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11/12/2020 – This Week in Gold

Price Movements

Gold fell early on Monday to near $1823 as European and Asian stocks suffered from rising Covid-19 cases resulting in a stronger dollar. However, gold rebounded quickly from these lows to return to $1840 at the finish on Monday. Gold moved above the 50-day moving average on Tuesday as the US reported their coronavirus cases had surged past 15 million on Tuesday, the highest in the world. Gold slid on Wednesday as the UK planned for a rollout of the Pfizer and BioNtech vaccine candidate. After a 0.5% increase on Tuesday, gold fell by 1.9% to finish at $1838.50. Despite Worse than expected jobless figures and a weaker dollar, the gold price pulled back a little on Thursday. Gold saw little movement early on Friday but found some late support to make it a weekly gain for the yellow metal. As of 17:00 Friday spot gold was up just over five dollars for the day at $1842.

Silver US Eagle Sales Top 30 Million for 2020

Silver sales increased by 475,000 ounces for the US Mint on Monday made up entirely of silver Eagles. This day’s trading of the silver bullion sent the total silver Eagle sales for the year bursting through 30 million ounces overall. This more than doubled the amount sold last year and is the second highest total of silver coins sold by the mint since the Eagles were first minted in 1986. Becoming closer to surpassing the record of sales held by the US refinery having sold 37,701,500 of the silver coins in 2016.

MetalWeek OpenWeek CloseWeekly ChangeYTD ChangeYTD LowYTD High
Gold$1,835$1,8430.44%24%$1,453$2,070
Silver $24.16$24.010.63%34.37%$11.74$29.37

Newmont to invest $500 million in greener initiatives

The world-renowned gold miner announces on Tuesday that it would be spending $500 million dollars over the next five years in order to reduce their emissions and become more environmentally friendly in all of it’s mining operations. The recent surge in the gold price buoyed by the global pandemic has been extremely beneficial for gold mining companies but it has also put issues over their carbon footprint in the spotlight. Newmont recently set out a commitment to reduce 30% of it’s carbon emissions by 2030 and to be reporting net zero emissions by 2050. This will involve studying solar and wind energy systems used by existing mining companies and looking to implement them by establishing new processes and materials and developing existing capital. Along with this investment, Newmont also plans to increase production by half a million ounces in 2021 at lower costs.

Steve Forbes – Gold Vs Bitcoin

The Forbes magazine editor in chief has given his two cents on the gold Vs. Bitcoin debate. The publishing executive has stated how he feels Bitcoins current volatility and supply cap are major factors that will “hinder it’s future usefulness.” He outlines how gold has been the original store of value for 4,000 years and that the recent fluctuations in value of Bitcoin are too big and that the crypto only works best when it has a stable value. In comparison to this Forbes indicates that when we see fluctuations in the dollar price of gold that what we are seeing is not movements in the value of gold but more so the value of the greenback that is changing. This and the fact that the gold supply is scarce but not limited is why Forbes is adamant that gold is currently best store of value and hedge against inflation between the two.

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Brexit Deal and Gold

On Thursday morning the UK and the EU appeared no closer to reaching an agreement for a trading relationship after the end of the transition period on 31st December. In recent months Brexit has received comparatively little attention as the media and investors focused on COVID-19 and the race to develop a vaccine for the pandemic. In recent days Brexit has come sharply back in to focus as time runs out to avoid a ‘No Deal’ scenario. After a meeting on Wednesday evening Boris Johnson and Ursula von der Leyen agreed to extend talks until Sunday, but both sides appeared pessimistic about reaching a compromise before then.

            Failure to reach a deal could cause significant disruption and therefore damage to both economies in the short and medium-term. Since the referendum in 2016, gold has enjoyed a number of sharp increases against GBP in the aftermath of negative news regarding the agreement of a deal. It is safe to assume UK-based investors will seek refuge in haven assets should a No Deal scenario materialise, which in combination with a weakening GBP could see gold rise as the 31 December deadline approaches.

            While GBP is expected to suffer more than the Euro if no agreement is reached, many analysts are closing monitoring the single currency’s performance. The impasse regarding a new stimulus package for the EU has finally been overcome, with Poland and Hungary agreeing to the deal. The agreed stimulus package, which includes a €750 billion  pandemic aid fund, contains a level of quantitative easing that has raised worries regarding inflation across the Eurozone. The combination of Brexit uncertainty in the short-term and excessive money creation in the long-term have led many analysts to see gold as an opportunity for hedging against GBP and EUR weakness.

