for $6.8 billion in economic activity.

Miners Getting Back to Work

There’s perhaps no greater signal of a shift in sentiment than an increase in mining activity as producers take advantage of higher prices. Bloomberg reported last week that the number of new holes drilled around the globe has accelerated for five straight quarters as of June. What’s more, drilling activity so far this quarter, as of August 7, suggests that number could extend to six quarters.

US ISM non-manufacturing PMI sinks to 11 month low in july
click to enlarge

I believe activity will only continue to expand as China pursues further large infrastructure projects, which will require even more raw materials such as aluminum, copper, zinc and other base metals. And I still have confidence that Trump and Congress can deliver on a grand infrastructure deal—the president has been turning up the heat on Senate Majority Leader Mitch McConnell, writing on Twitter that the Kentucky senator needs to “get back to work” and put “a great Infrastructure Bill on my desk for signing.”

With government spending on infrastructure falling to a record low of 1.4 percent of GDP in the second quarter, such a bill would help modernize our nation’s roads, bridges, waterways and more. It would also serve as a huge bipartisan win for Trump, which he sorely needs to build up his political capital.

But beyond that, a $1 trillion infrastructure deal would greatly boost demand for metals and other raw materials, perhaps ushering in a new commodities supercycle.

Gold traders attacking triple top

Gold Today –New York closed Friday at $1,294.00. London opened at $1,282.75 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1799 after the Friday’s $1.1754: €1.

         The Dollar index was weaker at 93.33 after Friday’s 93.47

         The Yen was weaker at 109.76 after Friday’s 109.09:$1. 

         The Yuan was weaker at 6.6691 after Friday’s 6.6672: $1. 

         The Pound Sterling was slightly stronger at $1.2995 after Friday’s $1.2975: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    12

     2017    8    11           

     2017    8    10

SHAU

SHAU

SHAU

/

277.06

274.85

Trading at 277.25

276.86

275.77

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6691

       $1: 6.6672

       $1: 6.6594     

  /

$1,287.26

$1,270.07

Trading at $1,287.77

$1,286.32

$1,269.70

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $7.00 higher than Shanghai’s close yesterday. Then today sees Shanghai lifting the gold price again. But London pulled it down $6 lower. London and Shanghai see the gold price differently with London being more volatile that Shanghai as you can see above. Shanghai still needs to take gold above $1,300 for the gold price to run higher.

As we said on Friday, “Today and next week become important days for the gold price. It is also the time when North Korea said they would fire a missile towards Guam!”

Silver Today –Silver closed at $17.07 yesterday after $17.06 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set today at $1,281.10 from yesterday’s $1,288.30.  The gold price in the euro was set at €1,085.86 after yesterday’s €1,095.59.

Just before the opening of New York the gold price was trading at $1,282.60 and in the euro at €1,087.23. At the same time, the silver price was trading at $17.02. 

Price Drivers

We are amazed today to find that, fears of war with North Korea are almost off the table and markets are calmed because of it. We looked round to see if these assumptions were due to the North Korean President saying something along the lines that he will not fire the missile towards Guam? No, he hasn’t said anything! Did President Trump say anything? No! But U.S. officials said nuclear war is not a danger. It’s time for a reality check we think and ask, which ‘Officials” are in a position to counter both Presidents?  Hence we do not see the market calmness as a result of these official’s statements. We see the market calmness simply calm after the dramas of last week that could easily change back to heightened fears in a heartbeat.  But also as we said last week, we do not accept that gold rose on war fears, it was because of the dollar’s ongoing weakness and Asian demand.

But if a missile is fired by North Korea towards Guam then the whole set of global financial markets changes. Gold will certainly rise on war fears then.

But the failure of inflation to rise, alongside disappointing wage pressures is assisting gold’s rise outside of China, where demand is proving a constant. Now add to that a toppy equity market in the U.S. and we could see moves out of equities into gold as well. These elements are not quickly passing features of the financial world. It is on these that the gold price is rising. All this is happening ahead of the start of the ‘Gold Season’ which starts in a couple of weeks from now!

We see the gold price pulling back today because traders are attacking the ‘triple top’ that is in the Technical picture. The week could prove volatile!

Julian D.W. Phillips – GoldForecaster.com | StockBridge Management Alliance 

Gold back over $1280; Silver over $17; U.S. recovery fragile and vulnerable

Gold Today –New York closed yesterday at $1,279.30. London opened at $1,278.00 today. 

Overall the dollar was stronger against global currencies, early today. Before London’s opening:

–         The $: € was stronger at $1.1732 after the yesterday’s $1.1760: €1.

–         The Dollar index was stronger at 93.70 after yesterday’s 93.61.

–         The Yen was weaker at 109.98 after yesterday’s 109.75:$1.

–         The Yuan was much stronger at 6.6594 after yesterday’s 6.6782: $1.

–         The Pound Sterling was weaker at $1.2980 after yesterday’s $1.3005: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    10

     2017    8    9           

     2017    8    8

SHAU

SHAU

SHAU

/

273.77

273.21

Trading at 275.75

273.69

272.70

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6594

       $1: 6.6782

       $1: 6.7059     

  /$1,270.07

$1,262.21

Trading at $1,282.92$1,269.70

$1,259.84

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed just under $10.00 higher than Shanghai’s close yesterday. Then today sees Shanghai lifting the gold price even higher as you can see. London is still lagging but not by much as it opened

We were looking to see if this was a jump on the back of the deteriorating situation with North Korea. We would have thought that if this were so, the gold price would have jumped higher. So far the evidence is not there.

London is $5 lower than Shanghai, but raced to catch up and at one point in London was the same as Shanghai’s earlier trading levels.

Silver Today –Silver closed at $16.86 yesterday after $16.38 at New York’s close Tuesday.

LBMA price setting:  The LBMA gold price was set this morning at $1,278.90 from yesterday’s $1,267.95.  The gold price in the euro was set at €1,091.03 after yesterday’s €1,080.30.

Just before the opening of New York the gold price was trading at $1,280.60 and in the euro at €1,092.38. At the same time, the silver price was trading at $17.10. 

