Market Updates

We’re two weeks on from the Federal Reserve Bank’s meeting that sparked the ‘taper talk’.

The question most people want an answer to this week is: what is the direction of gold, up or down? Are we strapping in for bigger falls, or is it time to get excited about a new rally?
The takeaway here is, indecision in the gold space remains. The gold bull is yet to be released from the gates without some decisive moves from the yellow metal.
I appreciate their position. Traders move with the market rather than running with a narrative.
For me, when gold dips like this I see it as an opportunity to pick up more…

The rumblings began a few weeks ago. Basel III changes are soon to be implemented. People wanted to know, what do they mean for gold?

Rather than listen to the echoes doing the rounds on the internet, I turned to our in-house expert — Nick Frappell.

Turns out, Nick had some market leading analysis for us…

Well, that’s one way to get everyone talking.
What was meant to be another routine Federal Open Committee Meeting (FOMC) for the month…ended up giving the market the jitters.
The tone of the June FOMC was tipped to cool the markets inflationary fears and water down the down the ‘taper talk’.
Instead, the Federal Reserve Bank did the opposite.
Our central banking mates didn’t calming things down, rather they acknowledged inflation may be a bigger problem than first thought. Suggesting rates might increase sooner than originally planned…and that ending monetary stimulus is a discussion the room needs to have.
All this noise caused gold to sink like a stone.
There’s a lot to unpack today. Let’s get started…

As the week draws to a close, we look back on the things we learned.

One of those, is that the Aussie stock market doesn’t care if Melbournians are trapped in their homes.

Another, could be coming from own our gold expert on whether cryptocurrencies can cut the mustard.

I personally learnt earlier in the week, that a magnet will ‘glide’ down a 1 kilo silver bar because of its slightly magnetic properties.

But the most important lesson for this week, is that changes to capital requirements for the banking system may impact the gold markets on the inside.

Settle in folks, we have some ground to cover today.
In fact, think of this edition as a choose-your-own-market-update-adventure.
There’s an interview with a legendary commodities investor. Some titbits from the Reserve Bank of Australia and we have what Opposition Leader Anthony Albanese said about ABC Refinery over here.
Our most important topic for today, is that we start understanding what the new rules for banks mean…and the potential impact on gold. 
Before we get to any of that, let’s check in and see what the yellow metal is doing…

What a week.

Gold rallies and another Australian city goes into lockdown. Again.

I’ve woken up twice to see the price of gold has danced with US$1,900 (AU$2,450). That was the good news…

…for those Melbourne bound like me, we won’t dwell on our 4th shut-in in a 12 month period. No! Instead, we look to rising gold prices and perhaps the better days ahead for precious metal investors.

This was something Nick Frappell and I talked about last week over at our You Tube channel.

As Nick pointed out from secret studio location in Marrickville, gold breaking through US$1,900 is an important psychological point for traders.

What’s the better long term investment?

Over the weekend – after the morning coffee but before the household chores – I picked up my phone to delay my responsibilities. Afterall those weekend papers wouldn’t read themselves.

Much like the week that preceded it, inflationary fears and commodity commentary filtered its way into the digital ink space.

Copper continues to trade at multi decade highs. Even though the friendship between China and Australia is frosty, iron ore is still dancing around US$205 (AU$264) per tonne.

Talk of US Treasury bonds rising was among the papers. As was what the Federal Reserve Bank will do to save us from this monetary policy they’ve unleashed. It goes without saying that Aussie house prices got a mention.

Then my eyes landed on an unexpected gold story…

What a year for precious metals it's been! Whilst we wrap up the year, our online trading platform continues to stay open 24/7 - with our team working full steam ahead to service our investors during this holiday period.

Vaccine optimism is the central driver of this movement. GDP growth anticipates a successful roll-out of the vaccine in H1 of 2020.

The RBA says they aren't considering negative rates, but then they ruled out super low rates and QE.

Australia's Federal budget pushes the country to a record debt level while a FOI raises concerns whether the RBA is serving the public interest.

The classic 60/40 portfolio could be a wealth hazard with low interest rates capping bond gains and equities facing a Baby Boomer retirement headwind.

Precious metals experience a sharp correction but the bull market remains intact as central banks continue to peddle stimulus poison in a desperate attempt to keep the biggest bubble of all time inflated.

Aussie banks are being ghosted by deferred loan borrowers - maybe a debt jubilee is required? Dumb money continues to pile in as smart money gets out. The hypocrisy of not adjusting the cash transaction reporting limit.

With the tailwind of an inflation driven commodity supercycle and the possibility of simultaneous Western and Eastern demand, gold could experience a rare price boost in the coming decade.

Gold & silver remained range bound this week but not so for shares, which appear to be peaking in stupidity reminiscent of the crypto bubble in 2017-2018. With the All Ords sideways in ounces of gold, it may be prudent to reallocate away from risk assets to gold.

Precious metals spike and dump on Jackson Hole speech and we look at the how and why of gold and silver investing.

Gold failed to hold above US$2,000 but found support above $1,900 and is trading just above the previous all-time high in 2011.

We Are All Gold Bugs Now says Morgan Stanley, worried about inflation. While gold and silver were volatile on profit taking the broader long-term fundamentals remain unchanged and we are confident there are a plethora of investors waiting to buy significant dips.

Another amazing week with gold pushing strongly through $2,000 and silver reaching just shy of $30. Over only 16 trading days the move in gold, as shown in the chart below, is an impressive 14.3% but silver steals the show at 46.7%.

Gold stopped short of hitting $2,000 but with a permanent change to mainstream market attitudes towards precious metals any decent dips in the price will likely be bought.

We focus on silver this week given its massive 17% gain. We expect the market to take a breather back to the mid $21s but in the long-term silver is clearly in a new bull market. We also look at how gold and silver in Australian dollars are less volatile than some blue chip stocks.

The markets are a very dangerous place for savers says Russell Napier with financial repression, US Federal Reserve turning on the liquidity taps and retail rookies running rampant.

A significant week for gold as it broke through the round number $1,800 level, a figure it last saw in 2011, on the back of concerns about a second COVID wave in the US.