DÉJÀ VU FOR GOLD ALL OVER AGAIN
The week started off with gold and silver taking a big drop. Gold hit a 5 ½ month low and silver a 9-week low.
The whole dip in price really made little sense. The stock market soared and the dollar dipped.
No new political hotspots, a Covid vaccine on the way and an expected transfer of power in Washington seemed to make the traditional markets feel good and less risky which caused a sell off in gold and silver.
But what might 2021 really hold in store for us?
Very likely we may have another Covid surge before the vaccine can be of much help. No doubt that will bring even more lockdowns and economic disaster.
A dip in GDP is very likely in the first quarter; very bad for the dollar especially if we look at other factors.
Joe Biden’s choice of Janet Yellin for Treasury secretary has calmed the markets temporarily.
BUT take Yellin, who is in favor of more stimulus, add Chairman Powell, another stimulus proponent and finally add the ongoing fight for more relief from the Covid situation and you have the potential of massive printing of money.
Right now the markets have discounted the additional spending but Yellin, along with legislators, are likely to get it.
That would be terrible for the dollar and very good for gold and silver. PLUS, the dollar is at a two and a half year low which points to higher gold.
It seems like Biden plans to bring back the old guard, which are known commodities, instead of surrounding himself with the most progressive choices-yet.
Despite this, nothing has really changed for gold and silver. Soaring debt is not going away. It going to accelerate. Government is far from being done with supporting the fragile economy. Things will not be back to normal with tens of millions out of work.
Further, as Biden moves toward green energy we will likely see more inflation in the energy sector.
The green energy move will be good for silver as well as platinum. These metals are essential for solar and hydrogen technology (More on this in the next email).
We may have just experienced the calm before the storm
Though prices have rebounded nicely today, we are still well below this year's highs.
Call now and lock in current low prices. I can also offer presale 2021 coins for those interested.
- Nick Grovich
