Silver – not a secondary metal

Since the middle of March 2020, the iShares Silver Trust (NYSEARCA: SLV) has already seen rallies of more than 57%.

It is now clear that these incredible moves have come as a decisive response to the market’s assessments of the global economic outlook post-coronavirus era.

Ultimately, the recent rallies in SLV suggest precious metals assets still hold the top position as the most important safe-haven instruments.

One of the many misconceptions about the proper way to trade in silver markets lies in the fact that so many investors view silver assets as nothing more than a secondary precious metal. However, recent trend movements in the iShares Silver Trust (NYSEARCA:SLV) suggest that these long-term views might be ready for a revision.

In recent weeks, market uncertainties revolving around the destructive coronavirus pandemic have inspired incredible rallies in this space, as SLV has posted gains of more than 57% since March 18th, 2020. As we will see, several key events occurred on this day and all of this new bullish activity lends credence to SLV as a true value play that is also capable of posting sustained gains as long as macroeconomic disruptions continue to devastate global markets.

Trends in the gold/silver ratio have recorded massive reversals after reaching record highs on March 18th, 2020. This reversal occurred as the market’s underlying silver prices fell to $11.94 and one troy ounce of gold was worth nearly 127 troy ounces of silver. The gold/silver ratio has already fallen back into the 90s, so it is now clear that trend momentum favors a bullish outlook for SLV in comparison to the SPDR Gold Trust (NYSEARCA:GLD). Of course, we maintain a bullish viewpoint on both instruments but the potential for upside in the iShares Silver Trust remains clear given the underlying reversals we have recently seen in the ratios that guide GLD and SLV valuations.
Source: Author via TradingviewMarket performances during the second-quarter period seem to be validating these assertions and this adds even greater potential for SLV to outperform versus most of the fund-based trading instruments currently found in the commodities space. Macroeconomic correlations are significant here because they give traders an indication of which asset classes are likely to benefit from continued volatility in broader markets.

Fund flow activities largely support these assertions, as the iShares Silver Trust has benefitted from net inflows of $2.8 billion over the last one-year period. Here, it is important for investors to note the periods of strongly bullish activity (which are relatively widespread). The most significant bearish periods occur near the end of 2019 but this is a time frame that was characterized by rallies in stocks and a generalized sense of complacency throughout the financial markets. Of course, things quickly changed as we entered the year 2020 and this is when the iShares Silver Trust was able to resume with its prior bullish trends. This activity makes it more difficult for bearish investors to dismiss silver assets as an industrial metal that is incapable of posting rallies whence above-average levels of volatility become visible in stock markets.

Whenever investors are making an attempt to understand prevalent misconceptions in the financial markets, it is critical to analyze multiple asset classes and determine whether traditional correlations remain valid. In this case, it is quickly becoming obvious that SLV has an excellent opportunity to become something more than simply a “secondary” asset that always fails to receive as much attention as GLD. In reality, recent price rallies in the iShares Silver Trust have made it clear that long-term trends have reached extreme levels and are ready to reverse.

With recent trend reversals in the gold/silver ratio gaining in momentum, we could see SLV bulls in a strong position to outperform relative to many of their commodities counterparts. Since the middle of March 2020, the iShares Silver Trust has already experienced rallies that would have been thought of as impossible just a short time ago and we recommend that precious metals investors learn how to trade CFDs in silver markets. Bullish investors have been decisive in response to updated assessments of the global economic outlook for the post-coronavirus era and recent rallies in SLV show that all precious metals assets still hold a commanding position as the market’s most important safe-haven instruments.

 

 

By Richard Cox
Contributing to kitco.com

David

A ticket to a golden rally, will gold break its all-time record high?

For those investors, traders and market participants that actively trade or invest in gold, the last couple of trading days have truly been historic. Yesterday gold futures for the first time since 2011 closed solidly above a key psychological and resistance level which occurs at $1800 per ounce. That was followed today when physical or spot gold prices also traded above $1800 per ounce. Not since the historical run-up to the all-time highs in 2011 have we seen gold pricing trade above $1800.

The historical run in the middle of 2011 took gold pricing for a brief instant above $1900 to a record high of approximately $1920. However, that price point was unsustainable. In fact, on each of the two occasions during August and September 2011 gold traded above $1900, but closed below that.

During the historical run to the record price the highest close on record was $1898. What followed was a triple top at $1800 per ounce, with the third top occurring in October 2012. What followed was a multiyear correction taking gold pricing to $1040 per ounce at the end of 2015.

