Market Updates

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.

Gold posted a massive 28.5% return for the 2019/2020 financial year, with silver a more than respectable 20.1%, but its 45 year compounded per annum return is also impressive.

‎It is now time to leave the stock market party before the bubble blows. Yield breakdown is driving gold says Nick Frappell and professor shows that gold worked to reduce portfolio risk in the 1930s.

Equity prices are insanely disconnected from their underlying fundamentals and in “La la land” according to Crescat Capital. Jeremy Grantham agrees saying that he is increasingly confident that stocks are “the fourth ‘Real McCoy’ bubble of my investment career” and that the recent price action is “crazy stuff”.

Digital Finance Analytics estimates that the percentage of households in mortgage stress reached 37.5%, or 1.42 million households.

Gold recovered this week but looking back a few months it is still bound within a $1,680/$1,750 channel. Silver has had a strong recovery from its COVID bottom in March and is sitting around the mid-$17 as we write, with the gold:silver ratio staying below 100.

Nick Frappell talks about what the EFP is and discusses how it is priced, who trades it and its impact on gold prices in ABC Bullion’s 360 Monthly Review.

Gold continued to pull back in most currencies this week, but managed to remain above US$1,700, mainly on the back of some severe USD weakness. Silver briefly touched above US$18.00 before settling down to $17.70 at time of writing

Is surging private indebtedness creating a society of debt serfs and feudal creditor lords? We explore this question and more in this week’s review of Incrementum’s In Gold We Trust report, which says that the 2020s will be a golden decade.

Platinum was flat this week at USD $835 and Palladium fell back to $1,926, with both metals seeing a profound impact from COVID on both supply and demand.

Gold moved south of USD $1,700, ever so briefly, before rebounding to $1,720 on the back of US GDP Q1 data showing a 5% contraction on an annual basis. Silver also pulled back early in the week before rebounding back above $17.40.

This week, Crispin Odey got a lot of headline coverage, when he said that gold ownership could become illegal if inflation spikes.

AUD strengthened this week to 65.6 US cents, seeing gold in AUD $50 lower than this time last week. Silver pulled back to $26.20 from recent highs above $27.