March ructions deter bullion banks from gold futures

March ructions deter bullion banks from gold futures

photo of three poured gold bullion bars“Big bullion banks including HSBC have pulled back from trading gold futures after disruption in the market that flared up in the coronavirus crisis.”

USAGOLD note: An interesting look at what happened back in March when COVID-19 disrupted the flow of bullion in the gold market and affected settlement on the COMEX. Some bullion banks were caught short forcing them to take a major mark to market loss when premiums bolted higher. Delivery first notice day, by the way, was yesterday (5/28/2020), so we will see in time whether or not a similar event to March is in progress on the June contract.


Henry Sanderson/5-27-2020

The precious metals continue to climb to higher pricing

The precious metals continue to climb to higher pricing

As the last trading day of the month comes to a conclusion, precious metals futures traded moderately to strongly higher on the day. Today’s gains were felt across the metals.

However, none of the other metals could keep up with the precious ore and today could be summed up by the lone ranger himself “Hi-Ho silver away!”. SI futures were running like a horse in the Kentucky derby and in addition to earlier gains this month, silver galloped over 20% higher for the month.

The gains in silver were superb with the precious white metal gaining 2.88%. The July futures contract closed at $18 48 ½ cents, after factoring in today’s gains of almost $0.52. Technical studies indicate that resistance first starts at $18.65 per ounce, with major resistance at $19.

Gold also had a very strong finish closing higher on the day, as well as higher on the month. Gold futures basis the most active August 2020 contract gained $14.70 (+0.85%) and is currently fixed at $1743 per ounce. Our technical studies indicate that the first level of resistance occurs at $1765, with major resistance at $1788 per ounce.

Palladium futures gained 1.73%, a total of $32.90 with August futures closing at $1934.50. Platinum gained $5 in trading today, with the most current July futures currently fixed at $873.10 per ounce.

Strength in the precious metals this month can be attributed to two factors. The first of which is the global pandemic which has resulted in economies worldwide contracting. This global contraction of GDP has resulted in central banks worldwide taking emergency measures to aggressively curtail the economic damage.

The Federal Reserve along with the U.S. Treasury Department have taken dramatic steps infusing approximately $6 trillion in aid relief packages to individuals, small businesses and corporations. The massive government stimulus was a major underlying reason that both global equities and precious metals moved higher this month.

The second factor contributing to this month’s dramatic rise in the precious metals is due to the increased tensions between the United States and China. This tension stems from the recent unrest in Hong Kong, and the response by the United States.

Yesterday U.S. Secretary of State, Mike Pompeo declared Hong Kong to be no longer autonomous from China. That was followed by today’s press conference President Trump held in the White House Rose Garden. During this conference President Trump announced that the United States is leaving the World Health

Organization, and will begin to revoke Hong Kong’s special status. He also said that the United States would move to sanction Chinese officials if they continue to smother Hong Kong.

The economic fallout will take years before economies globally return to their pre-pandemic levels. It is also highly likely that the tension between the United States and China will continue. As such these two factors could have a profound impact on precious metals pricing taking the entire complex higher.


By Gary Wagner

The bubble is building how did famed gold investors make their fortune?

The bubble is building; how did famed gold investors make their fortune?

Famed investor Stanley Druckenmiller has recently said that the current return to risk ratio in broad equities is the worst that he has ever seen in his career, and that is the sentiment shared by Bob Thompson, portfolio manager at Raymond James.

Thompson told Kitco News that this market is “entirely liquidity driven.”

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“This market rally has been totally fed by the Fed over time. The bubble is building. We have corporate debt. Here in Canada, we have massive consumer debt,” he said. “This is how it happens. People are going to blame the coronavirus for this, but the coronavirus is just the pin that popped the bubble. The bubble was already there.”

Thompson’s comments come as China passed legislation to enact special security laws in Hong Kong that could strip away the city’s autonomy and freedoms, analysts say.

“People have to realize that China is a communist country. They use capitalism to their advantage…so sooner or later they were probably going to do this to Hong Kong. I think they chose this opportunity because things are in a bit of turmoil right now anyway. So obviously it’s going to be a big issue with trade going forward and the coronavirus is going to be played as a political issue so we can blame somebody,” he said.

However, with the Federal Reserve continuing to pump liquidity into the monetary system, investors are likely to shrug off any escalating tensions between the U.S. and China for now.

In terms of investing strategies that have worked, Thompson’s book “Stock Market Superstars” details the way some of the best fund managers have picked stocks, one of whom is Eric Sprott, former chairman of Sprott Inc.

