Rebound Year 2021

2021 Rebound Year Arrived with New Era and Economic Recovery As Pandemic Continues to Make Its Presence Known


GOLD & SILVER PROSPECTS 2021

GOLD & SILVER PROSPECTS 2021

2021
NEW YEAR, NEW ERA
AND NEW HOPE

2021:   NEW YEAR, NEW ERA, AND NEW HOPE
The new year 2021 arrived with new era of administration, prospect for economic recovery, and hope to return to normal life as Corona virus pandemic continues to make its presence known. A New Era Begins with . His swearing-in ceremony On January 20, 2021 in Washington DC marked the dawning of an era of recovery, certainty, and stability.

On the same day, signed executive orders (Proposals) to respond to the health and economic crisis created by the pandemic. His 200-page proposal is called, “” designed to bring Covid under control and revive the battered economy. It is a massive $1.9 trillion stimulus bill (also known as pandemic relief package ).

Biden‘s new administration has profound impacts on the financial markets. On January 20, 2021 ( Biden‘s Inauguration Day ), the market sentiment for U.S. equities rose high and the stock market rallied to a record. Dow Jones industrial jumps 257 points, or 0.8%, while the S&P 500 climbed 1.4%, and the tech-heavy Nasdaq jumped 2%.

Concurrently, Gold Prices rose against critical resistance on Inauguration Day as well. Typically, gold and stock perform in a negative or inverse correlation. There was renewed optimism and market sentiment that economic recovery and return to normal life should be well under way with widespread vaccination and massive fiscal stimulus aids.
2021 - Rebound Year with New Era and Economic Recovery While Covid Pandemic Continues to Make its Presence Know
2021 - Rebound Year with New Era and Economic Recovery While Covid Pandemic Continues to Make its Presence Know
PANDEMIC RELIEF PACKAGE
But things get complicated in the . A bipartisan Agreement on budget reconciliation was not reached due to a variety of issues . On Jan 22, 2021, Republicans rejected President Biden‘s (The Proposal) calling the proposal too expensive and pushed for a smaller plan targeting vaccine distribution. With the filibuster rule in place, the stimulus bill could get derailed. Democrats might not be able to pass the next round of Coronavirus relief until mid-March.

On Jan 25, 2021, Biden Says “Nothing We Can Do To Change Pandemic Trajectory In Coming Months”. His pessimistic comment causes stir and draw criticisms and backlash for his administration’s ability to combat the Coronavirus pandemic in the near future. The president’s statement made it clear that it took some time to resolve the economic issues and vaccinate U.S. citizens.

Secretary of Health and Human Services Xavier Becerra said that changing the pandemic’s trajectory would not happen overnight but progress is possible if people work together. Republicans’ resistance to Biden‘s proposed bill has created a stalled period, creating uncertainty as to whether and how quickly Biden‘s proposal will become law. But since then, markets began to trend in relation to resistance from Republicans.

People were shying away from gold and going to bonds and dollars, fearing a risk that the stimulus could get delayed. On Jan 26, 2021, Gold fell despite U.S. 10-year Treasury yields hitting a three-week low, concerns over the delayed passage of a U.S. stimulus package dented the metal’s appeal. It is the uncertainty that took gold pricing lower for that week. Generally, there is an inverse correlation between gold prices and treasury yields.
National Strategy for the COVID-19 Response and Pandemic Preparedness
National Strategy for the COVID-19 Response and Pandemic Preparedness
GOLD PERFORMANCE
Gold price rally in 2021 is expected to be a brighter forecast but there are challenging months ahead for gold to struggle. Nothing goes in a straight line for gold and other precious metals. It is still consolidating and looking for momentum to keep going.

Gold price unexpectedly jumped to $1,870 per ounce on Jan 20th, 2021 in hope of a swift passage of Biden‘s but later consolidated back to the $1,850. In late January, Gold was temporarily stuck with a trading range between $1,800 and $1,900 amid uncertainty and lacking momentum to move higher. And gold could contain either a narrow and sideways consolidating market or lower pricing in the short term forecast. But historical market data shows that gold always recuperates and trended higher in the long-term prognosis.

HISTORY ALWAYS REPEATS

1. Gold always is on a roller-coaster ride. Even though there were occasional drops in gold prices, it always tends to recover after a few days or weeks. Gold usually climbs to new highs, especially if equities remain depressed.

2. Financial crises during a great recession or pandemic emerged in different forms but the approach to stabilizing economic conditions is done the same way.

3. In general, gold is likely to rise and gain in value when stimulus and inflation start to kick in.

Gold moves along while balancing between Pros and Cons Factors below:

DRIVING FACTORS
(BULLISH FACTORS)
FOR GOLD

DRIVING FACTORS (BULLISH FACTORS) – FOR GOLD

1. Massive stimulus
PANDEMIC RELIEF PACKAGE
1. Massive Stimulus
* One of the main drivers of Gold’s rally is the massive stimulus injected into the economy by the world’s central banks and governments. The U.S. National Debt had risen to $27 trillion at the end of 2020.
* Excessive stimulus and ballooning deficits could weaken the U.S. dollar and give a boost to commodity prices, particularly gold.
* And with the Democrats controlling the White House, Congress, and the Senate, more spending is expected.
* In late January 2021 – Biden‘s advisers say U.S. Will remain vulnerable to unless Congress acts. also warned that there is a risk to the economy if the government does nothing and it is better to ACT BIG now. “Without further action, we risk a longer, more painful recession now – and long-term scarring of the economy later,” she said.
* The massive bond-buying program and trillions in stimulus erode the purchasing power of money and it could potentially lead to inflation. This makes gold more attractive as a haven for investors.
2. Low Interest Rates
Low Interest Rates
2. Low Interest Rates
The real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation.
(The real interest rate = interest rate minus the inflation rate)

If the economy is growing strong, the nominal yields could get higher and this will prompt the real estate interest rates to get higher. And gold will be struggling with headwinds. If the economy shows signs of faltering, the interest rates may be adjusted to get lower and gold performs well up.

