There’s a New Sheriff in Town

Market participants and investors are under the assumption that this new administration will aggressively continue to propose fiscal stimulus aid.

Before his inauguration, President-elect Joe Biden revealed his stimulus proposal which will add another $1.9 trillion to the national debt. The proposed relief package will concentrate on the immediate needs of the nation. In an evening speech in Wilmington Delaware, President Biden said, “Unity is not some pie-in-the-sky dream. It’s a practical step to get any of the things we have to get done as a country, get done together,”.

More importantly, this is only the first step to a much larger recovery package that will follow. The new administration will begin its term with more than one crisis stemming from the global pandemic. Healthcare and distribution of the vaccines will be first and foremost as the president will allocate a large portion of the $2 trillion expenditure to focus upon testing, production, and delivery of vaccines. The remainder of the funds from the “American rescue plan” will provide direct aid to Americans, communities, and businesses which have been directly impacted by the pandemic.

Today’s solid move in both gold and silver, as well as U.S. equities, is based upon the expectations that President Biden will announce additional fiscal stimulus actions which will be announced and detailed as one of his first acts as president of the United States.

Concurrently the Chairman of the Federal Reserve, Jerome Powell has pledged to maintain an extremely accommodative monetary policy with interest rates near zero at least through the end of 2022 and simultaneously continue to purchase $120 billion monthly adding to their assets. These purchases will be primarily mortgage-backed securities, corporate bonds, and U.S. treasuries.

There are also high expectations that the new head of the United States Treasury Department Janet Yellen will continue to allocate additional trillions of dollars in fiscal stimulus. Janet Yellen is on record saying that the United States should “act big” on the economy. Since the beginning of the pandemic, the U.S. government has allocated almost $6 trillion for fiscal aid.

It is the massive expenditures by central banks globally in unison with the United States Federal Reserve and Treasury Department that will provide the underlying support which will weaken the dollar, and take gold and silver prices higher. The European Central Bank will hold a policy meeting this week with the goal of keeping the accommodative monetary policy in place.

Gold

As of 5 PM EST, February 2021 Comex gold futures are up by $31.10 (1.70%) and fixed at $1871.50. March Silver futures gained approximately $0.60 (+2.33%) and is fixed at $25.91.

Silver

As far as the expenditures that have totaled approximately $4 trillion for aid goes according to President Biden, he believes that this allocation of capital is unfinished business and said that “I know what I just described will not come cheaply. But failure to do so will cost us dearly.”

Clearly there is a new sheriff in town, one who promises to provide the American public and businesses with the needed capital to stay afloat. As such we expect that our national debt to reach new record levels.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Gold Traders Await more Clarity on The New Administration’s Policies

Silver futures are trading respectably higher on the day, scoring the largest percentage gain of all of the precious metals.

Silver

Dollar weakness was a definitive factor in today’s gains. As of 4:11 PM EST, the U.S. dollar index is currently trading down 27 points (-0.30%) and fixed at 90.48.

Currently, February 2021 gold futures are up to $9.20 (+0.50%) and fixed at $1839.10. March Silver futures have gained approximately $0.40, fixed at $25.26. Spot gold had fractional gains of $2.00 which was due to dollar weakness overcoming the selling pressure.

Gold

President-elect Joe Biden has just arrived at Joint Base Andrews, as he prepares to be sworn in as the 46th president of the United States. This new administration will bring forth a completely different set of policies, and market participants will focus intently on his proposals to rebuild our economy and eradicate Covid –19.

Expectations are that he will greatly increase fiscal stimulus and continue as long as needed. He has already proposed a $1.9 trillion package. While fiscal aid is proposed is essential for the economy. At the same time, we are aware that the more fiscal stimulus that is allocated the greater the United States digs deeper into debt.

The Fed has stated they will be maintaining the current highly accommodative monetary policy, which includes quantitative easing and the purchase of approximately $120 billion of assets a month in which they will add to their current balance sheet.

The question becomes what long-term effects will these actions have upon our national debt and budget deficit. As we reported last week data from the Federal Reserve Bank of New York indicated that the national debt has risen by almost $7.8 trillion during the Trump administration. This additional debt amounts to $23,500 in additional Federal debt for every individual in the United States according to the associated press.

The most alarming fact is that the United States Treasury Department acknowledged that the budget deficit rose by 60.70% during the first three months of this fiscal year which began in October. Current projections indicate that by the second quarter of last year we had a jump to 127% of our GDP. This enormous mounting national debt is still coupled with massive unemployment that will likely lead to a major devaluation of the U.S. dollar and a tremendous rise in the price of gold over the upcoming years.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

Gold Closes Fractionally Higher amidst Dollar Strength and Higher US Treasury Yields

The logic of this proceeding has no basis in reality because the outgoing president would be escorted out of the White House if he chose not to leave on January 20. More importantly, if their endgame is to further incite the militant supporters of President Trump and create more havoc than they may be successful.

Rather today’s preceding truly takes away from the incredibly critical important work that the legislation should be focused upon which is dealing with the global pandemic in America. One of the more important discussions that the legislation needs to be working on is the current budget deficit.

As reported by Reuters today, “- The U.S. government posted a December budget deficit of $144 billion – a record for the month – due to far higher outlays with coronavirus relief spending and unemployment benefits, while revenues ticked slightly higher, the Treasury Department said on Wednesday.

The Treasury said the December deficit compares with a $13 billion deficit in December 2019, before the COVID-19 pandemic started in the United States. The cumulative U.S. deficit for the first three months of fiscal 2021, which started Oct. 1, reached $573 billion, up from $357 billion in the pre-pandemic year-earlier period. Receipts for the first three months of the fiscal year were largely flat at $803 billion, while outlays were up 18% at $1.376 trillion.”

As the pandemic continues to grow at an alarming rate the economic fallout that will follow will only be magnified and lengthened without strict oversight and precise use of the money allocated for the next round of fiscal stimulus. Precision is essential in allocating money word is needed most and will accomplish the greatest good.

Today market participants witnessed a mixed bag in the precious metals markets with gold futures trading fractionally higher and silver closing lower. As of 4:20 PM EST gold futures basis, the most active February 2021 Comex contract is up $0.50 (+0.03%) and fixed at $1844.70. The March contract of silver futures is currently fixed at $25.285, after factoring in today’s decline of $0.15 (-0.59%).

gold vs dx

Many analysts have cited dollar strength as a primary factor pressuring both gold and silver pricing today. Dollar strength resulted from a rise in U.S. Treasury yields. The logic from one analyst, Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto said that “The greenback has also found support from expectations of a continued economic recovery in the United States, even as countries in Europe resort to lockdowns to fend off a second COVID-19 wave. You are seeing a continuance of the U.S. outperformance trade.”

