Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Gold and silver markets continue to test support levels as investors await the next directional move in the U.S dollar index.
The dollar gave up ground during the week of the election, but it hasn’t quite yet broken down to a new low for the year. Perhaps currency traders are waiting for a new stimulus package to be rolled out by Congress or the Federal Reserve.
The recent surge in virus cases and the reimposition of economic restrictions in many states brings new urgency to stimulus talks in Washington. The potential of another economic downturn heading into the winter also calls into question the sustainability of the stock market rally.
Investors are currently optimistic about the vaccines developed by Pfizer and Moderna. However, even if they prove to be as effective as advertised, they will take months to reach most of the general public.
In the meantime, some speculators are deciding to dump gold. Exchange-traded funds that track gold prices have seen net outflows of over one million ounces in the past week.
That selling may be short sighted, according to Citibank analysts. They are forecasting a major down leg in the U.S. dollar next year as vaccine rollout and stimulus measures reignite inflation. Citi maintains a bullish outlook on gold.
The monetary metal currently comes in at $1,880 an ounce after declining 0.9% since last Friday’s close. Silver is off 1.7% this week trade at $24.42 per ounce.
Turning to the PGMs, platinum is showing some surprising pop – up 6.1% on the week to trade at $961. And finally, palladium is unchanged on the week to check in at $2,348 per ounce.
Earlier this week, Senate Democrats blocked President Donald Trump’s nomination of Judy Shelton to the Federal Reserve Board. They brought in prospective Vice President Kamala Harris to ensure Republicans would lack the necessary votes.
Republicans came up short because two GOP Senators were in quarantine and three others including Mitt Romney opposed Trump’s pick.
As we noted last week, the intense opposition to Shelton’s nomination was based in large part on her past support of a gold standard and other reforms that would constrain the central bank’s ability to stimulate and inflate.
Even if Senate Majority Leader Mitch McConnell can find another opportunity to get her confirmed in the days ahead, Shelton wouldn’t be able to single-handedly sway the central bank away from its interventionist agenda. Too many powerful interests in Washington and on Wall Street are hooked on Fed stimulus and artificially suppressed interest rates.
It does remain a relatively favorable time to be a borrower with certain types of loans that carry low rates and can be hedged with real assets backing them. Mortgage rates are near historic lows and the housing market is strengthening in many parts of the country where inventories are thin.
Of course, buying a home entails large closing costs along with the continual expenses of insurance, maintenance, property taxes, and homeowner’s association fees where applicable.
Buying and holding ounces of precious metals entails far less hassle and overhead compared to real estate acquisitions. Plus, bullion items can be sold immediately into a liquid market whenever the need arises. You don’t have to list them with an agent and wait for a willing buyer!
You may also be able to borrow against your bullion holdings to satisfy business or investment needs as they arise.
Money Metals Capital Group announced this week that a consortium of capital providers have dramatically stepped up their financial backing for loans to precious metals investors. Money Metals’ industry leading program provides low-interest loans to Americans wishing to borrow against their own gold and silver.
Individuals and businesses can now obtain easy access to cash liquidity without actually selling their precious metals. And they won’t have to pay exorbitant pawn-shop-type interest rates.
This type of lending is unavailable from traditional bankers who view gold and silver with skepticism.
Money Metals loan applicants can borrow up to 75% against the market value of their gold, silver, platinum, or palladium tendered as collateral.
Terms on Money Metals’ revolving lines of credit include interest-only payments, auto-renewal options, and lower interest rates than any other source.
Borrower collateral is stored in a physically segregated manner and fully insured at Money Metals Depository, a privately operated Class 3 vaulting facility in Eagle, Idaho, which secures precious metals holdings for trustees, IRA custodians, banks, individuals, and businesses.
The Money Metals loan program is free of hassles and complex or slow underwriting procedures.
Borrowers simply submit a two-page application, ship their collateral to Money Metals Depository for inspection and storage, and receive funds immediately upon execution of loan documents.
Loan proceeds must be used for business or investment purposes and cannot be immediately used to purchase additional precious metals. The minimum loan size is $25,000, and the program is available in most states.
For more information or to apply for a loan, call 1-800-800-1865, or visit moneymetals.com/gold-loan.
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 great weekend everybody.
About the Author:
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.