On Jan 27, 2021, Federal Reserve Chairman said that the Fed will continue to maintain interest rates between 0% and 0.25% until the labor market is improved and inflation exceeds 2% or until at least 2023.

Treasury Secretary Janet Yellen also confirmed the U.S. commitment to market-set currency rates. This means the opportunity cost of holding gold is very small and it is supportive of investment demand for gold and silver.
3. Inflation
INFLATION
3. Inflation
will be the key trigger behind gold’s rally. Delayed recovery, accelerating inflation risk and rising inflationary pressures could lead gold prices to maintain high. In the past, when the Fed tried to keep rates low artificially, it led to out-of-control inflation.

DEFLATION PERIOD
In a deflationary period, cash tends to be very useful. Even though it is not a currency in itself, Gold may still be functioning as a de facto currency, preserving capital, especially in an environment where the money supply is increasing a lot. If interest rates are at extremely low levels or negative, gold could be used in that environment.

INFLATION PERIOD
“When inflation expectations increase, investors start to look for a hedge against inflation. Gold historically tends to outperform other assets in a period of high inflation,” said.
4. Central Bank and Money Stock
U.S. Central Bank and Money Stock
4. Central Bank and Money Stock
demand is not going away. They are taking all preventive measures to counter the impact of the global pandemic by setting interest rates at nearly zero percent, monthly consistent buying, net purchases, and net sales. Central banks continue to favor gold as an integral part of the foreign exchange reserves.

Liquidity and stimulus programs can be initiated by central banks and governments at any time as much as needed. But gold and silver are rare and in limited supplies extracted from the earth and you can’t keep making them.

Countering the coronavirus pandemic impact involves weighing on the value of the fiat currencies (Money stock) whose value is derived only from the faith and credit in the governments that issue the legal tender.

But gold and silver are primary means of exchange and their roles in the financial system are validated by Central banks worldwide. These actions by the central bank and governments will boost gold and silver gains in markets.
5. Overvalued Equities
Stocks and Equities
5. Overvalued Equities
Overvalued U.S. equities are also a possible driver of gold. According to the popular market cap to GDP ratio, the U.S. stock market, collectively, is about 77% overvalued.

Investors and market analysts warn that the U.S. dollar could be heading to a downturn in 2021 and 2022. are volatile and vulnerable even to the slightest disappointment, especially when economic prospects don’t materialize, and investor’s sentiment evaporates.

Stocks can be overvalued for an extended period of time. However, if the stock market has disconnected from the underlying economy for some time and the fundamentals don’t catch up with valuations, (in other words – if out of touch with reality) then stocks will fall as will rise. The market cap to GDP ratio will decrease. Bonds may no longer be attractive. Investors are wary of having stocks and equities which are increasing risk. In order to manage that risk, investors will look for gold as a better alternative.
6. Political Driver
U.S. Government
6. Political Driver
Historically, when there has been a Democratic president with the Democrat-controlled Senate and House, gold has tended to perform well.

After taking office, President Biden is rejoining the , an international agreement to curb global warming. President Biden plans to spend government stimulus more on solar, wind, Green Energy, and infrastructure would likely increase precious metals demand in the long run. Treasury Secretary Janet Yellen‘s stimulus sentiment and dollar-negative comments added a boost to gold’s gain recently.

The policymakers’ focus on decarbonization of renewable energy in 2021 may also help silver. About 50% of silver used in industrial applications is linked to solar panels and electronics.   The fiscal stimulus measures to be enacted under the new Administration and Congress controlled by Democrats can lead to wider deficits than what would have been under a Republican Administration.
7. Covid Pandemic makes its presence known
Coronavirus  PANDEMIC
7. Pandemic Makes its Presence Known
In the Fall of 2020, the world embraces positive news of Covid-19 vaccines with optimism that there is “A Light at the End of the Tunnel.”   But we are still in the tunnel and the tunnel becomes longer and uglier.

A Highly contagious British variant of the new COVID-19 virus is now spreading in the U.S., dampening prospects for life to return to normal. The Discovery of the new virus variant set pressure on the government to speed up the pace of vaccinations of the population.

On Jan 27, 2021, at the press conference, Federal Reserve Chairman Jerome Powell reiterated that the COVID-19 pandemic remains the Biggest Risk to the U.S. economy.

There are worries about the loss of economic momentum following the latest Covid spikes and the reintroduction of containment measures in many areas of the country. The timeline and expenditures to reach the conclusion of pandemic become uncertain. According to historic records, precious metals prices usually strengthen amid uncertainty and robust demand.

THREATS, RISK & PRESSURE
TO PRECIOUS METALS

THREATS, RISK & PRESSURE TO PRECIOUS METALS


Glossary of Gold Facts
Glossary of Gold Facts
 

Interest Rates
Interest Rates When the economy improves beyond pandemic or uncertainty, nominal yields will get higher, which in turn will raise real interest rates, which is a significant setback for gold. When the economy improves beyond pandemic or uncertainty, nominal yields will get higher, which in turn will raise real interest rates, which is a significant setback for gold.


Glossary of Gold Facts
Glossary of Gold Facts
 

Dollars
Dollars Another factor weighing on gold will be a stronger U.S. dollar. When the U.S. dollar strengthens, it makes gold bullion expensive. Gold usually rises when the dollar declines. Another factor weighing on gold will be a stronger U.S. dollar. When the U.S. dollar strengthens, it makes gold bullion expensive. Gold usually rises when the dollar declines.



Glossary of Gold Facts
Glossary of Gold Facts
 

Inflation
Inflation Demand for Gold and silver can be up only when inflation comes. But inflation, a key driver of gold prices, will return only after the economy opens up. Demand for Gold and silver can be up only when inflation comes. But inflation, a key driver of gold prices, will return only after the economy opens up.



Glossary of Gold Facts
Glossary of Gold Facts
 

Sentiment
Sentiment The value of gold is like “superstition” generated from investors’ and consumer’s confidence. It depends on people’s belief that gold is worth something. Weak consumer demand could create a downturn for gold. The value of gold is like “superstition” generated from investors’ and consumer’s confidence. It depends on people’s belief that gold is worth something. Weak consumer demand could create a downturn for gold.