However, this analysis completely disregards the net effect of the debt incurred when the treasury prints money. More appropriately is to highly focus on safeguards to ensure that the fiscal stimulus allocated is used responsibly.Because it is the growing budget deficit and a national debt that could ultimately continue to pressure the dollar lower, which would be highly beneficial for gold pricing.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Gold Moves Off of Today’s Highs and Closes Modestly Higher

This will mark the second consecutive day in which gold has closed higher than the previous day.

On Wednesday, January 6, 2021 gold futures managed to trade to a high of $1960 before market sentiment quickly turned bearish, creating selling pressure that would last for three days and take gold futures down to $1908. Thursday’s action resulted in gold closing higher than Wednesday but lower on the day.

However, it was Friday, January 8 when market participants witnessed the steepest single day decline since November 9, 2020. Novembers decline resulted in gold giving up $102. Gold futures opened at approximately $1915, but selling pressure took the precious yellow metal significantly lower to $1835. On last Friday gold prices opened above the 100-, 50- and 200-day moving averages and closed below all three key averages. This is the first occasion since November 27 that gold pricing traded and closed below the long-term 200 day moving average.

The 200-day average is widely accepted as an indication of long-term trend direction and momentum. Simply put as long as a commodity is trading above the average is considered to be in a long-term bullish phase, reciprocally when a commodity is trading below the average it signals that price action is in a long-term bearish cycle.

Although Mondays low dipped below $1820 for a brief moment, prices recovered and gold closed once again above $1850. This marks the second consecutive day on the price range between the open and closing pricing is above the 200-day moving average. It also is a strong indication that gold pricing is attempting to form a base before moving to higher pricing.

Our technical studies indicate that there are two primary levels of resistance. The first level occurs at gold’s 50-day moving average which is currently fixed at $1869.40. The next level is based upon the 100-day moving average which is currently at $1896.30. The key and critical support level which must follow is $1841 which is the current value of the 200-day moving average.

Strong fundamentals continue to be highly supportive of higher gold prices

As long as gold remains above $1840, the current fundamental events which took gold prices to its all-time record high last year are continuing to wreak havoc on the global economy. In March last year the coronavirus epidemic officially became a global pandemic. Today there been over 91 million individuals who have become infected by the virus resulting in almost 2 million deaths worldwide.

More worrisome is the fact that in many parts of the world daily Covid-19 infection rates are at an all-time, and now even with a vaccine being administered globally, the virus responsible for the pandemic has mutated. This mutation is harder to contain, which leading to higher infection rates. This is the primary cause for the global economic contraction, as many countries mandated measures to curtail the spread of the virus and in essence locking down many parts’ world.

The global pandemic is directly responsible for the trillions upon trillions of dollars that countries worldwide have needed for aid and financial support for the millions of individuals that lack a viable means of support, along with countless businesses that are under immense pressure to simply remain solvent.

With the upcoming inauguration of President-elect Joe Biden, it is highly expected that he will present one of the largest stimulus packages in history. President-elect Biden announced on Friday that there was extremely need for extra financial relief for Americans” now”. This announcement came following the latest US Labor Department’s jobs report which showed losses for the first time in eight months.

The most important day this week will occur on Thursday when President-elect Biden will be “laying out the groundwork” for his COVID-19 relief package. The aid package he presents could easily dwarfed the $4 trillion already allocated for the first two rounds of fiscal stimulus by the US Treasury Department over the last six months. Combined the trillions of dollars that will be needed could easily be the largest expenditure, and that the United States has ever incurred. This means that even after the pandemic has run its course the economic fallout that will occur will be felt for years to come.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

Gold Claws Back above its 200-day Moving Average

Even more alarming was the fact that after trading to a low of $1828, gold futures traded off the low closing at $1,836 which is four dollars below its 200-day moving average. Today we have seen an increase in volatility and an exaggerated range with gold opening at $1849, a mere $9 above the 200-day moving average, and then trading to an intraday low during the evening session of $1817 before recovering.

As of 4:48 PM EST gold’s most active February 2021 Comex contract currently up by $11.60 and fixed at $1,847.00. With all three major indices, the Dow, the S&P 500, and the NASDAQ composite trading lower on the day, and concurrently a strong selloff in Bitcoin, market participants have re-focused their attention on the safe-haven aspect of gold. Today’s price increase was strong enough to overcome dollar strength. Gold futures are currently trading up +0.63%, and the U.S. dollar is up +0.48% currently fixed at 90.485. This means that had we seen a neutral dollar today gold would have gained a total of 1.11%.

gold jan 11

Many analysts including myself believe that Friday’s strong selloff in gold was magnified or exaggerated possibly reflecting a rebalancing from gold into Bitcoin as the cryptocurrency broke $40,000 per coin for the first time in history. On Friday BTC hit an intraday high of 42,611.00. Recent action in BTC took pricing parabolic, with last week’s range containing a low of proximately $28,000 and a high of $42,000. But as any market analyst will explain typically a market that moves up in a parabolic manner has that same strength when it corrects, exactly what occurred today. Currently the most active BTC contract (CME’s bitcoin futures) is fixed at $33,800 putting it down $5,720 (-14.42%).

Our technical studies have indicated the following levels could become major levels of support. The lowest of these levels occurs at the 50% retracement that is currently fixed at $1,768.60. Above that price point, the next level is the 200-day moving average is currently fixed at $1,840 just above that is the 38.2% Fibonacci retracement level created from a data set beginning in March when gold traded at $1,400 to the all-time record high of August 2020 at $2,088. While current gold pricing is close to the levels of support that we have spoken about the first strong level of resistance occurs at $1,869 which is the current 50-day moving average.

The fundamental events that took pricing to a new record high are still very much with us. They continue to shape and determine market sentiment. On Thursday President-elect Joe Biden will lay out his budget for the next round of fiscal stimulus in which he has warned that it will be in the multiple trillions of dollars. When added to the $4 trillion worth of fiscal stimulus allocated over two rounds by the U.S. Treasury Department the net result takes the United States budget deficit the largest amount in history.