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04/12/2020 – This Week in Gold

Price Movements

Gold opened the week at $1,791 and dropped roughly $13 on the day. From this low point gold performed strongly for the rest of the week. A sharp rebound of 1.5% from on Tuesday  was the result from a quickly weakening dollar, reaching a two and a half year low against some currencies.  Gold continued this momentum into Wednesday and posted further gains as the sell-off in USD continued. A fall in US jobless claims of 75,000 seemed to have little effect on the gold price on Thursday. The data was outweighed by increased hopes for more stimulus measures as the spot price climbed to an eight-day high of roughly $1,845. Gold finished the week high, putting an end to four weeks of declines. As the dollar index fell below 90.6 and a potential $908 billion stimulus package is looming gold may look to continue this rise into next week.

Silver Rallies 6%

Silver rallied hard on Tuesday increasing more than 6% to return to $24.00. This rally in the precious metal came as Global PMI reports were released indicating that a significant rise in inflation is imminent. The 10-year inflation breakeven rate in the US rose above 1.8%, the highest since May 2019. Higher supplier and manufacturing costs are being passed onto consumers in the market prices being paid. This, along with potential new stimulus in the US could drive inflation even further.

MetalWeek OpenWeek CloseWeekly ChangeYTD ChangeYTD LowYTD High
Gold$1,788$1,78332.5%24%$1,453$2,070
Silver $22.68$24.106.26%34.37%$11.74$29.37

The Bull Case for Platinum

Platinum has been hovering below the $1,000 mark for quite some time but earlier this week the precious metal managed to break through this psychological price mark for the first time since August. As the global push for cleaner energy sources increases, platinum’s use as an industrial metal is becoming more and more attractive to investors. Thus, the platinum price has risen over 14% this month as president Biden plans to spend $2 trillion on green energy during his regime. A weakening US dollar, a possible supply deficit next year and China continuing to stack their platinum reserves are all reasons why analysts at Blue Line Capital see platinum rising towards $1300 in the next couple of months. As an industrial metal, platinum typically rallies in an advanced market rally phase. Thus, an increase platinum prices is often a signal that a rally in gold will follow suit as gold benefits from a depreciation phase in the market.

Can Gold Regain its Uptrend from Critical Threshold?

Gold recently fell below its 200-day moving average, this can often signal the end of an uptrend for many stocks and other investments. However, historically whenever gold has fallen below this threshold in past trading it has found increased support and managed to regain its uptrend rather sharply. In 14 of said cases since 1978, the price of the yellow metal has increased substantially in the following six to twelve months. This rebound is already becoming evident this week as prices have risen from $1,781 on Monday to be trading above $1,840 per ounce on Friday. The facts remain that quantitative easing is playing a major role in keeping the global economy on track. This will result in the debasement of world currencies, which along with increased inflation will provide the bull case for gold to continue to rally in the next 12 months.

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27/11/2020 – Scottish Bullion Guide to Coins

Price Movements

Gold opened on Monday at $1,873, but dropped nearly $40 on the day as positive economic data from the US combined with reduced uncertainty surrounding the results of the US Presidential election. A falling dollar was outweighed mainly by positive reports surrounding US home prices and gold fell towards the $1,800 mark, but remained above it during the middle of the week.  Despite worse than expected jobless claims posted in the US on the eve of Thanksgiving, gold ticked lower again but yet again managed to stay above $1,800. Thanksgiving on Thursday meant that gold had a slightly quieter day, finishing up 0.13%. During Friday gold ticked lower, falling below $1,800 on the back of investors reducing holdings in gold-backed ETFs. Gold fell below $1,780, enduring a drop for the day of more than 1.5% before rebounding slightly before close.

Oxford and AstraZeneca Vaccine Reports 70% Efficacy

Monday was met with more positive news on the vaccine front, this time coming from Oxford University in their combined effort with their manufacturing partner AstraZeneca. Gold fell as Astra reported a 70% efficacy rate. Although this may look like it doesn’t compare with the recent data from Moderna and Pfizer, it still ranked significantly over the 50% efficacy mark outlined previously as a target by the FDA. The possibility of three vaccines increased market sentiment and caused investors to shift to riskier assets as gold fell 2.5% to a four-month low.

Bank of America Sets $29.13 Price Forecast for Silver for 2021

Strategists at Bank of America backed Silver to outperform Gold during 2021. This hypothesis is based on a large increase in industrial demand of the metal as the world economy recovers from the pandemic in 2021. This increased industrial demand will be buoyed mainly by a shift towards greener energy sources, in particular solar panels which require high amounts of silver for production. New stimulus measures and rising inflation could bolster this silver demand further in the year ahead.