“There were a few things that I learned, one of them I learned from Eric [Sprott] is conviction. You have to have conviction, you can’t pay attention to what other people are saying. You have to do your own research,” he said. “There’s a saying, ‘stock market corrections are when stocks are returning to their rightful owners’ and I think that’s a great strategy, because if you have conviction you’re going to stick with it.”


By Kitco News

Rocks beat stocks’ gold is still on its way to 1900 Bloomberg Intelligence

‘Rocks beat stocks’ gold is still on its way to $1,900 – Bloomberg Intelligence


The gold market has seen consistent selling pressure since hitting a 7.5 year high last week, but one analyst said that investors need to keep their eye on the bigger-long term picture.

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that gold is just starting its bull rally and investors shouldn't get caught up in the short-term price action, "missing the forest for the trees."

McGlone described the latest price action in gold as "noise within the trend."

"The next really big step for gold is getting above $1,900; it's just a question of time," he said, "I don't see what it is going to take not to go higher and I can think of a dozen reasons for it to go higher."

With the Federal Reserve expected to maintain its extremely loose monetary policy and the global economy nowhere near the road to recovery after being disseminated by the COVID-19 pandemic, gold will remain in a long-term uptrend.

As to what will be the catalyst to drive gold prices to its next stage in its bull run, McGlone said he is looking at over-valued equity markets. McGlone's comments come as the S&P 500 pushed to its highest level since early March, closing Wednesday's session at 3036 points.

"The equity market, I view as delusional at these levels," he said. "I don't think equity prices are sustainable at these levels and that is the biggest debate on the planet, I think right now. The rock is beating stocks."

With more than 30 million people applying for employment in the U.S. even as lockdown measures around the country start to ease, McGlone said that a recovery won't mean business as usual.

"I don't think we're going to come back to the old days of spend what you can right away. We're going back to saving and preparing for the worst, which means more demand for things like gold and bonds," he said. "And there's no more yield in bonds."

As to the timing of his call for gold prices at $1,900, McGlone said that if equity markets see another sharp correction in the fall, then gold prices could be at his target by the end of the year or early 2021.


By Kitco News

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How the immune system works

How the immune system works

Our immune system is essential for our survival. Without an immune system, our bodies would be open to attack from bacteria, viruses, parasites, and more. It is our immune system that keeps us healthy as we drift through a sea of pathogens.

This vast network of cells and tissues is constantly on the lookout for invaders, and once an enemy is spotted, a complex attack is mounted.

The immune system is spread throughout the body and involves many types of cells, organs, proteins, and tissues. Crucially, it can distinguish our tissue from foreign tissue — self from non-self. Dead and faulty cells are also recognized and cleared away by the immune system.

If the immune system encounters a pathogen, for instance, a bacterium, virus, or parasite, it mounts a so-called immune response. Later, we will explain how this works, but first, we will introduce some of the main characters in the immune system.


White blood cells

A white blood cell (yellow), attacking anthrax bacteria (orange). The white line at the bottom is 5 micrometers long.

Image credit: Volker Brinkmann

White blood cells are also called leukocytes. They circulate in the body in blood vessels and the lymphatic vessels that parallel the veins and arteries.

White blood cells are on constant patrol and looking for pathogens. When they find a target, they begin to multiply and send signals out to other cell types to do the same.

Our white blood cells are stored in different places in the body, which are referred to as lymphoid organs. These include the following:

Thymus — a gland between the lungs and just below the neck.

Spleen — an organ that filters the blood. It sits in the upper left of the abdomen.

Bone marrow — found in the center of the bones, it also produces red blood cells.

Lymph nodes —small glands positioned throughout the body, linked by lymphatic vessels.

There are two main types of leukocyte:

1. Phagocytes

These cells surround and absorb pathogens and break them down, effectively eating them. There are several types, including:

Neutrophils — these are the most common type of phagocyte and tend to attack bacteria.

Monocytes — these are the largest type and have several roles.

Macrophages — these patrol for pathogens and also remove dead and dying cells.

Mast cells — they have many jobs, including helping to heal wounds and defend against pathogens.

2. Lymphocytes

Lymphocytes help the body to remember previous invaders and recognize them if they come back to attack again.

Lymphocytes begin their life in bone marrow. Some stay in the marrow and develop into B lymphocytes (B cells), others head to the thymus and become T lymphocytes (T cells). These two cell types have different roles:

B lymphocytes — they produce antibodies and help alert the T lymphocytes.