Also because of this recession, brought on by the Covid-19 pandemic continues to worsen even as vaccines are being rolled out globally. Then there is the potential, although remote, that Trump supporters will continue to wreak havoc with intel suggesting militants plan on storming capital buildings in every state next week.

Collectively these events will at best slow down the attempted economic recovery, and at worse could have the ultimate effect of a continuing economic contraction worldwide. It is for those reasons that the upside potential remains solid even though gold traded dramatically lower on Friday.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Gains in U.S. Equities and Dollar Curtail Upside move in Gold Today

As of 4:00 PM EST, the most active February 2021 Comex contract is currently up by $6.30 and fixed at $1914.90. This is a net gain of approximately 3/10 of a percent with a high of $1929.60, and a low of $1970.50. There were two major factors that limited gains in gold futures.

gold kitco jan 7

The first of which was dollar strength, with the dollar index gaining 29 points, or +0.33%, and is currently fixed at 89.80. On a technical basis, the dollar index is still below a key price level which was the former level of major support at 91.40. This price point is derived from a Fibonacci retracement. The data set used for the Fibonacci retracement begins in 2008 when the index was trading just above 71 and concludes in March of this year when the dollar index traded as high as 104. 91.40 represents the 38.2% Fibonacci retracement of that data set.

The second major factor that limited the upside move in gold today was a strong performance in the U.S. equities markets. The Dow Jones industrial average gained 211 points (+0.69%) and is currently fixed at 31,041.73. The S&P 500 had a respectable gain of +1.56% which takes that index to 3805.99. However, it was the NASDAQ composite that exhibited the most dynamic gain on the day which resulted in the tech-heavy index gaining +2.57%.

Although it’s difficult to quantify the net effect that today’s gain in bitcoin had been curtailing gains in gold, the cryptocurrency continues to run to new all-time highs almost daily. The Chicago Mercantile Exchange’s most active bitcoin futures contract gained +9.33% and is currently fixed at $39,940 per coin. BTC’s futures price is slightly above the cash market price for bitcoin which reached a high today of $40,419.00 before settling at $39,475.

Of the four precious metals traded on the futures exchange (gold, silver, platinum, and palladium) it was silver that shined the brightest resulting in the largest percentage gain of the precious metals complex. The most active March 2021 silver contract gained +0.99% today, and after factoring in the additional value of $0.27, March silver is currently fixed at $27.305. One plausible explanation for silver’s stellar performance today, when compared to other precious metals, is its characteristic of both a safe-haven asset but more importantly is an industrial metal that continues to be in high demand.

silver jan 7

The fact that both equities in the United States and globally performed as well as they did follow yesterday’s fiasco and chaos in Washington is a testament to the overall strength and resilience reflecting a long-term optimistic view even in the light of the pandemic which is still currently limiting any global economic expansion.

The take away from today’s respectable performance in equities worldwide is an indication that market participants continue to focus far into the future and based their investment decisions on where they believe the global economy will be a year or two from now rather than the current outlook.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Chaos and Crisis in Washington

The evacuation is a direct result of the U.S. capital being breached by protesters who are demonstrating against the results of November’s presidential election.

Both the Democratic and Republican members called on Trump to intervene in the chaos on the hill. Currently, armed protesters occupy both chambers of Congress. The protesters were able to breach the entrances to the house of Congress and one individual was shot inside the capital building.

President-elect Biden called the capital riots an “insurrection”, and concurrently President Trump told rioters to “go home”. According to USA Today, “Hours after a pro-Trump mob violently stormed the U.S. Capitol, President Donald Trump urged rioters at the Capitol to “go home” but repeated baseless claims of election fraud in a minute-long video posted to Twitter. “I know your pain, I know your hurt,” Trump said. “But you have to go home now. We have to have peace. We have to have law and order.”

However, in a message by President Trump, he once again claimed that the election was “stolen” from him. According to reports earlier today President Trump incurred supporters at the rally near the White House to March to Capitol Hill, where the House and Senate convened in a joint session to count the electoral votes which would formally declare President-elect Joe Biden’s victory.

President-elect Joe Biden in a comment made from the Queen Theater in Wilmington Delaware said, “What we’re seeing is a small number of extremists dedicated to lawlessness. This is not dissent, it’s disorder, it’s chaos. It borders on sedition. And it must end, now. I call on this mob to pull back now and allow the work of democracy to go forward.”

Biden also suggested that Trump goes on national television to urges supporters to “demand an end to this ease”. He added, “At this hour, our democracy is under unprecedented assault, unlike anything we’ve seen in modern times, an assault on the citadel of liberty, the Capitol itself; an assault on the people’s representatives, the Capitol Hill police, sworn to protect them; the public servants who work at the heart of our republic; an assault on the rule of law like few times we’ve ever seen it.”

The sad truth is that one of our strongest political tenants is that we have consistently had a peaceful transfer of power for over 200 years, which today was challenged. Today’s action also magnifies the fact that the chasm between the political factions has widened to the greatest degree since the Civil War and the fight for an ending and emancipation of slavery.

Although the U.S. equities markets did quite well with the Dow Jones gaining almost 500 points. Traders and investors who participate in gold and silver investments went on one of the more volatile roller coaster rides ever witnessed. Gold was trading under pressure for the better part overseas last night and into New York when it traded to a low this morning of $1902.60. As of 5:00 PM EST, the most active February 2021 Comex contract is currently fixed well off of the lows at $1920.20.

kitco gold

The question Americans must ask themselves is what will become of this protest and what will be the necessary steps to de-escalate the current tension between the vast majority of Americans and the protesters that have wreaked havoc using the basic right of freedom of speech to act in such a violent and uncivilized manner.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

New Year Begins with an Exponential Rise in Gold’s Bullish Sentiment

Although the factors that moved gold pricing just over $50 on the first trading day in 2021 have been in existence for quite some time. However, real concern regarding the eradication of the coronavirus through vaccinations and the timeline that would take, coupled with the enormous capital that the U.S. Treasury has already allocated for fiscal stimulus has become the primary focus of traders and market participants.

This can be easily expressed in today’s activity in the financial markets with US equities under tremendous pressure. Given that the Dow Jones recovered off of its lows it still lost 382 points in trading today which is a 1.25% decline. Similarly, the NASDAQ composite gave up 1.47%, and the S&P 500 lost 1.49%.

This type of strong bearish sentiment and selling in U.S. equities underscores the real concern market participants have that the economic recovery could take much longer than many had anticipated, and when coupled with the economic fallout from the massive expenditures by the U.S. Treasury and the extremely accommodative monetary policy of the Federal Reserve are the necessary components for a perfect storm scenario which could take gold and silver dramatically higher from current pricing.