MetalWeek OpenWeek CloseWeekly ChangeYTD ChangeYTD LowYTD High
Gold$1,873$1,7805%24%$1,453$2,070
Silver $24.37$22.617.78%34.37%$11.74$29.37

Copper Hits Record Highs on Vaccine Hopes

Copper has seen a huge increase in price in recent months as it surged to a seven-year high to reach $7,300 per ton, marking an increase of 58% since March. Similarly to silver, copper is predicted to benefit greatly from the Biden presidency when the Clean Energy Revolution plan is introduced. Copper is used in abundance in solar panels, Electric Vehicles and other hydro, thermal and wind energy sources. Copper has also benefitted in recent times from a weaker dollar and growing demand from investment funds.

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The American Buffalo – Scottish Bullion Guide to Coins

Background

The American Buffalo was first introduced in 2006, and was the first 24 carat 1 ounce investment grade gold coin to be produced by the US Mint. The Buffalo was introduced to challenge the Canadian Maple Leaf for its position as the dominant 24 carat gold coin for investors in North America and further afield. The one ounce coin has a nominal value of $50 and is considered legal tender in the US.

History

The Presidential $1 Coin Act of 2005 was a major catalyst in the development of the US Buffalo along with a number of other commemorative coins in the US. The act was put in place in an attempt to modernize and increase the development of American made coins with a particular focus on the aesthetic appeal of the coins. Under Title II of the Act, the US Mint began manufacturing the one ounce gold Buffalos with a face value of $50 and a minting limit of 300,000 coins per annum. The uncirculated and proof versions of the coin were introduced in June and July 2006 respectively. The success of the one ounce coin in its first two years prompted the US Mint to begin minting the coin in denominations for 1/2, 1/4 and 1/10 oz with face values of $25, $10 and $5 in 2008. This decision proved to be extremely fruitful for the mint as investors flocked to gold as a safe haven asset during the sub-prime mortgage crisis of 2007 to 2010. Demand for the bullion coin was so high during this period that in September 2008, the US Mint had to stop selling the coin as they could not meet the huge demand.

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20/11/2020 – This Week in Gold

Price Movements

Gold opened the week at $1,890 per ounce. Positive news from Moderna regarding the 95% efficacy rate of their vaccine saw gold drop sharply to $1,869, before rebounding back to $1,890. On Tuesday a weaker dollar had little effect on prices as they continued to move laterally and edge slightly lower. Pfizer’s announcement that the efficacy results of their vaccine was being upgraded from 90% to 95%. These results outweighed the rising coronavirus cases worldwide and gold fell 0.6% to record its first back to back daily loss in three weeks. On Thursday gold reached a low for the week of $1,857, before a stronger Friday saw gold finish the week at $1,872, down 1 % for the week.

Silver also dropped in the aftermath of the positive announcements regarding COVID-19 vaccines. After opening the week at $24.66, silver dropped 1% on Monday before rebounding sharply. Silver edged lower throughout the middle of the week before reaching a low for the week of $23.78 on Thursday. Silver recovered on Friday to finish the week at $24.29.

Goldman Sachs & Degussa Gold Forecasts

Goldman Sachs published a report reaffirming their 2021 price forecast for gold to reach $2,300 per ounce. Analysts at the bank have stated that gold should be in for an extended bull run in 2021 as the post-pandemic recession takes effect on the global economy. Increased stimulus measures, low interest rates and government spending were cited by the bank as possibly causes for causing long-term inflation. The Goldman analysts see the US inflation rising sharply, which in the past has caused investors to purchase gold as a hedge.

Degussa have gone one step further by setting their gold forecast for mid-2021 at $2500. This would imply roughly a 30% increase from current prices. The analysts have based their prediction mainly on continued low interest rates and an over reliance by central banks on stimulus measures.

Silver and the Green New Deal

Analysts have identified silver as a possible beneficiary of the Biden presidency. Biden has emphasized his support for the Green New Deal on many occasions. His stance on climate change and the environment points to a national shift towards greener energy sources. Silver’s use in the renewable energy industry, particularly the solar industry, has been identified as an opportunity for the metal to enjoy a bull run in the coming months.

