Gold is up on the month but down over $50 on the week

Gold futures declined over $19 today, with the most active contract (June 2020) breaking below a key support level at $1700, and is currently fixed at $1693.90. However, even with the declines that have occurred this week gold pricing still gained 6% this month.

Lower gold prices were curtailed somewhat by dollar weakness. The U.S. dollar index is currently fixed at 99.015 and is showing a net decline of – 0.63% in trading today. Dollar weakness today took the index below its 50-day moving average, a key indicator analyst used to determine the short-term trend of a stock, commodity or index.

Spot gold sold off even harder currently fixed at $1684.80, after factoring in today’s decline of approximately $29. According to the KGX (Kitco Gold Index) selling pressure took gold pricing down $38, however dollar weakness softened that decline by $8.70, resulting in today’s decline of $29.30.

Today’s weekly jobless claims came in at 3.84 million new unemployment claims, slightly above economists’ estimates of 3.5 million indicating that the economy continues to contract.

According to Tyler Richey, co-editor at Sevens Report Research, and reported in MarketWatch, traders moved to “square their books into the end of the month,”

Statements made by both the Federal Reserve and the ECB (European Central Bank) indicated that both entities will continue to take emergency steps to help curb a contracting GDP in the United States as well as the eurozone. The Fed announced that they will leave federal funds-rates at near zero, and reiterated that it will continue to use all and any policy tools available to them. The ECB allocated €750 billion for a Pandemic Emergency Purchase Program, and also left their interest rates unchanged.

On a technical basis gold broke through two key levels of support today as it traded to lower pricing. First gold futures traded and closed below the key psychological level of $1700 per ounce. Secondly it broke below the 21-day exponential moving average which is currently fixed at $1699. While pricing is still above the 50-day moving average, which is currently fixed at $1648.50, this week’s sharp decline of over $50 is bewildering.

Currently we show the next level of support at $1681.80, which is the 50% retracement of the most recent rally which began at $1580 and concluded at $1788. Below that is the next level of support occurs at $1660 which corresponds to the 38% Fibonacci retracement of a larger data set beginning on March 16th when gold was trading at $1451 per ounce, and concludes at this year’s high of $1788.


Gold trades fractionally higher, overcoming a drop in consumer confidence

Gold Tops $1,750/oz; Ends Trading Week At Best Price Since October 2012

Precious metals prices gained Thursday, the final trading day of the holiday-shortened week. Major U.S. and European markets are closed tomorrow, April 10, in observance of Good Friday. All the metals scored weekly increases. As for the day, silver jumped 5.6% to end at a more than one-month high and gold soared 4.1% to notch a more than seven-year high.

Gold prices rallied 6.5% this week, logging a more than seven-year high

Gold for June delivery on Thursday jumped $68.50 to settle at $1,752.80 an ounce on the Comex division of the New York Mercantile Exchange. The settlement was the highest for gold since it closed at $1,753 an ounce on Oct. 17, 2012.

“The market is flooded with cash from central banks around the world which is inflating gold prices at this highly uncertain time,” MarketWatch quoted Craig Erlam, senior market analyst at Oanda, in a daily research report.

Gold futures surged 6.5% this week after sliding 0.5% last week. The yellow metal is 15.1% higher on the year to date. In looking ahead to next week, Kitco News offers the following forecasts via their Wall Street & Main Street surveys:

“All fifteen market professionals who took part in the Wall Street survey look for gold to rise next week…”

“Meanwhile, 1,172 votes were cast in an online Main Street poll. A total of 821 voters, or 70%, looked for gold to rise in the next week. Another 222, or 19%, said lower, while 129, or 11%, were neutral.”

Elsewhere, silver for May delivery advanced 84.8 cents to settle at $16.053 an ounce. The close was the highest since March 6 when silver ended at $17.263 an ounce. Silver futures traded 10.8% higher this week after falling 0.3% last week. They are down 10.4% on the year.