Although the U.S. dollar closed, in essence, unchanged it is currently fixed below 90 at 89.87 after today’s decline of 0.03%, market participants were active buyers in both gold and silver today taking both precious metals substantially higher. As of 5 PM EST gold futures bases, the most active February contract is currently up by $51.60 (+2.72%) and fixed at $1946.70. Silver also had a stellar performance today gaining $0.97 per ounce or 3.68%, taking the precious white metal to $27.385.

kitco DX jan5

A technical basis market action today provided traders with confirmation that the bullish trend is not only intact but has the energy to sustain prices moving to a higher level. The first significant observation is that gold prices opened just above their 100-day moving average which is currently fixed at $1901.70

Secondly, gold prices broke through and closed above a key resistance area based upon Fibonacci retracement. The data set used for this retracement begins in the middle of March when gold bottomed at $1450 and concludes during the first week of August when gold reached its all-time record high at $2088. The 23.6% Fibonacci retracement is currently fixed at $1937.90, and gold close well above it currently fixed at $1946.70.

kitco gold chart jan5

The 23.6% Fibonacci retracement is the final retracement level between current pricing and the all-time record high. This means that we have minor resistance levels that are based upon recent price tops that were not sustainable. The first level of minor resistance occurs at $1961 which was the high achieved during the second week of November. The next level of minor resistance occurred mid-August when gold pricing was at approximately $2023 per ounce. With absolute major resistance found at $2088, the all-time record high occurred the first week of August.

Today’s dramatic rise in both gold and silver pricing represents the real potential for the current rally to gain momentum and to quickly move to the next level of potential resistance. The chart included in this article details the four primary levels where gold could find resistance that is based on recent tops in gold pricing.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

2020 A Year the World Will Want to Forget

There is no doubt that 2020 will be written about in history books as a year that billions of individuals will want to forget. For those individuals lucky enough to not contract the virus, the global pandemic overwhelmingly affected every component of their daily life creating a “new normal”.

Sadly, the world has lost almost 1.8 million souls, as the coronavirus left no part of the globe unscathed. With only one day left in 2020, the total number of infections from the virus this year is 82,456,204, according to John Hopkins University of Medicine.

Luckily the end of this year brought forth real hope as Pharma companies created multiple vaccines that are now being safely administered to billions of individuals worldwide. Concurrently as countries rush to vaccinate their citizens many of the top infectious experts predict that the pandemic will get worse before it gets better.

U.S. Equities and Gold trade to a new record all-time high

The pandemic also had a huge impact on the financial markets. All three major US indices are currently at all-time highs. The Dow will most certainly close above 30,000, and at the close of trading, today is at 30,409.56. The NASDAQ Composite and the S&P 500 are also at record highs. Partially responsible for the historical rise in U.S. equities is actions by the Federal Reserve as they initiated quantitative easing in conjunction with interest rates near zero.

However, these gains occurred simultaneously as the United States saw the highest unemployment rate since the great recession in the 1920s. The number of unemployed in the United States swelled to 23.1 million individuals or 14.7% in April. Currently, the unemployment rate has fallen to 6.7% according to the U.S. Bureau of Labor Statistics jobs report on December 4.

On the first trading day of this year, gold pricing was at $1521. Gold traded to a high of $1750 in March before dropping to its lowest value this year of $1450 in the middle of March. This was followed by a multi-month rally that took gold from $1450 to $2088 during the first week of August. From August until November gold prices declined each month trading to a low of $1780 in November. The correction ended this month with gold opening at approximately $1780, and with only one-half trading day left in the year is currently fixed at $1899, just one-dollar shy of $1900 per ounce.

upside targets for gold pricing

While it is highly likely that the global pandemic will conclude at some point next year, the economic fallout will linger long after the pandemic is only visible in our rearview mirror. The massive expenditures by the U.S. Treasury Department of approximately $4 trillion in two rounds of fiscal stimulus will have a dramatic impact on the economy in the United States which could certainly take the U.S. dollar lower and gold to a new all-time record high next year.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

2020 A Year the World Will Want to Forget

There is no doubt that 2020 will be written about in history books as a year that billions of individuals will want to forget. For those individuals lucky enough to not contract the virus, the global pandemic overwhelmingly affected every component of their daily life creating a “new normal”.

Sadly, the world has lost almost 1.8 million souls, as the coronavirus left no part of the globe unscathed. With only one day left in 2020, the total number of infections from the virus this year is 82,456,204, according to John Hopkins University of Medicine.

Luckily the end of this year brought forth real hope as Pharma companies created multiple vaccines that are now being safely administered to billions of individuals worldwide. Concurrently as countries rush to vaccinate their citizens many of the top infectious experts predict that the pandemic will get worse before it gets better.

U.S. Equities and Gold trade to a new record all-time high

The pandemic also had a huge impact on the financial markets. All three major US indices are currently at all-time highs. The Dow will most certainly close above 30,000, and at the close of trading, today is at 30,409.56. The NASDAQ Composite and the S&P 500 are also at record highs. Partially responsible for the historical rise in U.S. equities is actions by the Federal Reserve as they initiated quantitative easing in conjunction with interest rates near zero.

However, these gains occurred simultaneously as the United States saw the highest unemployment rate since the great recession in the 1920s. The number of unemployed in the United States swelled to 23.1 million individuals or 14.7% in April. Currently, the unemployment rate has fallen to 6.7% according to the U.S. Bureau of Labor Statistics jobs report on December 4.

On the first trading day of this year, gold pricing was at $1521. Gold traded to a high of $1750 in March before dropping to its lowest value this year of $1450 in the middle of March. This was followed by a multi-month rally that took gold from $1450 to $2088 during the first week of August. From August until November gold prices declined each month trading to a low of $1780 in November. The correction ended this month with gold opening at approximately $1780, and with only one-half trading day left in the year is currently fixed at $1899, just one-dollar shy of $1900 per ounce.

GOLD CHART

While it is highly likely that the global pandemic will conclude at some point next year, the economic fallout will linger long after the pandemic is only visible in our rearview mirror. The massive expenditures by the U.S. Treasury Department of approximately $4 trillion in two rounds of fiscal stimulus will have a dramatic impact on the economy in the United States which could certainly take the U.S. dollar lower and gold to a new all-time record high next year.

