Bonds & Interest Rates

Gold advances beyond $1,470 as US T-bond yields extend slide

  • 10-year US Treasury bond yield erases nearly 2% on Tuesday.
  • US President Trump threatens to raise tariffs if there is no deal with China.
  • US Dollar Index stays below 98 for second straight day.

The XAU/USD pair capitalized on the sour market sentiment in the second half of the day on Tuesday and rose above the $1,470 handle. As of writing, the pair was trading at $1,473.70, adding nearly $3, or 0.2%, on a daily basis.

Earlier in the American session, Bloomberg reported that the US side was softening its stance on the tariff rollback and sides were looking to use the near-deal from May as the benchmark for tariff reduction. Although these comments helped the market sentiment improve slightly, US President Trump reiterated that he will raise tariffs if they failed to reach an agreement on trade with China to help safe-haven assets find demand.

Reflecting the dismal mood, the 10-year US Treasury bond yield is losing nearly 2% on the day and the Dow Jones Industrial Average is down 0.4%.

Meanwhile, after closing the first day of the week in the negative territory below the 98 handle on Monday, the US Dollar Index is moving sideways on Tuesday, allowing the risk perception to continue to drive the pair’s action. The only data from the US revealed that Building Permits and Housing Starts both rose more than expected in October but was largely ignored by investors…CLICK for complete article

Silver Steadies Following Wild Week In Precious Metals Markets

Gold and silver prices jumped Monday on fresh safe-haven demand following a 10-drone strike on Saturday that took out two major oil facilities in Saudi Arabia. Iran-backed Houthi rebels in Yemen claimed responsibility, but the US government said Iran was behind it. Iran rejects the accusation.

The attacks, which destroyed about 5.7 million barrels a day, equivalent to 5% of world oil supplies, immediately spiked oil prices. Brent crude ran up by 19%, the most daily gain the commodity has ever posted, Monday. One of the bombed facilities, Al Abqaiq, is the world’s most important oil processing plant.

The Saudis are the world’s largest exporters of crude, a significant percentage of which is still shipped to the United States, despite huge production gains from shale oil fields (Saudi Arabia is the second-most important US oil supplier, behind only Canada. The kingdom shipped 876,000 bopd to the US in July)

Oil markets haven’t seen this scale of a disruption since Iraqi forces invaded Kuwait in 1990. For now the Saudis are drawing from stockpiles to make up for the lost output. US President Trump also reportedly ordered the release of oil from emergency reserves…CLICK for complete article

Gold Is Beating Buffett’s Berkshire Hathaway

Way back in January, I showed you that the price of gold had beaten the S&P 500 Index over a number of different time periods, including the month, quarter, year… and even the century (so far!).

Last week it was brought to my attention recently—in a tweet by Charlie Bilello, director of research at Pension Partners—that the yellow metal has also outperformed arguably the greatest living investor, Warren Buffett.

For the 20-year period, gold has returned more than 485 percent, beating Warren’s Berkshire Hathaway, which was up 426 percent.

Granted, gold saw an unusually strong rally in the 2000s, while equities were knocked down hard during the dotcom bubble and financial crisis. But that’s precisely my point. Those who had the prudence to diversify their portfolios during this period—and not just in gold but also bonds, real estate and more—were in much better shape than some other investors….CLICK for complete article

Fundamentals Point Higher For Gold Miners

The mid-tier gold miners’ stocks have soared in recent months on gold’s decisive bull-market breakout. They are this sector’s sweet spot for stock-price upside potential, with room for strong production growth which investors love. That’s an attractive contrast to the stagnating major gold miners. The mid-tiers’ recently-reported Q2’19 results reveal whether their fundamentals justify their strong surge this summer.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. Required by the US Securities and Exchange Commission, these 10-Qs and 10-Ks contain the best fundamental data available to traders. They dispel all the sentiment distortions inevitably surrounding prevailing stock-price levels, revealing corporations’ underlying hard fundamental realities….CLICK for complete article

Gold Climbs Higher As Stocks Tumble

The gold miners’ stocks have surged dramatically this summer, catapulted higher by gold’s major bull-market breakout. That atypical strength bucking the normal summer-doldrums slump has carried this sector right back to its traditional strong season. That begins with a robust autumn rally starting in late summers. This year’s autumn-rally setup is very unusual, but investment buying could still fuel further gains.

Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals. We humans are creatures of habit and herd, which naturally colors our trading decisions. The calendar year’s passage affects the timing and intensity of buying and selling…CLICK for complete article

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