Glossary of Gold Facts
Glossary of Gold Facts
 

Gold Flow
Gold Flow According to the World Gold Council, the inflow of gold into gold-backed ETF remains weak in November and December 2020 along with some net negative flows recorded. According to the World Gold Council, the inflow of gold into gold-backed ETF remains weak in November and December 2020 along with some net negative flows recorded.


Glossary of Gold Facts
Glossary of Gold Facts
 

Relief Delay
Relief Delay Stalemate for Stimulus package Passage – If Congress is not passing the stimulus package, and put it on delay, that could be very detrimental for gold. Stalemate for Stimulus package Passage – If Congress is not passing the stimulus package, and put it on delay, that could be very detrimental for gold.


Glossary of Gold Facts
Glossary of Gold Facts
 

Relief Pace
Relief Pace Whether it would be a catalyst for gold to rise higher or not will depend on how quickly the stimulus package could be approved, in what form, and to which extent. Whether it would be a catalyst for gold to rise higher or not will depend on how quickly the stimulus package could be approved, in what form, and to which extent.



Glossary of Gold Facts
Glossary of Gold Facts
 

Regulatory
Regulatory The Government’s financial regulations, fiscal policies, and adaptive measures have a direct impact on the financial markets and economic activities, even an insignificant announcement.
As a small example – on Jan 27, 2021, Federal Reserve Chair Jerome Powell announced that The Fed will wait and see possibilities and will not take additional accommodative fiscal measures for the time being. Financial market and investors were disappointed as they were waiting for new Federal government guideline for future monetary policy. And subsequently, Gold prices dropped slightly lower and remained under pressure.
The Government’s financial regulations, fiscal policies, and adaptive measures have a direct impact on the financial markets and economic activities, even an insignificant announcement.
As a small example – on Jan 27, 2021, Federal Reserve Chair Jerome Powell announced that The Fed will wait and see possibilities and will not take additional accommodative fiscal measures for the time being. Financial market and investors were disappointed as they were waiting for new Federal government guideline for future monetary policy. And subsequently, Gold prices dropped slightly lower and remained under pressure.


FUTURE PERSPECTIVES

FUTURE PERSPECTIVES

As time moved on, increasing vaccine rollout, immunization of the population, and stimulus package kicking-in, business analysts expect the eventual recovery of the economy and its growth to accelerate in the second half of the year 2021.

But pessimism is also on the rise about when things in the United States will get back to normal.

Economists warn that The United States will remain stuck in a recession and U.S. GDP won’t recover to pre-pandemic levels until 2022.   Dr. Anthony Fauci, director of the , offered the end of 2021 as a possible time-line for ending the COVID-19 pandemic, only if mass vaccination campaign goes well.   On Jan 21, 2021, President Joe Biden has cautioned that the pandemic is going to get worse before it gets better.

Slow economic recovery, prolonged pandemic and weak labor market could be bullish (boost) for gold. And this could bring strong demand for gold investment as investors look for high quality, liquid assets, such as gold, in these risk-off environments. As long as the dollar weakened and the economy crippled, Investors are still looking at gold to replace cash and fixed income. But precious metals may have to ride up-and-down roller-coaster ride in the coming months before prices climb up .

“Gold and silver have a lot of potential for upside and could continue to rally into the new year amid geopolitical and economic uncertainty and a still divided U.S.”. “Gold to be well supported into 2021 on the perceived need for a safe-haven even in the event of economic recovery”, said precious metals specialists and the World Gold Council.

Gold, Economy and the future

Gold, Economy and the future

Priority Gold

America’s Precious Metals Dealer

15260 Ventura Blvd., Suite 610,
Sherman Oaks, CA 91403
(888) 465-3008
info@prioritygold.com

Gold and Pandemic

GOLD AND PANDEMIC

1. COVID-19 IMPACT
GOLD AND PANDEMIC - COVID-19 IMPACT
1. COVID-19 IMPACT
Before the pandemic, The United States was enjoying the longest period of uninterrupted growth in U.S. history dating back to 1854. Unemployment was at a 50-year low and the inflation rate was below the Fed’s standard target of 2.0%.

Suddenly, the pandemic has disrupted lives, led to the loss of lives, pushed the hospital systems to the limit, caused epic damage to the U.S. job market, slowed down the economy and the fell by an astounding 31%. And the pandemic intensified and business operations were curtailed to control the spread of the virus. It forced more companies to cut jobs. The U.S. National unemployment rate rose to a historic high of 14.7% in May 2020,

Besides, consumer spending fell and U.S. industrial production dropped sharply in mid 2020. And the U.S. economy had fallen into a depression. As of February 2021, there are over 111 million confirmed cases and 2.4 million deaths globally and the rates are increasing daily. The covid-19 pandemic has created both a public health crisis and an economic crisis. In the United States, there has been a balancing “tug of war” between the health of people and the health of the economy.
2. COVID-19 VACCINE
GOLD AND PANDEMIC - COVID-19 VACCINE
2. COVID-19 VACCINE
In November 2020, the world is moving a step closer to ending the coronavirus pandemic. After developing and testing for months, pharmaceutical companies , , , and reported that their covid-19 vaccine is up to 95% effective. The world embraces positive news of vaccines with optimism that there is “a light at the end of the tunnel.”

After government regulatory approval, the vaccines are to be distributed across the country and territories to deliver shots to millions of Americans. This encouraging news on the Covid-19 vaccine development helped stocks rise higher on Wall Street and global stocks markets were rejoicing. But the distribution of vaccines and immunization of the entire population can be a massive undertaking. It requires extraordinary communication, planning, and coordination by Federal, state, local and private organizations.

Experts cautioned that even if Pharmaceutical companies win approval for its vaccine, they need much more data to improve. The Pfizer vaccine is difficult to transport and it requires very cold storage with a temperature of about minus 95 degrees Fahrenheit.
3. GOLD PRICE
GOLD AND PANDEMIC - GOLD PRICE
3. GOLD PRICE
. On August 4th, 2020, Gold’s price climbed its highest level above $2000 ($2021 per ounce) for the first time in history as investors look for safer places to store their money. A record hit inflow of $40 billion of gold into Gold E.T.F. arrived in the first half of 2020, the World Gold Council said.