MetalWeek OpenWeek CloseWeekly ChangeYTD ChangeYTD LowYTD High
Gold$1,890$1,871-1%23%$1,492$2,067
Silver $24.66$24.29-1.50%34.70%$12.01$28.88

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The American Eagle – Scottish Bullion Guide to Coins

Background

The American Eagle is a world-renowned gold bullion coin manufactured by the U.S. Mint in West Point, New York and Philadelphia. The Gold Bullion Act of 1985 enabled the U.S. mint to begin minting the American Eagle coin. The 1 ounce gold coin has a $50 face value, and is the most popular size, with smaller denominations also available. The coin was initially introduced as a 22-carat coin to challenge the huge market share held by the South African Krugerrand at the time. The Eagle quickly became popular among American investors, especially after economic sanctions against apartheid in South Africa (introduced in 1985) made the importation of Krugerrands illegal. The sanctions, combined with the economic recession of the 1980s created huge demand for the coin as an American safe haven asset.

History

The direct origins of the American Eagle coins we know today date as far back as 1972. The original coin was offered with a $10 value and was also minted as a quarter, half and double eagle coin with values of $2.50, $5 and $20. The coins became hugely popular during the 1930s as the U.S. suffered through the Great Depression and holding gold became popular as a safe haven asset. The Gold Bullion Act of 1985 introduced by Ronald Reagan, allowed for large scale minting and widespread distribution of the gold bullion coin from 1986 onwards. The 22-carat coin is now the most popularly sold bullion coin in the United States having sold 651,000 gold coins (and more than 27 million of the silver 1 ounce edition as of November 2020.

Design

The design on the obverse of the coin depicts a depicts a striking image of Lady Liberty. This was first designed by the Irish born Augustus Saint-Gaudens on the $20 gold coin produced from 1907 to 1933. Augustus took inspiration from the Greek and Roman coins of old to show Lady Liberty striding gracefully with an olive branch in one hand and a lit torch in her other, as a symbol of hope for future U.S. generations. The Capitol building can be seen in the background. After Reagan’s Gold Bullion Act was passed, although Augustus was deceased, his design was adapted and now features on the modern coin.

The coin gathers its name from the design on the reverse which features a male eagle designed by sculptor Miley Busiek. This side of the coin portrays a bald eagle flying towards a nest where a female eagle and their hatchlings are waiting. It features the words “e pluribus unum” (Out of many, one) and “In God We Trust” it also shows the weight and nominal value. Luckily Miley lived long enough to be present at the inaugural minting of the coin in 1986.

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13/11/2020

Price Movements

After enjoying the biggest weekly gain since July last week, gold dropped significantly on Monday. In what turned out to be the largest daily decrease in seven years, gold plunged 5% by the close of trading. This came as a result of Pfizer and BioNtech releasing data showing that their COVID-19 vaccine has been proven to be 90% effective in preventing the virus.

Fresh hope of new stimulus measures to be introduced in the near term in the U.S saw gold rise 1% on Tuesday, with investors also identifying the potential for a weaker dollar under a Biden presidency as being a key worry. There was little price movement on Thursday despite very positive U.S. jobless claims posted by the US labour market. As the vaccine hopes began to ease further and coronavirus cases continued to grow in the US, gold managed to rebound slightly from Monday’s woes and had broken through $1890 by close on Friday.

Silver did not emerge unscathed from Monday’s trading either, the vaccine news sent the silver futures tumbling by 7.6% to finish at $23.70. Similarly, to gold this was a fall from grace, as the silver price had also recorded its largest weekly gain since August last Friday (6/11/2020).  The rally in the global stock market took its toll on the midweek silver price as it went moderately lower to $24.18/oz. Similarly to gold, increasing coronavirus cases and potential stimulus buoyed the silver price on Friday, and it edged towards $24.60/oz.

Positive Vaccine News Causes 7 Year Daily Low on Monday

This Pfizer vaccine has been in the pipeline for months, and Monday’s announcement revealed some positive results regarding the efficacy of the vaccine. Tens of thousands of people were involved in the trial and the vaccine was able to prevent infection in the vast majority of them. These results were far better than most experts expected and were evidently detrimental for the gold price as it plummeted in the immediate aftermath of the announcement.

Gold Still Expected to Edge Towards Record High in Long Run

Despite suffering such a substantial loss as gold did during Monday’s trading, the precious metal is still expected to reach record highs again in the long run. Vaccine developments were always going to present a bearish case for precious metals in the short run. However, for investors looking towards the longer term, gold still presents a very bullish case for a number of reasons. The Biden regime is likely to keep interest rates low and introduce new stimulus measures to help bolster the U.S. economy. This, in turn will increase inflation and quantitative easing which will stand to devalue the dollar further. Gold could benefit greatly from this scenario as it’s appeal as both a hedge against inflation and the dollar will shine brighter, increasing demand and edging gold back towards the record highs of $2000/oz.