Gold’s historical climb to the record high occurred as a direct result of the actions of the Federal Reserve. In November 2009 the Federal Reserve responded to the recession created by the global financial crisis by initiating quantitative easing (called QE1). In order to stimulate the economy, the Fed began a program which added over $2 trillion to the money supply and at the time was the largest expansion of any economic stimulus program in history. The result was that the Federal Reserve’s balance sheet doubled from 2.106 trillion in November 2008 to 4.486 trillion by October 2014.

 

The recent rally which began in March when gold was trading for $1450 and took gold to $1800 per ounce is also a direct result of the actions of the Federal Reserve and the U.S. Treasury. In response to the global Covid-19 pandemic the Federal Reserve initiated quantitative easing for the first time since they ended QE3 in the last quarter of 2014.

In response to the global pandemic the Federal Reserve added$3 trillion to their balance sheets with the purchases of mortgage-backed securities, U.S. treasuries bonds and corporate bonds. The U.S. treasury allocated an additional 3 trillion to fund the “Cares act”, an aid package passed by the House and Senate.

While the investment community has weathered many financial recessions, a response to the pandemic puts us in uncharted territory. While many parts of the world have seen the number of reported daily cases decline, total cases of the coronavirus in the United States has now surpassed 3 million. The top infectious disease expert in the United States, Dr. Anthony Fauci, yesterday warned that "It's a false narrative to take comfort in a lower rate of death,". In fact, he warned that we could still be in the first wave of this pandemic in the United States. That being said it is not unrealistic to believe that the optimism of a quick recovery which is fueled recent rally in U.S. equities is unsustainable. It is also not unrealistic to believe that there will be further stimulus by both the Federal Reserve and the U.S. treasury if the pandemic takes more time to contain than anticipated.

Until there is an effective vaccine this pandemic will linger. As such we could see gold challenge, and surpass the all-time record high.

For those who would like more information simply use this link.

Wishing you as always good trading and good health,

 

By Gary Wagner
Contributing to kitco.com

David

Kirkland Lake sells its gold for $400 oz higher compared to a year ago

Kirkland Lake Gold (NYSE:KL) said today that consolidated Q2 2020 production was 329,770 ounces, a 54% increase from 214,593 ounces produced in Q2 2019.

Kirkland seemed to escape any major falls in output due to the pandemic, which suspended operations in Q1 and Q2 at several miners. Kirkland said its production results were largely unchanged from 330,864 ounces produced in Q1.

Detour Lake Mine produced 131,992 ounces despite facing disruptions, said the company. Production at Fosterville was 155,106 ounces, a 10% increase from 140,701 ounces in Q2 2019.

Production at Macassa seemed to suffer the most with production totaling 41,865 ounces compared to quarterly production of 49,196 ounces in Q2 2019.

Gold sales totaled 341,390 ounces at an average realized price of $1,716 per ounce compared to gold sales of 212,091 ounces ($1,320 per ounce) in Q2 2019 and 344,586 ounces ($1,586 per ounce) the previous quarter.

“We had a very solid second quarter despite the impact of COVID-19 and the extensive measures we took to protect our workers, their families and our communities. In Australia, Fosterville continued to perform well, with tonnes processed increasing in the quarter and grades continuing to average around 40 g/t," said CEO Tony Makuch.

"At Detour Lake, the ramp up of business activities after the mine was placed on reduced operations in March due to COVID-19 commenced in early May and has gone very well. Detour Lake produced over 130,000 ounces in Q2 2020 even with lower average grades during the period of reduced operations due largely to processing stockpiled material. With improving operating performance, strong free cash flow generation and very encouraging exploration results from early drilling, our acquisition of Detour Gold is already emerging as a very successful transaction, with substantial value creation potential.

Lifting the hedge at Detour was a good move, said analyst Luis Reivera in a note about Kirkland's Q2

"The hedges on Detour that they paid roughly $30m to terminate was very well timed, as usual with this team. These hedges were in the $1300-$1490 range and the average realized price was $1714 in second quarter. A rough calculation on this maneuver when all is set and done will likely yield more than 2x their money," writes Rivera in his blog High Grade.

 

By Kitco News

 

David

RBC commits C$150 million to diversity efforts

Royal Bank of Canada (RY.TO) is committing C$150 million ($111 million) to racial diversity initiatives and aims to increase the proportion of non-white executives to 30% from 20%, Canada’s biggest lender said on Monday.