In other precious metals prices on Thursday and for the week:

  • July platinum added $15, or 2%, to end at $748.60 an ounce, for a 4.3% weekly gain.
  • Palladium for June delivery gained $14.80, or 0.7%, to finish at $2,110 an ounce, for a 0.2% increase on the week.

The two are split on the year so far with platinum off 23.4% and palladium up 10.5%.

London Precious Metals Prices (LBMA)

London precious metals prices ended divided Thursday and gained on the week. In comparing their levels from Wednesday PM to Thursday PM:

  • Gold rose $32.85, or 2%, to $1,680.65 an ounce.
  • Silver added 11 cents, or 0.7%, to $15.175 an ounce.
  • Platinum fell $6, or 0.8%, to $735 an ounce.
  • Palladium declined $14, or 0.6%, to $2,166 an ounce.

In LBMA weekly results, gains reached 4.2% for gold, 5.5% for silver, 2.9% for platinum, and 1.2% for palladium.

US Mint Bullion Sales in 2020

United States Mint bullion sales slowed from a week ago. In week-over-week comparisons:

  • Sales of American Platinum Eagles were flat after rising by 25,000 coins last week.
  • Combined sales of American Gold Eagles rose by 12,000 ounces after rising by 43,000 ounces last week.
  • Sales of American Silver Eagles moved up by 350,000 coins after increasing by 650,000 coins last week.
  • Sales of American Buffalo gold coins were flat for a second week in a row.

Below is a sales breakdown of U.S. Mint bullion products with columns listing the number of coins sold during varying periods.

US Mint Bullion Sales (# of coins)

Thursday Last Week This Week January February March April 2020 Sales
$50 American Eagle 1 Oz Gold Coin 0 43,000 12,000 38,000 3,500 133,000 45,500 220,000
$25 American Eagle 1/2 Oz Gold Coin 0 0 0 23,000 2,000 8,000 0 33,000
$10 American Eagle 1/4 Oz Gold Coin 0 0 0 18,000 2,000 20,000 0 40,000
$5 American Eagle 1/10 Oz Gold Coin 0 0 0 60,000 20,000 95,000 0 175,000
$50 American Buffalo 1 Oz Gold Coin 0 0 0 21,000 1,000 47,500 0 69,500
$1 American Eagle 1 Oz Silver Coin 0 650,000 350,000 3,846,000 650,000 5,482,500 350,000 10,328,500
$1 American Eagle 1 Oz Platinum Coin 0 25,000 0 14,500 9,300 31,200 0 55,000

Continue reading Gold Tops $1,750/oz; Ends Trading Week At Best Price Since October 2012

2020-W $50 Proof American Buffalo Gold Coin Released

Today, April 9, the United States Mint kicked off sales of the 2020-W $50 Proof American Gold Buffalo. Made for coin collectors and containing 1 ounce of .9999 fine 24-karat gold, the piece debuted for $2,315.

U.S. Mint product Images for the 2020-W $50 Proof American Buffalo Gold Coin. The coin ships in a hardwood box with a matte finish and a leather-like inset. It is accompanied by a Certificate of Authenticity.

This release is the numismatic version of a companion bullion coin made for investors. Both are authorized under Public Law 109-145.

“The American Buffalo One Ounce Gold Proof Coin is the first 24-karat gold proof coin ever struck by the U.S. Mint and is the coin collector version of the official United States Mint American Buffalo Gold Bullion Coin,” the U.S. Mint describes.

