Gold and Silver Climb As Iran Attack Sends Haven Assets Higher

Gold rose to a four-month high after a U.S. airstrike killed one of Iran's most powerful generals, ratcheting up tensions in the Middle East.

Spot bullion climbed 0.9% to $1,542.47 an ounce. Silver rallied 1.3%, while platinum and palladium also advanced. The yen strengthened 0.6% and oil jumped close to $70 a barrel.

The strike in Baghdad ordered by President Donald Trump killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards' Quds force. Iran's supreme leader, Ayatollah Ali Khamenei, vowed "severe retaliation."

"The likelihood of further reactions cannot be ruled out, which may keep gold supported in the near term," Jingyi Pan, market strategist at IG Asia Pte in Singapore, said in an email.

Bullion is building on a 2019 rally as the dollar weakens and geopolitical concerns return. Prices rose 18% last year, the biggest annual advance since 2010.

Last year's advance marked a positive shift in investor attitude toward gold, according to RBC Capital Markets, which predicted further gains this year and next. Goldman Sachs, Citigroup and UBS Group have said they're looking for $1,600 an ounce.

January is historically gold's best month, according to Bloomberg Intelligence. If prices match the average January advance of 2.7% over the past 20 years, they'll surpass the six-year high reached in September. The metal will approach $1,600 by February if it matches the 5.2% average increase of the past five years.

BLOOMBERG NEWS04:22 AM ET 01/03/2020

David

Gold and silver exploding

Featuring views and opinions written by market professionals, not staff journalists.

Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It's a showdown of global proportions, so don't miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.

(Kitco News) – Overnight, there were a couple of geopolitical events, including an airstrike in Iran taking out one of the most powerful generals in Iran’s Quds Force. This was a big hit for the U.S. as we took down another powerful leader that hates the U.S.

This event caused gold, silver and crude to soar higher after big days yesterday. We had expected the metals to consolidate some before exploding higher, but with the geopolitical events, the explosion happened sooner.

We wrote yesterday that we were long and looking for a test of the recent highs; we just didn’t expect it today. The pattern being created by the overnight action is known as a blow-off pattern. Although we remain bullish and expect new highs, we expect a reasonable sell off in the next couple of days.

Fear trades that create this blow-off pattern almost always end up in a reversal pattern, which should take gold back to Thursday’s closing. However, that doesn’t mean it will happen today or Monday. We will remain long but are looking for a spot to sell for a day trade to resolve this blow-off pattern.

By Todd 'Bubba' Horwitz

Contributing to kitco.com

Friday January 03, 2020 08:51

David

Silver is INCREDIBLY UndervaluedâNew Mike Maloney Video

Silver is INCREDIBLY Undervalued—New Mike Maloney Video

Many investors know that silver is undervalued relative to gold. Many also know that silver remains undervalued relative to the stock market.

But check out just how undervalued silver is in this new video with Mike Maloney and Ronnie Stoeferle.

This chart shows the silver/gold ratio (the gold/silver ratio inverted) vs. the S&P 500. Note the strong correlation for two decades—until it abruptly ended in 2011.

What happened? Ronnie explains that we had monetary inflation (QE) from 2008 to 2011, then asset price inflation beginning in 2011, a process that pushed up asset prices and thus pushed this ratio to an extreme.

He points out that based on Murray Rothbard’s research, inflation occurs in three stages—and we’ve now seen the first two stages. Next up is stage three: price inflation.

It’s a contrarian call, but a recent Bloomberg cover referred to the “death of inflation.” As Ronnie says, this is a reliable contrarian indicator and investors should thus prepare for price inflation.

If he’s right, big inflation is ahead—and much higher gold and especially silver prices.

Tune it to also hear Mike talk about the wealth disparity… it isn’t because Jeff Bezos created the world’s biggest shopping center and made billions of dollars, for example, but because currency creation has lifted asset prices and made him worth more at a much faster pace than the average investor.

It’s all very eye-opening, and has clear implications for investors that want to maximize their profit opportunity in silver.

GoldSilver.com Team

JAN 2, 2020

David

Outlook 2020 – The Big Picture Backdrop for Precious Metals

The year ahead promises to be an eventful one. It will, of course, be dominated by political headlines leading up to the 2020 election. It could also be a big breakout year for precious metals.

In the second part of Money Metals' 2020 Outlook, we’ll drill down on the fundamental and technical setup for gold and silver…

However, in this first part, we’ll set the stage by digging into the macro forces at play in the economy, monetary policy, politics, and geopolitics.