Price Drivers

The gold price in dollars is now at $1,280, so the answer to yesterday’s question, “Will it run higher in the $1,270s?” was given in a day! So, where next?

The Yuan continues to strengthen strongly against the dollar, which itself is strengthening against other currencies.

The Fed

Members of the FOMC are talking to the media in very dovish manners. The evidence that inflation is falling has clearly disturbed them. After the 2015, 2016 steady building of inflation, it is falling back again. This implies that we may well not see another rate hike in 2017. They still feel that a start to the Fed’s Balance Sheet tightening will be made. After all, it will be slight and the Fed believes it will have barely any impact on markets.

While academically that may be true, psychologically it may be a mistake. The recovery remains vulnerable and fragile. Any hint of tightening may well cause a market reaction when they broach that subject with action. Meanwhile, the earnings picture is pointing to it peaking in the near term, if it has not already done so. This makes equity markets toppy. They could turn mercurial if evidence arrives that tightening, even slightly, is about to happen.

Gold will benefit from any stalling of Fed tightening. Real interest rates continue to be negative but if inflation falls back further until rates are not negative, we fully expect the Fed to turn back to the easing path.

North Korea

It is apparent that North Koreans are being fed propaganda that the U.S. is its main enemy and about to invade the country. This distracts from the dire economic state of the country. President Trump is reinforcing that idea with his responses. His words would, in the North Koreans eyes, justify continuing on the threatening war path. The President of the country is seen as a psychopath and intent on going ahead with his threats.

China, on the other hand, will not allow that buffer state to be destroyed, bringing the U.S., militarily dominated South Korea to its doorstep. This formula will lead to conflict, we now believe. But the markets have not yet responded to this potential. Gold has not jumped as it would have done if markets were reacting. The rise overnight in the gold price in the U.S. was not via physical buying but a dealer’s response to the North Korean situation. On the other hand the rise in Shanghai prices would be based on physical dealings. A $10 rise in Shanghai falls far short of a ‘war fear’ rise.

As we said yesterday, “Gold will benefit if war does break out as the war hurts financial markets the whole world over.”

Gold ETFs – Yesterday there were no changes in the holdings of the SPDR gold ETF or the Gold Trust holdings yesterday. The SPDR gold ETF and Gold Trust holdings are at 786.869 tonnes and at 211.43 tonnes respectively.

Julian D.W. Phillips  GoldForecaster.com | StockBridge Management Alliance

Market morning – Gold and the North Korean crisis

Gold Today –New York closed yesterday at $1,262.60. London opened at $1,265.00 today. 

Overall the dollar was stronger against global currencies, early today. Before London’s opening:

         The $: € was stronger at $1.1760 after the yesterday’s $1.1804: €1.

         The Dollar index was stronger at 93.61 after yesterday’s 93.36

         The Yen was stronger at 109.75 after yesterday’s 110.58:$1. 

         The Yuan was much stronger at 6.6782 after yesterday’s 6.7059: $1. 

         The Pound Sterling was weaker at $1.3005 after yesterday’s $1.3035: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    9

     2017    8    8           

     2017    8    7

SHAU

SHAU

SHAU

/

273.21

273.36

Trading at 274.20

272.70

273.31

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6782

       $1: 6.7059

       $1: 6.7190     

  /

$1,262.21

$1,260.43

Trading at $1,272.08

$1,259.84

$1,260.20

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $2.80 higher than Shanghai’s close yesterday. Today, we are seeing the dollar stronger overall but the Yuan is quite a bit stronger against the dollar. London is $7 lower than Shanghai.

Shanghai is on the front foot today and likely to pull London and New York higher today.

Silver Today –Silver closed at $16.38 yesterday after $16.25 at New York’s close Monday.

LBMA price setting:  The LBMA gold price was set this morning at $1,267.95 from yesterday’s $1,261.45.  The gold price in the euro was set at €1,080.30 after yesterday’s €1,067.85.

Just before the opening of New York the gold price was trading at $1,270.45 and in the euro at €1,082.43. At the same time, the silver price was trading at $16.71. 

Price Drivers

The gold price in dollars is now at $1,270. Will it run higher in the $1,270’? If so that would be very positive for future rises. Or will it be turned back again?

The currency markets are in a correction phase with the dollar rising but not against the Yuan or Yen. The gold price is higher in the euro but mainly as a result of the stronger dollar. This is why it rose more in the than in the dollar.

North Korea

We were around when the Cuban Missile Crisis brought the world to the brink of World War 3. Today this is one country, North Korea, against the U.S. to begin with. But in 1952 when the Korean War raged it became China plus North Korea that took on the Allies. We see a potential restart to the war again [which never officially ended] and a major deterioration of U.S. – China relations if it does. China will not accept the elimination of North Korea!

At the moment the markets are not discounting this likelihood. We may see China and Japan do so soon. In South Korea the atmosphere is moving towards fear quickly.

Gold will benefit if war does break out as the war hurts financial markets the whole world over.

U.S. credit levels are up as high as they were before the 2008 crisis. While it is widely believed that the developed world banking system is repaired and capable of withstanding another financial crisis any financial accident that strikes now will have a devastating impact, more so than in  2008.

Gold ETFs – Yesterday there were no changes in the holdings of the SPDR gold ETF or the Gold Trust holdings yesterday. The SPDR gold ETF and Gold Trust holdings are at 786.869 tonnes and at 211.43 tonnes respectively.

 Julian D.W. Phillips  GoldForecaster.com | StockBridge Management Alliance 

Gold and Silver weaker, dollar stronger, on U.S. jobs report

Gold Today –New York closed Friday at $1,264.40. London opened today at $1,258.40. 

Overall the dollar was stronger against global currencies, early today. Before London’s opening:

         The $: € was stronger at $1.1802 after the Friday’s $1.1881: €1.

         The Dollar index was stronger at 93.38 after Friday’s 92.74

         The Yen was weaker at 110.81 after Friday’s 110.026:$1. 

         The Yuan was stronger at 6.7190 after Friday’s 6.7200: $1. 

