>> 29 July 2020

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

The U.S. Mint made an unusual request last week. In a press release dated July 23, the bureau literally begged Americans to start putting coins back into circulation by spending or depositing them.

As you may have noticed, people just aren’t making transactions with coinage like they used to. That’s especially the case now in the age of the coronavirus. With many people sheltering-in-place, billions of dollars in everyday purchases are being made online that in normal times would have happened at the cash register.

This is creating a national coin shortage. >> 27 July 2020

Gold SWOT: Silver’s Biggest Weekly Gain in 40 Years
By: Frank Holmes, US Funds

The best performing precious metal for the week was silver, up 17.79 percent. Silver had its biggest weekly gain in nearly 40 years and could keep soaring. The metal hit its highest level since 2013. Mike McGlone, commodity strategist at Bloomberg Intelligence says the white metal could eventually climb to $30 an ounce amid a broad-based bull market for precious metals. McGlone predicts the metal will stay between $20 and $25 for an extended period before moving higher. The Global X Silver Miners ETF had a ninth straight day of inflows and the iShares Silver Trust saw five consecutive days of money flows. >> 22 July 2020

Gold SWOT: Gold Is Only Getting Started, Says This “Doomsday” Hedge Fund Manager
By: Frank Holmes, US Funds

Wheaton Precious Metals CEO Randy Smallwood said that mining companies could raise as much as $3 billion by selling shares of future output. “Any time there’s a bit of financial stress in the industry it always opens up financial opportunities for us,” said Smallwood. Royalty companies such as Wheaton provide upfront payments to miners in exchange for the right to buy metals at a discount in the future, reports Bloomberg. Wheaton says it has been “very active” on potential deals, including one valued at $1 billion. >> 14 July 2020

Precious Metals Were the Winners in H1 2020
By: Frank Holmes, US Funds

Gold in a Secular Bull Market… Ready for $2,000 an Ounce?

Gold had a phenomenal week, notching its fifth straight week of gains as investors sought a safe haven from sinking government bond yields. Last Tuesday, the yellow metal broke through the $1,800 an ounce resistance level for the first time since 2011. It touched a nine-year high of $1,828 on Wednesday before declining on profit-taking, but it’s clear to most analysts that the precious metal is in a secular bull market.

Many are now predicting all-time record highs for gold in the next 12 months, with Goldman Sachs forecasting $2,000 on an “uneven recovery.” >> 13 July 2020

Gold SWOT: SPDR Gold Shares ETF Has Seen 15 Straight Weeks of Inflows
By: Frank Holmes, US Funds

The SPDR Gold Shares ETF has seen 15 straight weeks of inflows, the longest streak since its debut in 2004, boosting assets to $68 billion, according to data compiled by Bloomberg. Investors continue to get on the yellow metal on speculation that yields will stay low for years, increasing the appeal for assets that don’t pay interest. Holdings in all gold-backed ETFs rose to 3,234.6 tons on Tuesday, which includes 655.6 tons so far this year, and is more than the total added in 2009. >> 29 June 2020

Gold SWOT: Russia’s Gold Output Rose 5 Percent in First Quarter
By: Frank Holmes, US Funds

The best performing precious metal for the week was gold, up 1.57 percent. Gold is heading toward $1,800 an ounce driven by fear that the resurgence in virus cases will impede the global economic recovery. Gold for August delivery rose to $1,796.10 on the Comex on Monday – the highest level since 2012. The yellow metal saw a third straight weekly gain, which is its longest winning streak since January. According to Bloomberg data, gold-backed ETFs saw a fourteenth week of net inflows. >> 22 June 2020

Gold SWOT: Goldman Forecasts $2,000 Gold
By: Frank Holmes, US Funds

Goldman Sachs raised its 12-month price forecast for gold to $2,000 an ounce. Analysts including Mikhail Sprogis said in a note that “gold investment demand tends to grow into the early stage of economic recovery, driven by continued debasement concerns and lower real rates.” The bank added that it estimates fear-driven demand for bullion has boosted prices by 18 percent this year. >> 15 June 2020

Gold SWOT: Gold’s Biggest Weekly Gain Since April
By: Frank Holmes, US Funds

Goldman Sach’s Jeff Currie says gold prices could rise beyond $2,000 an ounce if the Fed tolerates above-target inflation. “While this is not our base case, we see the tail risk of above-target inflation as a potential driver for gold prices beyond $2,000.” Roth Capital said precious metals and related equities could significantly outperform the market in 2020 and peak in 2022. Bloomberg reports that Roth sees gold rising to as much as $2,200 per ounce and silver to as much as $27.50. Analysts say that the Fed buying debt and inflating its balance sheet, coupled with the government printing money, bodes well for precious metals and their equities. >> 9 June 2020

Gold SWOT: Gold Has Outperformed Multiple Stock Exchanges Around the World
By: Frank Holmes, US Funds

The Brasher Doubloon, the very first gold coin made in the U.S., is being offered privately at a $15 million asking price, according to PCAG Inc. who is marketing the coin on behalf of a collector. The coin dates back to 1787 – 11 years after the Declaration of Independence was signed. Bloomberg notes that the coin was originally worth $15. It went on to sell for $625,000 in 1981, $2.99 million in 2005 and $7.4 million in 2011. >> 5 June 2020

Emerging Technologies to Drive Silver Demand
By: Frank Holmes, US Funds

The price of silver soared in May, jumping more than 19 percent on safe haven demand as well as increased expectations of a swift economic recovery, given its many industrial applications. Not only was this silver’s best month since 2011, but it also marked an impressive turnaround for the white metal that just recently plunged to a more-than 10-year low. From March 18 through June 1 of this year, silver soared more than 52 percent, erasing all of its losses due to the coronavirus pandemic. >> 1 June 2020

Gold SWOT: Silver Up on Stronger Industrial Demand
By: Frank Holmes, US Funds

The best performing precious metal for the week was silver, up 3.78 percent on stronger industrial demand. After a slow start to the week, gold and silver were moderately higher in midday U.S. trading Thursday as haven demand returned due to China’s security law imposition on Hong Kong. The move by China ratcheted up tensions with the U.S. Gold rose Friday morning as investors awaited President Trump’s news conference to announce his China response. Broader equity markets have been somewhat euphoric on the immediate fear-of-missing-out hope for a COVID-19 vaccine. However, with little mention in the news, American investors cannot get enough gold. Swiss gold exports to the U.S. surged to 111.7 tons in April – the most on record. >> 27 May 2020

You Can't Just Print More Gold
By: Frank Holmes

Although the chances of the U.S. returning to a gold standard are slim to none, I think it’s incredibly important in this time of economic uncertainty to ensure you have a 10 percent weighting in gold and gold mining stocks. I call this the 10 Percent Golden Rule. >> 26 May 2020

Gold SWOT: Record Levels of Platinum Buying by Retail Investors
By: Frank Holmes

The best performing metal this week was platinum, up 5.65 percent, due to stronger retail buying. Gold and silver rose on Friday morning on safe haven buying. U.S.-China relations remain tense and China announced that it will impose new security laws on Hong Kong. Palladium rose the most since March, holding above $2,000 an ounce on Monday, due to renewed optimism about China’s economy and stimulus for automakers. >> 18 May 2020

Gold SWOT: No Major New Gold Discoveries
By: Frank Holmes, US Funds

The best performing precious metal was silver, up 7.30 percent. Gold had a strong week and held above $1,700 an ounce. Bullion rose the most in a week on Wednesday after Fed Chairman Jerome Powell said that the U.S. economy is facing unprecedented downside risks that could do lasting damage. Powell pushed legislators to take more action to support the economy. The possibility of negative interest rates and continued near-zero rates is supportive for the yellow metal. By the end of the week bullion was holding near $1,750 an ounce. Goldman Sachs’ global head of commodities Jeffrey Currie said in a Bloomberg TV interview this week that gold is his favorite commodity trade right now. “There are a lot of reasons to still hold gold. Foremost is that you are still seeing the debasement effects of all the stimulus measures.” >> 11 May 2020

Gold SWOT: Traders Price In Negative U.S. Rates in 2021
By: Frank Holmes

The best performing metal this week was silver, up 3.34 percent. Gold rebounded on Thursday to steady around $1,700 an ounce as economic data worsened. Unemployment surged to nearly 15 percent in the U.S. Bloomberg notes that the number of Americans filing for unemployment was above 3 million for the seventh straight week, boosting demand for havens as the economic situation continues to deteriorate. According to Bloomberg data, holdings in gold-backed ETFs surged about 3,000 tons to an all-time high this week. Inflows in 2020 so far have already surpassed the volume added in all of 2019. >> 4 May 2020

Gold SWOT: Palladium at $2,300 by Quarter End, Says UBS
By: Frank Holmes

The best performing metal this week was platinum, off slightly by 0.32 percent, with investors increasing their bullish platinum outlook to the highest in three weeks. Retail investors can’t get enough of gold coins. Consumers typically pay a little more for gold coins than the per-ounce prices quoted on financial markets in London and New York. That premium has surged to $135, more than tripling from two months ago, according to Argent Asset Group LLC. As 2019 saw the lowest gold coin and bar demand since 2009, this year demand has surged amid the coronavirus. The Perth Mint reported sales totaled 120,504 ounces in April and that gold coin sales were the highest ever. >> 29 April 2020

These 10 U.S. States Are Best Prepared for a Deep Recession
By: Frank Holmes

This week Treasury Secretary Steven Mnuchin called out “mismanaged” states, suggesting that the federal government should not be responsible for bailing out states that had poorly managed budgets before the coronavirus pandemic brought business activity to a halt, triggering a deep recession. >> 27 April 2020

Seeking Free Cash Flow? Gold and Precious Metal Miners Have Got You Covered
By: Frank Holmes

Physical gold continued to catch a bid last week, trading above $1,760 an ounce, on a host of head-spinning economic news, from millions more Americans filing jobless claims to record money-printing to negative oil prices.

­­­Gold SWOT: 24 Straight Weeks of Positive Gold-Backed ETF Inflows
By: Frank Holmes, US Funds

Bank of America made two very bold precious metal price predictions this week. The bank said silver could rally to $20 an ounce due to a rebound of economic growth later in the year. Spot silver last traded at $20 in 2016 and is down 14 percent so far in 2020. Secondly, the bank says gold could nearly double to $3,000 an ounce over the next 18 months as central bank stimulus and economic turmoil drives record interest in the metal. The bank released this forecast in a report titled “The Fed can’t print gold.” >> 23 April 2020

Make America Go Back to Work Again?
By: Frank Holmes

The world watches as a number of economies begin, or plan, to lift certain lockdown measures that were earlier put in place to slow the spread of the coronavirus. China may have been the first to do so when it reopened Wuhan, the industrial city of 11 million that was ground zero for the novel virus, though life there is still far from normal. >> 20 April 2020

SWOT Analysis: UBS Raises Its Gold Price Forecast to $1,800
By: Frank Holmes

The best performing metal this week was platinum, up 3.45 percent despite hedge funds cutting their net-long positions to an eight-month low. However, platinum mines in South Africa are to remain closed for time being. ETFs added 73,044 troy ounces of gold to their holdings in the trading session ended Thursday – marking the 19th straight day of inflows. Gold rose toward $1,800 an ounce this week, a level last seen in 2011, before ending the week lower. Joni Teves, strategist at UBS Group, said in a note that “gold’s journey has been quite bumpy so far, but given the macro backdrop we think the destination remains higher.” >> 15 April 2020

Gold Sparkles as “The Great Lockdown” Hammers the Global Economy
By: Frank Holmes

Gold and gold stocks are among the highest performing assets of 2020 so far as investors seek a haven amid the coronavirus-fueled rout, and as central banks and governments around the world roll out unprecedented monetary and fiscal measures in an effort to mitigate the economic impact of the “Great Lockdown.” >> 13 April 2020

SWOT Analysis: Newmont Gets an Overweight from JPMorgan
By: Frank Holmes

The best performing precious metal for the holiday shortened week was silver, up 7.26 percent, likely on the waves of money printing that’s just getting started. Gold rose above $1,700 an ounce for the first time since 2012 on Tuesday after March’s panic selling to raise cash has subsided. ETFs backed by gold added 263,504 troy ounces on Wednesday, bringing net purchases for the year so far to 9.06 million ounces. According to Bloomberg data, this is the 13th straight day of growth. >> 9 April 2020

Excess Money Supply Has Been Like Miracle-Gro for Gold Prices
By: Frank Holmes, US Funds

Last month I predicted that at least $10 trillion would be spent to mitigate the economic impact of this virus, and it appears as though we’re already there, with much more to go. And this is all before considering monetary stimulus in the form of near-zero rates and quantitative easing (QE).