Economy

Over the summer, the mainstream financial media ran hard with the “recession” angle. A manufacturing slowdown seemed to be afoot. But the main impetus for all the recession talk was an inversion of the yield curve – putting short-term bond yields below those of longer-term bonds.

Democrats were nearly gleeful at the prospect of a recession. But such thinking proved to be premature.

The economy does not appear to be headed into recession as we begin 2020. Official employment numbers continue to come in historically strong. And GDP growth, though modest at 2.1% as of Q3, is still indicating an overall expansion.

As for the yield curve inversion, the Fed got the message and drove short-term rates back below long-term rates. The inversion still serves as a possible precursor to a recession, but it may not actually hit until 2021 or later.

Continued global economic growth in 2020 could drive a late-cycle bull market in commodities, including the metals complex.

Leading up to a recession, the energy and materials sectors tend to outperform the broad market before rolling over. Gold and silver tend to peak later, with gold often rising counter-cyclically to economically sensitive assets.

Monetary Policy

In 2019, the Federal Reserve did a dramatic about-face on interest rates. Instead of hiking, as was widely expected by mainstream forecasters, the Fed paused… then cut rates three times.

By the fall, it was engaging in massive interventions to prop up the repo market and launching what is effectively a new Quantitative Easing program.

Nobody in the financial “mainstream” saw that coming at the beginning of the year!

The Fed is now back on pause for an unknown period. At his latest press conference Fed Chairman Jerome Powell indicated he would like to a see a significant and sustained rise in inflation before hiking rates again.

Higher inflation coupled with accommodative monetary policy would potentially be rocket fuel for precious metals markets.

A weaker Federal Reserve Note “dollar” versus foreign currencies isn’t necessary for hard assets to gain, but it certainly wouldn’t hurt. The U.S. Dollar Index peaked for 2019 in late September after a modest run-up. It has since retraced and will finish the year nearly flat.

The dollar has fallen in the fourth quarter along with the QE surge in the Fed’s balance sheet. The central bank’s net asset purchases are up by $400 billion already. Its balance sheet will likely rise to an all-time record by spring 2020, further cheapening the real value of the Federal Reserve Note in the process.

Politics

There is no shortage of opinion on who will, and who should, win the 2020 election. But we’ll stay out of the political “horse race” debate that fills the airtime on all of the cable news channels hour after hour, day after day.

We note only that political prediction markets currently give the upper hand to President Donald Trump. As long as the economy doesn’t dip into recession, the smart money seems to be on Trump to triumph over a weak Democrat field.

Should the economy falter or Trump get bogged down in a new controversy that erodes his support, the political dynamics could shift – and potentially roil markets.

Several outspoken billionaires – from Ray Dalio to Paul Tudor Jones to Stanley Druckenmiller to Leon Cooperman – have each warned that a Democrat victory over Trump could trigger a stock market meltdown (especially if the victorious Democrat is a Bernie Sanders or Elizabeth Warren-type anti-capitalist firebrand).

Such an event, in turn, would enhance the safe-haven appeal of precious metals.

So far during the Trump presidency, “fear trade” demand for physical precious metals has been mostly muted. The metals have made modest gains based on other factors. But before we see truly spectacular gains in gold and silver, we will likely need some sort of economic, political, or geopolitical black swan event to shake investors out of their complacency.

Geopolitics

The big geopolitical story of 2019 was the trade standoff between the United States and China. Every week, seemingly, brought us either one step closer or one step further behind a trade deal.

Much – perhaps too much – was made of the impact of trade wars on market trends. But a favorable outcome in 2020 would certainly go toward boosting manufacturing activity and demand for industrial metals.

Other geopolitical threats loom in 2020 as well.

As the U.S. continues to ramp up economic sanctions on Russia, the Russians continue to look for ways to retaliate. One if its long-term strategic aims is to secure international trade deals outside the Federal Reserve Note dollar system. It is finding willing partners in U.S. adversaries who have been hit or threatened with sanctions.

The U.S. has shown in the past that it is willing to go to war to defend its fiat dollar.

A possible war with Iran, North Korea, Russia, or China – or a shutdown of oil production from the Middle East – would be extremely disruptive to markets and could send safe-haven demand for precious metals skyrocketing.

Barring an unforeseen black swan event or crisis, the big picture backdrop for precious metals looks constructive for another year of significant but not necessarily spectacular gains.

At some point, though, whether next year or in future years, mounting risks will propel gold and silver higher with explosive force.

by: Stefan Gleason

Money Metals News Service

December 31st, 2019

David

Gold, silver post strong finish to 2019

– Gold and silver finished strong for 2019 posting the best year for both metals since 2010 and adding to the New Year’s Eve cheer for precious metals owners. Gold ended the year at $1521 – up 18.5%. Silver ended the year at $17.89 – up 15.9%. The Dow Jones Industrial Average, by way of comparison, was up 22% on the year.