         The Pound Sterling was weaker at $1.3050 after Friday’s $1.3149: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    7

     2017    7    4           

     2017    7    3

SHAU

SHAU

SHAU

/

274.98

274.52

Trading at 273.75

275.49

274.22

$ equivalent 1oz at 0.995 fineness

@   $1: 6.7190

       $1: 6.7237

       $1: 6.7253     

  /

$1,266.35

$1,264.91

Trading at $1,262.24

$1,269.40

$1,263.53

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $2 lower than Shanghai’s close Friday. But today, we are seeing a stronger dollar, and a lower dollar gold price in London. The jobs report was met with enthusiasm that turned the dollar higher for now. Even with a stronger dollar we are seeing a stronger Yuan. London opened $3.85 lower than Shanghai but Shanghai was trading at only $2 lower than New York’s Friday close.

Silver Today –Silver closed at $16.25 Friday after $16.63 at New York’s close Thursday.

LBMA price setting:  The LBMA gold price was set this morning at $1,257.55 from Friday’s $1,269.30.  The gold price in the euro was set at €1,065.90 after Friday’s €1,068.34.

Just before the opening of New York the gold price was trading at $1,258.20 and in the euro at €1,065.73. At the same time, the silver price was trading at $16.21. 

Price Drivers

The jobs report was read by the market in a positive light. It turned the dollar stronger against all currencies and pulled the gold price down in dollar terms. We expected a rise in  the gold price because we expected higher employment and felt the market would only react to wage inflation, which, in line with our views, was barely noticeable. But the market looked only at the jobs numbers.

In the euro there was only a small drop in the gold price. So where is the dollar going from now on? We don’t see the gold price falling in other currencies and indeed we are not convinced by the jobs report spurring wage inflation soon. The jobs being created are easily low, but on top of that the impact of technology on quality jobs is heavy. The failure of full employment to spur wages is a structural change that will not reverse.

In the Gold Forecaster we have outlined that in the developed world up to 50% of all jobs will be permanently lost to A.I. and machines. This fact has not been accepted in general, by economists. Until, not just the problem but new-industry, job creation is put into effect it is unlikely that wage inflation will take off. In turn, that slows the recovery and makes it vulnerable. Likewise, for fixed interest markets! The current equity, fixed interest rate levels are becoming more vulnerable by the day.

So we don’t move away from a weak dollar. We see the current rise as being short lived before the dollar resumes its fall.  This translates into gold holding current levels in currencies other than the dollar, then rising in the dollar once more. It will see a good boost in the Autumn when the gold ‘season’ kicks off.

Gold ETFs – 

There were sales from the SPDR gold ETF (GLD) of 4.731 tonnes but no change in the Gold Trust (IAU) holdings on Friday. The SPDR gold ETF and Gold Trust holdings are at 787.144 tonnes and at 211.43 tonnes respectively.

 Julian D.W. Phillips – GoldForecaster.com | StockBridge Management Alliance 

Be pepared for Historic Gold and Silver Run

By David Smith* –  Money Metals News Service

The Bigger the Base, the Greater the Upside Case. This saying among technical analysts/chartists helps define where we are today in the precious metals – and where we’ll soon be headed.

It means that when prices “base” in a relatively narrow sideways range for an extended period, they will at some point break out. Before the action gets underway, bears and bulls alike will get “sandpapered” as they take positions, trying to guess whether or not the price is getting ready to decline further or move upward into a new bull phase.

If you consider that time spent in sideways consolidation represents a build-up in stored energy, then a valid upside breakout will be propelled by a lot of buying fuel as old shorts who bet on lower prices offset their losing positions and new longs jump in to get onboard the change in trend.

2017 Feb. Silver - Continuous Contract

Chart by Gary Savage, Editor, Smart Money Tracker.

 

This frustrating sideways movement is not taking place in a vacuum.

Bankster manipulation, algo-trading, “fat finger” futures markets’ whip-saw behavior, and price chasing in both directions becomes a regular feature of the trading landscape. A long time goes by with neither side having enough trading power to break out of congestion.

This takes place concomitant with the central banks’ war on cash, currency and trade manipulation, and geo-political brushfires stacking up around the globe. Ongoing strife in Syria, possible war with North Korea and flash points in the South China sea may be classed as severe “low-probability events, but as Jim Rickards says, when taken in total, it becomes highly probable that at least one of them will ignite a crisis, possibly starting a chain-reaction with the others.

At some point prices jump the rails, catching most by surprise. By the time the picture clears and Mr. Market decides to provide us with some answers, it’s usually too late to climb aboard.

Gold Chart - Red Line in the Sand

$1300 Gold’s “red line in the sand”
Courtesy Nick Laird

 

Given the powerful seven-month rally during the first half of 2016 notwithstanding (followed by a more than 50% give-back over the past year), a lot of gold and silver bugs can be forgiven for coming to believe that they will never see a meaningful, sustained resumption of the exciting days of 2005-6, 2009-11 and early 2016.

The feeling of being either “worn out or scared out” – as David Morgan likes to characterize the patience-testing during an extended cyclical bear market wave – has caused more than a few people to sell back their insurance and investment positions in the metals. I believe this is a decision that – sooner rather than later – they will come to seriously regret.

Make no mistake. The government is not here to help you.

Steward Dougherty, in the essay, Currecide: The Globalists’ Planned Annihilation of Your Savings and Freedom states:

Its (gold) going ballistic, is probably better set-up right now than at any other time in history, for a large number of reasons… I continue to think that cash elimination is the biggest story out there. It is a fraud of epic proportions, and its implications are dark and deeply disturbing… Sometimes, you have to say something five times before people say, “Wow. This is important. I better do something about it.” If people decide to “do something about it,” they are going to find that their options are limited. Gold being one of the few of them.

Gold demand would go nuts if only the people could finally understand why they need to buy it right now… I think the dam of realization is coming very close to breaking, and that there could be an outright flood of new, popular awareness and action (my underline).

A Greek financial golden age? Looking at the pathetic financial state of Greece today, it’s hard to imagine that there was ever a time when financial acumen was a trait of which they could be proud. Does the following sound even remotely like what we’ve got going on now – just about anywhere around the globe?

When the Athenian treasury was audited in 440 B.C., it showed a surplus of over 9700 talents – a common unit of measurement for gold and silver during those times. Using current precious metals’ values, aligned with the 14:1 silver/gold ratio favored by the ancient Greeks, those 9700 talents would be the equivalent today of around $700 million!