The U.S. economy is being flooded with excess money and liquidity right now. Compared to the same period a year ago, M2 money supply––which includes not just cash but also savings deposits, money market funds and other “near” money––has increased some 12 percent, the most in more than 10 years.

Money Supply Flowing Into Physical Gold >> 6 April 2020

SWOT Analysis: U.S. Gold Coins Bought at Fastest Pace in Three Years
By: Frank Holmes, US Funds

The best performing precious metal for the week was gold, off only 0.45 percent. The yellow metal is continuing its strong showing. Gold futures had its sixth straight quarterly gain in the first three months of this year – the longest stretch of gains since 2011. Bullion rose 4.8 percent in the first quarter. >> 31 March 2020

Congress and the Fed Just Opened the Stimulus Floodgates
By: Frank Holmes, US Funds

Time to Buy the Gold Miners?

As I’ve discussed plenty of times before, such massive levels of money printing has historically been supportive of gold. In September 2011, when the Fed was rapidly expanding its balance sheet, the precious metal’s price hit its all-time high of $1,900 an ounce.

With real rates already below 0 percent, the Fed has little choice right now than to jump directly to extreme measures. That means loading up on Treasuries and mortgage-backed securities (MBS) “in the amount needed,” as the central bank put it in a press release dated March 23.

I believe this policy will once again be constructive for gold, and so it may be prudent to consider buying not just physical gold, but also the gold miners. >> 30 March 2020

SWOT Analysis: Gold May Reach $2,500 Due to Fed Stimulus
By: Frank Holmes, US Funds

The best performing metal this week was palladium, up 37.90 percent, essentially regaining all the losses from the prior two weeks. Platinum and silver also rebounded strongly. Gold headed for its biggest weekly gain since 2008 while platinum and palladium were on track for their biggest weekly increases on record. It was a smashing week for precious metals due to supply concerns over mine shutdowns in top producing South Africa. Palladium surged more than 20 percent on Tuesday, its biggest ever gain, after South Africa announced a 21-day coronavirus lockdown. Dmitry Glushakov, head of metals and mining research at VTC Capital, said the country “accounts for some 70 percent of global platinum mined supply and 35 percent of palladium, with a 21-day lockdown possibly resulting in a 4 percent and 2 percent of 2020 supply reduction respectively.” >> 23 March 2020

SWOT Analysis: Investors Should Be Long Gold, Says CIO
By: Frank Holmes, US Funds

The best performing metal this week was gold, down just 2.04 percent. BullionStar, a bullion dealer in Singapore, has seen a record number of orders, order revenue and number of visitors to its center over the past month, according to a post on its website and as reported by Bloomberg. “We have managed to replenish a bit of gold on Saturday but it’s very difficult to find any supply anywhere.” A lack of physical gold supply is positive new for buying and a sign that demand is strong. Bloomberg’s Andrew Cinko writes that gold has a love/hate relationship with equity bear markets. At first, havens such as gold are a good bid, but then they are sold to raise cash. This is what happened this week, with investors selling gold to raise cash. Gold traders are also selling out of their futures contracts, which are dragging on gold’s price. Margin calls hit hedge funds on derivative trades and their traders are forced to sell and pony up cash with gold being liquid. >> 3 March 2020

SWOT Analysis: 25 Straight Days of Inflows Into Gold-Backed ETFs
By: Frank Holmes, US Funds

Credit default swaps surged this week as insurance costs jumped by the most on record. Fears about the coronavirus essentially shut out almost all borrowers looking for fresh cash in the U.S. and Europe. Fed Chairman Jerome Powell said that the virus outbreak poses evolving risks for U.S. growth and signaled that the central bank is prepared to cut interest rates to support expansion if necessary, reports Bloomberg. >> 24 February 2020

SWOT Analysis: Could There Be a New Gold Rush… in Egypt?
By: Frank Holmes, US Funds

Citigroup continues to update its bullish forecast for gold, reports CNBC. The firm said in a note on Wednesday that it believes market jitters will prompt invests to flee to safe haven assets, which could push gold prices to $1,700 an ounce in the next six to 12 months and $2,000 in the next 12 to 24 months. Ed Morse, lead analyst of the report, says “gold should perform as a convex macro asset market hedge, resilient during ongoing risk market rallies but a better hedge during sell-offs and volatility spikes.” >> 19 February 2020

SWOT Analysis: Barrick Raises Its Dividend 40 Percent
By: Frank Holmes, US Funds

The Russian government is looking at giving $1 billion in funding from the National Well-Being Fund to help develop the Arctic Palladium project in Siberia, reports Interfax. The project is a joint venture of Norilsk Nickel and Russia Platinum. This is part of Russia’s plan to be the world’s top platinum metals producer, reports Bloomberg. Russia’s biggest gold miner, Polyus PJSC, is focusing on smaller projects and cutting its debt ratio before starting work on Siberia’s Sukhoi Log deposit, which accounts for more than a quarter of Russian gold reserves. >> 12 February 2020

Gold Projected to Beat the Market in 2020
By: Frank Holmes, US Funds

Gold will outperform the S&P 500 Index in 2020. That’s one of several projections made by CLSA in its just-released “Global Surprises 2020” report.

The Hong Kong investment firm has an impressive track record when it comes to making market predictions—last year it had a 70 percent hit rate—so it may be prudent to take this one seriously.

CLSA’s head of research Shaun Cochran: “If investors are concerned about the role of liquidity in recent equity market strength… gold provides a hedge that could perform across multiple scenarios.” >> 10 February 2020

SWOT Analysis: LBMA Is Looking for a Double-Digit Increase in the Price of Gold
By: Frank Holmes, US Funds

The London Bullion Market Association (LMBA) released its gold price forecasts for 2020 and the consensus is looking for double-digit increases. The average forecast is $1,558.90 an ounce, with the highest at $2,080 and the lowest at $1,300. Analysts are expecting more volatility, as the range between the high and low prices is $780, much bigger than last year’s range of $325. >> 3 February 2020

SWOT Analysis: Gold ETFs Hit a Seven-Year High
By: Frank Holmes, US Funds

The best performing metal this week was gold, up 1.12 percent. The majority of gold traders and analysts were bullish in the weekly Bloomberg survey as concerns mount regarding the coronavirus spreading out of China. The yellow metal had a second monthly gain as investors flock to safe havens amid the global health emergency. China’s gold imports rose in December to the highest level since April, according to customs data. Total imports of non-monetary gold rose to 146,758 kilograms. >> 28 January 2020

New Beginnings With the Year of the Rat
By: Frank Holmes, US Funds

The normally reliable Love Trade during China’s Lunar New Year has been impacted by the deadly coronavirus, which was first reported in the central Chinese city of Wuhan—population 11 million—but has since spread to other areas of the country, not to mention the U.S. Travel and spending in general have largely been restricted, with the Chinese government’s recent travel ban affecting as many as 35 million people. On Friday we even learned that Shanghai Disneyland has temporarily closed its doors in an effort to curb the outbreak. >> 21 January 2020

SWOT Analysis: Palladium at $2,500 an Ounce
By: Frank Holmes, US Funds

Bridgewater Associates’ Greg Jenson told the Financial Times this week that gold could spike 30 percent as central banks allow inflation and political fears mount. “There is so much boiling conflict, that gold being part of a portfolio makes sense to us,” Jensen said. This would mean a gold rally to more than $2,000 an ounce. Peak gold could be more distant in the future than originally thought due to increased exploration spending. 2019 saw a flurry of gold M&A activity and a return to levels last seen during the 2011 boom. There was around $26.5 billion worth of completed deals last year. >> 14 January 2020

Dollar Weakness Could Be the Catalyst Commodities Are Looking For
By: Frank Holmes, US Funds

Gold, meanwhile, had its best year since 2010, climbing as much as 18.31 percent. The yellow metal’s role as an exceptional store of value shined brightly in the second half of the year when the pool of negative-yielding debt around the world began to skyrocket, eventually topping out at around $17 trillion in August. On the news last week that Iran launched a counterstrike against U.S.-occupied military bases in Iraq, the safe haven briefly broke above $1,600 an ounce for the first time since April 2013.

In the past two decades, gold has helped investors limit market volatility and portfolio losses. Between 2000 and 2019, the precious metal’s average annual price was down in only four years. Put another way, gold was up on average in four out of every five years—a remarkable track record. >> 13 January 2020

SWOT Analysis: Goldman Says Gold Is a Better Hedge Than Oil
By: Frank Holmes, US Funds

Newmont Goldcorp announced on Monday that it is streamlining its name after last year’s megamerger with Goldcorp. The company will now go by simply Newmont, and has promised shareholders a 79 percent increase in its quarterly dividend. Centamin reported that its fourth quarter gold output at the Sukari mine was up 51 percent from the same period last year for a total of 158,387 ounces. The company said its 2019 total gold production was up 2 percent from the previous year. Bloomberg reports that Sibanye Gold Ltd has exercised its option to buy an additional 168 million shares in DRDGold to take controlling shareholding interest in the surface-tailings producer. >> 9 January 2020

Tariffs Are Having a Bigger Effect on U.S. Manufacturing Than Initially Thought
By: Frank Holmes, US Funds

The U.S. manufacturing sector contracted for the fifth straight month in December, with the monthly reading from the Institute for Supply Management (ISM) hitting its weakest point in more than 10 years. The purchasing manager’s index (PMI) fell to 47.2, a level we haven’t seen since June 2009, as global trade tensions continued to take a toll on the country’s manufacturers. >> 6 January 2020

SWOT Analysis: Palladium Was Top Performing Precious Metal in 2020
By: Frank Holmes, US Funds

Gold had a strong finish to the year, recording its biggest annual advance since 2010 as the dollar weakened, reports Bloomberg, even amid optimism on the trade front along with signs of stabilization in China’s economy. In a statement from the London Bullion Market Association, the amount of gold held in London vaults rose 2.5 percent from a month earlier to 8,228 tons in September. That’s the highest in data going back to July 2016. In related news, Hong Kong’s purchases of gold coins from China surged last month as demand for haven assets soared amid the ongoing social unrest. >> 30 December 2019

SWOT Analysis: Will Gold Have Its Best Year Since 2010?
By: Frank Holmes, US Funds

Gold had its biggest weekly advance in more than four months, and with only a few days left in 2019, the metal is headed for its best year since 2010, reports Bloomberg. Margaret Yang, analyst at CMC Markets Singapore Pte, says investors are betting that gold is poised for a rebound after three months of price consolidation. Turkey’s central bank increased its gold holdings by $446 million from the previous week. >> 24 December 2019

SWOT Analysis: Equinox Gold Corp is acquiring Leagold Mining Corp
By: Frank Holmes, US Funds

Russia has taken steps to potentially limit gold exploration, which could be positive for the gold price with tighter supply. The Natural Resources Ministry will not raise the threshold for deeming a gold field strategic, leaving the number at 50 tons. Bloomberg reports that the Russian government can seize a gold mining license for a deposit from a company if exploration shows reserve exceed 50 tons – this should limit exploration by non-Russian companies. Australia hopes to dethrone China as the world’s top gold producer in 2019. Currently in the number two spot, Australia has seen gold production increase from 302 tons in 2017 to 322 tons in 2018, and expects to mine 337 tons by year end. >> 16 December 2019

SWOT Analysis: Palladium on Its Way to $2,000
By: Frank Holmes, US Funds

Gold has remained resilient this week in the face of many developments that could have rocked the price. Bullion rose after the Federal Reserve signaled it would keep U.S. interest rates on hold, then rose again after jobless claims rose. Gold fell on Thursday after the initial U.S.-China trade deal was announced, but held its own on Friday after weighing the impact of a weaker dollar, reports Bloomberg. Michael McCarthy, chief market strategist at CMC Markets, said in an interview that there are “two currents that are pushing and pulling gold at the money” – the trade war breakthrough and a weaker U.S. dollar. >> 10 December 2019

Supercharge Your Gold Position With Precious Metal Royalty Companies
By: Frank Holmes, US Funds

The yellow metal remains on sound footing, though, and over the next 12 to 24 months, I see its price advancing further on strong fundamentals. Mean reversion, in particular, is the theme I believe investors should be focused on in 2020 and beyond.