But Gold prices on Sep 23, 2020, fell below $1900, a psychologically important round number. Spot gold fell 1.5% at $1,894.73 per ounce as the U.S. dollar strengthened making gold bullion expensive.

In October 2020, in the U.S. Congress, Republicans and Democrats were at odds over a Covid-19 relief plan and hope of getting the Covid-19 pandemic stimulus package began to fade as the Coronavirus continued to spread with accelerated infection rate across the country. Then gold prices tended to rebound and fluctuate above and below $1900 for several months.

Nevertheless, investment in gold still remains strong. backed by physical gold climbed to a record amount of 111 million ounces, according to the , The Authority on Gold.
4. GOLD RISE & FALL
GOLD AND PANDEMIC - GOLD RISE & FALL
4. GOLD RISE & FALL
The positive updates on the covid-19 vaccine are going to be dominant for the markets. Throughout 2020, risk aversion, central bank liquidity, and global uncertainty have pushed the gold price up to its historic peak. The ultra-low U.S. interest rate is one of the causes of the gold price hike recently.

But the gold price may lose its rising momentum beyond pandemic after the virus is fully contained and the economy will eventually recover. The promising economic data, effective vaccine, and expanded gold supply could cause the precious metal price to drop further over the coming months. According to the U.S. Market Watch Group – Gold prices may have more dips in the near future as more promising vaccine news emerges.

Despite dramatic fall, gold price is expected to recover eventually. “Even though gold is now at crossroads of volatility, the safe-haven trade for gold will not be completely gone. As long as the dollar weakened and the economy crippled, Investors are still looking at gold to replace cash and fixed income.”, said precious metals specialists and head of research for the World Gold Council. According to historic records, usually strengthen amid uncertainty and robust demand.
5. GOLD & POLITICS
GOLD AND PANDEMIC - GOLD & POLITICS
5. GOLD & POLITICS
(1) During the 2020 presidential campaign, said – “I’m going to get rid of Trump’s $2 Trillion Tax Cut, and a lot of you may not like that but I’m going to close loopholes, … which pushed us into a trillion-dollar deficit.” Biden’s Tax Hike Plan could trigger the higher spending which could offset any additional revenue that comes into the government’s coffer that would continue to keep a lid on US dollar strength.

(2) The Biden administration and Democrats would likely push for an, even more, bigger Covid-19 pandemic relief package for small businesses and consumers. More government spending would likely weaken the dollar a bit further or keep it relatively flat. Gold usually rises when the dollar declines.

(3) Biden also hinted against the further proliferation of fossil fuels and also raising taxes on corporations. It would cause detrimental impact on investment in the U.S. However, raising the corporate income tax rate may not impact the metals business and mining industry as much as other industries, such as insurance or technology. President-Elect Biden plans to spend government stimulus more on solar, wind, Green Energy, and infrastructure would likely increase precious metals demand in the long run.
6. GOLD PERSPECTIVE
GOLD AND PANDEMIC - GOLD PERSPECTIVE





6. GOLD DEMAND
GOLD AND PANDEMIC - GOLD TRADING
6. GOLD PERSPECTIVE
It is difficult to predict exactly how much and how fast the economy will recover in the future. Economists warn that The United States will remain stuck in a recession and U.S. GDP won’t recover to pre-pandemic levels until 2022. This weakened economy makes gold more attractive and many investors will be looking to the gold sector as a haven amid economic volatility. The U.S. Market research analysts said “People are looking at gold as an alternative currency. For investors who are wary of the dollar, gold also could be a good substitute for bonds”.

Moreover, A global economic rebound could also boost gold prices due to consumers in emerging and developing economies such as China, Russia and India may look to buy more gold. “Consumer demand for gold should go higher as the global economy recovers. About 40% of demand for gold is tied to jewelry sales as well as some industrial uses,” Artigas of The World Gold Council said.

In other developments:

(1) In August 2020, , headed by CEO , made a US$563 million investment in in Toronto, Canada, one of the world’s largest gold mining companies. “The gold industry itself has done exceptionally well in the last two years” Bristow, Barrick Gold CEO said. Gold experts cheered that “gold is becoming mainstream as popular media outlets investors.”

(2) During the Gold Forum Americas conference held in September 2020, many company executives, analysts, and other market observers expressed their optimism that the precious metals would increasingly play a role in investors’ portfolios. (The world’s largest gold mining company) President and CEO Tom Palmer announced “Company has returned more than US$2 billion to shareholders through dividends and share buybacks since January 2019. At current gold prices and with our portfolio, there is a clear opportunity for further returns to long-term shareholders”. “It’s almost a perfect storm in favor of gold right now.”Frank Giustra, a Canadian billionaire and philanthropist and also the founder of said.

(3) “Investment demand for gold will likely remain strong”, according to John Reade, chief market strategist and head of research at the World Gold Council.

(4) In a recent precious metals update, Capital Economics forecast the price of gold would climb back up higher by the end of 2021.

(5) According to the September 14th note, James Steel, chief precious metals analyst of HSBC, says he expects “gold to be well supported into 2021 on “the perceived need for a ‘safe-haven’ even in the event of economic recovery”.
7. GOLD IS FOREVER
GOLD AND PANDEMIC - GOLD IS FOREVER
7. GOLD IS FOREVER
Gold and Silver served as a desirable model currency and have been revered for their beauty, store of wealth, and intrinsic value for thousands of years throughout human history.

Historical market data shows Gold stays strong in the high value commodity market and the trended higher for many years. Even though there were occasional drops in gold prices, it always tends to recover after a few weeks or months.

Gold average price in 1920 was $20.67. And Gold average price in 2020 is $1,765.13. increases 85 times in 100 years.

They have not suffered the boom and bust cycle in turbulent times. They will never default, devalue, or be at risk. Investing in Gold and silver can be a safe and stable option to achieve financial stability and security.