USDX vs GC

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Gold Scores Modest Gains as Dollar Weakness Provides Tailwinds

While on the surface this could be interpreted as traders bidding the precious metal higher, in the case of today’s action it was 100% due to a weak U.S. dollar. The U.S. dollar traded under pressure today down 4/10 of a percent and after factoring in today’s decline of 37 points is currently fixed at 89.905. Simple math tells us that the 0.40% decline in the dollar is a little over twice the gain of 0.16% of gold futures today.

monthly dollar index

The same result in spot gold can be seen when viewing the KGX (Kitco Gold Index) which shows that as of 3:41 PM EST spot gold was fixed at $1878.40, which is a net gain of $5.50 or +0.29%. On closer inspection we can see that traders contributed fractional selling pressure of about $1.20 per ounce. It was dollar weakness which contributed $6.70, and resulted in today’s net gain of $5.50.

Much of today’s net changes in the financial markets were tied to confusion as Senator Majority Leader Mitch McConnell blocked Senator Chuck Schumer’s effort to increase the direct payments from the new round of fiscal stimulus from $600 to $2000. Yesterday the house passed a related bill to address the amount of stimulus that would be allocated through direct payments as part of the fiscal stimulus package signed by President Trump on Sunday.

On a technical basis support for gold pricing over the last three days has been defined by intraday lows that have come exceedingly close to the 50-day moving average which is currently fixed at $1870.90. Below the 50-day moving average, the next level of support occurs at $1860 and is based upon a series of lows that occurred on December 22 and December 23.

Resistance over the last five trading days have been defined by gold’s 100-day moving average which is currently fixed at $1904.50. Over the last seven trading days gold has traded to an intraday high just at the 100-day moving average twice. But on both attempts was unable to sustain a price above the 100-day moving average, let alone close above that price point.

Gold chart

Another major factor that has put pressure on gold prices recently has been a strong risk-on market sentiment in which market participants favored U.S. equities for potential returns in lieu of a flight to the safe-haven allure of gold. There is then the question of Bitcoin’s historical climb to all-time record pricing capturing some of the capital that would have flowed into gold.

Bitcoin futures (BTC F21) that trade on the Chicago Mercantile Exchange gained $280 today and is currently fixed at $27,370 per coin. This is the highest price futures ever recorded for a single coin. Over the weekend Bitcoin’s price gained over $3000 causing a gap from the close on Friday and Monday morning’s open.

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Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Trump Signs Off on Government Funding and Covid Fiscal Stimulus Bill

Collectively the expenditures contained in this bill amount to $2.3 trillion, of which $900 billion is allocated to fund the second stimulus package, and the remaining $1.4 trillion to be allocated to fund the government budget.

According to CNN, “Congressional leaders announced Sunday night that they have secured a deal for a sweeping $900 billion rescue package to deliver much-needed relief for small businesses, unemployed Americans and health care workers while bolstering vaccine distribution.”

McConnell’s statement was followed by a joint statement from Speaker of the House Nancy Pelosi and Senator minority leader Chuck Schumer which said, “We are going to crush the virus and put money in the pockets of the American people.”

The fiscal relief package will fund automatic payments of up to $600 per adult. It will also provide direct aid for small businesses that have been struggling by allocating roughly $284 billion through the paycheck protection program. It will extend the enhanced unemployment benefits of an additional $300 per week for unemployed Americans. As well as allocate $25 billion for rental assistance and extend the eviction moratorium.

This additional aid will also include help for the educational system providing $82 billion worth of funding to help reopen classrooms safely. It will fund $10 billion of aid to assist with childcare needs and $13 billion for the supplemental nutrition assistance program and child nutrition benefits. Additionally, the stimulus package will allocate billions of dollars to pay for the vaccine distribution, testing, and contact tracing efforts.

This announcement sparked a rally in U.S. equities taking the Dow, S&P 500, and NASDAQ Composite to new record highs. It was highly supportive of silver pricing which gained over 2% on the day. However, it had a negative impact on gold pricing.

In trading overseas last night gold futures basis the most active February 2021 contract broke above $1,900, trading to a high of $1,904 before correcting. As of 4:00 PM EST gold futures are currently fixed at $1,876.70 which is a net decline of $6.30. As we enter the last trading week of the year attention to the solid gains in U.S. equities limited any sustainable gains in gold which could have kept pricing above $1900 per ounce. The dollar closed, in essence, unchanged, and is currently fixed at 90.28, which is an increase of 0.03%.

gold dec 28

Silver futures basis the most active March 2021 Comex contract gained $0.53 (+2.07%) taking silver to $26.445 per ounce. Overall precious metals price changes today were muted by a phenomenal upside jump in bitcoin and bitcoin futures pricing.

silver dec28

Currently, the most active January 2021 bitcoin contract which is traded on the Chicago Mercantile exchange gained $3,425, which is a net gain of 14.46%, making a single Bitcoin now worth around $27,000.

Bitcoin Weekly Heikin Ashi

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Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

Gold Futures Close Moderately Higher All on Dollar Weakness

Dollar weakness today is the primary contributor to gains in gold futures. Currently, the dollar index is down 0.29 points which is a decline of 0.32%, and fixed at 90.255. That means that only an extremely fractional portion of today’s price gain in gold futures is attributed to buying with the remaining 98% a direct result of dollar weakness.

The same cannot be said for spot gold pricing. According to the KGX (Kitco Gold Index), spot gold is currently fixed at $1871.90 after factoring in today’s gains of $12.40. However, dollar weakness accounted for $6.50, with the remaining gains of $5.90 directly attributable to traders bidding the precious yellow metal higher.

This means that the current spread between futures and spot gold is approximately $5.10 and the differential yesterday was over $11. In both futures and spot pricing dollar weakness was a major contributor to gains, however, gains due to traders bidding gold futures pricing higher were marginal at best.

Today the U.S. Labor Department released its jobs report for the week ending on December 19. The net result was that jobless claims declined by 89,000 taking the total number of Americans on unemployment benefits to 803,000. This is a three-week low and came in well under economic forecasts. A poll by MarketWatch indicated that economists projected that the initial jobless claim would come in at 875,000 individuals.

The lowest number of Americans obtaining unemployment benefits occurred at the beginning of November and came in at 711,000. However additional furloughs and layoffs as the pandemic infection rates spiked in the United States bringing the number of individuals higher by approximately 100,000.