Sales of Proof American Buffalo Gold Coins from 2006 to 2019

The first proof American Gold Buffalo launched in 2006. The 1-ounce coins opened at prices and achieved sales of:

Year Debut Price Final Sales
2019 (released on April 12) $1,660.00 14,279*
2018 (released on May 10) $1,710.00 15,756
2017 (released on May 11) $1,590.00 15,810
2016 (released on March 31) $1,590.00 21,878
2015 (released on April 9) $1,590.00 16,591
2014 (released on May 8) $1,640.00 20,557
2013 (released on May 23) $1,790.00 18,594
2012 (released March 15) $1,960.00 19,715
2011 (released May 19) $1,760.00 28,683
2010 (released June 3) $1,510.00 49,263
2009 (released October 29) $1,360.00 49,306
2008 (released July 22) $1,199.95 18,863
2007 (released May 23) $825.95 58,998
2006 (released June 22) $800.00 246,267

*The 2019-dated coin is currently unavailable. The U.S. Mint last published it sales through the week ending Jan. 12, 2020, so its final figure is likely higher.

Along with the 1-ounce proof and bullion coins, the U.S. Mint has issued other variations of the American Gold Buffalo to include fractional editions and a special reverse proof to celebrate the anniversary of the designs.

Coin Designs

The gold coin’s obverse showcases a right-facing portrait of a Native American. The image by James Earle Fraser is said to be created from a composite of three different individuals. Inscriptions around the design include ‘LIBERTY’, a ‘W’ mint mark to denote its production at the West Point Mint, ‘2020’, and an ‘F’ for the artist’s initial.

This image shows the gold coin’s obverse or heads side

On the reverse, also designed by Fraser, is a single American Buffalo, or bison, surrounded by inscriptions of ‘UNITED STATES OF AMERICA,’ ‘E PLURIBUS UNUM,’ ‘IN GOD WE TRUST,’ the coin’s legal tender face value of ‘$50’ and its weight and fineness of ‘1 OZ. .9999 FINE GOLD’.

This image shows the coin’s reverse or tails side

Coin specifications include a diameter of 1.287 inches (32.70 mm), a weight of 31.103 grams, and a reeded edge.


The 2020-W $50 Proof American Buffalo Gold Coin may be ordered directly from the U.S. Mint via its webpage dedicated to gold coins, or by calling 1-800-USA-MINT (872-6468).

Its price of $2,315 will change over time, possibly weekly. The Mint’s numismatic gold coins are tied to its pricing matrix and gold market conditions.


Gold Dips 0.7% on Monday, March 30

Gold, silver and platinum futures declined on Monday while palladium prices edged higher.

Gold futures fell $10.90 on Monday, March 30

Gold for June delivery — the new, most-active contract — shed $10.90, or 0.7%, to settle at $1,643.20 an ounce on the Comex division of the New York Mercantile Exchange.

“The recessionary fallout of the Covid-19 outbreak on the global economy suggests investors are likely to continue to seek refuge in gold,” analysts at BNP Paribas said in a note reported by Reuters. “We expect demand for gold to remain strong, at least until such time that economic conditions stabilize and the outlook begins to improve following the raft of unprecedented stimulus measures put in place by governments and central banks alike.”

Gold futures ranged from a low of $1,632 to a high of $1,673.60. They jumped 9.5% last week.

Silver for March delivery fell 40.2 cents, or 2.8%, to settle at at $14.132 an ounce. Silver futures traded between $13.94 and $14.71. They rallied last week by 17.4%.

In other precious metals futures Monday:

  • July platinum declined $17.80, or 2.4%, to $723.80 an ounce, ranging from $710.90 to $745.10.
  • Palladium for June delivery inched up 80 cents, or 0.04%, to $2,197.60 an ounce, trading between $2,105.30 and $2,224.

Last week, platinum gained 18.9% and palladium soared 42.6%.

London Precious Metals Prices (LBMA)

In comparing earlier fixed London gold and silver prices from Friday PM to Monday PM:

  • Gold rose $1, or 0.06%, to $1,618.30 an ounce.
  • Silver fell 26 cents, or 1.8%, to $14.055 an ounce.

In LBMA results last week, metal prices increased by 8.2% for gold, 13.3% for silver, 20.8% for platinum, and 37.8% for palladium.

