Gold
Gold took a breather last week while watching the stock market try to decipher the mixed signals being sent by economic reports. Opening the week at $2,334.04 and closing at $2,326.37 per troy ounce, there was little movement up or down all week. Without a huge rally on Friday, the Dow Jones Industrial Average was headed for a $1,000.00 loss. A nearly $600.00 rally in the last hour of trading saved the week. First Quarter news has many trying to pick up the wind direction. The Gross Domestic Product figure showed a dismal 1.6% growth for Q1 which would be good news for future interest rate cuts but shows weakness very close to negative GDP which of course is a significant statistic for identifying a recession. Existing home sales were lower than predicted for the same period, which sends the same signals. News was also reported that China dumped $54Billion in U.S. Treasury Bonds over the same tie period. A worrisome revelation in a bond market that is having a problem finding buyers of late. Gold clearly has put a floor in for the moment at $2,300.00 thumbing its nose at naysayers.
Silver
At first glance it might look like Silver just followed Gold in taking a week off, but that was not the case at all. The gain of only six cents does not tell the story. Opening the week at $30.35, the shiny metal once again took on the next level of resistance, $32.00, for a couple of days before yielding to the pressure and settling back nearly to its open at $30.41. It is only a matter of time until Silver takes out the next level of resistance and chooses another milestone. Silver Bugs are thrilled to see their favorite metal perform on its own without help from Gold.
Platinum And Palladium
The Platinum Family failed to make headlines yet another week. Palladium fell back to the absolute lowest it can possibly go, its production cost, Platinum posted a modest $8.90 gain. Tune in again next week for a different description of a similar performance.
Conclusions
Generation-Xer’s, Millennials, and even Baby Boomers have never experienced real pain in an economy. The Boomers enjoyed the construction of the wealthiest middle class in history. There were some bumps, but no wrecks. Even the inflation of the 70’s when the Fiat Currency experiment began times were tolerable because salary increases were quick to catch up to exploding price increases. Certificates of Deposit paid 19% back then. Mortgage Interest Rates were in the low double digits, but we printed money so fast it didn’t matter. The two-income family reared its ugly head and cars got bigger, houses got bigger, and borrowing money got easier. The millennials had it even better. A crazy good stock market allowed the middle class to act like lower uppers. Generation-Xr’s bought a snake oil pitch about an imaginary currency and derivatives of such that can not be touched or held or even seen. Only owned. And owned they have. Millions and Millions of digits on a screen. Except for the older Boomers who saw two stock market crashes right after the turn of the century, no one in America has experienced real pain economically. It is not going to be fun for them when this house of cards tumbles down. It is not going to be fun for us to watch. By us, I am talking about those that have tangible assets in their portfolio. Dirt, Real Estate, and Pressure Metals. No Empire has ever been able to outmaneuver mathematics. Eventually mathematics will expose and call out irresponsibility. The United States of America is on an unsustainable economic path, and mathematics will cause the dollar to crumble into history. There is never a bad time to buy Gold and Silver. But some times are better than others.
Sincerely,
Doug Pulle, President GMR Gold Companies