This is Jalonomi's weekly review of interesting precious metal news from various sources around the world. Our goal is to provide the reader with a concise and quick-to-read overview of the news on a weekly basis. We particularly focus on news related to investment gold.
This week in our review:
- GoldSilverWorlds: Pension funds are turning their attention to gold
- Sharps Pixley: Gold leaving the $1900 mark behind and moving upwards?
- Sprott Money: Regardless of the election winner, the rally in precious metals continues
- AlkHaleej Today: The UAE's central bank increased its gold reserves by 122%
Goldsilverworlds: US pension funds are turning their attention to gold
Public and private pension funds in the USA are in a double crisis, writes GoldSilverWorlds. According to the publication, the biggest crisis is that defined benefit plans are severely underfunded and pension systems are deeply in the red. The second crisis is that pension funds are unable to meet their promised return targets by holding traditional, safe fixed-income instruments like government bonds. The Fed, in turn, is punishing savers by keeping both short and long-term interest rates near zero.
How can pension funds then combat the mentioned crises? By owning gold, says GoldSilverWorld, but laments that only two funds do so. The publication reports that the Ohio police and firefighters' pension fund approved a 5% allocation to gold last week. The Texas teachers' pension fund is also known to be the first public pension program to own precious metals, according to the publication. Both pension funds aim for a $1 billion investment in gold to diversify their portfolios. Other funds are also encouraged to do the same, according to the publication. Precious metals make up only about 0.5% of all savings and investments in the U.S. Therefore, a large portion of retirees and workers are in a vulnerable position in the face of rising inflation or a systemic economic crisis – like “sitting ducks” – says GoldSilverWorld.
According to GoldSilverWorlds, a secured retirement requires physical support from precious metals, as retirement programs are unable to protect retirees even from inflation. Traditional investment models are, according to the publication, downright dangerous in the face of potential stagflation. In addition to gold, the publication recommends owning silver, which has promising prospects.
Read full article in English/ 2.9.2020, Stefan Gleason
Sharps Pixley: Is the $1900 gold price milestone being left behind?
The fluctuation of precious metal prices increases as the U.S. presidential election approaches in less than a month, writes Sharps Pixley. The publication speculates that the $1900 milestone has finally been left behind for gold. Noted commentator Bill Bonner warns, according to the publication, about the most important economic indicator that has been overlooked in discussions by both Republicans and Democrats: the rapid acceleration of debt and the simultaneous deterioration of debt repayment capacity. According to the author, the growing debt burden will lead to a depreciation of the U.S. dollar's value as a reserve currency and a loss of global confidence in the stability of the U.S. economy. This has implications for the economic advantage that has benefited the United States up to this day, writes Sharps Pixley.
Gold appears to have surpassed the $1900 price level, around which it has been fluctuating day after day, writes Lawrence Williams in the same article. The world's largest gold consumer, China, has once again started importing gold, although October has often proven to be a challenging month for precious metal prices, he notes. The early October Gold Week holiday period could turn out to be a turning point for the precious metals sector, according to Williams. He writes that a $2000 per ounce price is soon in sight, and even Goldman Sachs has set a target price of $2300 for gold and $30 for silver for next year.
Read article in English/ 10.10.2020, Lawrence Williams
Sprott Money: Regardless of the election winner, the rally in precious metals continues
The magazine writes compellingly about the upcoming United States presidential elections and their impacts both locally and globally. Regardless of which candidate wins, extreme money printing is likely to continue, according to the magazine.
The dollar index has weakened again, as the article states that market participants understand how much money needs to be printed before the crisis is over. At the same time, as the probability of Joe Biden's victory increases, the prices of physical gold and silver have surged higher. According to the magazine, forecasts should be approached with caution, referencing previous elections, but the author suggests that the markets apparently believe Biden will be an even "easier money president."
The newspaper advises to approach the whirlwind of elections and many economic uncertainties by preparing – and storing precious metals.
Read full article in English/ 9.10.2020, Nathan MacDonald
Alkhaleej Today: UAE central bank increased its gold reserves by 122%
The Central Bank of the United Arab Emirates (UAE) has increased its gold bullion holdings by over 122% in the first eight months of the year, writes AlKhaleej Today. Interviewed banking experts say that gold is a safe haven in times of crisis and economic uncertainty.
Gold is one of the many asset classes of the UAE Central Bank, which also includes liquid assets, certificates of deposit, and securities held to maturity. In 2015, the UAE Central Bank decided to start building gold reserves for the first time in eight years, the newspaper reports. According to it, gold is also an international trade currency, as the United States, China, and India own vast amounts of the precious metal.
Banking expert Ahmed Youssef says that central banks around the world are viewing gold as an investment and practically a risk-free store of value, especially in the current situation. Therefore, according to him, the demand for and preservation of gold is significant right now. Youssef states:
“The economic situation of the UAE can be characterized by stability, maintained by a good level of the central bank's own assets as well as foreign currencies and gold; this reduces risks and increases investor confidence.”
