The positive momentum for precious metals continues, as the effects of Covid linger and an overall risky marketplace continue to push investors towards safe havens. The gold price is up another $30 since our last update on May 22nd, trading today at $1766/oz USD. That's 27% year-over-year and 16% since January 1st, 2020 to the upside. All smiles over here.
The gold price is up another 2% since my last update on May 1st, trading today at $1736/oz USD. Analysts are making bullish predictions for the price almost daily and the ETF inflows have been net positive for the last 20 trading sessions, two positive indicators that the market's sentiment for gold is highly favorable at the moment.
This week saw the market lose yet another major producer to the COVID virus. The United States Mint, North America's largest producer of gold and silver bullion products, announced the closure of its West Point, New York facility on Wednesday, due to concerns for their workers' safety. The closure throws yet another wrench in the industry's already fragile supply chain.
This past week was very positive for the precious metals. Not only were prices for both gold and silver up significantly, our industry has also had the chance to catch its collective breath following 'March Madness'.
Gold closed last week at $1484/oz. A week later, the yellow metal is firmly positioned at $1627/oz, having experienced some of the largest single day movements in its history. Silver fared equally well, rebounding from $12.35/oz to $14.48/oz this week (prices are in USD).
The price action was reflective of continued strong demand, bordering on 'extreme', for the metals. At this point, it's safe to say that most of the required selling of metal positions to cover margin calls and other liquidity requirements has ended. The fundamentals are now setting up nicely moving forward.
There is A LOT going on with precious metals at the moment. In fifteen years, I've never experienced a week quite like this one. I'm going to focus my comments today on the most critical points for investors; product availability, product premiums and the price outlook going forward.
I don’t generally comment on the markets unless I feel we’ve reached a critical point. My last communication with regards to the state of the market was back in September 2019 when I said that I believed we were entering the early stages of a precious metals bull market. Gold was trading at $1538 at the time. Just last week, we touched a seven year high for gold, and today we’re back to $1530 following a dramatic series of trading sessions, not only for the metals, but also for the global equity markets.
Admittedly, Las Vegas is not my favorite place in the world. There are many other cities where I’d rather spend my free time. But out of necessity, I do find myself there fairly regularly, and if nothing else, Sin City has provided me with two very valuable life lessons, which can be applied to either gambling or investing in precious metals.
Gold and silver are experiencing an impressive rally at the moment. The yellow metal is up 20% since January 1st and 29% year-over-year. Our favorite white metal has fared even better, producing returns of 25% since Jan.1 and 36.5% year-over-year. This is all good news for precious metal investors, who have been waiting a long time for this rally. But the big question for many still remains; will we see new record highs (in terms of US dollars) for gold and silver, surpassing the highs we experienced during the last financial crisis?