Why High Net Worth Investors are Opting for Physical Gold Vs ETFs, Digital Gold & Crypto-Currencies

Today we are taking our weekly look at the charts for gold and silver.

Republicans and Democrats continue to play the “will they, won’t they?” game over another stimulus package in a Covid19 ravaged US economy. An agreement on a package will ultimately be seen as positive for the markets but, with the US Election just weeks away this may prove to prolong negotiations or postpone decisions until the results of the election are clear and accepted by all.

Will Gold Now Retest $1,930?

As you can see from the gold chart below, gold has rallied on positive stimulus news and pulled back as negotiations stall.

After the previous “false break” above $1,910, gold once again closed above this level which opens up a retest of $1,930. However, the short-term upward trend line is

Source: Finiz.com

◆ Gold is the top performing asset in the world in the first half of 2020, outperforming all stock markets including the S&P 500 and the Nasdaq and outperforming “safe haven” U.S. government bonds (see table above).Gold had an 18% gain in dollars in the first half of 2020 as risk assets, especially stock markets, fell sharply with the S&P down 4.5% and other stock markets down more than 10% (see table). Gold gained 18.6% in euros and by 25% in British pounds as the UK economy had the worst contraction since 1979 and the pound was further devalued.

The historical data in the last 20 to 40 years shows that seasonally gold and silver tend to do poorly in June and very well in the summer months in July and August and extending into September. Indeed late June

You’re likely aware of the price action in gold lately. Gold has rallied from $1,591 per ounce on April 1 to $1,782 per ounce as of today. That’s a 12% gain in less than three months.

This is an interesting interview between Professor Brian Lucey and Dr. Fergal O’Connor, lecturer in finance and economics at University College Cork (UCC) on gold’s performance as a safe haven asset in the last 200 hundred years and in recent history including the 2008-2012 global financial crisis. 

Gold fell by nearly 6% yesterday and silver by a whopping 15%, the largest one day loss in over 7 years. The futures market saw massive volumes of selling with over 1.6 bn ounces of silver contracts sold yesterday. That’s a value of over $40 billion.

Spot gold headed for back-to-back gains as investors weighed the outlook for the metal’s record-setting rally after this week’s dramatic price swings. Silver climbed the most in more than five years.

Markets have struggled to find a clear direction as they attempt to digest US election news, debate performance, the impact of increased Covid-19 restrictions in many countries and vaccine news.

Today we are taking our weekly look at the charts for gold and silver. Corvid 19, the US Election and US Financial Stimulus talks have given gold plenty to digest over the last week. On a short term basis gold has been taking a lot of signal from the fortunes of the stock markets and increased hopes of agreement of a financial stimulus package gave a boost to both stock markets and the gold price.