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closes in 5 hrs. 2 mins.Jun 16, 2020 11:58 NY Time
| Bid/Ask | 1726.60 / 1727.60 | |
| Low/High | 1714.10 / 1734.10 | |
| Change | +3.00 | +0.17% |
| 30daychg | -15.60 | -0.90% |
| 1yearchg | +385.50 | +28.75% |
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Silver Price & PGMs
Jun 16, 2020 11:58 NY TimeKitco 10AM Silver Fix
| Silver | 17.36 | -0.01 |
| Platinum | 812.00 | +6.00 |
| Palladium | 1852.00 | -3.00 |
| Rhodium | 6500.00 | 0.00 |
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(Kitco, Tues. June 16TH, 2020) – The Federal Reserve is not looking to raise interest rates from its zero-bound target for the next two years and according to Peter Grosskopf, CEO of Sprott Inc., this is now the time for investors to be aggressive in the gold market.
In an interview with Kitco News, Grosskopf said that in the current environment where inflation is expected to pick up in a low interest rate environment, a 5% to 10% allocation to gold will become a necessity for all investors; however, he added that he is a lot more comfortable holding 30% of his portfolio in gold.
Eric Sprott , “would be a hundred percent weighted,” he said. “I think it’s time to be quite aggressive with your bullying allocations, just given how much of a credit crisis we’re really still in.”
Grosskopf said that he is not surprised with the Federal Reserve’s two-year interest rate projection; he noted that debt levels have ballooned out of control as governments and central banks have tried to support the global economy devastated by the COVID-19 pandemic.
“We think that the central banks have no choice other than to anchor rates at zero for the foreseeable future. This is a long-term need for them now,” he said.
To achieve their goal of lower-for-longer interest rates, Grosskopf said that it will only be a matter of time before the Federal Reserve embarks on a yield-curve-control program. He added that this will create a positive environment for gold.
“If you go back to the Second World War era, the treasury managed interest rates for almost a 10-year period,” he said.
Although Grosskopf is bullish on gold, and expects that it is only a matter of time before prices push to an all-time high, he added that the market needs a new spark to ignite a new rally and break prices out of their current months-long trading range.
He added that a correction in equities could be the spark the gold market has been waiting for. He said that he does not think that the optimism, for a sharp economic recovery, driving equity markets can be sustained.
“[Gold is] such a massive market and it needs other markets to kind of operate with its thesis. And I think a correction in the equity markets would help that the most right now,” he said. “Personally, I don’t buy the V-shaped recovery at all. I would think that you should be very cautious with this equity market rally.”
Powell Stresses Uncertainty Around ‘timing’ And ‘strength’ Of The U.S. Recovery, Gold Prices Wait For Direction.
(Kitco News, Tues. June 16TH, 2020) – ) Federal Reserve Chairman Jerome Powell reiterated his feelings of uncertainty in terms of timing and strength of the U.S. economic recovery.
“The levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery. 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 is confident that the disease is contained, a full recovery is unlikely,” Powell said during an appearance before the Senate Banking Committee on Tuesday.
Powell did acknowledge that things are beginning to look up but stressed there is going to be a disparity in terms of who get hurt the most.
Recently, some indicators have pointed to a stabilization, and in some areas a modest rebound, in economic activity,” he said. “The burden of the downturn has not fallen equally on all Americans. Instead, those least able to withstand the downturn have been affected most.”
Powell also warned that Q2 economic growth is going to be the worst the U.S. has ever seen. “The decline in real gross domestic product (GDP) this quarter is likely to be the most severe on record,” he said.
There are three stages that the U.S. economy will see with the COVID-19 crisis, said Powell.
The first was the shutdown stage when there was a sharp decline in economic activity and high levels of unemployment, which described Q2. The second stage is the bounce-back stage, which will see the economy reopening and people going back to work. And the third stage will see the U.S. “well short” of where the economy was in February prior to the crisis as some parts of the economy will struggle to get back to pre-coronavirus production levels, Powell explained.
Gold prices remained largely flat on the day, waiting for direction. At the time of writing, August Comex gold futures were trading at $1,727.10, down 0.01% on the day.
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com