Posted on December 31, 2019 by Daily Market Report

(USAGOLD AFTERNOON UPDATE – 12/31/2019)

David

Gold shows resilience as it maintains pricing well above $1500

With only one trading day left for the calendar year 2019, gold is benefiting from US dollar weakness and thin holiday volume. Today’s volume in the February contract of gold futures is only 204,993. As of 4:00 PM EST spot gold is currently trading up $3.70 and fixed at $1514.50. These gains are combination of a weak dollar (+ $3.30) and traders bidding the precious yellow metal fractionally higher (+ $0.40), this according to the KGX (Kitco gold Index).

day.

Gold futures have been trading fractionally higher and fractionally lower throughout the day. Currently February futures are fixed at $1518, which is a net decline of $0.10 on the day.

U.S. dollar weakness can be partially attributed to an announcement by the White House that the phase-one trade deal will probably be signed next weekend. It was reported in the South China morning Post that, “Washington has sent an invitation and Beijing has accepted it.”

Peter Navarro also spoke with Fox news citing a report, “that Chinese Vice Premier Liu He would visit this week to sign the deal, but did not confirm it.”

According to Reuters, “The White House’s trade adviser, Peter Navarro, on Monday said the U.S.-China Phase 1 trade deal would likely be signed in the next week, but said confirmation would come from President Donald Trump or the U.S. Trade Representative.”

Given that reports seem to indicate that there is an extremely high probability that this agreement will be signed this weekend, there has still been very little released about the agreement itself and what concessions both sides have made to implement this limited agreement.

As reported by MarketWatch today, Chintan Karnani, chief market analyst at insignia consultants in a Monday research report said, “It is only fears of Trump withdrawing from the trade deal that is preventing gold and silver from a crash.”

Lastly gold is being supported by potential geopolitical hotspots. First although North Korea has not fulfilled its promise to deliver a “Christmas gift” to the United States, today national security advisor Robert O’Brien said that the United States is ready to take action if North Korea does act.

The other geopolitical hotspots which are being watched closely include Syria and Iraq. Yesterday officials of the United States announced that they had completed limited airstrikes against Syria and Iraq which were successful, however “additional actions” may still be taken

Wishing you as always, good trading,

By Gary Wagner

Monday December 30, 2019 18:34

David

Why Elon Musk Secretly Loves Silver

It’s no secret that Elon Musk has some revolutionary ideas.

And by most measures, he has been wildly successful. Tesla orders hit a record 97,000 vehicles globally in the third quarter (not to mention 250,000 preorders for the new CyberTruck). The stock has more than doubled since May 1. And you might recall Mike Maloney is a big fan of Tesla cars.

But there’s something you may not know about Elon Musk. He won't admit it publicly. Neither will most “green” company CEOs. But it’s a reality for all of them.

They desperately need silver.

The fact is, the growing green revolution requires the use of silver. Due to its unique chemical makeup, silver is one of the elements that, directly or indirectly, make green technologies what they are.

Whether you know it not, incorporating more green technologies and products into your life means you are, by default, using more silver. Ditto society as a whole.

Here’s where silver plays a key role in the green revolution…

Electricity Generation

Silver is used in most electrical generation today, because it has the highest known electrical and thermal conductivity of all the metals. And when it comes to green electricity, solar is one of the fastest growing segments of the market. Solar is green because it is a renewable energy source and emits no carbon emissions.

The amount of silver used in solar panels can vary, but a fair average is about 20 grams, or 0.643 troy ounce, roughly two-thirds of an ounce. We put 23 solar panels on our roof earlier this year, so we used 14.8 ounces of silver.

That may sound like a small number of ounces, but adds it up quickly…

Consider even if you don’t have solar panels on your home, an increasing number of buildings do. In California, a new law goes into effect January 1 that will require solar on every new building of four stories or less. Other states and countries could easily follow suit.

And by any measure, the use of solar in our society is poised to grow significantly:

Electricity from solar power is expected to more than triple in just the next ten years.

This growth is partly due to greater environmental awareness and government policy, but it’s also a result of energy-efficient technologies themselves: solar costs less, and can be installed faster than most other energy sources. This makes it especially appealing to second and third world countries; both China and India are on track to see a significant increase in solar capacity.

It’s not just solar but all renewables; windmills use silver, too. Brushes that contain silver are used in the motors and generators of wind turbines. Copper versions of the brushes have been popular, but many end users are switching to silver brushes, which, although more expensive, perform better long term.

