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Gold Prices Fall By Most In 3 Months on Covid Vaccine News

hank
edited November 2020 in Other Investing
They got the gold price news about right. But haven’t told the whole story.

Main reason gold’s backsliding today - Dollar fell about 2% on international currency markets overnight..

Reason for Dollar’s strength - Yields on Treasury bonds are soaring. The commonly watched 10-year jumped about 10 basis points overnight as global stock markets rallied. Now at around 0.93% - the highest in many months.

Reason rates spiked - There are many. But the vaccine news suggests a notably higher inflation outlook as global economies emerge from pandemic. No doubt, some of the move in bonds is also attributable to the Biden victory and likely increased government spending.


Gold is nearing a $100 loss for the day, down from around $1950 Friday. Miners look to be down 8% for the day at the moment. But 10% by day’s end wouldn’t surprise me. Points to the risks of trying to play the precious metals markets.

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Comments

  • Sven
    edited November 2020
    Where is rono and others who invest in gold ?
  • hank
    edited November 2020
    Sven said:

    Where is rono and others who invest in gold ?

    End of day update - Miners lost a bit over 6% today. About what they gained 3 or 4 days ago. Re @rono. He posted on the OT board last week. Sounds well. I agree we could benefit from more of his wisdom regarding gold.

    Bottom line, from my point of view, however - It takes a strong stomach and a certain degree of conviction to mess around with the miners. 6% swings in one day aren’t to be taken lightly. 30-50% 1-year swings sometimes occur.

  • Sven
    No gut to invest in miners. I stay with what I know just gold, IAU. Took some profit when it peaked over $2,000/ounce. The low correlation to equity makes it a good hedge as First Eagle fund to use it for a long time. Also inflation is concerning.
  • MarkMark
    "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it.”

    - Warren Buffet
  • Sven
    In its latest Form 13F filing, Warren Buffet invested $597,856,475 in Barrick gold (miner stock). His investment is evolving as many of decision are made by his successors.
    https://forbes.com/sites/robertberger/2020/08/28/warren-buffetts-gold/?sh=24cebf506a63
  • hank
    edited November 2020
    Mark said:

    "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it.”

    I dig it @Mark. But have you ever beheld the beauty of a one-ounce Krugerrand close up? Had a couple in the 70s & 80s. Stashed ‘em in a can of “Cherry Blend” and the sweet smell hung with the coins. Still smell that damned pipe tobacco when I view an image of one.

    The 1-oz K-Rand weighs a bit over 1 Troy ounce, as a small amount of copper is added for hardening and giving the coin a distinctive tint. Do I regret selling them? Yes. I value aesthetics - be it in art, sculpture, architecture, coin mintage or precious stones & metals.

    image

    “Beauty is truth, truth beauty” / John Keats - Ode on a Grecian Urn


  • MarkMark
    @hank - I actually like the panda and the maple leaf but those are nice too.

    So anyway you know I sold the miners but I couldn't resist the abuse and bought GOLD on the Nov. 9th drop. Can't wait to get my tush handed to me. (p.s. Mr. Buffett is a big holder).
  • hank
    edited November 2020
    Thanks for taking a look @Mark. The photo is a “cheat” - as it’s a MS 70 “proof“ coin specially minted for collectors (to celebrate 50 years of K-Rands) in 2017. Same gold content and overall design - but minted using higher relief dies to give it some extra sharpness. Wouldn’t mind owning it.

    Actually, I took a few pennies off the “gold roulette table“ this morning on a slight bounce today. Generally been pulling risk out of all my spec positions this week & building cash. Already been a good year (at least for most all of us) - so why gamble when you don’t have to?

    Don’t care for the smell of things in Washington, plus the Covid has gone wild everywhere - and up here in northern Michigan the past week or two. Admittedly, those factors might possibly be good for gold in some perverse way - but not for equities.

    Good luck with your latest move.
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