Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Well, after appearing to be set for a big breakout, the gold market has settled back into a trading range -- at least for now.
Gold had posted a new all-time closing high on a monthly as well as a weekly basis last week.
With such powerful technical strength, a follow-through rally early in this week's trading seemed inevitable. And indeed, prices did spike to over $2,100 per ounce in futures trading before Monday’s U.S. market open.
The monetary metal was about to grab headlines by opening at never-before-seen prices.
But clearly some big institutional traders didn't want that to happen. They flooded the market with sell orders. Gold futures experienced a sudden $100 change of fortune.
Some dare not call it manipulation. But whatever you call it, the price takedown at exactly the moment of a historic breakout is not a coincidence.
We've seen this movie before. Gold advances strongly in overseas markets, often overtaking key technical levels. Then it gets hammered down just in time for the opening bell on Wall Street.
Be that as it may, gold and silver markets remain on sound fundamental and technical footing. Price suppression efforts may succeed on any given trading day, but they won’t succeed at stopping the long-term trend of higher metals prices.
As of this Friday recording, gold is down a bit more on the heels of a better-than-expected jobs number posted this morning. The non-farm payroll data beat estimates by about 5%, strengthening the dollar and hurting the yellow metal. The gold market is now posting a weekly decline of 3.6% to trade at $2,008 per ounce.
Meanwhile, silver has gotten slammed especially hard this week, with another leg down here today. Spot prices are off a whopping 9.5% or nearly $2.50 since last Friday’s close to come in at $23.25 an ounce.
Turning to the platinum group metals, platinum prices are off 2.2% this week to trade at $928. And finally palladium is giving up another 5.9% to settle under $1,000 an ounce at $980 as of this Friday recording.
Putting aside the wild trading action in recent days, goldbugs are likely encouraged that both gold and silver may finally break out of the range in which they have traded in since 2020.
It's less clear, though, that the recent rally in silver has enough steam to propel it over $26 and toward $30. The metal will need to close above $29.14/oz to best the high-water mark set in 2020.
Even as gold hits new highs, an all-time high in silver won't be set until the white metal closes above $50/oz.
Retail demand in the physical bullion markets remains subdued. However, if gold decisively rallies above $2,100 – grabbing world headlines – we expect more buying activity to kick in.
Alternatively, some folks who have been waiting to reduce their gold holdings are seeing this as their chance. And, speaking of that, we’ve seen a lot more customers sell their gold and silver back to us in recent days than we’ve seen in a long time.
In other news, Money Metals Exchange and the Sound Money Defense League are pleased to announce the 2023 Sound Money Scholarship winners.
With the world facing high levels of inflation and financial instability, more students than ever applied this year for the Sound Money Scholarship, the only known gold-backed scholarship program worldwide.
The scholarship is funded by 100 ounces of physical gold with the stipulation that it be used to reward exemplary students who display a thorough understanding of economics, monetary policy, and sound money.
All told, more than $13,000 was awarded among nine high school, undergraduate, and graduate students who earned a scholarship check for their outstanding applications.
This year, student essays addressed topics such as the problems of the Federal Reserve System, how a monetary system based on sound money could be restored, Central Bank Digital Currencies, and how a growing BRICS trade alliance might impact the United States.
Young people today overwhelmingly sense that the political and economic systems are failing them. They are understandably pessimistic about their chances of being able to enjoy the same or better standard of living as their parents.
They will bear the burden of tens of trillions of dollars in national debt that they did not ask for or get an opportunity to vote on. And by the time they retire, Social Security and Medicare may have gone bust. They certainly won’t be able to pay out all the benefits promised to future beneficiaries, not in real terms anyway.
At the root of these problems is the fiat monetary system. It enables and encourages excess borrowing. It steals away the purchasing power of wages and savings.
Most high school and college students aren’t taught the lessons of sound money in their economics classes. But they are, or will soon be, learning some hard lessons in the real world.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.
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