US Mint Bullion Sales in 2020

United States Mint bullion sales were unchanged Monday following solid gains last week. Below is a sales breakdown of U.S. Mint bullion products with columns listing the number of coins sold during varying periods.

US Mint Bullion 
Sales (# of coins)
Monday Last Week January February March 2020 Sales
$50 American Eagle 1 Oz Gold Coin 0 50,000 38,000 3,500 123,500 165,000
$25 American Eagle 1/2 Oz Gold Coin 0 5,000 23,000 2,000 8,000 33,000
$10 American Eagle 1/4 Oz Gold Coin 0 14,000 18,000 2,000 20,000 40,000
$5 American Eagle 1/10 Oz Gold Coin 0 25,000 60,000 20,000 95,000 175,000
$50 American Buffalo 1 Oz Gold Coin 0 2,000 21,000 1,000 47,500 69,500
$1 American Eagle 1 Oz Silver Coin 0 1,650,000 3,846,000 650,000 4,832,500 9,328,500
$1 American Eagle 1 Oz Platinum Coin 0 0 14,500 9,300 6,200 30,000



Opinion: Why gold won’t save your portfolio from inflation’s bite

By Mark Hulbert

Think gold will be a good inflation hedge in coming months? Think again.

Consider: If gold GCJ9, -0.34% were a good inflation hedge, its inflation-adjusted price would be constant. Yet, while U.S. inflation (as judged by the Consumer Price Index) has declined in each month since last October, gold has risen nearly 12%. In the process, the gold-to-CPI ratio has risen markedly, from below 4.8 to nearly 5.3.

Of course, five months is a short period of time. But even over periods of several years, or even decades, the gold-CPI ratio fluctuates wildly. The ratio got as low as 1.5 in the early aughts, for example, and as high as above 8.0 earlier this decade.


Might it be that gold is instead reacting to expected, rather than realized, inflation? It’s hard to see how that does any better job explaining gold’s recent behavior. Consider 30-year expected inflation, as judged by the 30-year breakeven inflation rate (the difference between the yields on the 30-year Treasury and 30-year TIPS). That rate has declined from 2.13% in October, according to the St. Louis Federal Reserve, to its current 1.85%.

To be sure, inflation is not the only thing that makes gold go up or down. In a recent MarketWatch column, Michael Brush listed several other factors. But inflation is, by far, the leading suspect. And you have to torture the inflation data a lot to generate a forecast that gold should rise significantly over the next several years.

Consider the study “A Golden Dilemma,” which the National Bureau of Economic Research began circulating several years ago. The study was conducted by Campbell Harvey, a finance professor at Duke University, and Claude Erb, a former commodities portfolio manager at TCW Group. The researchers proposed a fair-value model for gold that was based on the average historical ratio of gold to CPI.

That average is 3.57-to-1, based on data since gold began to trade freely in the early 1970s. The researchers’ implied forecast is that, whenever gold trades significantly above or below this level, it eventually will return to trade at that ratio again. Call it reversion to the [golden] mean, if you will.

What does this mean now? For gold to justify its current price in terms of inflation, the CPI either needs to be 47% higher or gold needs to trade for $902.

Many scoffed at the researchers when they first circulated their study in late 2011, when gold was trading above $1,700. Gold’s subsequent decline led many to take their research a lot more seriously. Unfortunately for gold investors, their study continues to imply that gold’s fair value is a lot lower than where the yellow metal stands.

It’s worth noting that the study did find an historical basis for believing gold to be a good inflation hedge. But the yellow metal does this better job only over super-long periods — measured in centuries rather than years. Over shorter periods, including periods as long as an investment lifetime, they showed that gold fluctuates widely relative to inflation.

This in turn means that it’s entirely conceivable that gold could rise markedly over the next several months. But if it were to do so, it would become even less tethered to the inflation data than it already is. Note carefully that, if that is what you’re expecting, you can’t then turn around when the CPI jumps up to argue that gold’s price should respond bullishly.