This was the message shared by Bloomberg Intelligence commodity strategist Mike McGlone in a note to investors last week.

The chart below illustrates the 10-year rate of change for gold, the S&P 500 and U.S. trade-weighted dollar. In other words, it shows you how much each asset class has changed from a decade earlier. >> 9 December 2019

SWOT Analysis: 50-Year High in Central Bank Gold Purchases
By: Frank Holmes, US Funds

2019 is on track to be a 50-year high in central banks’ net gold purchases. Bloomberg Intelligence reports that central banks have been absorbing about 20 percent of global gold mine supply. Based on the gold-to-silver ratio, it looks like silver might have more upside if demand for safe haven assets rises. Bloomberg’s Eddie van der Walt writes that the gold-silver ratio has dropped to 86 from 93 in July and that means silver has outperformed on the back of gold’s gains. UBS analyst Giovanni Staunovo is bullish on palladium and platinum. Staunovo wrote in a December 5 report that palladium will likely enter its ninth straight year of market deficit in 2020 and could climb above $2,000 an ounce. Even as platinum is set to enter a surplus, its price could be driven by gold. “As platinum is highly correlated to gold, our bullish view for gold should mean higher platinum prices, which we expect to trade at around $1,000 an ounce next year.” >> 2 December 2019

SWOT Analysis: Palladium at a Fresh New Record
By: Frank Holmes, US Funds

According to central bank governor Adam Glapinski, Poland repatriated around 100 tons of gold from the Bank of England in a bid to demonstrate the strength of the nation’s $586 billion economy, writes Bloomberg. Poland could generate “multi-billion” profits if it sold its holdings, but has no plans to do so, he said. In Turkey, official gold reserves, including deposits and swaps, increased 2.7 percent to $26.6 billion, compared to September, according to central bank in Ankara. >> 25 November 2019

SWOT Analysis: Citigroup Just Cut Its Three-Month Gold Price Target
By: Frank Holmes, US Funds

The best performing precious metal this week was palladium, up 3.85 percent. Shipments of palladium from Switzerland to Hong Kong rose to a five-year high in October. In the weekly Bloomberg survey of gold traders and analysts, most respondents were surprisingly bullish on the yellow metal for next week, expecting further tension between the U.S. and China over Hong Kong. President of Serbia Aleksandar Vucic told reporters this week that it has the largest amount of gold in Serbia’s history and that it will continue to buy gold based on the direction the crisis in the world is moving. >> 19 November 2019

Miners Are Facing Challenges Globally
By: Frank Holmes, US Funds

A couple of weeks ago, I was in Lima, Peru, attending the Mining & Investment Latin America Summit. I heard from a number of industry leaders that mining in South America has become more challenging in recent years. One of the biggest reasons why is that the burden for taking care of local communities has, in many cases, fallen on the miners’ shoulders. Venezuela’s corrupt socialist president Nicolas Maduro continues to destabilize and finance radicalism throughout the continent using revenue from narcotics, and mining companies often end up having to pay the price.

Chilean lawmakers, for instance, are considering a new tax on mining and mineral extraction to address the country’s social unrest I described earlier.

As you can imagine, this could discourage speculation in the junior mining area.. >> 18 November 2019

SWOT Analysis: South Africa’s Gold Output Fell for a 24th Straight Month
By: Frank Holmes, US Funds

Gold prices are down from recent highs, but that doesn’t mean investors are giving up. Open interest is still rising, showing that lower prices are driven by new short-sellers rather than by long investors liquidating. Another potential catalyst for the yellow metal is President Donald Trump pushing the Federal Reserve to deploy negative interest rates, which are positive for gold. >> 5 November 2019

You’re Probably Underinvested in Gold
By: Frank Holmes, US Funds

In a September report, the World Gold Council (WGC) pointed out that some investors are underexposed to gold. The gist of the study is that investors may assume they have adequate exposure to gold because they’re invested in a fund that tracks a broad-based commodity index. The problem with this assumption is that most major commodity indices have a relatively small weighting in gold, and so their gold exposure is much smaller than they realized. >> 4 November 2019

SWOT Analysis: Zimbabwe Is Hoping for a Platinum Mining Boom
By: Frank Holmes, US Funds

The yellow metal initially fell after the Fed cut rates for the third time on Wednesday, but then quickly regained those loses despite policy makers hinting they might put further cuts on hold. Bloomberg reports that the Fed looks prepared to stop cuts in order to assess the impact on the economy of their reductions over the past three meetings. Dan Pavilonis, senior market strategist at RJ O’Brien & Associates LLC, said “there’s a lot of moving parts now that are creating a theme to be bullish on gold.” >> 28 October 2019

SWOT Analysis: Gold’s Best Week in Five
By: Frank Holmes, US Funds

Sprott Inc. CEO Peter Grosskopf says this time gold’s rally is different because monetary policy has reached the point of being ineffectual. “Gold’s 2019 performance is quite different than prior rallies in that the gold market is no longer small and gold is no longer seen as a fringe asset.” Grosskopf added that “the Fed is in checkmate and gold is now a mandatory” portfolio holding. Australia & New Zealand Banking Group is also bullish on the yellow metal, saying that it could hit $1,700 an ounce in the next six months, citing expected changes in U.S. interest rates. >> 21 October 2019

SWOT Analysis: The Dutch National Bank Is Bullish on Gold
By: Frank Holmes, US Funds

Bloomberg’s Lisa Lee reports that leveraged loan investors are “getting increasingly angsty, and their fear may be a harbinger of more pain coming in credit markets.” Leveraged loans are performing worse than junk bonds, which is surprising since they have been considered a lower-risk way to invest in junk-rated companies. Lee adds that “the loans have grown into a $1.2 trillion market” and that “safeguards and protections for investors have weakened.” While most economists rightly argue you can’t have a recession without a credit blow up, the green brown shoots are beginning to show their color. >> 15 October 2019

The Optimist’s Guide to Airlines and Gold
By: Frank Holmes, US Funds

I agree and stick by my call for $10,000 an ounce gold. Some critics believe only a major event, such as a war or famine, would be enough to push the metal up that high, but really all it takes is monetary and fiscal mismanagement. That’s exactly what we’re seeing right now in Europe, where growth is slowing because of business-killing regulations. But instead of getting rid of these rules, interest rates have been allowed to dip below zero. In Denmark, banks are actually paying borrowers to take out a mortgage, which is contributing to what Nancy sees as a European housing bubble.

Conditions aren’t much better in the U.S.—or at least they weren’t, until President Trump began rolling back unnecessary regulations.

According to Steve Forbes, there are 773,000 words in the Bible, which sounds like a lot until you learn that there are around 10 million words in the federal income tax code. Similarly, there are more than 185,000 pages in the Federal Register of rules and regulations. That’s up 17 percent from 158,000 pages in 2008. But in 2018, the number of pages actually fell almost 1,000 pages, or 0.5 percent, meaning Trump is keeping his word. >> 14 October 2019

SWOT Analysis: Gold Sales in India Continue to Weaken
By: Frank Holmes, US Funds

The best performing metal this week was palladium, up 1.98 percent. Even after a weekly loss, gold traders and analysts stayed bullish on their outlook for prices in the weekly Bloomberg survey. Stocks continue to swing and currencies fluctuate ahead of continued U.S.-China trade talks. Just like last week, palladium hit a fresh all-time high this week of $1,707.51 an ounce, according to Bloomberg data. September marked the 10th straight month of gold buying for the People’s Bank of China, adding 5.9 tons and bringing total holdings to 62.64 million ounces. China has added over 100 tons to its reserves in the last 10 months, demonstrating that it sees value in the metal. >> 7 October 2019

SWOT Analysis: Peak Gold Could Be Here Sooner Than You Think
By: Frank Holmes, US Funds

The best performing metal this week was gold, up 0.51 percent. Gold traders and investors are positive on future gold prices in this weeks’ Bloomberg survey. For the first time in a month the gold bulls outnumbered the combined bearish and neutral responses. ETFs added 39,919 troy ounces of gold to their holdings on Thursday, marking the 14th straight day of inflows, according to Bloomberg data. This year’s net purchases now total 10.3 million ounces. As seen in the chart below, holdings in gold-backed ETFs are near 2012 records, while the price of gold is taking longer to catch up. The yellow metal rallied the most in a month on Wednesday after U.S. private companies’ payrolls rose less than forecast, reports Bloomberg. This builds the case for the Fed cutting rates again this year. >> 2 October 2019

These Are Bigger Market Risks Than Impeachment
By: Frank Holmes, US Funds

A record $17 trillion in global debt now carries a negative yield, which is equivalent to about 20 percent of world GDP, according to a recent report by the Bank for International Settlements (BIS). The bank notes that the growing acceptance of negative yields has become “vaguely troubling.”

Just as troubling is the expanding level of global debt, which is now the highest it’s ever been in peacetime, according to Deutsche Bank’s recent analysis of 12 major economies. These dozen economies collectively have an average debt-to-GDP of 70 percent, the highest level in 150 years outside of a world war. >> 30 September 2019

SWOT Analysis: Sibanye Gold Announced Plans to Cut 5,270 Jobs
By: Frank Holmes, US Funds

Conviction in gold’s uptrend is strengthening, according to UBS’s Global Precious Metals Comment for the week. As Joni Teves writes, as gold gains further upward momentum, UBS believes other areas in the market can become more active and support the next leg higher. “Participation out of China, the private wealth community, and retail investors has scope to pick up ahead, granted the supportive macro narrative remains intact,” she continues. Bloomberg ads in another article this week, which due to insufficient exploration spending, gold reserves have depleted significantly. This alone looks to be enough supply-side impetus to perk up the yellow metal. >> 24 September 2019

Pierre Lassonde Says Gold Could Hit $25,000 in 30 Years
By: Frank Holmes, US Funds

This year marked the 30th anniversary of the Denver Gold Forum (DGF), the world’s most prestigious precious metal equities investment conference. The invitation-only event, held last week, was attended by an incredible seven-eighths of the world’s publicly traded gold and silver companies by production, as well as leading metals and mining executives, money managers, analysts and investors.

Much has changed in the precious metals and mining industry in the past 30 years, as we were all reminded by my longtime friend and mentor Pierre Lassonde. Pierre, as many of you know, is the legendary co-founder, along with Seymour Schulich, of Franco-Nevada, the first publicly-traded gold royalty company. What you may not know is that Pierre is also one of Canada’s most gracious philanthropists and currently serves as the chairman of the Canada Council for the Arts Board of Directors.