However, there were additional 397,511 applications filed for benefits last week through a federal relief program which puts the total number of new claims at 1.27 million. These numbers indicate the great need for an extension of the additional benefits which were set to expire the day after Christmas. This new bill which was passed yesterday has extended that timeline into the first quarter of 2021.

As more individuals become vaccinated and the country slowly returns to a new normal, we would expect the number of jobless individuals to decline and that of course would have a positive impact on the current economic contraction.

This brings us to the real issue which is the total expenditures through the Treasury Department which are now close to $4 trillion when you combine the “Cares act” and the recent financial aid package costing $908 billion. President-elect Joe Biden also acknowledged that one of his first actions after being sworn in as president will be to allocate more aid.

The combination of the cost of the two financial aid bills this year and the additional aid packages that will occur during the next administration will mean that our budget deficit will swell to the highest level in history. This is why many analysts including myself believe that the dollar will continue to lose value as capital expenditures dilute the real value of the dollar. It is also a primary factor why we believe we will see gold trade to a new record high next year.

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Wishing you as always, good trading and good health,

Gary S. Wagner

 

Gold Prices Reach $1911, The 100-Day Moving Average than Corrects to Close Lower

This price point is exactly $0.40 above gold’s current 100-day moving average which is currently fixed at $1911.60.

However, at roughly 3:30 AM EST gold futures had already sold off from the intraday highs of $1912 and was trading just below $1900 before trading sharply lower. Over the next hour of trading, between 4:30 and 5:30, AM EST gold pricing dropped from $1897 to $1859 as news surfaced about concerns that the Covid-19 virus had mutated creating a new variant of the novel strain of coronavirus.

According to MarketWatch, “Worries about increased lockdown procedures in London and other parts of the world drove investors to the perceived safety of dollars and compelled some traders to momentarily sell some of their bullion holdings… Bullion has tended to slide, at least momentarily, as worries about the virus have caused broader selling in risk assets and prompted some flight to cash and out of precious metals.”

The article cited a research note on Monday written by Edward Moya, Senior market analyst at Oanda who said, “Today’s price action for gold reminded traders of the panic selling that occurred in March.”

The news of a new coronavirus mutation dampened the optimism that the House and Senate had finally reached an agreement. The $900 billion bipartisan aid bill was voted upon today and passed in both legislative branches. This took gold prices off of their intraday low, with the most active February 2020 Comex contract currently fixed at $1881.70, after factoring in today’s decline of $7.20. However, the current price is $30 below the highs achieved overseas.

This indicates that there is major technical resistance at $1911. The inability for gold to hold pricing above $1900 also suggests that there could be more selling pressure as market participants await more clarity on the new variation of the coronavirus and its implications on whether or not the current vaccine will also protect individuals against this new variation.

We will focus upon the recent acknowledgment of the mutation of the coronavirus as well as discuss our outlook for the precious metals in greater detail tomorrow. At 4:00 PM EST Kitco news will stream their first live interview with David Lin and myself Kitco media’s first-ever live event. To view this event simply use this link, kitco.com/news/live to access the live stream.

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Wishing you as always, good trading and good health,

Gary S. Wagner

Federal Reserve Statement and Fiscal Stimulus Negotiations Guide Market Action

Today the primary focus of market participants and investors was the release of the Federal Reserve statement, and the current negotiations to finalize the wording on the bipartisan proposal announced yesterday. This revision is a revamp of the original bipartisan proposal which was presented last week.

Although negotiations continue to finalize the draft to be voted upon, by splitting the original proposal into two parts and separating the two primary issues which caused the negotiations to deadlock in a stalemate, it is now highly likely that this revision will allow the Senate and House to easily pass this proposal.

According to a report by Microsoft News, “Lawmakers are closing in on a roughly $900 billion COVID-19 stimulus deal Wednesday morning that may include another round of stimulus checks and other much-needed benefits, according to a source familiar with negotiations not authorized to speak on the record.”

The optimism of passing this legislation is extremely high. Senate Minority Leader Chuck Schumer today said they were on the “precipice” of an agreement. Senate Majority Leader Mitch McConnell said on the Senate floor that they had made “major headway” on closing a deal that could pass both the House and Senate.

The report said that “Schumer acknowledged the emerging deal did not include everything Democrats would have wanted, but said it was necessary in the “short term,” and vowed to “work in the future to provide additional relief.”.”

The first proposal will allocate $748 billion having support on both sides include an allocation to boost the federal unemployment benefits, as well as capital to fund the second round of the paycheck protection program. The cost of these two components will be approximately $330 billion. It will also include capital so that stimulus checks to all taxpaying Americans of $600 or $700.

Gold

This additional aid will add to our current budget deficit and government debt. As such it will pressure the dollar lower, and could very well be extremely bullish for gold pricing.

Today’s release of the statement which followed the conclusion of this month’s FOMC meeting did little to move gold pricing. However, the press conference that followed with Chairman Powell first making a prepared statement and the Q&A session that followed resulted in gold trading back to the intra-day highs.

Chairman Powell maintained that the Federal Reserve will continue to be extremely accommodative, and will continue to purchase assets to add to their balance sheet to the tune of $120 billion each month. He also vowed to keep interest rates near zero likely for as long as needed.

To that end Chairman Powell said, “the enhanced guidance provided today should ensure that policy remains highly accommodative as the economic recovery progresses.”

The net result was solidly bullish for gold pricing. As of 4:30 PM EST gold futures basis, the most active February contract is currently fixed at $1868.10 which is a net gain of $12.80. Concurrently the US dollar which had been fractionally higher before the release of the statement and press conference has moved from positive fractional gains to close lower on the day. Currently, the dollar index has declined by approximately 2/10 of a percent and is fixed at 90.245.

The initial price spike witnessing gold yesterday was highly attributable to optimism that fiscal stimulus would be forthcoming by the end of the year. Statements by the Federal Reserve as well as the comments from the House and Senate have continued to be highly supportive of higher gold pricing.

On a technical basis, there is no real resistance until $1875, $1915, with major resistance at $1941 per ounce. Based on the fundamentals that have been the catalyst for the recent price spikes in both gold and silver we would expect the uptrend to continue and the rally to run through the remainder of 2020.

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Wishing you as always, good trading and good health,

Gary S. Wagner

What a Difference a Day Makes, as Market Sentiment for Gold Reacts to New Aid Proposal

The new comprehensive aid package was broken into two separate bills; the first bill will require $748 billion and contains only the components that both democrats and republicans have already agreed upon. The second bill will entail $160 billion to fund the components that cause negotiations to a stalemate.

