Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I was watching KR earlier the guest said they can;t rise rates because of the extra interest due...would overwhelm them
Tornadotony - they have too much debt out there to raise rates, so I am happy to hold this all year
Took some off the table to buy back on any retreat. A small profit, but at least I have buy ammo if it goes that way.
Its bear trap and bull trap day in the gold market. I am on the side that gold elevates higher in H2. May is quite often a tricky month for everything.
Pog back up to $1840 atm
Gold has been struggling this year – but is the turnaround finally here?
Earlier this year, amid gold’s struggle, we noted all the negatives: that bitcoin was stealing gold’s thunder; that bond yields were rising; that the US dollar was rising; that the world no longer valued physical assets as much as it does digital.
But, especially, we noted the role that rising yields were playing.
Gold pays no interest – you don’t get a yield. If bond yields are rising, money that would otherwise have gone to gold (in the event that yields were flat or falling) goes to bonds instead. Gold suddenly has an opportunity cost to it, as well as a storage cost. Thus rising bond yields are bad for gold.
For some reason, the effect of bond yields on gold is most visible with the ten-year bond. I’m not sure why, but one theory is that the average time it takes to take a mine from discovery through to production is around ten years, so gold and ten-year bond yields tend to correlate.
But we also noted that gold was oversold, that it was sitting on an important technical level, that we were headed into a positive time of year for gold (April is usually a good month). What’s more, we noted that business was getting back to normal.
Rising yields indicate that people expect economic strength. A strong economy gives rise to inflation. Gold is the de facto hedge against inflation. In the long-term then, rising yields are good for gold.
The bottom-line roadmap was that we expected a rally in April, a turn in May, a June low and then highs later in the year.
We got the April rally: gold went from $1,680 to $1,845 a couple of days ago. It now sits ten bucks lower. Are we now getting the May turn? It’s possible, but the landscape has changed.
There are two big changes in the underlying drivers. Firstly, bond yields have turned down. Inflation expectations, meanwhile, have risen again. As Charlie Morris notes in The Fleet Street Letter this week: “If the reduction in the bond yield continues, then markets will start to favour more defensive assets. This would be a major shift in the narrative that has built up over the past year, from value back to gold”.
Morris has recommended that his readers, already long gold, buy more. He thinks we are headed back into a “risk-off” environment, and you want to be in safe assets.
The fates of gold and the US dollar are once again intertwined
Perhaps the biggest driver of the lot though is the US dollar itself....
Read the whole of this article on the MoneyWeek website
Until next time,
Dominic
When will the man in the street learn(especially in the US with Reserve status) that if you pour water in beer to a greater and greater degree the less beer is in there...this is magicing money backed by nothing....At some point Govt debt in the UK and US is going to be looked at for what it is...a whole bowl of nothing. You only have to watch the cowboy westerns to see what money was...GOLD and Silver...if there was paper money...it was backed by GOLD and Silver....there are some westerns that actually have mention of the first paper bills...treated with extreme suspicion
U.S. dollar's status as reserve currency in jeopardy, ‘I'm bold gold, silver & platinum ’ - Danielle DiMartino Booth
Even in light of a clearly recovering economy, and new COVID cases on the decline, the government continues to inject liquidity into the financial system through fiscal and monetary stimulus, with the end result being the devaluation of the dollar and losing its global reserve currency status to China, said Danielle DiMartino Booth, CEO of Quill Intelligence.
“We are no longer in an emergency situation. If the Fed is going to insist on being an ostrich and sticking its head in the sand, while it's pumping out $120 billion per month of quantitative easing as if we were in a depression, then yes, I see every reason for China to continue playing its very game with the intention of eventually unseating the U.S. dollar,” DiMartino booth told Michelle Makori, editor-in-chief of Kitco News.
Even if the Federal Reserve wanted to turn things around for the dollar, it would not be in a position to do so, Booth said.
“If the Fed was to try and normalize policy and the stock market were to take a really big downturn, then you would see that ripple through the economy and we would be back in recession,” she said. “The magnitude of the Fed’s intervention in this particular episode has put an entire economic recovery inside of a time compression chamber.”
The labor market, automobile and other consumer discretionary sectors have all rebounded as a result of fiscal stimulus, facilitated by the central bank, she said, but the Fed has gone on a ‘bridge too far’ and needs to step back and regain its independence from the Treasury.
Booth emphasized that should the dollar lose its crown as the world’s defacto reserve currency, the mantle would be taken up by the Chinese yuan.
“I can’t see [the dollar] being replaced by anything else but the Yuan, which would explain why [China] is trying, as aggressively and as rapidly as they are,” she said. “I’m not of the opinion that it’s going to be a cryptocurrency.”
On the fiscal stimulus front, Booth said that stimulus checks are not encouraging people to return to work, hence the lower-than-expected nonfarm payroll report in April; the U.S. added only 266,000 jobs last month, well below the 1 million expected by economists.
On the contrary, stimulus checks are indirectly hurting small businesses, Booth said.
The brokers get paid every time they sell or buy on behalf of a client. The more rash predictions from the analysts the more sells and buys, and the more $ for the brokers and their friends, the analysts. Funny about that.
Yep- every time the markets drop a little people panic lol- the amount of times I've heard "correction" markets will crash" in the last 12 months is incredible- the analysts should be sacked! If you look at the recovery in the markets (bar UK due to BREXIT uncertainty) you can see. The amount of missed opportunities by some analysts is breathtakingly bad- it was always going to be a "K" shaped recovery, the indices are NOT the economy!
Has bounced back sharply. The market is in AF.