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The Austrian Philharmonic – Scottish Bullion Guide to Coins

Background

The Austrian Philharmonic is produced by the Austrian Mint as a celebration and a symbol of Austrian musical heritage. First offered in 1989, the coin was designed by Thomas Pesendorfer. The coin is the only bullion coin to have adopted the Euro system, and today bears a nominal value of €100. The Philharmonic is considered legal tender in Austria. The Philharmonic is popular around the world for its unique design features, and is particularly popular in Europe.

History

The coin was first introduced on 10th October 1989, the same year that the Austrian Mint became a publicly limited company. The Austrian Gold Philharmonic was initially produced in two denominations, 1/4 ounce and 1 ounce, and today is also available In 1/2 ounce and 1/10 ounce. To celebrate the coin’s 20th anniversary, a limited run of 20 ounce  (622 grams) Philharmonics were commissioned. The coin’s popularity quickly grew and was named the best-selling coin in the world by the World Gold Council on three occasions during the 1990s.

Design

Uniquely for the world’s major gold bullion coins (all of which have a smooth edge), the edge of the Philharmonic is “reeded”. The intricate design on the coin is inspired by one of Europe’s greatest cultural institutions, the Vienna Philharmonic Orchestra. On the obverse of the coin, Pesendorfer depicts an image of the ‘Great Organ’ of the orchestra which can be found in the centerpiece of Vienna’s Golden Hall. This side of the coin also features the words “REPUBLIK ӦSTERREICH” (“Republic of Austria”), the weight (1oz), the fineness of the 24-carat coin (999.9) and the year of issue. On the opposite side of the coin, there is a litany of predominantly string musical instruments used by musicians in the Orchestra. The reverse features, a Vienna horn, a bassoon, a harp, two violins, a cello, and two more violins, headed by the words WIENER PHILHARMONIKER” (“Vienna Philharmonic”).

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06/11/2020 – This Week in Gold

Price Movements

Gold gained support on Monday extending its recovery from the lows of last week by approaching the $1900 mark. This was mainly buoyed by an easing of gains for the USD as positive US and Chinese manufacturing figures boosted market sentiment. Gold broke through $1900 on Tuesday after a third consecutive day of gains, recording its highest price since October 21st. The price remained above $1900 on Wednesday but struggled to find a clear direction following a tighter than expected race for the US presidential election.

The gold price surged a substantial 2.3% higher on Thursday in dollar terms as yields consolidated and the USD saw a sharp decline on the inevitable stimulus package to follow the election. This momentum continued into Friday as gold pushed higher towards $1960 and a Biden victory begins to look more and more likely.

Researchers in Italy Develop Covid-19 Test based on Gold Nano-Particles

As a second wave of coronavirus cases spreads rapidly across the globe, Italian researchers have innovatively developed a new rapid testing system for COVID-19. A group of Italian physicists claim to have developed a test that combines the sensitivity and effectiveness of genetic material testing using PCR, with the low cost and speed of the more universally administrated antigen-based tests.

Physicists Raffaele Velotta and Bartolomeo Della Ventura

The test is a colorimetric test that uses gold nanoparticles that will gather around the virus and cause them to change color when in contact with SARS-CoV-2. In a recent study the test achieved more than 95% accuracy in detecting the virus, the test can be completed within minutes and can also show the severity of the infection in different people. The researchers hope to start administering their test in labs within a couple of weeks.

Gold hits Biggest Weekly Gain Since July

The anticipation of the outcome of the U.S. presidential election and the inevitable stimulus package that will follow the election is the main driving force behind a surge in the gold price this week. As coronavirus cases begin to tick higher across the U.S. the Federal Reserve have outlined how they will certainly require fiscal and monetary stimulus measures to be introduced in the near future. Gold gained support from the prospect of these stimulus measures and the yellow metal saw a 3.5% increase for the week, the largest consecutive increase in price seen since July 31st. As long as the Fed keeps interest rates near zero and the dollar continues to weaken, gold bullion could continue its rally.

Silver Price Movements

Silver saw a sharp increase in Thursday’s market also, buoyed mainly by a weaker dollar. The price broke through the psychological $25.00 point and remained above this mark into Friday’s session. The chaotic U.S. election and potential stimulus measures spurred a sharp sell-off in the dollar market sending silver higher.

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