According to Pierre, annual global gold demand has exploded in the years since the first DGF was held. Demand grew more than fivefold, from a value of $32 billion in 1989 to $177 billion in 2018. >> 23 September 2019

SWOT Analysis: Chinese Gold Company on the Hunt for a $2 Billion Deal
By: Frank Holmes, US Funds

Bloomberg’s Liz Capo McCormick writes that there is not enough cash on hand at major Wall Street firms to meet the funding demands of a market trying to absorb record Treasury bond sales needed to cover U.S. budget deficits. She adds that there isn’t enough liquidity and that there are deep structural problems in the money markets. The big catalyst causing the squeeze in repo liquidity is the big swath of new Treasury debt that settled into the marketplace just as cash left due to quarterly tax payments to the government. >> 17 September 2019

Look Which Precious Metal Is Beating Warren Buffett…
By: Frank Holmes, US Funds

“We expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,” Citi analyst Aakash Doshi wrote in a note dated September 10, and reported by Bloomberg.

I agree with Citi’s projection. Last week I joined fellow goldwatchers Peter Schiff and Imaru Cassanova on Liz Claman’s Countdown to the Close, and I pointed out that gold is looking more and more attractive as central banks pursue easy money policies. When governments offer you a negative rate of return, that automatically makes gold much more appealing. What’s more, I think this easing cycle has just begun. >> 16 September 2019

SWOT Analysis: The U.K.’s Royal Mint Is Planning Its Own Gold ETF
By: Frank Holmes, US Funds

The best performing metal this week was palladium, up 4.41 percent. Central banks continue to stock up on gold – led by Russia, the world’s top buyer for seven consecutive years. Russia’s central bank quadrupled its gold holdings in the last decade and has diversified away from U.S. assets. According to Bloomberg, the value of the nation’s gold surged 42 percent in the past year to $109.5 billion due to higher prices. Russia is also a top miner and saw its gold production rise 11 percent in the first half of 2019 from the same period last year to 142.2 tons. China is also growing its gold reserves. The People’s Bank of China (PBOC) has raised its bullion holdings for a ninth consecutive month, adding 5.91 tons in August, reports Bloomberg. >> 4 September 2019

The Power of Scarcity
By: Frank Holmes, US Funds

Gold and Munis Look Attractive With Limited Supply

Gold is an obvious example. The precious metal is both rare and finite, making it an ideal global currency. Although output continues to grow, the number of large, high-grade gold discoveries has been declining for decades now. Some experts, myself included, believe peak gold is already here.

Copper could soon be in the same boat. The red metal isn’t nearly as rare as gold is, but because of surging global demand, mostly for use in electric vehicles and renewable energy, it’s expected to go into deficit in 2021. >> 3 September 2019

SWOT Analysis: $1,600 Gold in the Next Three Months?
By: Frank Holmes, US Funds

The best performing metal this week was platinum, up 8.86 percent. Platinum had its best week since 2011 as haven demand for gold expands to other precious metals. Gold rose to as much as $1,550 an ounce this week due to the escalated U.S.-China trade war. And silver is catching up. The gold/silver ratio was trading at its lowest level since April 17, which indicates that the silver price is starting to trade more like gold, but still has some room to go higher. >> 26 August 2019

SWOT Analysis: Inflows Into Gold ETFs Hit 1,000 Metric Tons
By: Frank Holmes, US Funds

The best performing metal this week was silver, up 2.03 percent. Gold came in second place, up 1 percent. Inflows into ETFs backed by gold have hit 1,000 metric tons since holdings bottomed in early 2016. Bloomberg data shows that total known ETF holdings rose to 2,424.9 tons on Wednesday, which is the highest since 2013. Goldman Sachs predicts that the price of the yellow metal will climb to $1,600 an ounce over the next six months. >> 19 August 2019

SWOT Analysis: Gold Equities Have Room to Run…
By: Frank Holmes, US Funds

Gold equities are cheap and have room to continue running relative to the gold price, as they are lagging their historical relationship. The chart below compares the price of the senior gold miners to the price of gold 10-years ago. The miners have taken a much bigger drop than the gold price. TD Securities writes in a note that it expects a further rotation from producers down to the junior miners and eventually to the emerging producers to developers, which will be catalyzed by high profile M&A activity. Jeff Currie, global head of commodities research at Goldman Sachs, says that central banks are buying gold because they don’t want to own dollars with sanction, geopolitical and trade-war risks. UBS raised its gold price forecast in 2020 to $1,550 per ounce as their economists believe a U.S.-China deal is looking increasingly unlikely, reports Bloomberg. >> 12 August 2019

SWOT Analysis: Silver Is Catching Its Bid
By: Frank Holmes, US Funds

The best performing metal this week was silver, up 4.78 percent. Silver had been somewhat detached from gold’s price changes, but now with recession odds rising, silver is catching its bid. Gold traders and analysts were bullish on their outlook for the yellow metal this week as it set a new six-year high above $1,500 per ounce. The metal saw a second straight weekly gain, fueled by uncertainty surrounding global trade tensions and monetary policy. Investors have taken notice of the rally with ETFs backed by gold growing holdings for nine straight days. Bloomberg reports that total gold held by ETFs rose 8.5 percent this year to 77.1 million ounces, the highest level in at least 12 months. SPDR Gold Shares, or the GLD, saw five straight days of inflows this week totaling a whopping $1 billion. >> 7 August 2019

5 Things Every Investor Should Know Right Now
By: Frank Holmes, US Funds

Given the considerable risks right now, is it any wonder that gold has performed so well this year? As I write this, the yellow metal is trading above $1,475, up 12.6 percent from the start of January.

Gold demand in the first half of 2019 was its best in three years, climbing to 2,181.7 tonnes, largely due to increased appetite for gold-backed ETFs as well as record buying by central banks. Bank purchases of bullion rose an incredible 47 percent year-over-year in the second quarter, pushing the total amount for the January-to-June period to its highest since central banks became net buyers of gold in 2010. Poland was the top buyer—ahead of Russia, even—with reserves growing 77 percent to 100 tonnes. >> 5 August 2019

SWOT Analysis: Gold Demand Hit a Three-Year High, Says the WGC
By: Frank Holmes, US Funds

As the gold price continues to heat up, so too does M&A activity among gold miners. Resolute Mining Ltd. agreed to buy Toro Gold Ltd. for $274 million in cash and stock. Toro is private and operates its flagship asset in eastern Senegal. Citigroup is maintaining its third quarter average price forecast for the yellow metal at $1,425 per ounce.

Silver continues to pull in speculation from investors. The combined volume of calls and puts for silver soared to 218,000 contracts in July – the highest since November 2010. Bloomberg’s Justina Vasquez writes that silver is getting a boost, just like gold is, due to the prospect of central banks easing monetary policy. Investors are betting that silver will catch up to gold in terms of price gains. >> 1 August 2019

Get Ready for a Weaker U.S. Dollar… And Stronger Gold
By: Frank Holmes, US Funds

Unemployment in the U.S. is at a half-century low and the S&P 500 is trading at near-record highs. Nevertheless, the Federal Reserve today trimmed interest rates for the first time since the financial crisis on stalled manufacturing growth and an anticipated world economic slowdown.

The easing cycle may be the catalyst gold needs to outperform the market and retrace its monster bull rally in the 2000s, according to Bloomberg Intelligence strategist Mike McGlone. >> 30 July 2019

Follow the Trend Lines, Not the Headlines
By: Frank Holmes, US Funds

“Follow the trend lines, not the headlines,” President Bill Clinton once said. I’m a news junkie myself, but I guarantee you I wouldn’t be where I am today had I based every one of my investment decisions on what the talking heads tell me.

The headlines might make it feel like our lives are progressively getting worse sometimes, but the trend lines tell a different story. We’re living longer, healthier and freer lives than we were in years past.

Don’t believe me? Take a look.. >> 29 July 2019

SWOT Analysis: $1,500 Gold by Year End?
By: Frank Holmes, US Funds

JPMorgan research shows that no reserve currency lasts forever and many are questioning how long the U.S. dollar’s reign will last. Reserve currencies tend to be a reflection of markets that have the best prospects. JP Morgan sees the younger demographics and proliferating technological know-how of the Asian economic zone as having the best prospects with 50 percent of global GDP and two-thirds of global economic growth being the strongest contender. With $30 trillion in middle-class consumption growth forecast between 2015 to 2030, only $1 trillion is expected to come from Western economies. The bank sees the dollar deprecating over the medium term due to these structural reasons as well as cyclical impediments, which is why they recommend diversifying into developed markets and in Asia, as well as precious metals. >> 22 July 2019

Silver Seeks to Catch Up With Gold
By: Frank Holmes, US Funds

The best performing metal this week was silver, up 6.40 percent on perhaps a paradigm shift as the investors poured $133 million into silver bullion ETFs on Wednesday, the single biggest inflow in six and a half years. The weekly Bloomberg survey of gold traders and analysts shows that most are bullish on the yellow metal as prices broke through a five-year high and touched $1,453 per ounce on Friday morning. Traders seem to be set on an interest rate cut from the Federal Reserve this month, which is helping gold, even as some better-than-expected economic data was released on Tuesday. Turkey, which often sells its gold, saw its reserves rise by $71 million this week compared to last. >> 16 July 2019

Here’s What the Market Did EVERY TIME the Fed Cut Rates During an Economic Expansion
By: Frank Holmes, US Funds

Finally, analysts at Alpine Macro see the beginnings of gold’s “third great bull market of the post-war period.” A rate cut by the Fed could set in motion a multi-year bear market in the dollar, analysts write, which is very supportive of gold. With the recent technical break above $1,400, “new all-time highs for gold should be seen in the coming years,” the research firm writes.

SWOT Analysis: Will Gold Fall Back to $1,300?
By: Frank Holmes, US Funds

According to data compiled by Bloomberg, the iShares Silver Trust had its best week in a year and hasn’t seen any outflows so far in July. Plus, the fund had its biggest monthly inflow since 2017 in June. Bloomberg’s Colin Beresford writes that silver has benefitted from haven demand as major central banks respond to weakening economic growth with a more dovish stance. The gold-to-silver ratio was at 93 this week, just shy of the high of 100 reached in February 1991. >> 8 July 2019

SWOT Analysis: Trump’s latest Fed picks could be positive for gold
By: Frank Holmes, US Funds

Some big names are backing gold this week—veteran investor Mark Mobius is one of them. As reported by Bloomberg, Mobius says that gold is set to push higher, potentially topping $1,500 an ounce, as interest rates head lower, central banks extend purchases and uncertainty surrounding geopolitics and cryptocurrencies fans demand. Strategists from Societe Generale are also looking at the yellow metal, particularly in the form of gold miners. In a note to investors, the strategists explain that gold equities tend to outperform physical gold through every cycle and have further to run. In addition, UBS raised its gold forecast to $1,450 on both trade and geopolitical risks. >> 5 July 2019

It’s Time We Talked About Modern Monetary Theory (MMT)
By: Frank Holmes, US Funds

Instead of singling out the U.S.-China trade war as the catalyst for this potential slowdown, he criticized global monetary policy that currently favors lower interest rates and has created an imbalance relative to fiscal policy.

What banks should have done, Singer suggested, “and what they should do now, is try to restore the soundness of money. They should not be cutting rates right now. They should be calling on the congresses and parliaments around the developed world to take steps to deal with the economic slowdown in growth.”

I’ve seen Singer speak before, and he’s discussed at length that he likes gold for its diversification benefits. This is in line with fellow billionaire hedge fund manager Paul Tudor Jones, who recently said that gold is his favorite trade in the next 12 to 24 months. >> 1 July 2019

SWOT Analysis: 40% of Global Debt Now Delivers a Negative Yield
By: Frank Holmes, US Funds

Even as U.S. stocks remain near record highs, a growing cohort of investors say they are ready to throw in the towel, reports Bloomberg. According to the latest reading from the Conference Board’s sentiment indicator, the number of Americans expecting equities to decline over the next year jumped the most since 2007 and for the first time since January exceeds those who expect gains. In addition, consumer confidence dropped in the month of June, well below the range of consensus forecasts, reports Bloomberg. Confidence dropped 10 points to 121.5, raising a potential red flag regarding households’ willingness to drive growth beyond trend over the next several months. >> 25 June 2019

Gold Gets a Boost of Rocket Fuel From Negative Bond Yields
By: Frank Holmes, US Funds

Ladies and gentlemen, we have liftoff!