According to CBS News, “Senator Joe Manchin, a moderate Democrat from West Virginia, placed two thick stacks of paper on the podium as he announced a comprehensive $748 billion measure, and an additional $160 billion for state and local funding.

After placing the stacks of paper on the podium before him Senator Joe Manchin said, “Bipartisanship and compromise is alive and well in Washington, contrary to what you’ve been hearing. We’ve proven that,”.”

The senator was surrounded by a group of his fellow collaborators. One of those collaborators Republican Senator Susan Collins called it a, “Christmas miracle” saying that “lawmakers had worked during the Thanksgiving holiday to create this bill.”

By breaking up the original bipartisan proposal of $908 billion into two bills with the most needed aid that has already been agreed upon by both the House and Senate, this aid package will likely be passed. The first bill of $748 billion includes additional funding for the paycheck protection program, unemployment insurance, schools, and allocates funds for vaccine development and distribution. All of these components within this bill have been accepted upon by both Republicans and Democrats.

The second bill contains components that either the Republicans or the Democrats had issues with. It contains the issues that stalemated the first proposal which had little or no chance of passing. The $160 billion proposal contains relief for state and local governments and a liability shield for businesses. These were the two issues that either the Republicans or the Democrats had strong opposition to.

There is brilliance in breaking the first aid proposal into two separate aid bills. It allows the most important and needed aid to quickly be passed by both the House and Senate. The issues that caused the negotiations to come to a stalemate have now been removed and can be dealt with at a later date, in a separate bill that allocates the remaining $160 billion contained in the first bipartisan proposal.

This news was a key factor in gold and silver pricing today as traders witnessed a key reversal that was needed to shift market sentiment.

As of 4:30 PM EST gold futures basis, the most active February Comex contract is fixed at $1857.80, gaining $25.60 (+1.40%) on the day. Silver futures basis the most active March contract gained $0.60, or 2.51%, and are currently fixed at $24.655.

Concurrently, the last FOMC meeting began today and will conclude on Wednesday with a statement released by the Federal Reserve which will be followed by a press conference in which Chairman Powell will address the issues discussed during the meeting and have a question-and-answer period following his opening remarks.

According to Reuters, “If 2020 was the year the Federal Reserve overhauled its game plan for supporting the U.S. economy, 2021 will be the year its new approach gets tested should a coronavirus vaccine deliver the lift that many analysts expect.”

The Reuters article suggests that during this final meeting of the year the Fed will keep its interest rates (Fed funds) near zero, and signal that these low rates will continue for years to come. Many analysts will focus on guidance regarding how long the Federal Reserve will continue its massive bond-buying program.

The combination of the new aid proposal revealed today and comments by the Federal Reserve tomorrow could be the undercurrent that was needed to move market sentiment for gold from bullish to bearish. If that is the case, we could see a major rally begin and continue through the rest of the month into the first months of 2021.

For a look at all of today’s economic events, check out our economic calendar.

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

Wishing you as always, good trading and good health,

Gary S. Wagner

Dollar Weakness Curtails Some of the Selling Pressure in Gold

As of 2:50 PM EST spot gold is trading down by $12.10 and is currently fixed at $1827.40. On closer inspection market participants bid spot gold lower by $17.60 today. However, dollar weakness contributed $5.60 in gains, resulting in today’s price decline of $12.10.

As of 2:50 PM EST gold futures bases the most active February 2021 Comex contract is fixed at $1830.50, after factoring in today’s price decline of $13.10 (-0.72%). Currently, the dollar index is down by approximately 3/10 of a percent and fixed at 90.65, which is a net decline of- 0.274 points.

A combination of fundamental factors has fueled the selling in gold today. The fact that a Covid-19 vaccine has been granted emergency use by the FDA, and as of today has begun to rollout to vaccinate the tier 1 vaccine candidates. This includes medical workers and first responders. Following vaccination of those individuals’ vaccinations will move to those who are most susceptible, which are the elderly in nursing homes or group housing for senior citizens. There is a caveat; the vaccine will not be available to the general public until the 1st or 2nd quarter of 2021.

The second primary reason market participants have seen gold trade under pressure today is the mounting concerns and doubts as to whether or not The Senate will be able to agree on the second round of fiscal stimulus to aid individuals and businesses most adversely affected by the pandemic. Reports have surfaced by the Wall Street Journal that the House and Senate are close to a compromise that could provide $160 billion of state and local aid and liability projections into a separate stimulus package in an attempt to come to a compromise and possible legislation before the end of the year.

Another important event this week that gold investors and traders will focus upon is the upcoming FOMC meeting which is the last to be held in 2020. Although it is expected that there will be no major policy changes forthcoming from this week’s FOMC meeting which begins on Tuesday and concludes on Wednesday. The one real concern according to Daily-FX is that the “Fed may well continue to talk the US dollar lower, leaving the path of least resistance lower for the greenback.”

There is general optimism that a vaccine is rolling out this week, and the government continues to negotiate a stimulus aid package that could be enacted before the end of the year. However, to date, there is no agreement on the stimulus aid package, and the vaccine will take many months before it’s available to the general public.

As these two realizations begin to gain some clarity affecting whether or not an agreement will be reached and a stimulus bill will be passed this year. This unresolved issue along with the unknown amount of time before a vaccine is readily available to the public creates some great unknowns and uncertainty. It is this uncertainty that could quickly change market sentiment in gold which is currently bearish to a bullish demeanor.

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Wishing you as always, good trading and good health,

Gary S. Wagner

Gold Futures Score Fractional Gains Even With Vaccine Expectations

Gold futures scored fractional gains in active trading today, with the February 2021 Comex contract trading to a low of $1831.50 before recovering. As of 3:40 PM EST gold futures are currently fixed at $1839.40 after factoring in a net gain of $1.10 (+0.06%).

Today the U.S. Food & Drug Administration released a statement written by Commissioner Stephen M. Hahn, M.D. which said that the FDA held an advisory committee meeting to discuss the authorization of a Covid-19 vaccine candidate as part of the agency’s review of safety and effectiveness data.

“For nearly 11 months, we have all been learning to live and function in a state of uncertainty, adjusting to a “new normal” as the COVID-19 pandemic has drastically affected the way most of us live, and has also tragically claimed the lives of hundreds of thousands of Americans.”