Says Simon Black, writing in Sovereign Man, “At the time, Athens boasted a population of around 43,000 citizens and 28,500 foreign residents… so on a ‘per capita’ basis, the ancient Athenian surplus amounted to just under $10,000 per person in today’s money. If you compare this figure to our modern world, it’s pretty extraordinary.”

Of the 5 classifications of estimated metals’ holdings for a given project or property tallied for a formal NI-43 101 Report, the most reliable are found in the “Reserve” category, the subsets of which are “Proven” and “Probable”. Everything else being equal, these two listings show what management believes – backed by a variety of exploration methods – have the highest probability of being economically feasible.

Average Number of Years Between Discovery and Production

Source: SNL Metals & Mining, U.S. Global Investors, IAMGOLD.

Discoveries, reserves, and grades (grams/tonne) are in steady decline.

For well over a decade, the grade (grams/tonne) of gold produced has been steadily declining. Since 2013 listed reserves, as well as absolute production itself looks to have peaked. And now it’s taking years longer just to bring a new discovery into operation. Toss increasing demand into the mix, and the math points in only one direction – higher prices.

It’s not easy to buy metals when they’re trading sideways to down.

It’s taken a lot longer for us to reach “the promised land” of sustainably higher gold and silver prices than most anticipated. Yes, the herd is throwing money at the DOW and the S&P, assuming they will grow indefinitely to the sky. Yes, with all these things considered, it’s difficult to start or continue accumulating precious metals. And the charts have only recently begun to suggest a change. But…

When things look this way and you feel like going with the herd and maybe stepping in what it leaves behind, recall once again Rick Rule’s famous (and profitable) investment cautionary, “You can either be a contrarian… or road kill.” Could his “investing rule” make your decision to “keep on stackin'” a bit easier?

Warren Buffet has without a doubt, been one of the pre-eminent investors of the modern era. As you read the following quote, replace the term “stocks” with “precious metals.”

“To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying – except buying stocks. When stocks go down and you can get more for your money, people don’t like them anymore.” – Fortune Magazine: “The Wit and Wisdom of Warren Buffett.”

The clock is ticking. The ducks are lining up. Are you paying attention? Do you have a plan? Are you working your plan…?

* About the Author:

Gold and silver brought down after hours

Gold Today –New York closed yesterday at $1,278.40. London opened at $1,261.40 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1849 after the yesterday’s $1.1832: €1.

         The Dollar index was weaker at 92.92 after yesterday’s 92.99

         The Yen was stronger at 110.66 after yesterday’s 110.78:$1. 

         The Yuan was stronger at 6.7237 after yesterday’s 6.7253: $1. 

         The Pound Sterling was almost unchanged at $1.3232 after yesterday’s $1.3223: £1

Yuan Gold Fix
Trade Date     CContract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    3

     2017    7    2           

     2017    7    1

SHAU

SHAU

SHAU

/

275.08

275.29

Trading at 274.75

274.95

275.37

$ equivalent 1oz at 0.995 fineness

@   $1: 6.7237

       $1: 6.7253

       $1: 6.7179     

  /

$1,267.20

$1,269.58

Trading at $1,265.98

$1,266.60

$1,269.06

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed at almost $14 higher than Shanghai’s yesterday’s close. In what we see as a striking testament to the power of Shanghai’s pricing dominance Shanghai moved slightly lower than its previous close with London following it at today’s open with $4.60 discount to Shanghai’s trading level today. With the gold world still looking at New York in the belief that the world will follow that market an understanding of the interrelationship of the three global gold markets is becoming paramount!

Silver Today –Silver closed at $16.73 yesterday after $16.76 at New York’s close Tuesday.

LBMA price setting:  The LBMA gold price was set today at $1,261.80 from yesterday’s $1,266.25.  The gold price in the euro was set at €1,065.35 after yesterday’s €1,070.55.

Just before the opening of New York the gold price was trading at $1,263.00 and in the euro at €1,066.50. At the same time, the silver price was trading at $16.48. 

Price Drivers

The gold price in New York yesterday ran away with itself but on no physical gold movements in the gold ETFs. COMEX was the main influence on gold prices there. In the past this would have been enough to drive physical gold prices higher, but this time it had no influence on global gold prices.  In fact, this morning we see New York badly out of line with the other two main global gold markets and expect it to be pulled down to London and Shanghai’s level today as it was in after-hours trading yesterday. This should not be translated as gold’s weakness but as evidence that COMEX is no longer the main influence on gold prices. The physical markets in gold are the determinant of gold prices going forward. This is a tremendous structural change in global gold markets. What is remarkable is that it is being ignored by commentators in the western world’s gold markets.

Currencies have played almost no role in the last day’s gold price action. However, we continue to see the dollar index gently decline.

Gold ETFs – The SPDR gold ETF holdings remain unchanged as no sales or purchases took place yesterday but in the Gold Trust sales of 0.58 of a tonne took place. The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 211.43 tonnes respectively.

 Julian D.W. Phillips – GoldForecaster.com | StockBridge Management Alliance 

 

Gold consolidates as dollar continues to fall

Gold Today –New York closed yesterday at $1,269.20. London opened at $1,266.75 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was almost unchanged at $1.1832 after the yesterday’s $1.1833: €1.

         The Dollar index was almost unchanged at 92.99 after yesterday’s 92.98

         The Yen was weaker at 110.78 after yesterday’s 110.47:$1. 

         The Yuan was weaker at 6.7253 after yesterday’s 6.7179: $1. 

         The Pound Sterling was stronger at $1.3223 after yesterday’s $1.3202: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    2

     2017    7    1           

     2017    7  31

SHAU

SHAU

SHAU

/

275.29

275.85

Trading at 275.30

275.37

275.46

$ equivalent 1oz at 0.995 fineness

@   $1: 6.7253

       $1: 6.7179

       $1: 6.7282     

  /

$1,269.58

$1,270.12

Trading at $1,268.22

$1,269.06

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed at almost the same level as Shanghai’s yesterday’s close. London opened at $1.50 lower than Shanghai. All three global gold markets continue in sync. Because New York reached $1,275 at one point, it is clear that Shanghai is dominant as it started a small shift downwards.