The researchers’ forecast merely is that, regardless of whether gold rises or falls over the next few months, gold eventually will return to trade at the mean of its historical ratio to the CPI.

The Gold Rush is Over

Concerns that Turkey’s currency crisis will spill into other emerging markets — and maybe Europe — aren’t spooking investors much. Just look at gold.

It’s supposed to be the classic fear trade, something to buy when things are falling apart in the world.

But the price of gold has been tumbling.

It’s below $1,200 an ounce for the first time since January 2017 and about 13% below its peak this year of more than $1,365. What gives?

Gold does best when the US dollar is weakening. That’s when investors truly appreciate the value of gold as an alternative form of currency, not just a precious metal.

But the greenback has surged this year as the Federal Reserve has raised interest rates and is expected to hike them two more times this year. Strong corporate profits and solid economic growth have helped, too.

And gold doesn’t always do well when investors are scared.

During both the 1997-1998 Asian emerging markets meltdown and the 2008 financial crisis, the price of gold plunged, and the dollar rallied.

So as long as the dollar remains red hot, gold could continue to lose luster, Simona Gambarini, commodities economist for Capital Economics, wrote in a report last week.

“Given our view that the dollar will remain strong into 2019, we don’t expect the price of gold to recover much ground before then,” Gambarini wrote.

It’s not just gold that’s tumbling lately. Copper and other economically sensitive commodities have dipped, too. That could be a sign that investors are worried about the health of the rest of the world, even as the US economy holds up.

“Commodity prices are falling along with gold, indicating a lack of pricing pressure,” wrote Paul Nolte, portfolio manager with Kingsview Asset Management.

Rich Sega, global chief investment strategist at Conning, agrees with that assessment. For the time being, weaker emerging markets are a bad thing for copper, gold and other metals, not a reason to buy them.

“Generally, commodity prices have softened due to slack in demand. Inflation fears have been allayed too,” Sega said. Although prices are starting to pick up, few economists are worried about runaway inflation anytime soon.

And the continued concerns about Trump administration tariffs could keep copper and gold prices depressed as well.

Sega adds that gold usually tends to be a fear trade for geopolitical reasons, not necessarily economic ones. He notes that improved US-North Korea relations and a recent cooling of tensions in the Middle East have made gold less attractive.

So while panic can motivate people to rush to gold, it has to be a specific type of fear — and, for now, that fear is absent.

Miners Tumble as Gold Sinks

Gold spot futures sank more than 1%, below the $1,300 per troy ounce level on Tuesday, taking mining stocks down with them. VanEck Vectors Junior Gold Miners (ticker: GDXJ), iShares MSCI Global Gold Miners (RING), and VanEck Vectors Gold Miners (GDX) fell more than 2% each, ranking among the worst performers in exchange-traded fund land.

Morgan Stanley’s commodity team sees gold hitting $1,263/oz in 2017 and $1,258 in 2018, “a flat/benign outlook,” according to their note published Monday. Uncertain economic growth for the U.S. and China, declining trade relations and of course, geopolitical tension is expected support prices in the short-to-medium term.

Metals and mining analysts Plyush Sood and Hunter Alley updated their forecasts on large-cap miners. Sood and Alley raised their price target modestly for Newmont Mining (NEM) to $33 from $31, below its recent price of nearly $38, but left its $15 forecast for Barrick Gold (ABX) unchanged. They explained:

Newmont: The cost guidance for 2017 was lowered by ~4% or $30/oz at the end of 2Q. After our trip, we have lowered our 2018 cost estimate to $697/oz, down $36/oz from our prior estimate, and is now at the low end of 2018 cost guidance of $700-800/oz. In our model, we have made similar cost reductions to our estimates for future years. These cost cuts raise our PT by $2 to $33.

Barrick: Our team’s gold price forecasts stay nearly unchanged. We have cut our 2017 forecasts to factor in the impact of the export ban in Tanzania, but haven’t changed our forecasts for 2018 and onwards assuming that exports can resume next year. A continuing inability to export or a value leakage in the region will affect our NAV for ABX.