In total, renewables are expected to increase to a whopping 4.5 times their current level by 2030, expanding their share of global electricity generation from 6% to 14%. This means more and more silver will be required.

By 2050, it is estimated that solar panels and wind turbines will require three times more silver than what is used today.

If the silver price gets too high, could it be reduced or even eliminated from renewables? For the most part, no. As CRU International reported, “it bears repeating that silver has remarkable electro-conductive qualities unmatched by other metals, and there is a physical limit on the ability of solar PV manufacturers to continue reducing silver loadings before performance and efficiency losses begin to outweigh whatever benefits are achieved from lower raw material costs.”

So, if your home or business or any establishment you visit gets some or all of its electricity from solar or wind, you can thank silver.

Electric and Hybrid Vehicles

Electric cars and trucks require silver. This category includes electric vehicles (EVs), battery electric vehicles, (BEV), and plug-in hybrids (PHEVs).

These vehicles use more silver than the internal combustion engine (ICE). The electric engine, battery pack, and battery management system all require silver.

While the amount of silver used in a Tesla and other electric vehicles is small, the aggregate total adds up quickly—and will only go higher.

If you own either type of vehicle, or ride in a car or bus that uses this type of energy, you are using a green technology—which silver helped provide.

It’s not just electric vehicles, either. Autos in general are becoming more “electrified” every year. The majority of electrical connections in a car use silver-coated contacts—silver switches are used to start the engine, control electric seats, and open/close electric windows. Silver is also used in heated seats, window defoggers, and most luminescent displays.

This all means that silver demand for this sector is set to rise at a fast clip. CRU International estimates that by 2030, electric vehicles will account for as much as 17% of global car sales, with hybrids accounting for an additional 20%. As a result…

The amount of silver used by the auto industry alone will reach an estimated 70 million ounces by 2030, up from 45 million ounces in 2017.

Nuclear Energy

While the use of nuclear power plants may be controversial, nuclear is a zero-emission clean energy source. And unbeknown to many people, nuclear power plants use silver, too.

Silver is used (with other metals) to produce control rods for nuclear reactors. While the amount of silver per rod is small, it is a vital component.

The amount of silver in a reactor can vary, but the average reactor contains 20 individual rods, which amounted to about 56 thousand ounces of silver for the industry last year.

If you are the recipient of electricity generated from a nuclear power plant, silver helped produce that green power.

And the nuclear industry is set to grow.

So if you don’t get power from nuclear now, you may in the future.

It’s worth pointing out that the newer nuclear plants use rods that contain more silver. That’s why CRU International says demand for silver from this industry will undoubtedly grow. There is a low rate of replacement for the rods, though, so the growth will primarily come from new nuclear plants being built.

The amount of silver used in nuclear control rods is small, but it is an essential element and will grow with the industry.

Going Green = Going Silver

As the world incorporates more green technologies into society, you will, by default, use more and more silver in your daily life. Silver helps make green technologies what they are.

And as new technologies are discovered, silver’s unique properties will make it a key component in their development and use.

Welcome to the green revolution. And, welcome to silver.

Jeff Clark, Senior Analyst, GoldSilver.com

David

DIGITAL GOLD AND SILVER HAS ARRIVED

my.kinesis.money/signup?referrer=KM13461268

Here we are, the time for the launch of the Kinesis Monetary System is upon us and we have achieved a great number of milestones since our last article within the Jewellers Network Magazine.

Some of our more notable achievements are in Indonesia with Kinesis to launch our revolutionary new bullion backed monetary system in Indonesia. This comes with development of Indonesia’s first and only purpose-built bullion vault which will serve Kinesis clients and the Indonesian, Asian Market. We have further entered the healthcare space with a U.S.-based healthcare platform, Rejuvenan Global Health, enabling reward payments using our KAU and KAG digital currencies with the addition of Xceltrip which is a decentralised travel ecosystem.

With XcelTrip you will be able to use the KAU for travel bookings and rewarded. More and more businesses are now experiencing the benefits of the Kinesis Monetary System and a greater number of participants are joining the Kinesis Monetary System to benefit from their participation within this new paradigm of world finance.

Kinesis is growing worldwide, and Africa is no exception.

We made major strides towards building out plans, advising on digital asset policy and establishing relationships with countries across Africa and we should shortly see the first country wide deployment of the Kinesis Monetary System in an African country.

For those who missed our previous article in the Jewellers Network Jewellex Edition and want to know what Kinesis is. Please read further.

