Interest rates and bond prices affect the economy like a seesaw

• MonetaryMetals: Vital interest rate
• SCMP: Asians are shopping for cheap gold
• FXStreet: Has the gold-silver ratio broken down?
• Kitco: Is gold appealing to investors seeking short-term gains?

MonetaryMetals: Vital interest rate

Monetary Metals CEO Keith Werner presented at the Austrian Economics Research Conference on monetary and non-monetary influences on consumer prices, the importance of interest rates, and the cyclical relationship between prices, interest rates, and borrowing. His talk began with a definition of non-monetary influences: such "unproductive elements" refer to regulatory actions that raise the cost of business (and products) without adding value. These actions include mandates for mandatory hand sanitizing stations and face masks, as well as requiring additional oversight work, such as determining the nutritional content of food. Non-monetary influences can raise product prices, and they are often mistaken for inflation because consumers do not see the reason for the price increase.
Next, Werner explains how monetary influences change prices and identifies two key factors that act like a seesaw: the price of bonds and the interest rate. When one of these rises, the other falls. This is also the mechanism by which central banks control interest rates and, through them, the overall price level of the economy. In naturally free markets, the interest rate is naturally constrained between time preference and the return on capital. However, when banks manipulate the interest rate, it can fall or rise beyond either limit—this creates a feedback loop that either lowers or raises prices uncontrollably. This has occurred, for example, between the years 1933 and 1971.
Keith encourages interested parties to read his article, where he elaborates on the topic further.
See full video in English / March 26, 2021, Michelle Agner

SCMP: Asians are shopping for cheap gold

The demand for Chinese and Indian jewelry is increasing as the price of gold falls to its lowest in nine months. The drop in price, eased concerns over interest rates, and the annual spring festival have prompted many to go jewelry shopping.
Precious metals analyst Suki Cooper states that "physical markets have become an increasingly important price setter" at a time when investment demand is low. The spot price of gold fell 0.9% last Monday to €1,473.23. Consumers, spooked by the August record price of €1,768.04, welcomed this news. Indian jewelers are eagerly anticipating the next quarter. Early estimates suggest that gold purchases are at their highest since February 2019.
In China, gold jewelry consumption is expected to rise by 28% during 2021. The premiums on kilo bars have increased since February in Singapore, Hong Kong, and Thailand. This is believed to be due to material difficulties faced by gold refiners.
Read full article in English / March 28, 2021, Bloomberg

FXStreet: Has the gold-silver ratio broken down?

The relationship between silver and gold has weakened during the first quarter of 2021. Investors are wondering whether this temporary deviation will become a more permanent one. Investment analyst Christina Parthenidou discusses the opportunities silver has in a post-pandemic world.
Both gold and silver reached record prices in August 2020, with gold rising to €1,771 and silver hitting an eight-year record price of €25.41. Since then, both metals have stabilized, but silver has not followed the decline of its yellow cousin. Instead, silver's volatility increased, reaching a new record of €25.58 at the beginning of 2021. Only time will tell if this deviation is just a quirk or a sign of a permanent change.
The value of silver has remained above the support area of €19.16 - €18.63, and its trend is technically positive. The metal has the potential to target the €25 level again, and a higher rise could even take it to €29.47. The fundamental conditions for silver are very promising: there is more of it than gold, and its industrial uses benefit from President Biden's stimulus package as well as China's industrial development. Although silver reserves and production have slightly decreased, the silver mining from copper, lead, and zinc mines keeps the supply side positive. At the same time, gold suffers from growing investor confidence in the U.S. economy and the central bank's promise to keep interest rates near zero.
Read full article in English / March 29, 2021, Christina Parthenidou

Kitco: Is gold appealing to investors seeking short-term gains?

KE Reportin Cory Fleck interviews Dollar Collapse's John Rabin about gold and the state of the economy. John does not find the current state of gold concerning: the yellow metal goes through cycles, and its demand is always higher in the latter part of the year than in the early part. He assures that the markets are currently in a dull phase, after which more interesting times will come.
However, there are many exciting things in the current state of the world: debt is increasing, and government budgets are massively in deficit while they are injecting huge amounts of new money into the economy. Currently, investors are interested in "story stocks," such as Bitcoin, Big Tech, and innovations like NFTs, which attract many investors with their seemingly limitless potential. There is so much money circulating in the economy that luck can easily strike. According to John, investors see themselves as rich geniuses, which makes them uninterested in safe-haven assets like gold. He explains that we are in the early stages of inflation, the effects of which are only on the scale of the Internet age.
The laws of the economy can be bent, but they cannot be broken. The current bubble will burst as soon as governments can no longer stretch the limits of the economy. The current situation can only last as long as the money taps remain open - and when they close, gold stock buyers will be in a much better position.
Listen to the full podcast interview / 30.3.2021, Cory Fleck'}