The demand for gold remains strong and it makes gold a reliable store of value and purchasing power. This reputation is not likely to change any time soon.   Gold is forever.

Priority Gold

America’s Precious Metals Dealer

15260 Ventura Blvd., Suite 610,
Sherman Oaks, CA 91403
(888) 465-3008
info@prioritygold.com

Hold Onto gold In Time of Uncertainty

HOLD ONTO GOLD IN TIME OF UNCERTAINTY  

 Gold and Silver coins for investment
Corona Virus Pandemic, Unemployment, Recession, Stock Market Volatility, and Civil Unrest are driving uncertainty. And everyone is feeling uneasy about their financial future during challenging economic times.

Gold has been the most stable and long-standing circulating medium of exchange, purchasing power, profit potential, and store of wealth for centuries. Hold onto gold for financial security in a time of uncertainty.
 Federal Reserve Chairman Jerome Powell
SIGNIFICANT UNCERTAINTY
On June 16, 2020, Federal Reserve Chairman Jerome Powell warned at the Senate Hearing that “U.S. Economy Faces Deep Downturn With Significant Uncertainty.  Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it.” Until the public regains confidence, economic recovery from the pandemic is uncertain and the Fed does not expect a quick recovery.    While there are signs that the US is bouncing back from the worst pandemic impact,  there’s still a long way to go.  “If not contained and reversed, the downturn could further widen the gap in economic well-being that the long expansion had made some progress in closing.”, Powell said.  
Sources:  Federal Reserve, Bloomberg, Forbes, Fox Business, Yahoo Finance
 COVID-19 Pandemic
COVID-19 PANDEMIC
The Corona Virus outbreak in early 2020 suddenly shut down many businesses. Subsequently, Gross Domestic Product (GDP) along with the US economy has shrunk 5% in the first quarter of 2020.     So far, there are over 111 million confirmed cases and 2.4 million deaths globally and the rates are increasing daily. Currently, there is no vaccine to cure Coronavirus disease (COVID-19). Doctors are treating COVID-19 patients at their best guess. It may take years to develop a vaccine and it reaches the entire global population. Uncertainty in health and economic sectors would continue before a vaccine is found.
Sources:  U.S. Bureau of Economic Analysis (BEA), W.H.O, CDC
 US UNEMPLOYMENT hit record high
UNEMPLOYMENT
The sudden shutdowns of businesses had caused epic damage to the US job market.  Eventually, many of these businesses begin to reopen slowly or partially.  But for some business, shutdowns and job losses can be permanent and some laid-off workers may never come back. As of June 2020, Government reports showed the U.S. unemployment number climbed to 42 million. May unemployment rate of 14.7% is the highest since the Great Depression during the 1930s (25.6%). The grim picture of the job market is widespread uncertainty and economic analysts believe it could take years to recover.
Sources:  U.S. Bureau of Labor Statistics, Fox Business
 POLITICAL & Civil Unrest
POLITICAL & CIVIL UNREST
Nationwide Civil unrest and looting across the US could hurt markets and the US economic recovery.  Because continued civil unrest could threaten consumer confidence and slow down the trajectory of the business reopening. As cities and states have embarked on some stage of reopening from the Corona pandemic shutdown, unrest will add a whole new level of uncertainty. The deterioration in consumer spending is susceptible to Downside Risks to U.S. GDP growth.   If the GDP number continues to go down instead of going up for a period of at least six months, then recession is on the way, most experts agree.
Sources:  Civil unrest & economy
 VOLATILE STOCK MARKET
VOLATILE STOCK MARKET
There is no guarantee that the stock market strength, rebound, and surge will last forever, especially when economic prospects don’t materialize, experts said.   COVID-19 Pandemic shutdown the NYSE stock market’s trading floor on March 20, 2020, as while stock prices were plummeting. On March 16, 2020, the Dow Jones hit a new record Low with 12.93% Free-Fall, closing at 20,188.52. (Losing 2,997.10 points). The brewing trade tensions between the US and China and Covid-19 Pandemic could have become negative catalysts for volatile stock markets, heightening economic uncertainty,  according to industry watchers. 
Sources: WSJ, NYSE, Forbes, Bloomberg



STOCK MARKET

STOCK MARKET PLUNGED DURING PANDEMIC
 Stock down during pandemic



STOCK MARKET VOLATILITY
 Stock market volatility



UNEMPLOYMENT

U.S. UNEMPLOYMENT HISTORICAL CHART
 US UNEMPLOYMENT hit record high
UNEMPLOYMENT AND U.S. ECONOMY

Labor Statistics Data
The Government official unemployment rate of 14.7% in early May 2020 could be higher than it looks due to worker categorization error. The Labor Department explained that millions of temporary-layoff workers (Furloughed workers) may have been misclassified as employed when they should have been categorized as unemployed. If those workers were properly categorized as unemployed, the jobless rate would have been 3 percentage points higher, according to the Bureau of Labor Statistics. More than 42 million Americans have filed for unemployment benefits.

Economic Rebound
At the end of May 2020, the government is easing lockdown restrictions, and businesses are reopening and rehiring furloughed workers. And there are some glimmers of hope suggesting the worst economic downturn might be over. On June 5, 202, The Bureau of Labor Statistics announced that US employers added 2.5 million jobs in May, the largest monthly gain since 1939. It is surprisingly good news that defied economists’ worst expectations. The US unemployment rate declined to 13.3% in late May.

Slow Recovery
But Some industries may struggle to bounce back even as economies reopen. Some may never recover from the Coronavirus crisis. How likely employers rehire more workers will depend on how reopening goes. The economic recovery also depends on how much the spread of the Coronavirus is contained and when a vaccine is developed.  

US Economy in Recession
On June 8, 2020, NBER, The National Bureau of Economic Research declared that The United States is in a recession that began in February, ending the longest period of uninterrupted growth in US history dating back to 1854.   On the same day, a chief economist of investment and financial firm says “Despite the strong job market rebound in May, there are more uncertainties in the United States. One reason is that the U.S. is now a clear under-performer in virus control than other countries”.