Silver Today –Silver closed at $16.76 yesterday after $16.78 at New York’s close Monday.

LBMA price setting:  The LBMA gold price was set this morning at $1,266.25 from yesterday’s $1,267.05.  The gold price in the euro was set at €1,070.55 after yesterday’s €1,071.95.

Just before the opening of New York the gold price was trading at $1,268.00 and in the euro at €1,072.21. At the same time, the silver price was trading at $16.60. As trading continued gold rose back up through the key $1,270 level

Price Drivers

The gold price consolidated yesterday as the currency markets calmed down. The dollar index’s decline paused, but we expect it to continue down with pauses and corrections. Meanwhile gold is pausing in its rise as the key $1,290 and $1,300 levels are now in sight. In the past these price levels have proved effective resistance.

We look across to the equity markets and see that the Dow is just about to climb over the 22,000 level. While this is a record achievement, it brings to mind that above that level investors who buy there must believe that there is a profitable distance to go in  that index.

With the disappointing data coming out now we can see that our comments about the equity markets may be closer than most think. With President Trump now returning to his negative comments about China we could see pressures in currency markets coming with a high degree of uncertainty.

Likewise Alan Greenspan’s comments about bond prices ‘popping’ tells us that bond holders may well be asking what more is there left by way of profit in the bond market? The slightest hint of tightening could cause the bond market to ‘pop’!

Gold ETFs – The SPDR gold ETF holdings remain unchanged as no sales or purchases took place yesterday but in the Gold Trust purchases of 1.14 tonnes took place. The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 212.01 tonnes respectively

This is the first sign  that U.S. investors are looking kindly on gold investments after the heavy month of sales from the SPDR gold ETF.

Julian D.W. Phillips 

GoldForecaster.com | StockBridge Management Alliance 

 

Further dollar weakening sees gold retain $1,270 level

Gold Today –New York closed yesterday at $1,273.40. London opened at $1,269.00 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1833 after the yesterday’s $1.1725: €1.

         The Dollar index was weaker at 92.98 after yesterday’s 93.50

         The Yen was stronger at 110.47 after yesterday’s 110.67:$1. 

         The Yuan was stronger at 6.7179 after yesterday’s 6.7282: $1. 

         The Pound Sterling was stronger at $1.3202 after yesterday’s $1.3122: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    1

     2017    7  31           

     2017    7  28

SHAU

SHAU

SHAU

/

275.83

274.60

Trading at ……

275.46

274.79

$ equivalent 1oz at 0.995 fineness

@   $1: 6.7179

       $1: 6.7282

       $1: 6.7415     

  /$1,270.12

$1,261.93

Trading at ……$1,269.06

$1,262.81

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $4.40 higher than Shanghai’s close on yesterday. London opened at the same level as Shanghai. All three global gold markets continue in sync.

Silver Today –Silver closed at $16.78 yesterday after $16.75 at New York’s close Friday.

LBMA price setting:  The LBMA gold price was set this morning at $1,267.05 from yesterday’s $1,266.35.  The gold price in the euro was set at €1,071.95 after yesterday’s €1,079.31.

Just before the opening of New York the gold price was trading at $1,266.20 and in the euro at €1,072.14. At the same time, the silver price was trading at $16.66. But after NY opened the dollar gold price moved up to back over $1,270 and silver to over $16.70 but the latter’s rise was looking a little weaker in comparison with that of gold.

Price Drivers

The gold price remained strong but has not yet broken higher, as it sits on support that was previously overhead resistance. We continue to expect more strength, shortly. The dollar price of gold does not reflect buying and selling of gold at the moment but the weakness of the dollar. The strength of the euro likewise does not reflect gold demand in Europe. Hence the fall in the euro gold price today seems to us out of line and likely to recover adding strength to the gold price’s rise.

The dollar’s weakness is heavy today against all currencies and not just against the euro. We repeat that this is not just due to the White House incidents or Trump’s family despite the media insisting that it is. Global currency markets and particularly the dollar would not move on such non-financial incidents.

The problem with the dollar is that it is expensive and other currencies are hurrying to take a chunk out of its dominance. The dollar is structurally weak. The post-election hopes of a re-invigorated USA have faded, so returning the dollar back to its pre-election fundamentals. This leaves the U.S. with negative yields.

Comments from Alan Greenspan, that the equity market is not yet a ‘bubble’ but the bond market is, comes as a stark warning to financial markets. When it does ‘pop’ everyone will be hurt he says. When that happens, you will see equity and property prices badly damaged too. Gold will become a haven for U.S. investors then too.

We reflect on the fact that at one time the euro cost $1.40.

Gold ETFs – The SPDR gold ETF and the Gold Trust holdings remain unchanged as no sales or purchases took place yesterday.

The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 210.87 tonnes respectively.

Julian D.W. Phillips 

GoldForecaster.com | StockBridge Management Alliance 

Global demand driving gold prices higher.

Gold Today –New York closed Friday at $1,269.40. London opened at $1,266.45 today. 

Overall the dollar was weaker against global currencies, early today. Before London’s opening:

         The $: € was weaker at $1.1725 after the Friday’s $1.1709: €1.

         The Dollar index was weaker at 93.50 after Friday’s 93.71

         The Yen was stronger at 110.67 after Friday’s 111.23:$1. 

         The Yuan was stronger at 6.7282 after Friday’s 6.7415: $1. 

         The Pound Sterling was stronger at $1.3122 after Friday’s $1.3090: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    7    31

     2017    7    28           

     2017    7    27

SHAU

SHAU

SHAU

/

274.60

275.15

Trading at 275.60

274.79

274.74

$ equivalent 1oz at 0.995 fineness

@    $1: 6.7282

       $1: 6.7415

       $1: 6.7377     

  /

$1,261.93

$1,265.18

Trading at $1,269.06

$1,262.81

$1,263.29

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 New York closed $6.60 higher than Shanghai’s close on Friday with Shanghai catching up today. London opened $2.60 lower than Shanghai was trading at the same time. All three global gold markets are advancing as global demand is driving gold prices higher.