The Digital Evolution of the Monetary Standard

The Kinesis Monetary System is an award-winning physical asset-based monetary system utilizing blockchain technology, that also incorporates a fee-sharing yield on traditionally non-revenue bearing assets; precious metals. Kinesis has the advantage of experience in the precious metals market, as well as having significant technology development already completed. It also comes after 2018 saw gold outperform many global equity markets and currencies, attracting renewed interest in the precious metal.

The Kinesis Monetary System is based on 1:1 allocated physical gold and silver, powered by the Kinesis Blockchain Network and the world-leading Allocated Bullion Exchange infrastructure.

KAU (Gold) and KAG (Silver) are the Kinesis Monetary System digital asset currencies.

Digital Gold Currency (KAU)

Description: 1 fine gram physical gold digital token, consisting of gold cast bars of minimum fineness of 999.9 and bearing a serial number and identifying stamp of a refiner as per ABX Quality Assurance Framework, table of Approved Refiner List.

Digital Silver Currency (KAG)

Description: 1 oz physical silver digital token, consisting of silver cast bars of a minimum fineness of .999 and bearing an identifying stamp of a refiner as per ABX Quality Assurance Framework, table of Approved Refiner List.

Kinesis Monetary System participants hold full title ownership of allocated gold or silver to their KAU (gold) and KAG (silver) digital asset currencies.

Kinesis has developed a multifaceted fee-sharing yield system that is specifically designed to attract institutional and retail capital and incentivise use and velocity of the currency suite. Users are financially rewarded based on their participation and the overall velocity (rate that money changes hands) of the Kinesis digital asset currencies. This revolutionary unique yield is derived purely from economic output rather than debt, unlike fiat currency with fractional reserve banking. The unique yield system encourages adoption and stimulate use and economic value to participants.

When KAU and KAG are transferred between holders the network collects a 0.45% fee that is then accumulated and distributed monthly, in varying proportions, to participants in the Kinesis Monetary System as a ‘yield’.

Minter Yield: Minters receive a proportional 5% share of the transaction fees on the Kinesis coins they create and then use. Minting is the process of converting fiat currency or physical bullion holdings into KAU and KAG coins; this is done in the Kinesis Mint.
Depositors Yield: Kinesis depositors will receive a 5% share of transaction fees on their initial deposit and then use of Kinesis coins.
Holder Yield: Kinesis holders receive a 15% share of the transaction fees generated over the Kinesis Monetary System while holding the currencies, calculated on a daily basis and credited to their e-Wallets monthly.
Recruiter Yield: The recruiter yield rewards people or corporations who refer new users to Kinesis. A Kinesis recruiter will receive a proportional 7.5% yield on active Kinesis Wallets.

How to use Kinesis Digital Asset Currencies, KAU (Gold) and KAG (Silver)?

Kinesis Mint

The Kinesis Mint functions as the wholesale market where the currency is created and minted. This occurs in an institutional centrally cleared exchange with deep liquidity and connectivity into global wholesale trading organizations via Allocated Bullion Exchange (ABX). The Kinesis Mint is currently available to Kinesis Velocity Token owners (KVT) for the minting of Kinesis Digital Asset currencies.

Kinesis Exchange

The Kinesis Exchange operates as an exchange where Kinesis and other digital currencies can be traded. This is being developed internally to ensure deep liquidity for the Kinesis currencies.

Kinesis Blockchain Network (KBN)

KBN is the blockchain technology upon which the Kinesis suite of digital currencies are built. Kinesis currencies can be sent, spent, saved, or traded through the blockchain.

Kinesis Commercial Centre

The Kinesis Commercial Centre is another platform to be released with the Kinesis Monetary System. Merchants, entrepreneurs and various business owners will be able to display their products and services on our commercial “super-highway” for further market exposure.

Kinesis E-Wallet

The Kinesis E-Wallet allows the participant to have instant access to their digital asset currencies to send, spend, view balance and much more.

Kinesis Debit Card

Want to treat yourself to your favourite cup of coffee, piece of jewellery or spoil your loved ones, use the Kinesis debit card wherever you go in the world.

Kinesis is a full-circle monetary system made up of all elements and functions required for a successful and effective monetary system.

These differing functions make up different business units within the group.

Kinesis Monetary System and the South African Jewellers Network

Kinesis is proud to be partnered with the South African Jewellers Network to leverage a combined effort towards accessibility and education on the operational usage of the Kinesis Monetary System within the jewellery, precious metal and mining industries. We believe that is important to reward participation within our monetary ecosystem and this will add additional economic benefits and competitiveness for the participants of the South African Jewellers Network. Kinesis supports the growth of new entrepreneurs and established jewellers and aims to lay a foundation for impact towards the market and economic growth within these industries.

David Ogden

Find out More

David