After breaking out of a five-year trading range, the price of gold surged above $1,400 an ounce last week for the first time since 2013 on expectations of a U.S. rate cut. The 10-year Treasury yield fell to around 2 percent, its lowest level since November 2016. Meanwhile, the pool of negative-yielding government bonds around the world hit a fresh record high of $13 trillion. >> 24 June 2019

SWOT Analysis: Central Banks Continue to Show Their Love for Gold
By: Frank Holmes, US Funds

Central banks continue to show their love for gold. Kazakhstan raised its gold holdings to 11.93 million ounces in May, up from 11.79 million ounces in April. Russia’s climbed from 70.2 million ounces to 70.42 in May. Turkey was also up to 16.03 million ounces in May from 15.99 in April. Additionally, Turkey saw its gold reserves rise $167 million this week from the previous week to now total $21.7 million worth of reserves, according to central bank data.

Illegal gold mining in Ghana is now being cracked down on. A veteran NASA engineer developed a software tool that is capable of identifying illegal mines from satellite photos, making it easier to find and shut down illegal operations. Refiners are also taking steps to reduce illegal mining. >> 19 June 2019

This Billionaire Says Gold Has Everything Going For It
By: Frank Holmes, US Funds

Last week was a strong one for gold, which managed to eke out its fourth straight week of positive gains. The price of the yellow metal broke above $1,350 an ounce last Friday, while gold miners, as measured by the NYSE Arca Gold Miners Index, tested their 52-week high.

Investors sought safe haven investments on a number of geopolitical risks, including protests in Hong Kong over the now-delayed extradition bill and an attack on two oil tankers near Iran and the Strait of Hormuz, the world’s busiest sea lane through which a fifth of global oil consumption passes. After placing the blame on Tehran, President Donald Trump now faces a tough decision on how to respond, if at all. >> 11 June 2019

Put Your Trust in Gold
By: Frank Holmes, US Funds

Americans’ trust in institutions, from the federal government to banks to the news media, has been deteriorating for decades. Sixty years ago, three quarters of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Today, only one in five people, a near-record low, believes our leaders make decisions in the country’s best interest.

The news media fares just as poorly. A new survey finds that Americans believe “fake news” is a bigger problem right now than violent crime, illegal immigration and terrorism.

Just take a look at the chart below, based on Gallup polling data going back to 1973. Whether it’s newspapers, television news or, more recently, online news, Americans’ faith is steadily eroding... >> 10 June 2019

SWOT Analysis: Inflows Into Gold ETFs Are Gaining Momentum
By: Frank Holmes, US Funds

Ecuador just made a big show of support for the nation’s mining industry. The Vice President and Minister of Energy and Non-renewable Natural Resources visited Lundin Gold’s flagship project, where 50 percent of the construction is completed. The officials also presented a new Public Mining Policy that focuses on supporting large-scale operations and investments, and eradicating illegal mining.

The focus on “weak dollar policy” continues from lawmakers. Senator Elizabeth Warren called for “actively managing” the U.S. dollar’s valuation as a part of a plan to create more American jobs. A weaker dollar has historically been positive for the price of gold. President Trump has also been critical of a strong dollar. >> 6 June 2019

Global Manufacturers Just Shrank for the First Time in Seven Years
By: Frank Holmes, US Funds

The reason why the slowdown should be a concern for investors is because of the manufacturing sector’s outsized role in the broader U.S. economy. In the fourth quarter, manufacturers contributed some $2.38 trillion to the U.S. economy, accounting for nearly 12 percent of gross domestic product (GDP). The sector also has a huge multiplier effect. For every $1 that’s spent in manufacturing, another $1.82 is created, according to the National Association of Manufacturers (NAM).

Higher consumer demand for goods and services means manufacturers require greater amounts of raw materials and natural resources. This benefits the metals and mining sector, not to mention energy, transportation and more. >> 4 June 2019

SWOT Analysis: Gold Traders Are on Recession Watch
By: Frank Holmes, US Funds

The bond market is flashing a recession signal and it could be good for gold. Win Thin, head of currency strategy at Brown Brothers Harriman, told Bloomberg that “if the U.S. goes into a recession, then the Federal Reserve cuts rates and the dollar’s yield advantage evaporates.” A weaker dollar is historically positive for gold, and the latest tariffs are another sign that the Fed could cut rates. >> 29 May 2019

DOUBLE WHAMMY: Fed Policy and the U.S.-China Trade War
By: Frank Holmes, US Funds

Higher Inflation Has Historically Meant Higher Gold Prices

The good news in all this is that higher inflation has historically been supportive of the price of gold. In the years when inflation was 3 percent or higher, annual gold returns were 15 percent on average, according to the World Gold Council (WGC).

When gold hit its all-time high of $1,900 an ounce in August 2011, consumer prices were up nearly 4 percent from the same time the previous year. The two-year Treasury yield, meanwhile, averaged only 0.21 percent, meaning the T-note was delivering a negative real yield and investors were paying the U.S. government to hang on to their money. This created a favorable climate for gold, as investors sought a safe haven asset that would at least beat inflation. Go gold! >> 28 May 2019

SWOT Analysis: Another Two Countries Want to Up Their Gold Intake
By: Frank Holmes, US Funds

Citi upgraded Newmont Goldcorp to a buy and said that it offers “superior value” versus its peers in a challenging market, reports Bloomberg. The bank also downgraded Barrick to neutral. Giant Barrick Gold Corp. is proposing it buys the shares of Acacia Mining Plc that it doesn’t already own at a discount. The proposal implies a valuation of $787 for the entirety of Acacia, which is well below current market capitalization of $832 million. Barrick’s last no premium offer for Newmont back in February was withdrawn after just 17 days, as investors thumbed their nose at the offer. Will a discounted offer win the day? Not likely. >> 23 May 2019

How to Unrig the Gold Market, According to GATA’s Chris Powell
By: Frank Holmes, US Funds

In an earlier post, I gave you a sneak preview of my interview with Chris Powell, secretary/treasurer at Gold Anti-Trust Action Committee (GATA). For 20 years now, Chris and others at GATA have made it their mission to expose collusion by international financial institutions to control the price and supply of gold.

Below are highlights from my interview with Chris. I have to say that during much of our conversation, my jaw was on the floor. I don’t want to say much more than that! Read on, and remember to share widely. >> 21 May 2019

SWOT Analysis: Gold Bulls Regained the Upper Hand
By: Frank Holmes, US Funds

Tavi Costa, a global macro analyst at Crescat Capital LLC – one of last year’s best performing hedge funds – expects China’s debt woes to spur a rally in gold, reports Bloomberg. 2019 is shaping up to be the biggest so far for defaults in its $13 trillion bond market. In a telephone interview, Costa says that “the one pattern we found is that gold in local currency terms tends to rise significantly as a credit bust develops.” Costa calls its bullish bet on gold the “trade of the century.” >> 14 May 2019

These 3 Charts Will Convince Investors That Time May Be Running Out
By: Frank Holmes, US Funds

So what does this mean? Besides being a strain on international relations—a tariff is essentially a tax that must be paid to the U.S. government before a shipment can clear customs. But here’s the kicker: Tariffs are typically paid not by the exporting company but by the importer. In other words, it’s U.S.-based companies that are picking up the tab—then passing the extra expense on to American consumers.

With the exception of the U.S. Treasury, which collects the tariff payments, few stand to benefit here... >> 13 May 2019

SWOT Analysis: China Bought Gold for Fifth Straight Month
By: Frank Holmes, US Funds

China has now bought gold for the fifth straight month. The People’ Bank of China grew gold reserves to 61.1 million ounces in April, marking the biggest boost since 2016. Ole Hansen, head of commodity strategy at Saxo Bank A/S, told Bloomberg that “banks buying is the underlying demand story which continues to develop from central banks seeking to de-dollarize their reserves.” Gold imports by India grew to 121 tons last month from 52.8 tons a year earlier, as prices fell and demand grew ahead of the second-biggest gold-buying day in the Hindu calendar. >> 6 May 2019

SWOT Analysis: A Photo Finish for Gold
By: Frank Holmes, US Funds

Russia’s central bank emerged as the biggest buyer of gold in April, purchasing 19.4 tons, according to data from the World Gold Council (WGC). China also bought 11.2 tons and Kazakhstan bought 5.4 tons. India is considering reducing the import tax on gold from the current 10 percent to 4 percent. Bloomberg reports that the proposal is being reviewed by the Central Board of Indirect Taxes and Customs.

Turkey’s central bank turned bullish on gold this week after selling last week. The nation’s central bank reserves rose $51 million from the prior week to now be worth $20.4 billion... >> 29 April 2019

SWOT Analysis: World Bank Sees Gold Prices Higher in 2019
By: Frank Holmes, US Funds

Investors who are striving to optimize their portfolios should consider taking cues from the world’s central banks, writes the Financial Express. “Informed money,” such as these banks, is the cash invested by those who have a better understanding of the market, or with access to information channels that a regular investor does not. Furthermore, Bloomberg writes that official sector gold purchases could reach 700 tons this year, “assuming the China trend continues apace and Russia at least matches its 2018 volumes.” India’s central bank is likely to join its counterparts, as the Reserve Bank of Index (RBI) may purchase 1.5 million ounces in 2019, according to Howie Lee, an economist at Oversea-Chinese Banking Corp. >> 22 April 2019

SWOT Analysis: Venezuela Liquidated $400 Million in Gold Last Week
By: Frank Holmes, US Funds

Gold demand has been supported lately by the idea that global output could begin to roll over on higher operating costs and the lack of large discoveries. However, it doesn’t look as if “peak gold” has arrived just yet. Output is expected to rise to 109.6 million ounces this year, an increase of 2.1 percent more than in 2018, according to S&P Global Market Intelligence. This will be “the strongest growth in the past three years, debunking commentary calling for peak gold,” analyst Christopher Galbraith told Bloomberg. Galbraith added that more than half of the increase “is projected to come from new mines that are expected to come on stream this year or have recently commissioned.” >> 15 April 2019

SWOT Analysis: Google Pay Is Launching Gold Buying in India
By: Frank Holmes, US Funds

· Oliver Allen of Capital Economics writes that the group expects the S&P 500 to drop by roughly one-fifth in 2019 and that gold will come to the fore again as a safe haven asset. The research firm forecasts gold to rally to $1,400 per ounce by the end of the year. AO Chong of CITIC Securities cites a number of risk events that should bring gradual haven demand up for gold. The analyst says the IMF cutting global economic growth outlooks, rising geopolitical uncertainty, the downward trend of real interest rates and the continued central bank gold buying should all be positive for the yellow metal. >> 12 April 2019

What Ballooning Corporate Debt Means for Investors
By: Frank Holmes, US Funds

I want to end by sharing some excellent news from Metals Focus. The London-based commodities research group just released the 2019 edition of its widely-read Gold Focus report, and the big news is that global gold demand will climb to its highest level in four years. The uptick is expected to be driven by an increase in jewelry fabrication, with India, China and Italy leading consumption higher. >> 9 April 2019

SWOT Analysis: Will Gold Rally to $1,500 This Year?
By: Frank Holmes, US Funds

Ronald-Peter Stoeferle, managing partner at Incrementum AG, says that gold is poised to rally to $1,450 to $1,500 per ounce by year end if it breaks through the $1,360 to $1,380 per ounce resistance level. Stoeferle says that one of the drivers will be demand from pension funds, high-net worth individuals and wealth managers. Bloomberg writes that Stoeferle also cities his fund’s own inflation indicator to support his bullish gold view, which is currently showing increasing momentum. Goldman Sachs is also bullish on the yellow metals as it expects a rebound in ETF holdings to continue due to late-cycle worries and negative German 10-year real rates. >> 1 April 2019

SWOT Analysis: Central Banks Are Buying Gold at a Record Clip
By: Frank Holmes, US Funds

Globally, central banks have purchased a whopping 126 tons of gold so far this quarter, the fastest rate since 1971, according to Morgan Stanley. Most of this purchasing has come from China, Russia and Turkey. Russia has been adding to its gold reserves rapidly in an effort to “de-dollarize” and break reliance on the U.S. dollar. Renaissance Capital says that gold buying in Russia has now exceeded its mine supply and the country could soon start to import the metal. >> 27 March 2019

Gold Mining Stocks Are Surging on Global Economic Fears
By: Frank Holmes, US Funds

But will yields turn negative? I can’t say for sure, of course. What I can say is that gold and gold mining stocks have historically been a good place to be positioned when economic fears pushed down bond yields.