Silver Today –Silver closed at $16.75 Friday after $16.57 at New York’s close Thursday.

LBMA price setting:  The LBMA gold price was set this morning at $1,266.35 from Friday’s $1,259.60.  The gold price in the euro was set at €1,079.31 after yesterday’s €1.075.20.

Just before the opening of New York the gold price was trading at $1,268.35 and in the euro at €1,081.10. At the same time, the silver price was trading at $16.78. 

Price Drivers

The week has started on a strong note with gold prices re-attacking the $1,270 level. We expect prices to rise today as the dollar weakness continues to be the main feature of the gold market. But the dollar weakness is not the sole factor, because the gold price is also rising in the euro.

Toppy developed world financial markets

A lifetime of experience in global financial markets has taught us to recognize when a market is over extended either way. It has also taught us that it can stay over-extended for a long time.  The clear signs are when a market has discounted a very rosy future and expected returns are small relative to the price of assets.  But in a climate where prices are very high, fund managers have to decide if the reasons are because they are over-bought, or if the money used to buy them is depreciating in value.

Right now equity prices relative to fixed interest rate returns are not excessive. But the prospects of higher rates that will change this have been put off, allowing equities and other assets to remain too high for longer. Indeed the temptation this brings is that prices can go, unjustifiably, quite a bit higher. But this brings into view that when markets eventually do turn down they will fall precipitously. In such a climate ‘stop loss’ protections should be replaced with short positions. Once that happens on a large scale interest rates will become irrelevant and permit markets to fall precipitously simply because markets are falling. What will trigger such a change will simply be slowing momentum on the rise followed by sellers seeing the turn. We are very close to that in developed world equity market right now. Institutions are taking measures to guard against that now, which warns us that the turn when it comes will be fast and furious.  

Another lesson we learned over a lifetime in the markets is that it is always wise to leave the last few percent of rises and falls to someone else.

The attraction of gold when  other markets fall

At that point profit seekers, wealth protectors and safe haven seekers will run to gold. The weakness of the dollar and the realities that no other currency provides a safe haven will push investors into gold and silver. Bear in mind the gold and silver markets are very small relative to other financial markets, so such a change in outlook could produce extraordinary rises in their prices.

A look at global gold markets shows that each of these market’s fundamentals are different. In China, gold is bought for wealth protection and financial security. In Europe gold is bought to protect wealth owners from the unforeseen events that attack wealth, almost as a hedge against financial crises. In the U.S. gold is bought when it begins to rise because there is a profit to be made.  [Perspicacious investors in the U.S. buy for the long term.]

For all these to converge at the same time is rare, as we have seen in the sales of over 71 tonnes of gold over the last few weeks in the U.S. The net result, when all are added together, is that gold is not an alternative to equities any more [the U.S. perspective], the safe haven aspect has not kicked in yet, but the gentle flood of gold demand in China [and after September in India] is driving gold prices higher and will keep doing so as the country’s middle classes continue to grow. Hence the risk reward ratio for gold is very attractive.

Gold ETFs

We do expect U.S.investors to return fairly soon to the precious metals markets as they have sold off almost their entire 2017 purchases already. It seems that the institutions responsible for the buying are seeing greater profits in the U.S. financial markets still. We believe that, that will change in the relatively near future.

The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 210.87 tonnes respectively.

 Julian D.W. Phillips 

GoldForecaster.com | StockBridge Management Alliance 

Silly Money Printing, Negative Real Interest Rates, Restricted Supply – a “Great Scenario for Gold”

Moneymetals.com’s Mike Gleason interviews Frank Holmes

Mike Gleason: It is my privilege now to welcome in Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors. Mr. Holmes has received various honors over the years, including being named America’s Best Fund Manager for 2016 by the Mining Journal. He is also the co-author of the book The Goldwatcher: Demystifying Gold Investing. And is a regular guest on CNBC, Bloomberg, Fox Business, as well as right here on the Money Metals Podcast.

Frank, welcome back and thanks for joining us again today. How are you?

Frank Holmes: Outstanding.

Mike Gleason: Well, I’m looking forward to getting into some of these questions with you today, and to start off, I know you’ve had a lot to say about gold here recently in following your market commentaries and your Frank Talks like I do. Now before we get into some other stuff, including the exciting new gold fund that you’ve just launched there at U.S. Global Investors, let’s talk first about where we are in the metals right now. We saw prices heading higher earlier in the year, and then correcting lower more recently, but gold has really hung in there over the last month or so and it’s seemed to have found strong support in the low $1,200s. What do you make of the market action here recently in the metals, Frank?

Frank Holmes: Well, I think a big factor is real interest rates, and what’s happening in the bond markets around the world. A, debt levels are going through record highs. We saw money supply in EU, they jumped 5% in a month. It doesn’t matter, they’re just printing this money, but it’s stimulating their economy and that’s all they care about. And I think that you’re seeing this witness of this proliferation of paper money. You are witnessing that they’re manipulating real interest rates to be negative, and that is always good for gold.

You’re then seeing in the U.S. that even with rising interest rates, the dollar had one of its biggest declines last quarter, up over 3%. So, gold is rising in U.S. Dollar terms for different reasons than the rest, but it is to me, a real positive factor. We have global growth is being ignited from Europe, it’s good in Japan, and this is also good for the backend of gold. Then, I think the supply side is being restricted, and this silly tax in Tanzania of over hundreds of billion dollars. It’s just outrageous what these countries are doing.

You see it in Latin America and you see it in Mongolia and now it’s in Africa. They want money to come into these countries, they move the goalposts. There’s no fiscal stability, there’s no tax regime that’s disciplined for at least 10 years so you’re trapped capital. So, I don’t think you’re going to see supply coming onsite, so I think the world anticipates supply is actually peaking. We look at the gold production of the mines today, and you’re seeing that no more capital is going to come into these high-risk countries, no fly zone, and you’re seeing this continuous printing of money and negative real interest rates. It’s all a great scenario for gold.

Mike Gleason: Expanding the point here on the Fed specifically, the FOMC is meeting again this week. Janet Yellen is taking a more dovish posture, but lots of people still expect another rate hike or two before year end. What are you expecting here, Frank? Is the Fed basically done in your view?