The bank pledged C$100 million over five years in small business loans to Black entrepreneurs and said it would invest C$50 million until 2025 to create opportunities for 25,000 Black, Indigenous and people of color.

RBC is also committing to have BIPOC youth represent 40% of all summer opportunities by focusing on recruiting from Black and Indigenous groups, it said in a statement.

Reporting By Nichola Saminather

David

Rapper Kanye West announces U.S. presidential bid on Twitter

American rapper Kanye West, a vocal supporter of U.S. President Donald Trump, announced on Saturday that he would run for president in 2020 in an apparent challenge to Trump and his presumptive Democratic rival, former Vice President Joe Biden.

“e must now realize the promise of America by trusting God, unifying our vision and building our future. I am running for president of the United States,” West wrote in a Twitter post, adding an American flag emoji and the hashtag “#2020VISION”.

It was not immediately clear if West was serious about vying for the presidency four months before the Nov. 3 election or if he had filed any official paperwork to appear on state election ballots.

The deadline to add independent candidates to the ballot has not yet passed in many states.

West and his equally famous wife Kim Kardashian West have visited Trump in the White House.

At one meeting in October 2018, West delivered a rambling, profanity-laden speech in which he discussed alternative universes and his diagnosis of bipolar disorder, which he said was actually sleep deprivation.

Elon Musk, the chief executive of electric-car maker Tesla and another celebrity known for eccentric outbursts, endorsed West’s Twitter post: “You have my full support!” he wrote.

 

David

Gold and Silver prices today slashes in Hyderabad, Bangalore, Kerala, Visakhapatnam,

Gold prices in India have fell in the Indian markets on Sunday following the international trends. Gold and silver prices today, 5 July 2020: Gold prices in India have fell in the Indian markets on Sunday following the international trends. On MCX, August gold futures were decreased by Rs. 100 to Rs. 49,750 per 10 gram while the Silver futures on MCX were flat at Rs. 48,500 per kg with a decrease of Rs. 50. If we look at the gold prices ar major centres in the country, here are the gold prices for the day. Also Read – Gold prices today sees a fall in Delhi, Chennai, Kolkata, and Mumbai on 5 July 2020 The gold prices in Bangalore have decreased by Rs. 50 per ten gram of 22 carat taking the price to Rs. 45,650 and Rs. 100 decreased to Rs. 49,750 per ten gram of 24 carat gold In Hyderabad, the gold prices have slashed by Rs. 40 per ten gram of 22 carat to Rs. 46,230. At the same time, the price of 24 carats remained at Rs. 50,840 with a fall of Rs. 40. While in Kerala, the gold prices have been decreased by Rs. 40 per ten grams of 22 carat taking the price to Rs. 44,910 and rate of ten gram of 24 carat fell by Rs. 20 to Rs. 49,000. Also Read – Gold prices today decreased in Delhi, Chennai, Kolkata, and Mumbai on 3 July 2020 The gold rates in Visakhapatnam have stood at Rs. 46,230 and Rs. 50,840 per ten gram of 22 carat and 24 carat with a fall of Rs. 40 respectively.

 

 

David

More desk-bound geologists could be a good thing
 

Taylor said health protocols in the field make it more cumbersome to carry out field work. Instead, juniors are spending more time with the data sets they already have on hand.

"You know, one of the things I've seen year after year in the industry–and even I'm guilty of it sometimes–is that you have a data set that you've collected and you've been too busy. You're drilling and you're exploring, and you don't have time to really sit down and think about some of the data that you have," said Taylor.

"I think more companies in the near term…are going to be doing that data analysis work."

Taylor said that the discoveries at the Dixie project with Great Bear were due to careful desktop work, evaluating historical data and re-working models.

Great Bear (TSX.V:GBR) is focused on the Red Lake District in Northwestern Ontario. The company controls over 300 km2 land package, with focus on the flagship Dixie project, and the Pakwash property, the Dedee property, and the Sobel property.

In the last year stock has traded up from under $5 to a close of $17.61 today.

 

By Michael McCrae
For Kitco News

 

David

Gold settles with a gain for the session and shorter week

Gold futures climbed on Thursday, also posting a gain for the holiday-shortened week, as concerns over the increase in COVID-19 cases in part of the world provided safe-haven support for the metal. Some of that support lacked in the U.S., where data showed better-than-expected jobs growth in June. "The employment numbers are spectacular but an 11% unemployment rate is still elevated," said Jeff Wright, executive vice president of GoldMining Inc. "COVID cases are back on rise and numerous states have slowed down reopen plans." August gold GCQ20, -0.18% rose $10.10, or 0.6%, to settle at $1,790 an ounce. There will be no regular trading for gold futures Friday, which marks the Independence Day holiday. Based on the most-active contract, prices were up about 0.5% from last Friday's settlement.

