Kitco/Anna Golubova
This gold rally could take prices as high as $3,000 an ounce – Edison

golden bull with increasing arrow coming from behind“With the Federal Reserve’s response to the COVID-19 crisis, gold prices are likely to near $1,900 with the potential to go up as high as $3,000 an ounce, according to Edison’s latest gold report.

This outlook is based on the projections that the coronavirus crisis is a protracted one and the Federal Reserve’s balance sheet either stabilizes or continues to increase, Edison’s Investment Research director Charles Gibson said.

‘With the total U.S. monetary base now at US$5.1tn (and given the close historical correlation between the two), the gold price could very reasonably be expected to rise to US$1,892/oz and potentially as high as US$3,000/oz,’ Gibson wrote in the investment research company’s gold report.

Supporting gold at the moment is a combination of factors, including money printing, aggressive bond buying, COVID-19 lockdowns and economic crisis.

The report makes a comparison between the current negative interest rates in the U.S. to similar volatility in interest rates between September 1979 and October 1980, the time to which Edison refers to as gold’s “first great bull run in the period of flat money”.

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Business Insider/Ben Winck

Gold’s trading patterns foreshadow record highs in the 2nd half of 2020, Bank of America says

“Gold’s rally over recent weeks sets it up to post record-highs before the year is out, Bank of America said in a Tuesday note.

The precious metal is up 17% year-to-date, thriving on investors betting the coronavirus will drive a prolonged recession. Gold’s trading range now sets a breakout level at $1,900, the firm said. Should traders continue to flock to the popular safe haven, it stands to keep gaining through the end of the year.

‘The breakout occurring now that is ending Q2 completes an eight week trading range that has resumed higher,” Paul Ciana, technical strategist at Bank of America, wrote. “These patterns say gold can make a new all-time high in [the second half of 2020] with Q3 on our mind.’

Gold reached its highest point since early 2012 on Wednesday as rising COVID case counts fueled fresh recession fears.”

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Reuters/Tom Westbrook, Jessica DiNapoli

Stocks sell-off as coronavirus surge knocks recovery hopes

man walking in front of market changes wearing a mask“Asia’s stock markets slipped, bonds rose and the U.S. dollar was firm on Thursday as surging U.S. coronavirus cases, global trade tensions and an International Monetary Fund downgrade to economic projections knocked confidence in a recovery.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7%, Tokyo’s Nikkei slumped 1.4% and Australia’s ASX 200 tumbled 1.8%. U.S. stock futures also declined 0.7% following on from an overnight slide on Wall Street.

Markets in Hong Kong and mainland China are closed for public holidays on Thursday.

Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday. Seven other states had record highs earlier in the week and Australia posted its biggest daily rise in infections in two months.

The governors of New York, New Jersey and Connecticut ordered travelers from nine other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.

Texas is also facing a ‘massive outbreak’ and authorities are considering localised restrictions, Governor Greg Abbott said in a television interview.”

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Marketwatch/Jonathan Nicholson

U.S. to hit Japan-like levels of government debt by 2050, budget group says

person walking in front of capitol building“The level of U.S. government red ink is set to explode to more than twice the size of the entire economy in three decades, according to a prominent anti-deficit group.

The Committee for a Responsible Federal Budget, a bipartisan group that focuses on fiscal matters, issued its estimate in a report Wednesday that attempts to update the 10-year projections usually made by the Congressional Budget Office and the White House’s Office of Management and Budget.

The CBO has already estimated the deficit for 2020 will rise to a record, in dollar terms, of $3.7 trillion, with public debt rising to 101% of gross domestic product. The nonpartisan budget scorekeeper for Congress is expected to update its 10-year projections in September.

The CRFB’s estimates hint that update could be grim. While the CBO in March, before the pandemic began to affect the economy deeply, estimated a cumulative shortfall of $14.164 trillion from 2020 through 2030, the group’s estimate projects the deficit to be $19.899 trillion over that period, an increase of $5.735 trillion.”

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