Frank Holmes: Yes. The Fed is done, and in fact, I thought it was interesting that it just recently came out hot on the wire today that the Fed is going to be more about getting rid of some of those bonds they own in the marketplace, rather than raising interest rates now, to de-risk their balance sheet. But I think that they have to be very sensitive on that. So, I don’t think it’s really going to happen to any great degree, because you would have rates rise for anyone who’d want to buy those bonds, and the financial market itself. So, I think we’re in a very precarious situation.

President Trump believes a weak dollar is good for exports, and that’s what we’re seeing. The exports are pretty attractive in the U.S. Anytime you have a weak dollar’s fantastic for Boeing. Have you looked at Boeing’s chart? I mean, it’s a beautiful 45-degree angle, so the world is going to be buying Boeing, and it makes it more competitive against the Airbus. And I think this is so important because they’re high paying jobs and their export business is picking up.

Mike Gleason: Speaking of the dollar, metals should be getting some help from the weakness in the U.S. Dollar. The DXY index peaked in December and has been trending lower ever since. We now sit at the lowest levels in two years, but metals on the whole aren’t really reflecting that trend, at least not yet, or not in a meaningful way, or as much as you’d expect. What are your thoughts on why and what do you see in store for the dollar in the months ahead?

Frank Holmes: Well, I think the big concern is the infrastructure spending. President Trump has not been able to get through many things in the beltway, and he’s up against the beltway party, which is all the government agencies, along with all the lobbyists. And so, this is real evident from Obamacare which they all wanted to make changes to and they couldn’t get their act together twice. The only thing I’ve seen where he’s laid off, they fired 200 government workers in the VA Department, just terrible employees. But that seems to be the only agency that’s taken place that’s taken place with.

There’s been no streamlining except for he’s passed a law that you have to cancel two for opening one new law, but I think that maybe slows down what was on steroids, was every government agency putting through so many regulations and rules which was stymieing the economy. So, I think that this infrastructure, if we get the infrastructure bills passed, and that’s what he should have focused on in the beginning in my opinion, and not personal tax but corporate taxes, because they’re not lightning rods for lots of negative publicity.

Personal income taxes, the rich versus poor debate comes up in the media, and so that just makes it more difficult. But corporate taxes to be globally competitive, that would be easier to float. And I think the infrastructure spending would be easier to float. The last big boom in infrastructure spending was China, with great Gorges Dam, and other projects throughout their country, but there’s nothing of significance that would be beneficial to all the metals and resources like we had from 2001 to 2007.

Mike Gleason: Another potential catalyst for higher gold prices may be the theater surrounding the hiking of the debt ceiling in Washington. Congress is going to wrestle over whether or not to raise the borrowing limit again soon. Do you think we may actually see a real fight or will the Republican leadership manage to push the hike through without much fuss? And then as a follow-up, what kind of market reaction should we expect in gold?

Frank Holmes: I think the same conservative Republicans will be as disruptive as they were for Obamacare as they are for budget. They are very rigid and I was at a conference and I was hearing Alex Green speak, and his comments were that the different between Democratics and Republicans is that Republicans want to have freedom of your money and economics, but they want to control your social and personal agenda. Whereas the Democrats want to have freedom of social personal life, but they want to control your economics. And the fringes on both sides of that is what seems to be dictating or controlling the policies that are frustrating to mainstream America. I thought that was well put.

Mike Gleason: Switching to gold stocks here, and before we get into your new fund, Frank, are we entering a new rally phase after having successfully held above the key $21 support level on the GDX?

Frank Holmes: Well, two things. We’re in the seasonal pattern where gold starts its rally through the summer and rallies with down dips and corrections, but it’s usually from here up to the Chinese New Year, a succession of higher highs. But you can still get these gyrations taking place and downdrafts. So, that’s important to witness, but I think the wind is at your back, not in your face. Two, is the GDXJ, at the end of March, was like collectively with the triple, Direxion, bull and bear, and the GDX, and GDXJ, you add them all up, they were like 17 billion dollars or some big number. And they fell to 12 billion dollars.

You talk about five billion dollars blown out of the gold stocks, and I think the GDXJ has been extremely disruptive to the gold stocks around the world, especially the small mid cap. And it’s hurt financings, it’s hurt confidence and sentiment. I was speaking at a conference in Vancouver and they just couldn’t understand what was going on and I explained to them and then “ah-ha” the lights went off that it was all fund flows. And GDX has been a wonderful success but what’s happening in the psychology of investors is they don’t want to go and buy, give to an active fund manager. And even though last year we won these awards for our performance in the GDX and GDXJ, they want to go and trade the GDX and GDXJ, and what money would normally be distributed amongst 10 different gold fund managers all went to one fund which is then going to own 20 companies owning more than 20% of them.

So, that triggered all these compliance rules so then they had a blowout of three billion dollars in six weeks. So, what took a year for five billion to go in, three billion gets blown out in a very short period of time, and I don’t think a lot of investors are aware that the GDXJ owns a big slug of the GDX. I think it’s its biggest investor. It’s sort of like the movie “Deliverance.” It’s hillbilly time here of cross ownership. And so, the movement of these gold stocks has nothing to do with fundamental factors. It has to do with factors of just fund flows, and they have to buy a basket of names.

So, that was the reason why we launched our GOAU, GO Gold, which is an intelligent set of factors based on 8,000 hours of research of seeing what is the best factors for picking gold stocks as a gold analyst. And then also doing a lot of work on the new buyers in the capital markets, which are the quant funds. And they look for different factors, so we wanted to try to identify what do quant funds look for when they’re picking stocks, in particular the gold space?

And we’ve been able to embed that with a set of rules that are dynamically adjusting and adapting every quarter based on results, and when we back tested going back over 10 years, that particular index that we traded outperformed the GDX/GDXJ 95% of the time in rolling 12-month periods. So, I think that we’ve tried to deal with that as a solution to a problem in the capital markets for gold investors that just want to play the ETFs.