He went on to address the urgent need for medical countermeasures to diagnose, treat and prevent the coronavirus. To that end the focus of this meeting was “an important step in the process” to grant emergency use authorization for a vaccine for COVID-19 prevention, submitted by Pfizer Inc. in partnership with BioNTech Manufacturing GmbH.

A statement by Pfizer’s Chief Executive Albert Bourla said, “Filing in the U.S. represents a critical milestone in our journey to deliver a Covid-19 vaccine to the world and we now have a more complete picture of both the efficacy and safety profile of our vaccine, giving us confidence in its potential”.

Now it is up to the FDA panel which will vote as to whether or not they recommend the approval of Pfizer and BioNTech’s vaccine for emergency use on Thursday. This means that emergency use of the vaccine could begin as early as Friday.

While it is truly a medical miracle that vaccines with incredibly high efficacy rates have been developed in such a short period of time, the financial damage and economic fallout that will follow cannot be ignored. Besides the extremely accommodative monetary policy by the Federal Reserve, the U.S. Treasury has already spent approximately $3 trillion funding the first fiscal stimulus bill (cares act) passed and implemented earlier this year.

While the Congress, Senate and current administration have been unable to agree upon a new coronavirus relief package, the need for additional fiscal stimulus grows day by day. Approximately 12 million unemployed Americans who have been relying on the extended benefits will end later this month, and the 40 million Americans who have been aided by the eviction moratorium will also expire this month on December 31st.

Which is why many analysts including myself believe that it is not if more fiscal stimulus will be forthcoming, but rather when and how much. Additional fiscal stimulus will add to the economic fallout that will follow after the pandemic has ended. As such the budget deficit for fiscal 2021 could be much greater than the record budget deficit set this year. These necessary actions and expenditures by the government will most certainly devalue the dollar and conversely be highly bullish for gold prices next year.

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

For a look at all of today’s economic events, check out our economic calendar.

Wishing you as always, good trading and good health,

Gary S. Wagner

 

Gold Plummets as Stimulus Negotiations Stall and Vaccine Headway

Today the Wall Street Journal reported that the United States is about to begin, “one of the most daunting public-health efforts in generations: swiftly distributing a Covid-19 vaccine across all 50 states, each of which will determine who gets priority.”

The WSJ also reported that the FDA announced that the first Covid-19 vaccine being considered for use in the United States has, “met the prescribed success criteria in a clinical study, paving the way for the agency to green-light distribution as early as this weekend.” This report also stated that “Pfizer is seeking what is known as an authorization for emergency use, a kind of interim clearance the FDA grants during pandemics to speed up the use of urgently needed medicines.”

The Covid-19 vaccine developed jointly by Pfizer pharmaceutical and BioNTech is awaiting a decision by the Food and Drug Administration to begin vaccinations and grant this vaccine emergency authorization. Data suggests that this vaccine has a 95% efficacy rate and was well tolerated in a trial composed of 44,000 individuals.

A statement by Pfizer’s Chief Executive Albert Bourla said, “Filing in the U.S. represents a critical milestone in our journey to deliver a Covid-19 vaccine to the world and we now have a more complete picture of both the efficacy and safety profile of our vaccine, giving us confidence in its potential,”.

Concurrently the bipartisan fiscal stimulus proposal has been met with opposition, however, according to Reuters, “U.S. Senate Majority Leader Mitch McConnell said on Wednesday that lawmakers were still looking for a path toward agreement on COVID-19 aid, as the U.S. House of Representatives prepared to vote on a one-week funding bill to provide more time for a deal.”

Reuters also reported that both Speaker of the House Nancy Pelosi and Senate minority leader Chuck Schumer rejected McConnell’s offer and warned that the Republican Trump administration’s $916 billion proposals “must not be allowed to obstruct” the bipartisan talks.

The lack of any real progress which would lead to a fiscal stimulus package acceptable by the House, Senate, and current administration has certainly diminished the bullish market sentiment for gold, which led to today’s strong price decline along with vaccine approval being one step closer. Most analysts including myself are still working under the assumption that it is not if a fiscal stimulus package can be approved. Rather it is how much capital will be allocated and when and aid package can be passed.

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

Wishing you as always, good trading and good health,

Gary S. Wagner

The World Needs a Christmas Miracle

This as the aid keeping working families in their homes thanks to the promise the U.S. government has kept may soon be revoked, but still, there is hope. Hope in the form of genuine optimism regarding the development of a Covid-19 vaccine by at least three pharmaceutical companies. However, according to the World Health Organization as of December 8, 2020, there have been 67,210,778 confirmed cases. This includes the 1,540,777 people who have perished due to the ongoing pandemic.

This has caused extreme hardship for those that have lost loved ones, and those that that have contracted the virus. But there is also genuine concern for those that remain unemployed because of the pandemic. At its peak, there were over 22 million Americans unemployed.

Currently, it is estimated that there are about 12 million Americans unemployed, who are living week to week surviving off of the extended unemployment benefits. However, on the day after Christmas, the prolonged unemployed benefits that have been the only income for millions of Americans will expire. This will be followed by the conclusion of the moratorium on evictions which will go into effect on December 31.

According to Moody’s Analytics Chief Economist Mark Zandi the day after the conclusion of the moratorium on evictions there will be approximately $70 billion of unpaid back rent and utilities which will come due. The Aspen Institute predicts that up to 40 million individuals could be threatened with eviction over the upcoming months.

Aside from the incredible hardship that tenants will face, landlords don’t have it much easier many may be forced to liquidate their rental properties due to rental income losses. According to Stacy Johnson-Cosby, President of the Kansas City Regional Housing Alliance more than 40% of the landlord surveyed in her coalition said that they expect to have to sell their units in the upcoming months.

It is for the reasons we spoke about above that the proposed bipartisan $908 billion second stimulus package is so critically urgent. Sadly, even if lawmakers can pass the stimulus package it will only allocate $25 billion for rent relief, it will fall far short of the estimated $70 billion that will be needed in January.

Over the last two weeks, gold has been moving higher based on the optimism that some form of stimulus will be allocated to those in need. In fact, from the week of November 30, when gold futures traded to a low of $1767 to today’s current pricing of $1875, gold has gained just over $100 per ounce. As great as the need for additional fiscal stimulus is, it will have a detrimental impact on our budget deficit and should weaken the U.S. dollar. These factors will be the primary reasons we believe that gold has been on the rise and will continue to gain value throughout the end of the year and continue moving higher in 2021.

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

Wishing you as always, good trading and good health,

Gary S. Wagner