Gold and Silver Back on Track After Testing Recent Lows

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	Consumers And Central Banks Counterbalance Softer ETF Inflows To Produce Stable Q2 Gold Demand
	Modest increases expected in central bank buying and in gold supply . . . . World Gold Council
	Gold Consolidates As U.S. Inflation Data Cools Taper Bets
	Gold edged up on Thursday as fears of early tapering by the Federal Reserve eased . . . . Arundhati Sarkar
	Gold Price Tumbles To Yearly Low
	Spot gold is seeing it's worst two-day cash drop since April 2020 . . . . Michael McCrae
	U.S. Mint Gold Bullion Sales Rose 32% In The First Half of 2021
	Sales of both types of U.S. gold bullion coins were up 32.4% in the first half of 2021 versus the same six months in 2020 . . . . Mike Fuljenz

Last week was one for the history books, regarding the long-term price of Gold. Before
I provide information on that I need to explain what mining companies do to sell their precious metals.

Large Gold mining companies (i.e., Newmont and Barrick) mine and sell about 5 million ounces of Gold annually. They mine, refine and ship .999 Gold bars to licensed commodity exchange storage facilities in Asia, Europe and the U.S. Based on the estimated time from mining to delivery, they sell future contracts on the commodity markets. To secure bank financing, they need to sell these exchange future contracts to lock in their Gold price. They normally sell or hedge their Gold with these contracts gradually over a period of time so as to not disturb Gold trading. However, this did not happen last week.

Last weekend, starting with the opening of the Asian commodity market, there was sizable selling of Gold. That selling continued through Europe and on the opening of the U.S. Exchanges. Approximately 2.4 million ounces of Gold future contracts were sold for delivery from December 2021 to June 2022. Initially, I was told it was Newmont but I was unable to get confirmation, but it was a major mining company.

Gold closed at $1760 per ounce on Friday, August 6th. When Gold broke below the key $1,750 support level in Asian trading on Monday, many traders saw what was coming and started selling. Gold sold off sharply reaching a low of $1,675 (a 2021 low) when trading started in the U.S on Monday. At that price, there is a lot of professional short-covering and fresh buying. Gold quickly moved back above the $1,700 level and closed on Monday at $1,723 per ounce. The rally continued to move higher for the rest of the week. Gold closed last Friday at $1,775 per ounce, up $15 for the week and with excellent fresh buying and strong trading volume.

Last Friday, we also saw the 10-year U.S. Treasury interest rate move lower and the U.S. Dollar index sell-off, which contributed to a stronger Gold and Silver price. Plus, fresh inflation news helped Silver jump $0.50 on Friday.

What happened last week was a textbook example of a final clean out. A sharp sell-off, followed by a quick recovery to a high is a very strong technical sign of a strong market. Combine that with excellent bullish fundamentals for the Gold price, and we should see a higher price as the year moves on. For a short period of time, we need to see Gold trade between $1,750 and $1,800 to rebuild the confidence lost by the recent correction. I continue to believe that over $2,000 by year-end is still a strong possibility.

Today: This morning, interest rates continue to move lower and the U.S. Dollar Index is stable, leading to a higher Gold price. Gold tested support around $1,770 in early trading and then moved back above $1,780 on fresh buying.

Last week, Silver trading was pretty much the way Gold traded, breaking the key $24 and $23 per ounce support levels, and reaching a low of $22.28, during last Monday’s early trading. Silver also rallied back on high volume at closing. Silver closed last Monday about $1 higher from the low on record trading volume. Unlike Gold, a massive amount of Silver wasn’t sold into the world’s commodity markets. Silver’s value was driven down by commodity traders seeing a great opportunity to short sell as the Gold market was falling. Silver closed last Friday at $23.75, down $0.55 on large volume.

Today: Silver moved higher in late trading with Gold, reaching a high of $23.90 per ounce before seeing some light selling. Since Silver’s recent correction was more severe than Gold, I would like to see Silver move back above $24 this week.

Recent coin shows in Dallas and Chicago continue to show a strong demand for many of the popular series of certified investment quality rare coins. Many dealers are reporting shortages in inventory and are raising their bid prices to secure quality rare coins. Recent auctions are showing increases in Silver Dollars and $10 and $20 Gold series. Our company is in a similar situation and if you have high grade numismatic coins, please contact us to learn about our high buying prices.