Wall Street Traders, Speculators Put Gold on Sale

12 Nov

Wall Street Traders, Speculators Put Gold on Sale

We’re Always Grateful When They Do This

We are heading into the homestretch of 2020.  Soon will be the holidays and then 2021, which looks to be another dynamic year for precious metals.  Through last week gold gained more than 27 percent in 2020.  That is after a strong year in 2019 as well, one in which gold gained more than 18 percent.

Silver’s 2020 performance has been stellar as well, up more than 45 percent through Friday.   

Post-election news that Pfizer, the pharmaceutical giant, has produced a COVID vaccine with a reported 90 effectiveness rate in trials bounced the stock market sharply higher on Monday (11/9), driving Wall Street players to sell gold and other investment vehicles to jump on the stock market train.  

In doing so, they provided an opportunity to buy precious metals at “sale” prices.  In a year in which gold reached all-time highs in virtually every currency in the world, Wall Street provided a welcome bargain in gold.

Such opportunities do not usually last long.  You will remember that the COVID-19 panic in March had Wall Street traders and speculators selling gold to raise margin call cash as the stock market tumbled.  The impact on gold was brief, less than two weeks.  In no time it was higher than when the sell-off began.  

Monday’s gold drop of about $100 was followed by a quick recovery of $22 on Tuesday.  Chartists will note that this is the third time since September that the gold price has tested lows in the $1,850 range, providing good technical evidence of a floor and three months of base-building.

Meanwhile the Lombard Letter writes that surging coin sales make a compelling case for much higher prices:

Year-to-date, until around mid-October 2020, the U.S. Mint sold 678,000 ounces of gold in American Eagle coins. (Source: “Bullion Sales,” U.S. Mint, last accessed October 15, 2020.)

How significant is this? In the entire year of 2019, the U.S. Mint sold just 152,000 ounce of gold in American Eagle coins. In other words: gold demand is running 346% higher this year than last year.

Lombardi describes corroborating high demand at Australia’s Perth Mint.  It is evidence that, it its words, “there’s a gold rush happening at the moment, and it’s getting bigger.”

We recommend you get positioned now for 2021.  This is an opportune moment to speak with a Republic Monetary Exchange gold and silver professional and take steps to add to your existing precious metals holdings.

jim-sign