Darkened Economic Outlook
On June 25, 2020 – the Federal Reserve Bank of St. Louis published an alarming forecast of 32% U.S. unemployment in the second quarter as 47 million workers laid off and the Coronavirus continues to spread.  That would be the highest jobless rate on records dating back to the 1930s Great Depression era.  The stock market fell sharply on the same day as the worst day of the month for the  Dow, S&P 500, and Nasdaq.

Sources: BLS, NBER, Goldman Sachs , Fox Business, Bloomberg



GROSS DOMESTIC PRODUCT

US GDP HISTORICAL RECORD CHART
 The Gross Domestic Product (GDP) in the United States
US GDP DECLINES IN 2020
Gross Domestic Product (GDP) in the United State declined 5 percent in the first quarter of 2020 due to the massive job loss and business shutdown caused by the pandemic.   The figure indicates that G.D.P. contracted at an approximate annual rate of 30 percent, or more, a scale not seen since the Great Depression. A chief economist for the credit insurance company in North America said “They’re going to be the worst in our lifetime in the post-World War II era.” Uncertainty grows as questions arise about how much economic damage the country will get and how long it will take to recover.

GDP, the measurement factor of Gross Domestic Product in the United States was worth 21200 billion US dollars in 2019, according to official data from the World Bank. The GDP value of the United States represents 17.50 percent of the world economy.


Sources: NBER, World Bank  



HISTORY OF GOLD

GOLD PRICE HISTORICAL CHART
 Historical Gold price chart - 1975 to present year
GOLD PRICE HISTORY
The gold price has increased 85+ times in value Over the past 100 years.  Gold price in 1920 was $20.65 and the gold Price in 2020 is $1970.00+ per Ounce. Experts say this growing upward trend is expected to continue.   Gold outperforms the stock market, bonds, equities, S&P 500 Index, Dow Jones, Gold ETF’s (Exchange Traded Funds), and cash. Gold retains value, while the dollar has declined more than 24% in value.

Gold price isn’t tied to stocks and bonds (Which are volatile market environments).  Gold‘s low correlation to other assets provides more stability and security than other investment options.  That is one reason many investors buy physical Gold or Silver as long-term investments.    Investors shouldn’t panic over occasional drops in gold prices. Gold always rebounds.  According to 100 years of historical data, the gold price trend is always climbing upward in the long run. In most cases, the gold price rose during the biggest stock market crashes.  


Sources: Bloomberg, Kitco, Reuters, goldprice.org, NMA, elementmagn


GOLD IS FOREVER


 Gold - King of Metals
GOLD:   THE KING OF METALS
Gold, the king of metals with brilliant shiny glow color is the most useful and precious one among all other minerals mined from the Earth. Gold is always in high demand due to its Monetary Value, incredible malleability, base metals for use in jewelry, industrial usages such as electrical connectors in computers and other electrical devices, uses of gold in Aerospace, and Dentistry. 

Gold has been the most stable and long-standing circulating medium of exchange throughout world history.  Gold has been used to make ornamental objects and jewelry for thousands of years.   Gold has been a hedge against inflation, everlasting purchasing power, profit potential, and store of wealth for centuries. Gold Matters. Gold is forever.


Sources: Bloomberg, Kitco, Reuters, goldprice.org, NMA, elementmagn



DIVERSIFY YOUR PORTFOLIO WITH GOLD AND SILVER

PROTECT YOUR WEALTH, SECURE YOUR RETIREMENT

Global uncertainty and recession threat made Precious Metals Investment the best option. Protect your wealth and secure your retirement by investing in precious metals. Physical gold is a private tangible asset. Gold can not go broke or bankrupt. Gold is not vulnerable to manipulation or devaluation by the government or Central Bank.

Having an established Gold & Silver IRA (Individual Retirement Account) means that you will have direct physical ownership and full control of your assets and IRS Tax Exemption. And it also shields your retirement savings and preserves your wealth from (1) Inflation, (2) currency decline, and (3) economic collapse. As long as you have physical gold or silver in hand to sell or trade, you will never be broke, even if the economy collapses. You can only trust what you can hold. You can start your investment from one of these investment options below:

(1) Transfer your existing traditional IRA or 401k retirement savings into a Precious Metals
IRA Account backed by physical gold and silver.
(2) Or you can purchase Gold or Silver directly with cash, in the form of a bar or coin from
a precious metals dealer like Priority Gold.

Interested in Investing in Precious Metals?

Priority Gold can help you diversify your portfolio. The investment process is simple and easy. If you do not know where to start, contact us as below. Our team of precious metals specialists with expert knowledge is here to help you.

Phone: (888) 465-3008
Email: info@prioritygold.com



FREE PRECIOUS METALS IRA GUIDE

Learn how to invest in precious metals, gold, and silver. Priority Gold can help you invest in precious metals. The Priority Gold FREE Investment Information Guide will educate you on how diversifying your assets with precious metals may help you hedge against national and global instability. After reviewing your free information guide, you can contact any of our Priority Gold Specialists to get started now.

Our experienced team is here to answer and address all of your questions and concerns pertaining to all of your precious metals needs. You can view the Free IRA guide online now by clicking the 1st link below (or) you can download it in PDF version by clicking 2nd link below.


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Priority Gold

America’s Precious Metals Dealer

15260 Ventura Blvd., Suite 610,
Sherman Oaks, CA 91403
(888) 465-3008
info@prioritygold.com

The End Really Is Near: A Play-By-Play Of The Coming Economic Collapse

Economic collapse and growth

 

By Max Cea | Published August 12, 2018

Recoveries generally don’t die of old age. So what’s going to kill ours? Five economists call it like they see it

Since June, 2009, the pit of one of the biggest recessions in American history, the U.S. economy has been growing, slowly but steadily. That’s just over nine years of uninterrupted growth. If the good times roll for another year — and most economists expect they will — this expansionary period will go down as the longest ever in American history, surpassing the 120-month-long period during the ‘90s tech boom. But don’t be so quick to pop bubbly and send the confetti raining down. There’s precedence for unprecedented growth: It always ends. The economy, of course, moves in cycles.