T lymphocytes — they destroy compromised cells in the body and help alert other leukocytes.



Gold futures selloff strongly as it closes below spot gold

Gold futures selloff strongly as it closes below spot gold

Gold futures basis the June 2020 Comex contract closed down $30.50 (-1.76%), and is currently fixed at $1705.10. The June contract traded to a low of $1700 before recovering slightly. At the same time spot gold is currently trading down $17.30 and fixed at $1710.30.

Today’s lower pricing has created an inversion between gold futures (the June contract) and spot pricing, with spot above the futures contract prices. This selloff occurred with strong tailwinds provided by dollar weakness. According to KGX (Kitco Gold Index) spot gold actually sold off by $32.85. However, after factoring in a gain of $15.55 directly attributable to dollar weakness selling in gold as well as all the other precious metals was limited due to a weak dollar.

All of the precious metals traded lower on the day. A large component of today’s lack of safe haven allure was the strength of U.S. equities which traded strongly higher. According to MarketWatch, “Gold futures ended lower on Tuesday as global equities rallied, in response to the lifting of business lockdowns as the coronavirus pandemic recedes, along with encouraging reports of progress toward a COVID-19 vaccine, dulling the yellow metal’s haven appeal.”

The S&P 500 traded to a high of 3021 before closing just below 3000 at 2991.77, resulting in a net gain of 1.23% today. The Dow Jones industrial average gained over 500 points (+529.95) closing just shy of 25,000 points and gaining 2.17% today. This is the highest-level U.S. equities have traded to since the pandemic began reached America in mid-March. This caused investors to re-focus on positive signs and optimism as restrictions were eased in the United States.

Based on our technical studies, gold futures broke below critical levels. First the 23.6% Fibonacci retracement level at $1709.40. More importantly breaking below the support trendline based upon the previous lows since the middle of April to current pricing.

Although it is noteworthy that gold futures held above the key psychological level of $1700, and in fact that was the intraday low. However, if this level does not hold the next support level does not occur until $1660 per ounce, the 38.2% Fibonacci retracement level. The Fibonacci levels cited above are based upon data set which begins mid-March when gold traded at $1450 per ounce, up to this year’s high at $1788.

By Gary Wagner

What Is your Immune system?

What Is Your Immune System?

You’ve heard of your immune system. But how much do you know about it?

There’s a good reason to find out. When you understand everything that it does for you, and how everyday things affect it, you can help it keep you well.

1. It Looks Out for You

Your immune system works to root out germs and other invaders that have no business in your body.

For example, if you inhale a cold virus through your nose, your immune system targets that virus and either stops it in its tracks or primes you to recover. It takes time to get over an infection, and sometimes you need medicine to help, but the immune system is the cornerstone of prevention and recovery.

2. It Likes It When You Relax

Do your best to tame your stress. When you’re wound up, your immune system doesn’t work as well as it does when you’re confident and mellow about your challenges. That may make you more likely to get sick.

3. It’s Got Agents Standing By.

Other than your nervous system, your immune system is the most complex system in your body. It’s made up of tissues, cells, and organs, including:

4. It Learns From Your Past

You’re born with a certain level of protection, or “immunity.” But it can get better.

Think of a baby or young child who comes down with colds, earaches, or other everyday illnesses often and babies who are breast feed continue to get antibodies from their mother while they are making their own.. Their immune system is creating a "bank"of antibodies as they are exposed to illnesses for the first time, enabling them to fight off future invaders.

Vaccines work in much the same way. They turn on your immune system by introducing your body to a tiny amount of a virus (usually a killed or weakened one). Your body makes antibodies in response that protects against threats like measles, whooping cough, flu, or meningitis.Then, when you come in contact with that virus in your everyday life, your immune system is already primed to kick in so that you don’t get sick.

5. It Can Change Over Time

Your immune system can become less effective as you get older. That can make you more likely to get sick or get infections. You are also more susceptable to infections as you age or if you have a weakened immune system.

6. Medical Conditions that Weaken your immune system

Conditions which can weaken you immune system include:

autoimmune diseases




7. You Can Help It Out

The classic things that keep your heart, brain, bones, and the rest of you well are also good for your immune system:

Eat nutritious foods.

Stay active.

Work to keep your weight healthy.

Don’t smoke.

If you drink alcohol, keep it moderate (no more than one drink a day if you’re a woman, and two drinks daily if you’re a man)


Boost your Immune System