Mike Gleason: Yeah, and doing research on that new fund in advance of this interview, I was very excited about a lot of the things I was reading in there, the U.S. Global GO Gold and Precious Metals Miners ETF… Frank it looks like you have a big emphasis on the streamers and the royalty companies in that fund. Talk about that, and then also talk about how people can maybe get involved in that if they wish.

Frank Holmes: Sure. Well, it’s listed on the New York Stock Exchange. It’s a simple symbol, GO Gold, GOAU. The element symbol for gold is AU, and I think that we went for the streamers because the streamers have more volatility in revenue, and so we found the stocks that have lower volatility in their revenue and their cash flow get a better rating in the capital markets by any industry. Doesn’t matter what the industry is. Other parts that we found what the ratios, when we looked at revenue per employee. When we looked at all the gold stocks and put them all together, et cetera, and we did a test, which if you go to GOAUETF.com, there’s information there. Or go to US Funds(.com), you can get the information of all the research.

And what we found was that they outperformed. If you just take the best 10 names, a mutual fund of any type has to have at least 21 names. It’s a very important factor, is this revenue per employee. So, when you look at great firms like Goldman Sachs, has over a million dollars of revenue per employee, and Newmont has $300,000 of revenue per employee, and Barrick has almost $400,000 of revenue per employee. But interesting enough, Franco-Nevada – which has royalties on those two gold mining stocks’ mines in Nevada – it has 17 million dollars of revenue per employee.

So, it has a much more efficient cost of capital, and so with that, the royalty companies have outperformed the GDX and GDXJ. The other part was that GDXJ which really shocked us in our analysis, is that in the past four years, they’ve been issuing so much stock and financings. Over 100% dilution of issuing shares, but they’ve not grown the reserves per share or the production per share. So, they’ve been issuing shares at a rate of 25% a year, so what does that mean to an investor? That would mean that either the price of gold goes up 25% a year, which it’s not, or their production rises 25% a year, which it’s not, or the reserves per share are rising at 25% per year, and it has not.

So, those stocks are very vulnerable to downdrafts, whereas the royalty companies when they’ve done a financing immediately buy a cash flow. And it shows up that they’re just a safer bet. And the last thing is that the little micro-cap stocks, there’s a housekeeping seal when a Franco-Nevada or a Silver Wheaton or a Royal Gold buys a royalty in those assets, they’re sending their metallurgists, their engineers, their geologists, their whole intellectual brain trust to go and re-vet those assets. It’s like a good housekeeping seal, and for us, it was a way to play a lot of small-caps but they were vetted by those three royalty companies.

Mike Gleason: Yeah, very exciting. There’s certainly some flaws in those other indexes and I think yours is going to be a great one for people to take part in if they want to get exposure to that space. Real quick follow-up, in your view, do we see the miners lead the bullion or the bullion lead the miners? What’s your thought there?

Frank Holmes: I think the miners are going to lead. I think that those companies in particular that can show growth and revenue per share, production per share, cash flow per share, rising price to book, those are going to be the stellar performers. But I think the reasons for that is that the supply of gold coming out of the mines is going to continue to become more scarce, and shrinking supply has always been a catalyst for higher a commodity price. And the runaway printing of money I think that’s going to be just a factor of the continued consumption of gold by China, India. We also see the Russians are continuing to be buyers of gold, because they’re witnessing the currency devaluation with this money printing globally. So, I think that that’s going to be a key factor.

And then when we look at these cryptocurrencies. To me, they’re so fascinating – not so much about them having taken off, although a couple of them have, in particular, Ethereum and Bitcoin, and Bitcoin has been spectacular – but it’s really much more about the paper printing of the other countries. Since these digital currencies have landed in the marketplace, if you take a look, they’re limited in the supply that they can issue. However, the G20 countries have been printing money at an incredible rate, and their balance sheets with buying back their own bonds.

I mean, they’re the biggest buyer of their own bonds and it’s been brilliant to see what the Swiss have done, and the Japanese. They’ve been issuing this money at zero interest rates, and they turn around and take money, they create and print money themselves, and they go buy their own stocks. So, the biggest shareholders in Japan, South Korea, I believe, and also in Switzerland are the central banks. It’s unheard of. Because they recognize that this cheap money has to buy real assets. So, I think that the phenomena of these digital currencies is more a reflection of the lack of confidence in governments that are just printing money as sort of a silly behavior. And I think that the gold market is going to have its point where it just spikes to another level. So, I feel very positive regarding gold.

Mike Gleason: Well, we’ll leave it there. That’s fantastic stuff as usual Frank. We appreciate your insights and it’s always great to hear your thoughts and we really appreciate your time once again. Now, before we let you go, please tell listeners a little bit more about your firm and your services and then also plug the wonderful Frank Talk blog if you would, because this is an absolute must read for anyone listening to this podcast.

Frank Holmes: You’re so kind. I thank you very much. It’s USFunds.com. Subscribe to Frank Talk and Investor Alert. It’s won many awards. When we go up for competitions in the fund world against Fidelity and the Vanguards, which most people know of. It (the Frank Talk blog) is written by portfolio managers, and edited by journalists who are internal. We’re very proud of what we create, and it helps us. It helps me, I’m traveling around the world to relate to investors what I’m seeing and what I think some of the economic benefits are, and risks are. Because we always believe at US Global, in all of our prospectuses that, that government policies are a precursor of change, and it’s important to recognize what those policies are.

So, with that, just go to USFunds.com. I’d love to see you become subscribers, and if you have any ideas or thoughts, please feel free to send it into us.

Mike Gleason: Well, excellent stuff. Thanks as always for your time, Frank. Congratulations on the launch of the GO Gold and Precious Metals Miners ETF. Continued success there, and keep up the good work with those great market commentaries. I hope you enjoy the rest of your summer and I look forward to catching up with you again sometime in the fall. Take care.

Frank Holmes: Take care.

Mike Gleason: Well, that will do it for this week. Thanks again to Frank Holmes, CEO of U.S. Global Investors, and manager of the new GOAUX gold fund. For more information, the site is USFunds.com. Be sure to check out the previously mentioned Frank Talk blog while you’re there for some of the best market commentary you will find anywhere on gold and other related topics. Again, you can find all that at USFunds.com, and you can also go to GOAUETF.com