And no matter how you slice it, it would seem there’s only so much more climbing before a fall. But what will set off a downturn? How bad will it be? And when will it actually happen? To answer these questions and more, Salon consulted with five economists, three of whom (Peter Schiff, Steve Keen and Dean Baker) predicted the 2008 financial crisis before it hit.

What Will Happen: A recession caused by the Fed over-reacting to a temporary uptick in the inflation rate.

How this will transpire: There are two ways we get recessions. The first and more common is that the Fed raises interest rates too much (ostensibly because of concerns about inflation) and throws the economy into recession. The other is a bubble burst. The latter happened in 2001 with the stock bubble bursting and the 2008-09 recession with the housing bubble.

I don’t see a bubble bursting recession on the horizon because I don’t see any bubbles large enough to sink the economy when they burst. (We have bubbles, like Bitcoin and Tesla stock, but nothing terrible will happen to the economy when they burst.).

This leaves the Fed. I think [Chairman of the Federal Reserve Jerome] Powell has been cautious with his rate hikes and will likely continue to be. Nonetheless, inflation data is erratic and it is virtually inevitable that we will see some periods of higher inflation in the not too distant future. This should in principle not be too severe.

Gold to Close Best Month Since 2016; Palladium Jumps to 3-month highs

Gold close to best month since 2016

In the month, gold is closing its best month since 2016 with over 8.0% gains and logging its second consecutive month of gains. On the quarter, XAU/USD recovered itself from early losses, and it is posting near 9.5% gains in the last three months.

Gold and other metals are trading positive on the last day of the week as investors are nervous ahead of the well-waited meeting between Trump and Xi. Some risk aversion is hurting the dollar, giving power to gold buyers.

Investors are also focused on the end of the month and the quarter. They are trading in month-end rebalancing trades as they want to book profits to be included in their books. On Thursday, some profit taking was identified and Friday is not the exception as today will be the latest trading day of the month.

So, be aware of divergences that could be signaling profit taking and end-month rebalancing.

Gold to close green its sixth consecutive week and perform the best month since 2016

Gold is trading positive on Friday, however, the unit is losing some ground in the latest hours as the market is not confident about a resolution in the trade war.

Currently, XAU/USD is trading at 1,413.65, 0.26% positive on Friday. Technical indicators suggest that a consolidation phase is undergoing for the yellow metal.

The bullion is green on the week, the month and the quarter that are closing today. XAU/USD is ready to close its sixth positive week in a row, this time with slightly over 1.0% weekly gains.

In the month, gold is closing its best month since 2016 with over 8.0% gains. It is logging its second consecutive month of gains. On the quarter, XAU/USD recovered itself from early losses, and it is posting near 9.5% gains in the last three months.

According to experts, gold has been fueled by risk aversion due to the trade war, economic growth concerns in the United States, and geopolitical tensions in the middle east. At the top of it, the Federal Reserve hinted a possible rate cut in its meeting of July, giving extra power to the XAU/USD.

Metal prices report for June 28

Silver is trading down for the fourth consecutive day as investors are closing positions ahead of the end of the month. However, the metal is posting its first monthly gain since January. Currently, silver is trading 0.10% negative at 15.25.

Palladium is down on Friday, but earlier in the day it jumped to trade at highs since March 26 at 1,565.50. XPD/USD is closing its fourth consecutive week of gains and its best month since November 2016 with a 16.25% gain in June.

Copper is ready to close its first positive month since February as the mineral managed to post three weeks of gains in a row that took the unit from 2.6125 to test the 2.7450 area. On Friday, XCU/USD remains inside the range between 2.700 and 2.730 it has been trading in the last days. Copper is 0.20% negative on Friday at 2.7120.

Platinum is posting small gains on Friday as the unit is trading 0.30% positive at 816.00. XPT/USD is closing its second week of benefits and a month of recoveries after the big declined performed in May.

Source: FX Empire

The Retirement Crisis Is Much Worse Than You Think

Retirement Crisis

Are you sitting down for this? According to a recent survey, one in five American adults have nothing saved for retirement or emergencies. A further 20 percent have squirreled away only 5 percent or less of their annual income to meet certain financial goals. Less than a third of all Americans have saved at least 11 percent or more.

One in five working Americans arent saving any money for retirement
click to enlarge

The survey, conducted by Bankrate in late February and early March, is just the latest indication that the U.S. faces a major retirement crisis. Every day, some 10,000 baby boomers turn 65, and they’re reaching retirement in worse financial shape than the previous generation for the first time since Harry Truman was president, according to a report by the Wall Street Journal.

The survey also raises the question of why some working-age adults haven’t been able to take full advantage of a booming U.S. economy and historic bull market to build wealth. Unemployment is near a 50-year low, and wage gains were at their highest level in a decade last month.

According to Bankrate, the number one reason (40 percent) why Americans aren’t saving is that they have too many other expenses. Sixteen percent said they “haven’t gotten around to it,” while the same percentage blamed the low quality of their job.

Indeed, not every employer provides access to a retirement plan such as a 401(k). A recent study by the National Institute on Retirement Security (NIRS) found that a little over half of working American adults have access to an employer-sponsored 401(k)-type plan. Only 40 percent actually participate.

As such, the median retirement account balance among all working-age Americans is—again, are you sitting down?—$0.00. That’s the median balance, remember, so half of all Americans have more than that. The other half, meanwhile, have even less than $0.00 to their name.

A Record $4 Trillion in Consumer Debt

That brings me to my next point. Interestingly, only 13 percent of those surveyed by Bankrate cited debt as the reason why they’re not saving as much as they should. I say “interesting” because total U.S. consumer debt, including revolving and non-revolving debt, now stands at more than $4 trillion, the most ever.

gold mining stocks still greatly undervalued relative to the market
click to enlarge

Debt affects us all, but it can seriously hinder workers’ ability to retire on time. The more you’re on the hook to pay lenders, the less you have to pay yourself.