This is why I always recommend a 10 percent weighting in gold, with 5 percent in physical gold and the other 5 percent in high-quality gold mining stocks and funds. I like to call this the 10 Percent Golden Rule, and in the past, it’s helped investors stanch some of the losses they’ve experienced during economic pullbacks and equity bear markets. >> 26 March 2019

7 Market-Moving Charts Investors Need to See
By: Frank Holmes, US Funds

1. Palladium in Overbought Territory

The price of palladium briefly topped $1,600 an ounce for the first time ever last week on a widening supply-demand imbalance. Markets sent the metal higher on news that Russia, the world’s number one producer of palladium, was set to ban the export of scrap metal, which would have the effect of squeezing global supply even further. This comes a week after car manufacturers signaled an increase in demand for palladium, which is used in the production of pollution-scrubbing catalytic converters.

As such, the palladium-to-gold ratio—or the measure of how many ounces of gold can be purchased with one ounce of palladium—is now at an historical high. >> 25 March 2019

SWOT Analysis: Hedge Funds Boosting Their Long Position on Platinum
By: Frank Holmes, US Funds

Citigroup is bullish on platinum because its sister metal, palladium, continues to surge. Although platinum’s volatility surged to a six-month high, the bank believes the investment case for the metal is strong. It thinks substitution will eventually occur, which would raise demand and tighten supply further. Analysts including Max Layton wrote in a March 19 report that “platinum currently appears to embed an in-the-money call option on palladium.” >> 18 March 2019

SWOT Analysis: Goldcorp Chairman Ian Telfer’s $12 Million Retirement
By: Frank Holmes, US Funds

The gold price increase could be stymied by positive data, according to Tapan Patel, senior analyst at India’s most valuable bank, HDFC Bank. Patel said “things look to be settling down” and that “we can expect the risk appetite to come down and see investors shifting to the dollar from gold.” The bank forecasts that gold will trade between $1,240 and $1,380 an ounce this year. >> 15 March 2019

Gold Miners Are Finally Making Some Interesting Capital Investments
By: Frank Holmes, US Funds

As was the case at the BMO Global Metals & Mining Conference a week earlier, one of the dominant thoughts on everyone’s minds was Barrick Gold’s $17.8 billion hostile takeover of its longtime rival Newmont Mining.

This Monday we learned that, after both parties spoke with top shareholders, the bid fell through. But rather than continuing to duke it out in the capital markets, the two mining giants will instead be entering into a joint venture (JV) in Nevada. The JV will combine significant deposits and mines, processing facilities and infrastructure to unlock significant synergies.

As a standalone company, the Nevada complex will be the world’s single-largest gold producing operations, according to equity research firm GMP Securities. >> 11 March 2019

SWOT Analysis: China Continues to Grow Its Gold Reserves
By: Frank Holmes, US Funds

China grew its gold reserves for the third straight month to 60.26 million ounces, up from 59.94 million ounces in January, according to data on the People’s Bank of China website. Robin Bhar, head of metals research at Societe Generale SA said: “Ongoing efforts to diversify total reserves – away from the U. S. dollar – have prompted gold purchases by the PBOC, which we believe will continue.” Physical gold demand also picked up in major Asian hubs this week, as bullion was sold at a premium for the first time in more than three months in India, the world’s second largest consumer, according to Reuters. >> 8 March 2019

Can the Bull Market Run for Another 10 Years?
By: Frank Holmes, US Funds

The current stock bull market, already the longest in U.S. history, turns 10 years old this month. It’s been a phenomenally profitable time to participate, especially if you’ve stuck to an investment strategy that favors dividend-paying stocks.

As you can see in the chart below, the amount of cash that S&P 500 Index companies have returned to shareholders has grown each year since 2009. In the final three months of 2018 alone, S&P companies paid out $119.8 billion, a quarterly record. Total dividends for the full year stood at $456.3 billion, up 9 percent from the previous year—another new record. >> 4 March 2019

SWOT Analysis: JPMorgan Is Bullish on Gold
By: Frank Holmes, US Funds

Turkey continues to sell its gold reserves. Central bank data from Ankara shows that reserves fell 4.5 tons month-over-month in January to 440.8 tons. At least eight tons of gold were removed from Venezuela’s central bank last week, according to unidentified government sources who did not say where the gold was going to. In 2018, 23 tons of Venezuelan gold was transported to Istanbul, and some speculate that is the same place this going is going to as well. >> 25 February 2019

SWOT Analysis: Will Hedge Funds Ramp Up Their Bullish Gold Bets?
By: Frank Holmes, US Funds

In a note to investors this week, Morgan Stanley’s Macro Strategy Group lifted its September recommendation to be long gold, despite expectations of a weaker U.S. dollar and lower real interest rates in 2019. The research group bases its decision on two factors. One, because the price of gold has risen “materially” in recent months, it’s left little upside to Morgan Stanley’s earlier forecast of $1,350 an ounce by year’s end. And two, the target of $1,350 is “a price level gold has struggled to break on a sustained basis for the better part of five years.” If the precious metal manages to break above the target price, the analysts write, “We may need to revisit our view.” >> 20 February 2019

Will 2019 Be the Year of King Copper?
By: Frank Holmes, US Funds

To meet surging demand, four U.S. copper projects are set to open by next year, the first to do so in decades, according to Reuters. And Ivanhoe Mines, founded by my friend Robert Friedland, is in the process of developing the Kamoa-Kakula copper deposit in the Democratic Republic of Congo, which Robert describes as the second-largest copper mine in the world.

“You’re going to need a telescope to see copper prices in 2021,” Robert told us when he visited our office last year. >> 19 February 2019

SWOT Analysis: Agnico Eagle Mines Is Forecasting Record Gold Output
By: Frank Holmes, US Funds

China, the number one consumer of gold, added to its gold reserves for the second month in a row after a two-year dry spell. The People’s Bank of China increased its holdings to 59.94 million ounces in January, up from 59.56 in December. Russia’s gold output in 2018 rose 2.5 percent year-over-year to 314.42 tons, while silver production grew 7.2 percent to 1,119.95 tons. Russia is also taking steps to make gold investing accessible to more people. According to Bloomberg, the government is considering opening the precious metals market participation by allowing retail investors to buy bullion for their individual investment accounts. >> 13 February 2019

Gold Love Trade Could Set New Valentine’s Spending Record
By: Frank Holmes, US Funds

But what kind of jewelry should you get your spouse or partner? You may have seen stories about how yellow gold jewelry—as opposed to white and rose gold, not to mention silver and platinum—began to fall out of favor in the 1990s, the attitude being that it was “tacky” or “old fashioned.” Personally, I don’t believe it’s ever fallen out of fashion, but we have been seeing its popularity gain additional ground lately. Look no further than Menē, the revolutionary 24-karat jewelry company that’s disrupting the industry.

Much of the renewed interest in yellow gold jewelry is thanks to Prince Harry, who presented Meghan Markle with a gold engagement ring in late 2017. Speaking to the BBC, the prince said that choosing yellow gold was a no-brainer. >> 12 February 2019

This AI Company Is the Future of Gold Exploration
By: Frank Holmes, US Funds

Over the centuries, a number of innovations have emerged that disrupted and forever changed how we explore and mine for gold and other metals. Think dynamite, or the steam engine.

Lately, however, innovation has slowed. Mining companies are in cost-cutting mode, and many producers have favored generating short-term cash flow, often to the detriment of longer-term value. In last year’s “Tracking the Trends” report, Deloitte analysts observed that “miners from 50 years ago would find little has changed if they entered today’s mines, a situation that certainly doesn’t hold true in other industries.” >> 11 February 2019

SWOT Analysis: Palladium Prices Have Surged Past Gold
By: Frank Holmes, US Funds

Central banks bought 651.1 tons of gold last year, the second highest annual total on record and up 74 percent from the year earlier, according to the World Gold Council. Goldman Sachs predicts that central banks will continue to be big purchasers of gold in 2019 due to elevated geopolitical tensions and less pressure on emerging market currencies. A model the company uses shows that central banks will purchase around 650 tons of the yellow metal this year – the same level as 2018. Many central banks could be purchasing gold on concerns that the U.S. is using the dollar to exert its dominance on the global financial system, writes the New York Times. Azerbaijan’s sovereign wealth fund is looking to nearly double its holdings of gold in 2019 to 100 tons, just after going five years without buying any prior to last year. Executive Director Shahmar Movsumov said in an interview that “we would not want to have something that is not someone else’s credit risk.” >> 7 February 2019

Will the China Bulls Turn Out for the Year of the Pig?
By: Frank Holmes, US Funds

China and the surrounding region has experienced many changes since USCOX opened in 1994, but we believe the region continues to hold further investment opportunities. Many Asian countries possess characteristics similar to the U.S. prior to the industrial revolution: a thriving, young workforce; migration from rural to urban areas; and shifting sentiment toward consumption. >> 5 February 2019

Central Banks Haven’t Bought This Much Gold Since Nixon Closed the Gold Window
By: Frank Holmes, US Funds

Something big is happening in the gold market right now, and nowhere is that more apparent than in central banks of emerging economies. Last year was a watershed in the size of official gold purchases, as banks added an incredible 651.5 tonnes (worth some $27.7 billion) to their holdings, according to the World Gold Council (WGC). Not only is this a remarkable 74 percent change from 2017, but it’s also the most on record going back to 1971, when President Richard Nixon brought a formal end to the gold standard. In the final quarter of 2018 alone, central banks purchased as much as 195 tonnes, the most for any quarter on record, according to leading precious metal research firm GFMS. >> 4 February 2019

SWOT Analysis: Fastest Rate of Central Bank Gold Buying Since 1971
By: Frank Holmes, US Funds

The Federal Open Market Committee (FOMC) released several decisions this week that could be positive for gold. As summarized by David Doyle at Macquarie Group, those changes are: being patient in market future adjustments and removing forward guidance on further rate hikes. The balance sheet normalization path is also flexible, and the Fed is willing to use the balance sheet if economic conditions warrant it. Brown Brother Harriman wrote that the Fed sent a clear signal to buy equities and sell the dollar, which is positive for gold. >> 1 February 2019

These Emerging Markets Could Soar If the Dollar Falls
By: Frank Holmes, US Funds

Last year was admittedly a tough one for emerging markets. A number of currencies were under considerable pressure, with some of them falling to record or near-record lows against the strong U.S. dollar. Global trade tensions, threats of sanctions, rising U.S. interest rates and higher oil prices—before they began to crater in October, that is—also contributed to the selloff. From its 52-week high set in January 2018, the MSCI Emerging Markets Index sunk into bear market territory by the end of October. >> 28 January 2019

SWOT Analysis: Gold Traders Bullish for 11th Straight Week
By: Frank Holmes, US Funds

UBS analysts Giovanni Staunovo and Wayne Gordon wrote in a report this week that gold’s reaction to the stock market volatility in late 2018 has confirmed its role as a safe-haven asset. They write that gold “served investors well as a diversifier… and helped reduce portfolio swings,” and that “these qualities should remain highly relevant for investors this year as the business cycle matures further.” According to SkyBridge Capital, gold could become even more attractive in 2020, as a possible U.S. recession could lead the Fed to loosen monetary policy. Troy Gayseki, senior portfolio manager, told Bloomberg that “it is plausible that the next great monetary easing starts in later 2020, which of course would be very supportive for precious metals.” >> 24 January 2019

Why This Billionaire Just Bought Gold for the First Time in His Life
By: Frank Holmes, US Funds

Billionaire Sam Zell just announced that he bought gold for the very first time in his life because, as he puts it, “it is a good hedge.” In a recent Bloomberg interview, the Equity International founder and creator of the real estate investment trust (REIT) admitted to seeing an opportunity in gold’s increasing supply shortage.