 

Myra P. Saefong

David

UK regulators take aim at Apple's search engine deal with Google

The payments by Alphabet Inc’s Google to Apple Inc to be the default search engine on Apple’s Safari web browser create “a significant barrier to entry and expansion” for Google’s rivals in the search engine market, the UK markets regulator said in a report released on Wednesday.

Apple received the “substantial majority” of the 1.2 billion pounds ($1.5 billion) that Google paid to be the default search engine on a variety of devices in the United Kingdom in 2019, according to the report.

The U.K. Competition and Markets Authority, in its final report investigating online platforms and digital advertising, said the arrangements between Apple and Google create “a significant barrier to entry and expansion” for Google’s rivals in the search engine market. Those rivals include Microsoft Corp’s Bing, Verizon Communications Inc-owned Yahoo and independent search engine DuckDuckGo, all of which also make payments to Apple in exchange for being search engine options on its devices, the report said.

“Given the impact of preinstallations and defaults on mobile devices and Apple’s significant market share, it is our view that Apple’s existing arrangements with Google create a significant barrier to entry and expansion for rivals affecting competition between search engines on mobiles,” the regulators wrote in the report.

Apple and Google did not immediately return requests for comment.

Bernstein analyst Toni Sacconaghi earlier this year estimated that Apple generates about $9 billion per year globally from licensing arrangements, revenue with gross margins above 90% and with about 80% of the total coming from Google. Apple reports the revenue in its services segment, which investors are looking to for growth as consumers slow the pace of iPhone upgrades.

In the report, the U.K. regulators said enforcement authorities should be given a range of options to address the Apple-Google arrangement, including requiring “choice screens” in which users decide which search engine to set as a default during device setup or restricting Apple’s ability to monetize default positions.

Apple told the regulators that monetization restrictions would be “very costly,” according to the report.

 

Reporting by Stephen Nellis in San Francisco

David

Gold price today – Yellow metal rangebound; next target seen around Rs 49,000/10 gm

Experts are of the view that the trend in global and silver is likely to remain on the upside amid rising fears of COVID-19 related cases, and global recession.

India Gold August Futures trade in a range on July 1 after hitting record high in the previous session tracking positive trend in the international spot prices as a spike in COVID-19 infections in the United States push investors towards the safety of bullion.

Spot gold edged higher towards at $1,782.21 per ounce, after hitting its highest since early October 2012 at $1,785.46 in the previous session, said a Reuters report.

Experts are of the view that the trend in global gold and silver is likely to remain on the upside amid rising fears of COVID-19 related cases, and global recession. The yellow metal could face some resistance around 49050-49,230 levels.

On the Multi-Commodity Exchange (MCX), August gold contracts were trading higher by 0.04 percent at Rs 48,781 per 10 gram at 09:20 hours. July futures for silver were trading 0.35 percent higher at Rs 49,824 per kg.

Gold and silver prices gained on Tuesday amid rising coronavirus cases and worries on global growth. Gold prices gained around 1 percent and crossed $1800 per troy ounce at Comex division first-time in the last 8 years. Silver prices also gained around 2.50 percent and settled at $18.64 per troy ounce.

At MCX, gold prices reached to record highs of 48,825 and settled around 48,700 levels. Silver prices also crossed 50000 levels and settled around 50300 levels.

“U.S. Federal Reserve chairman is shows extraordinary uncertainty over economy due to pandemic. Viruses cases crossed 10 million in the world with death toll of 0.5 million. IMF already raised Red Flag on global growth with estimate of negative 4.9% growth in the year 2020,” Manoj Jain, Director (Head – Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.

“Rising coronavirus cases, grimed outlook on global growth and geo-political tensions will continue to support safe haven buying in both the precious metals. Long term trend of both the precious metals remain bullish and every decline in the prices will be opportunity to buy,” he said.

Jain further added that Gold is having support at $1784 per troy ounce /INR 48330 on a closing basis, prices sustain above $1800 / INR 48700 could extend the gains towards $1814-1822/INR 48900-49050 levels.

 

Kshitij Anand

David