Gold Boxed In by Bitcoin?

Gold remains under some pressure and as we noted here on Friday spot gold has fallen to “The Box” marking the 50-62% retracement of the move from the lows in early May of $1215 to the highs two weeks ago when spot gold traded to $1298. The Box is bounded on the low side by $1245 and on the high side by $1255 and as we write spot gold is perfectly in the “middle” of that range, with the low thus far in Asian dealing of $1250. We have to suspect that there shall be stops just under $1250 and that when those stops are elected that the lower boundary of The Box shall be put to test.

With crude oil steady at best and with stock prices generally trading better, the propensity on the part of gold buyers to rush forward is muted at best. Further, gold mining shares seem unwilling and/or incapable of 3 taking the lead and until such time as the miners lead weakness is the greater likely future.

Finally, Bitcoin is a bit weaker and we are still of the mind that the peak for the crypto-currencies generally but for Bitcoin specifically was made seven trading sessions ago when Bitcoin rose to just over $2800 and then plunged sharply, tracing out a daily “reversal” to the downside and finishing what appears to us to have been a nearly text-book Fibonacci 5 wave pattern to the upside. However, just did the EUR noted above failed to forge a weekly reversal to the downside, so too did Bitcoin “fail,” for although Bitcoin closed lower on the week it did not close below the previous week’s lows. Thus now a broader, time consuming top shall have to evolve instead. We believe it shall bit it may take time.

Gold pulls back, but on pace for second weekly rise in a row

Gold prices traded slightly lower Friday, but futures were on track to log a second weekly gain in a row as demand for assets perceived as risky waned and as the U.S. dollar retreated to near seven-week lows.

April gold GCJ7, +0.08%  fell $2.20, or 0.2%, to $1,245 an ounce, with the precious metal aiming for a 1.3% weekly gain. Meanwhile, the commodity’s sister metal, silver for May delivery, SIK7, +0.89%  was up 4 cents, or 0.2%, at $17.63 an ounce, on track for a 1.3% weekly advance.

Colin Cieszynski, chief market strategist at CMC Markets, said that momentum for gold, which has climbed in five out of the past six sessions, may be tapering.

A pullback in the dollar which has been trading around a seven-week low, has helped assets priced in dollars to trade higher. As measured by the ICE U.S. Dollar Index DXY, -0.12% a measure of greenback against six rival currencies, the buck was slightly lower Friday and staring at a 0.6% weekly decline. A softer dollar can make assets pegged to the currency more appealing to buyers using other monetary units.

The dollar, and assets considered risky like stocks, have been stalling out after a run of records amid heightened concerns about President Donald Trump’s ability to put in place pro-growth legislation, highlighted by the president’s struggle to get the House to pass a bill that would repeal and replace former President Barack Obama’s signature health-care law, known as the Affordable Care Act, or Obamacare. A vote on the new health bill is slated for later Friday, with a failure seen by some as signaling that Trump may face headwinds on other parts of his ambitious agenda.

Gold has mostly benefited in this environment but some market strategist see the path for further rises fading somewhat.

“Gold has started to drop back as its latest rally runs out of gas,” said Cieszynski. He said a recent reading of an asset’s momentum, known as relative strength index, suggests that the recent upswing may be “getting tired” and predicted that a pullback around the $1,242 an ounce, then $1,230 an ounce, as possible.

On the economic front, new orders for durable goods climbed in February for the second straight month. Durable-goods orders advanced 1.7% while the increase in January was raised several notches to 2.3%, reflecting a pickup in manufacturing that kicked in toward the end of last year.

In exchange-traded funds that track metals, the SPDR Gold Trust GLD, +0.20% was off 0.1%, the VanEck Vectors Gold Miners ETF GDX, +0.13%  was down 0.3%, while the iShares Silver SLV, +0.72%  gained 0.1%.