“For the first time in my life, I bought gold because it is a good hedge,” Zell, 77, told Bloomberg. “Supply is shrinking, and that is going to have a positive impact on the price.”

He added: “The amount of capital being put into gold mines is at most nonexistent. All of the money is being used to buy up rivals.” >> 14 January 2019

SWOT Analysis: 10 Straight Days of Gold ETF Inflows
By: Frank Holmes, US Funds

The best performing metal this week was palladium, up 1.71 percent, and now the most expensive precious metal. Gold, meanwhile, is set for its fourth weekly gain, marking its longest rally since October. Traders surveyed by Bloomberg are bullish on the yellow metal for a ninth straight week. In December, China added to its gold reserves for the first time since October 2016, according to the People’s Bank of China. Reserves now total 59.56 million ounces, or $76.331 billion. China – the world’s top producer of gold – adding to its reserves is a bullish sign for the precious metal. >> 8 January 2019

Is the Fed Done Hiking Rates? Watch the Price of Gold
By: Frank Holmes, US Funds

King Dollar was on top in 2018, one of the few major assets to close the year in the black on steady interest rate hikes and robust economic growth in the U.S. But greenback strength is a double-edged sword, as you know. Although good for U.S. consumers, it can hamper exporters, commodities, oil, gold and more.

So will rates continue to rise in 2019? If so, the dollar will follow suit, putting additional pressure on other assets. I think there are a number of signs that the rate hike we saw in December could be the last one this cycle. >> 7 January 2019

Gold SWOT Analysis: Momentum Is Building
By: Frank Holmes

Merrill Lynch research analyst Michael Jalonen writes that the outlook for gold in 2019 is very promising, with the potential to reach $1,400 per ounce by the end of the year. This could happen due to U.S. twin deficits and China easing monetary policy. Barrick Gold’s new CEO says that shakeups in the gold industry are just starting. >> 26 September 2018

Two Big Reasons Why I Believe China Looks Attractive Right Now
By: Frank Holmes, US Funds

Emerging markets continue to decouple from the U.S. market, making them look attractive as a value play—particularly distressed Chinese equities. Below I’ll share with you two big reasons why I think China is well-positioned to outperform over the long term.

So far this year, the MSCI Emerging Markets Index has given up about 10 percent, mostly on currency weakness and global trade fears. The S&P 500 Index, meanwhile, has advanced roughly 9 percent as a flood of passive index buying pushes valuations up and companies buy back their own stock at a record pace. >> 30 May 2018

Building a Better U.S. Economy
By: Frank Holmes, US Funds

I often say it’s not about which party is in power but rather the policies that matter. Whether the Republicans or the Democrats control Washington isn’t the point. There are ways for investors to make money in either case, and right now, government policy favors domestic small-cap stocks that have limited exposure to overseas markets. The trend is your friend, as they say, and with respect to small-caps, that certainly seems to be the case. >> 29 May 2018

SWOT Analysis: Brent Crude Prices Diverge From Gold And Copper
By: Frank Holmes, US Funds

The best performing metal this week was platinum, up 1.50 percent on expected Chinese demand for the metal, where demand for heavy-duty emission legislation will come into play by 2020. Bloomberg’s weekly survey showed that gold traders and analysts are divided on their outlook for bullion prices for next week. The yellow metal rose higher this week amid mounting geopolitical tensions and talks of tariffs on automobile imports. >> 27 December 2017

10 Charts that Show Why Gold Is Undervalued Right Now
By: Frank Holmes, US Funds

With the year quickly coming to a close, it might be time to start thinking about rebalancing the gold holdings in your portfolio. That includes bullion, jewelry, gold stocks and well-managed gold funds—all of which I recommend giving a collective 10 percent weighting. Because it’s been such a strong year for stocks—they’ve advanced more than 20 percent as of today—it’s likely that most investors will need to add to their gold exposure to meet that 10 percent weighting as we head into 2018. >> 7 August 2017

SWOT Analysis: What’s Next for the Yellow Metal?
By: Frank Holmes, US Funds

This is the second year in a row that policy changes in India may have strained gold sales, reports Bloomberg. Consumption is seen between 650 and 750 metric tons this year, compared to the annual average of around 850 tons in the previous half decade. The Indian government’s push to boost financial transparency cut consumption this year as they enacted a new consumer tax system, the article continues. >> 3 August 2017

Surprise! Gold Prices Have Beaten the Market So Far this Century
By: Frank Holmes, US Funds

Spot gold finished July up more than 2 percent, its best month since February, when it returned 3.7 percent. The yellow metal responded to a struggling U.S. dollar, which has lost more than 10 percent so far this year relative to other currencies and is currently at a 15-month low. The dollar could very well continue to slide on additional political uncertainty surrounding President Donald Trump and his administration. This would mean further upside for gold and gold stocks. >> 31 July 2017

SWOT Analysis: Popularity Rises for Initial Coin Offerings (ICOs)
By: Frank Holmes, US Funds

The best performing precious metal for the week was palladium, up 4.29 percent on hedge fund managers increasing their bullish positioning on the metal as expectations of increased usage in automotive catalyst to curb pollution. China’s purchase of bullion bars in the first half of the year rose 51 percent, reports Bloomberg, setting gold up for a sixth monthly gain in seven. China gold demand rose 545.23 tons, including gold bars to 158.40 tons. And as global gold prices retreat, China purchased more bullion from Hong Kong in June. >> 24 July 2017

SWOT Analysis: Silver In the Spotlight
By: Frank Holmes, US Funds

Scotia Mining Sales notes that as silver has gotten cheap again, particularly when looking at the widening gold-silver ratio, investors have been piling into silver ETFs (while dropping out of gold ETFs). Interestingly enough, there seems to be a bearish outlook in the futures market, where hedge funds are now holding the first net short silver position seen in two years, the group writes. The risk of higher U.S. interest rates should drive silver prices lower, is the reasoning behind this. However, if the Fed “blinks” and silver prices rebound, they will rebound quickly and violently, Scotia continues. >> 20 June 2017

Small-Cap Mining Stocks, Big-Time Opportunity
By: Frank Holmes, US Funds

Commodity prices have lately underperformed equities mostly on subdued oil demand growth, with the S&P GSCI commodity index falling about 4 percent over the last month. If we separate the index components, however, we see that precious metals have posted positive gains year-to-date along with industrial metals. >> 13 June 2017

Hope for the Best but Prepare for the Worst (with Gold and Munis)
By: Frank Holmes, US Funds

Daniel Marburger, CEO of European coin dealer CoinInvest, told Bloomberg that he had just finished working with a German customer whose bank account was charged negative interest rates. To prevent this from happening again, the customer converted his cash into gold and silver, which he sees as a more reliable store of value.

Negative rates are “definitely a driving factor and will lead to more sales and also more storage clients,” Marburger said. >> 12 June 2017

SWOT Analysis: Gold’s Strength Is Justified Says UBS
By: Frank Holmes, US Funds

Amid unease over a congressional hearing on possible links between Russia and the Trump campaign, holdings in SPDR Gold Shares (the world’s largest gold-backed ETF) climbed to the highest this year on the back of safe-haven demand, reports Bloomberg. In the two weeks through the end of May, hedge funds and other large speculators boosted their bullish bets on the precious metal by 37 percent, notes another Bloomberg article, the most since 2007 according to government data. >> 29 December 2016

Gold Technically Oversold, Ready for a Price Reversal
By: Frank Holmes, US Funds

In more ways than one, 2016 was a roller coaster year. One need only look at gold’s performance to confirm this. After rallying more than 30 percent in the first half, the precious metal stalled in the days before the U.S. election, then retreated on a weekly basis, under pressure from a strengthening dollar and tightening monetary policy.

As you can see in the oscillator below, gold is now down more than two standard deviations from its mean, or average, dollar amount. The reason I show you this is because, in the past, this was a good time to begin accumulating, as mean reversion soon followed. >> 28 December 2016

Holiday Edition: Here Are the Top 6 Frank Talk Posts of 2016
By: Frank Holmes, US Funds

This year has been one for the history books. Donald Trump was elected as the 45th president of the United States, gold had its best quarter in a generation, Warren Buffett decided he likes airlines again and voters in the United Kingdom elected to leave the European Union. Loyal readers of the Investor Alert newsletter and my CEO blog Frank Talk know that we covered it all, too.

As we head into the New Year, I want to share with you the six most popular Frank Talk posts of 2016. Before I do that, however, I think it’s important to note one recurring theme I write about that continues to help our investment team and shareholders better understand the movement in commodities and energy: the purchasing managers’ index (PMI). >> 27 December 2016

SWOT Analysis: This Could Result In a More Bullish Scenario for Gold
By: Frank Holmes, US Funds

In other gold-related news from Deutsche Bank, the group assesses the value of the gold “cost curve” when it comes to providing a fair value reference for the metal. Skeptical at first, the bank now recognizes that since 2000, the 90th percentile producer has been a good indicator of the minimum weekly gold price in a given year. “Under these assumptions, the gold price in 2017 would average $1,200 an ounce, with the minimum weekly price falling to $1,060 an ounce. >> 22 August 2016

SWOT Analysis: Gold Demand to See Boost from Indian Wedding Season
By: Frank Holmes, US Funds

Gold investment in the first half of the year broke previous levels, as seen in the chart below, with both coin and bar demand, as well as ETF product demand, soaring to record levels. Gold demand will get another boost in India as wedding season starts to heat up, particularly with the metal currently trading at a $40-$50 discount in the country, reports Bloomberg. Bullion traders noted persistent buying by jewelers at domestic markets to meet festive season demand. >> 18 July 2016

SWOT Analysis: Why Abenomics Cynics Are Buying Gold and Selling the Yen
By: Frank Holmes, US Funds

“Gold is the unprintable currency, unlike the yen,” said Itsuo Toshima, former regional manager for the World Gold Council in Tokyo. According to Bloomberg News, Abenomics skeptics are selling the yen to buy this unprintable currency – gold. Individual investors drove a 60 percent jump in sales of the precious metal in June from May at Tanaka Holdings, the operator of Japan’s largest bullion retailer. >> 27 June 2016

SWOT Analysis: Last Week’s Gold Moves Explained
By: Frank Holmes, US Funds

Despite the surge in gold prices on Friday following the U.K. vote, it was the worst performing precious metal for the week, although still up 1.43 percent. Gold backed ETFs have seen a surge in assets this year as investors have started to discount that political leaders at the central banks around the world have lost their mojo, as you can see in the chart... >> 20 June 2016

SWOT Analysis: Gold Has Room to Run
By: Frank Holmes, US Funds

The current ratio between gold and copper is showing a “recession-era fear level,” Bloomberg reports. Gold jumped to the most expensive relative to copper since 2009 this week. The price of copper (seen as an economic bellwether), has slumped over Brexit worries, while the low interest rate outlook has fueled demand for bullion – driving the ratio between the two farther apart. >> 13 June 2016

Gold SWOT Analysis: 13-June, 2016
By: Frank Holmes, US Funds

Philippines’ new president-elect Rodrigo Duerte has come out warning mining companies to “shape up,” reports Business Insider. Duerte stated that his incoming government might rewrite laws to limit environmental degradation as a result of mining, continues the article. “I have a big problem with mining companies,” he said. “They are destroying the soil of our country. >> 6 June 2016