Revolving debt, such as credit card debt, is now valued at more than $1 trillion, which exceeds the all-time high right before the financial crisis. And according to the Federal Reserve Bank of New York, people age 60 and older owe about a third of this total.

Non-revolving debt—auto loans, student loans, mortgages—is even worse. Student loan debt alone stands at an astronomical $1.5 trillion. It doesn’t help that, since the 1980s, the cost of college tuition has increased almost eight times faster than wages.

But if you think this burden belongs only to young people, you’re sorely mistaken. As many as 2.8 million Americans over the age of 60 are saddled with student debt, according to CNBC. Those over 50 owed more than $260 billion last year, up dramatically from $46 billion in 2006.

Confidence Lacking in Retirement Preparedness

All combined, it’s little wonder that a significant number of Americans feel some anxiety when it comes to their financial stability and retirement preparedness, despite a strong U.S. economy. A CFP Board survey conducted on Election Day 2018 found that less than a quarter of voting-age Americans were “completely confident” about their ability to navigate through economic ups and downs. Even less, 22 percent, felt the same about their ability to retire on time.

Large percentage of voting Americans lack financial confidence
click to enlarge

So what’s the solution?

Fund Your Financial Goals Affordably

I’ve heard from a number of people over the age of 50 who say they worry they haven’t adequately prepared for retirement, and yet are at a loss as to where to start. They want to build wealth fast but might have second thoughts about investing in the market.

I want to reassure those people that they need not put a significant amount in the market all at once, which for most people is impractical and risky. The truth is that they have options. One of the best, I think, is dollar cost averaging, which allows investors to fund their financial goals affordably.

In short, dollar cost averaging is an investing technique that lets investors add to an initial investment incrementally over time, usually once a month. That way, investors don’t break the bank, and as an added bonus, they don’t need to worry about market timing.

It’s a technique that has worked well for investors in the past. Take a look at the chart below. It shows a hypothetical initial investment of $1,000 in an S&P 500 Index in March 2009. Ten years later, after regular monthly contributions of only $100, the value of that initial investment grew at an annualized 12.96 percent to more than $26,385.

The power of dollar cost averaging
click to enlarge

This is just an illustration. The past 10 years have been an exceptionally profitable time to invest, and there’s no guarantee that the good times will last.

Also, $26,000 won’t sustain anyone through retirement, but remember, we were using only a hypothetical $1,000. All else being equal, an initial investment of $10,000 in March 2009 would today be worth more than $64,766, for an impressive annualized return of 14.81 percent.

Sound enticing? The good news is that U.S. Global Investors provides investors the opportunity to invest with dollar cost averaging! We call it the ABC Investment Plan, and I’m very proud to give investors this option. Investment minimums are just $1,000 initially and then $100 a month. With the ABC Investment Plan, you get to choose the day of the month your investment is transferred from your checking or savings account to your investment account.

That way, some of the worry is eliminated from your retirement preparations or other financial goals.

SOURCE: US Funds

Silver Stocks Look Poised to Move Higher

Silver price and stock poised to move higher

Since late December, silver and related precious metal commodities have proven to be some of the best investments for those looking for a hedge against geopolitical uncertainty and heightened market volatility. While prices have rallied tremendously over a short period of time, in this article, we’ll take a look at three silver-related charts that suggest the move is just getting started and try to determine how active traders will want to position themselves for a long-term uptrend.

 

iShares Silver Trust (SLV)

It wasn’t a particularly good year for silver and silver-related investments in 2018. The strong rally that started in September helped many recoup some major losses, and the momentum has continued to benefit investors so far in 2019. Taking a look at the chart of the iShares Silver Trust (SLV), a common barometer used for measuring the day-to-day movement of silver bullion, the price has been able to break above two key levels of resistance. The break above the 200-day moving average in late 2018 and subsequent retest of the newly formed support is a significant technical development and suggests that the bulls are now in control of the longer-term direction.

 

Active traders will be particularly keen on following the rising 50-day moving average, which looks poised to move above the 200-day moving average at some point this week. When it occurs, the bullish crossover will be referred to as a golden cross and is a technical signal that officially marks the start of a long-term uptrend. The proximity to the major support levels to current prices is providing followers of technical analysis a lucrative risk-to-reward ratio, and many will look to see if the crossover will be the catalyst required for a move back toward the January high and above.

 
Technical chart showing the share price performance of the iShares Silver Trust (SLV)
StockCharts.com

Wheaton Precious Metals Corp. (WPM)

One of the world’s leading mining companies when it comes to precious metals such as silver is Wheaton Precious Metals Corp. (WPM). Taking a look at the chart below, you can see that the breakout in December was strong enough to send the price of the stock above the resistance of its 200-day moving average. The price consolidated along its 200-day moving average for several weeks until it started its trek higher.

 

The break above short-term resistance was a clear sign to the bulls that prices were headed higher, and the momentum is likely enough to trigger a golden crossover between the two long-term moving averages, as shown by the blue circle. Followers of technical analysis will likely keep a close eye on this chart because a crossover will likely be used as confirmation of a move higher and will likely mark the start of a long-term uptrend.

 
Technical chart showing the share price performance of Wheaton Precious Metals Corp. (WPM)
StockCharts.com

First Majestic Silver Corp. (AG)

Another significant player within the silver market that active traders may be interested in following is First Majestic Silver Corp. (AG). While the pattern isn’t quite as developed as those mentioned above, the confined range shown on the chart is a clear indication that a major move in one direction or the other is imminent. The several failed breaks above the resistance of the 200-day moving average suggest that the bears are in control. However, if the other charts are any sort of indicator, a break above $6.17 could be the catalyst needed for a reversal in sentiment and likely a sharp move higher.

 
Technical chart showing the share price performance of First Majestic Silver Corp. (AG)
StockCharts.com

The Bottom Line

There are few segments of the financial markets in which traders are able to find shelter from the rising levels of volatility and uncertainty. With that said, the patterns that have recently started to show on charts of major silver assets suggest that the move higher in this niche could be in the early days and poised to continue over the coming weeks or months.

SOURCE: Investopedia