SWOT Analysis: Gold Advances After Surprising Jobs Report
By: Frank Holmes, US Funds

“Gold may be embarking on a new bull run and has the scope to rise to $1,400 per ounce over the coming year,” Allocated Bullion Solutions (ABS) stated in a report on Wednesday. The group expects market weakness to persist in the short term, along with a reappraisal from the market on the path of U.S. monetary policy. >> 1 June 2016

Here Are the World’s Top 10 Gold Producing Mines
By: Frank Holmes, US Funds

Gold output across the globe hit an all-time high in 2015, climbing 1.8 percent to 3,211 tonnes. Much of this growth was led by Mexico, whose output increased double digits (18 percent) from 112 tonnes in 2014 to 133 tonnes last year. Indonesia grew 20 percent, Kazakhstan 29 percent.
This year, global production is expected to level out as project development budgets were slashed during the three-year gold bear market. But with gold prices rebounding, miners are in a good position to be much more profitable.
Read to explore and discover the world’s top 10 gold producing mines. >> 23 May 2016

SWOT Analysis: Following Fed Minutes, Where Will Gold Go Next?
By: Frank Holmes, US Funds

In BCA’s weekly report, the research group writes “Investors are making a huge mistake in thinking that central banks are out of bullets…helicopter money is coming.” They go on to explain that once deployed, this policy will be more successful than people imagine. >> 16 May 2016

SWOT Analysis: The Smart Money Is Flowing Into Gold
By: Frank Holmes, US Funds

The best performing precious metal for the week was gold, down just -1.15 percent on a slightly stronger dollar and better than expected U.S. retail sales. Money flows for gold are benefiting from what Bank of America is calling an “equity exodus.” The bank points out that while $7.4 billion in equity outflows have taken place over the past five weeks, $3.5 billion went into bonds and $1 billion into precious metals. In the first three months of 2016, investors snapped up gold at a record pace, and even commodities investor Dennis Gartman told CNBC that he is becoming more bullish on the yellow metal. >> 9 May 2016

SWOT Analysis: Will the Gold Rally Persist?
By: Frank Holmes, US Funds

As we know, China recently introduced a new yuan priced gold fix. Within a week of the new fix being introduced however, Russia and China announced a new gold trading platform, reports Sputnik News. In a recent interview with Austrian Economist Sandeep Jaitly, Double Down asks him to explain the purpose of the fix and what the gold moves by Russia and China could tell us about the current fiat money system. Sandeep noted that with the demise of the London Gold Fix, which used to be set in pounds sterling and moved to only the dollar fix after World War II, has opened the door for the Chinese to be the price setter of physical gold. >> 2 May 2016

SWOT Analysis: Gold and Gold Miners Are Rallying
By: Frank Holmes, US Funds

The Bank of Japan (BOJ) opted against boosting stimulus this week, in a decision that battered the U.S. dollar and gave gold a surprise lift, reports Bloomberg. The Japanese yen also reacted to the bank’s decision, surging the most since the 2010 stock-market meltdown. On Wednesday, the Federal Reserve left its benchmark rate unchanged too, helping to boost the yellow metal. >> 25 April 2016

SWOT Analysis: Central Bank Overreach Benefits Gold
By: Frank Holmes, US Funds

Bank of America thinks the breakout we are witnessing in silver is for real, stating in a technical report this week that the precious metal could begin a bull move higher. Deutsche Bank agrees and believes silver could rise to $20 in near-term momentum. Silver has outperformed gold in nine of the last 10 sessions, reports Bloomberg, with the gold/silver ratio falling to the lowest since October. >> 18 April 2016

Why One Analyst Believes Gold Could Hit $3,000
By: Frank Holmes, US Funds

Based on a regression analysis holding gold as the independent variable, a negative 0.5 percent real rate level would suggest a gold price of $1,380 an ounce and a negative 1.0 real rate level would suggest a gold price of $1,546 an ounce… The potential for inflation rates to move upwards and match U.S. Treasury yields, which continue to be held down in the short-term, could create a 1970s-esque phase in real rates.

SWOT Analysis: Will the Gold/Silver Ratio Narrow Further?
By: Frank Holmes, US Funds

The CME reported that it received notice from the Federal Reserve that it is authorized to open an account at the Fed which would “allow it to better safeguard cash deposited by its traders,” writes Dave Kranzler on But why is a Fed custodial account any better than one held by a big bank? Is the CME preparing for an eventual Comex default? The ratio of physical gold available for deliver is dwarfed by the size of paper contract claims on such gold. >> 11 April 2016

SWOT Analysis: Yellen’s Interest Rate Intentions Are Good for Gold
By: Frank Holmes, US Funds

Gold popped to a one-week high following Federal Reserve minutes that indicated policy makers would remain cautious on raising interest rates, reports Bloomberg. Gold speculators think the precious metal has more room to run too; while gold futures have dipped from a 13-month high, hedge funds are the most bullish in fourteen months as seen in the chart below. >> 5 April 2016

Gold Had Its Best Quarter in a Generation. So Where Are the Investors?
By: Frank Holmes, US Funds

The last time gold had a quarter this strong, Ronald Reagan was a year into his second term as president, the Soviet Union was taking its final gasp and the U.S. was still reeling from the Challenger explosion. In the first quarter, the yellow metal rose 16.5 percent, its best three-month performance since 1986, mostly on fears of negative interest rates and other global central bank policies. >> 4 April 2016

SWOT Analysis: Is the Bear Market in Gold Over?
By: Frank Holmes, US Funds

Gold is had its best quarterly rally in 30 years, reports Bloomberg, as demand for haven assets continue to surge. The precious metal got a boost following Janet Yellen’s remarks this week stating that the Federal Reserve will proceed “cautiously” with rate hikes this year. Gold investors have also poured money into gold ETFs at the fastest pace since 2009, with negative rates in Europe boosting its appeal as seen in the chart below. >> 30 March 2016

Is Economic Growth in Its Final Innings?
By: Frank Holmes, US Funds

The start of baseball season is still several days away, but a recent survey conducted by Bank of America Merrill Lynch found that 59 percent of U.S. fund managers believe the current stretch of economic growth is in its “final innings.” This is the highest reading since the financial crisis in 2008. >> 28 March 2016

SWOT Analysis: By 2020 Germany Wants Half Its Gold Reserves Back
By: Frank Holmes, US Funds

Germany announced this week that it wants half of its gold reserves back by the year 2020, reports Bloomberg. Bundesbank, the country’s central bank (which has gold in London and New York), has repatriated 1,400 metric tons, or 41.5 percent, of Germany’s gold reserves to Frankfurt. >> 21 March 2016

SWOT Analysis: Negative Interest Rates Boost Gold Demand Overseas
By: Frank Holmes, US Funds

Barclays thinks that the rally in commodities is overdone, and although economic data has improved, it is not enough to support current prices. With a fragile global economy still in place, the group believes that a turning point for commodities is still some way away. >> 14 March 2016

SWOT Analysis: Gold’s Latest Rally Could Have Durability
By: Frank Holmes, US Funds

As Lawrie Williams points out however, Goldman’s call to short gold again hasn’t been the investment bank’s best move; it comments in its latest research report that it is down 5 percent on the call – with a stop loss indicated at 7 percent. >> 2 March 2016

Gold Is Crushing It So Far this Year
By: Frank Holmes, US Funds

Ironically, though, one of the latest monetary tools—negative interest rates—has been a boon to gold prices. As rates have dropped below zero in Japan, Sweden, Switzerland and elsewhere, and with speculation they could be introduced here in the U.S., many investors have moved into, or increased their exposure to, gold. The metal has historically served as a dependable store of value. >> 29 February 2016

SWOT Analysis: Gold Experiences First “Golden Cross” In Two Years
By: Frank Holmes, US Funds

The best performing precious metal for the week was gold, by a significant margin. Gold experienced its first “golden cross” in two years, as the 50-day moving average moved above the 200-day. This week Georgette Boele from ABN Amro, who switched her gold outlook from bearish to bullish, noted that investors are now buying the metal on dips, rather than selling on rallies as they’ve done previously. >> 22 February 2016

SWOT Analysis: Gold Holds On as Investors Lose Faith in Central Banks
By: Frank Holmes, US Funds

Gold’s rally is holding steady as investors are losing faith in central banks’ ability to deal with economic challenges, reports Bloomberg. “If they’re not going to put up U.S. rates as fast as the market had been anticipating, then that’s going to send the U.S. dollar lower, “ David Lennox from Fat Prophets in Sydney said. “That will be beneficial to the gold price.” Inflows into bullion-backed ETPs this year have also topped outflows in all of 2015, as seen in the chart below. >> 16 February 2016

SWOT Analysis: Central Banks Continue Gobbling Up Gold
By: Frank Holmes, US Funds

The Economist calls gold’s surge past $1,200 an ounce this week a “hedge against ignorance,” pointing to question marks hanging over the global economy, some of which include China’s economy, falling oil prices and the fragility of global banks. Even as gold prices fell on Friday, the metal headed for its biggest weekly jump since 2011, reports Bloomberg. >> 11 February 2016

3 Reasons Why this Gold Rally Is the Real Deal
By: Frank Holmes, US Funds

In a recent report, HSBC suggests that we could be in the early stages of a new gold bull market, one that will “probably” usher the yellow metal back up to at least $1,500. This “forthcoming market,” says the bank, “has the potential eventually to exceed the speculative frenzy seen in 2011.” >> 2 February 2016

Recession on the Horizon? Look at the Big Picture
By: Frank Holmes, US Funds

Today the Bank of Japan (BoJ) rattled global markets on Friday by announcing its adoption of a negative interest rate policy intended to spur banks to lend and consumers to spend. The world’s third-largest economy, then, joins a handful of European countries who are experimenting with less-than-zero rates, among them Denmark, Austria, Switzerland and Sweden, which I’ve written about previously. >> 26 October 2015

SWOT Analysis: Investors Are Eyeing Gold Once Again
By: Frank Holmes, US Funds

Gold got a boost this week as China announced further interest rate cuts and the ECB re-emphasized its pledge to use all the monetary tools at its disposal to support global growth. Furthermore, Russia boosted its gold purchases by the largest amount in a year throughout the month of September, adding 34 tonnes. >> 25 November 2014

Solar Shines on Silver Demand
By: Frank Holmes, US Funds

Every solar panel contains between 15 and 20 grams of silver. At today’s prices, that’s about $20 per panel. When silver was hanging out in the mid-$30s range a couple of years ago, it was double that. >> 24 November 2014

Can You Handle the Stress of Losing 40 Percent in the Market?
By: Frank Holmes, US Funds

If the answer to that question is no, we have a solution for your investment woes. Not many investors can handle the stress that comes with losing nearly half of their retirement funds and being forced to wait seven years to break even—only to lose another 40 percent a couple of years later. >> 28 October 2014

As the Eurozone Stalls, China Cuts the Red Tape
By: Frank Holmes

Consider this: of the 1.35 billion Chinese citizens, about 618 million, nearly half, have access to the Internet. Of those, 302 million, nearly half again, shop online. These numbers will continue to grow, and with them, greater investment opportunity. Name one Western European company that, in recent years, has achieved the sort of success Alibaba, Tencent or Baidu has. Not in a Piketty economy. >> 4 February 2014

SWOT Analysis: Gold Futures Tumble as Physical Sales in China Rise Ahead of Chinese New Year
By: Frank Holmes, U.S. Global Investors

Comex gold stocks eligible for delivery are at all-time lows, continuing to fall rapidly. J.P. Morgan withdrew a massive 321,500 ounces from its vaults last week, the largest withdrawal of physical gold ever, according to Lawrence Williams of Mineweb. Comex’s last report shows that delivery-eligible inventories are currently sitting at a very modest 70,000 ounces, or 2.2 tonnes. At the rate of current outflows, there will be no physical gold left to back the paper contracts.