Does anyone want to explain the run up in gold and silver?

A

Ayn Rand

Within the last 2 weeks gold and silver have shined. Does anyone think that this has to do with it becoming a medium of exchange in times of panic? Especially in Asia.

I do not have the volume numbers associated with price changes. Has volume numbers been on the high side?

Related is how you think mediums of exchange would erode with economic collapse?

Example

1st all electronic means of exchange would fail - 1-2 weeks
2nd actually currency would collapse in another week
3rd gold and silver would perhaps hold up for an additional 2-3 weeks
4th after about a month to a month and a half it would all be guns and roses.
 
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The move today had more to do with unexpected very weak PMI readings and a record-low on the 30 year treasury (it's never been lower in history). At this point, looks like Fed will be forced to cut, virus or no virus. Fed cuts, even in the greatest economy ever, are good for gold.
 
PMs are likely rising due to long run interest rate expectations falling into the basement - note the correlation with treasury prices.

Fundamentally the trend has a long way to go since we're still a ways off from zero yields on eg the ten year, but we're definitely headed there.
 
Look at the USD Index and the US Ten Year Note Yield. That’s what a possible worldwide virus pandemic and economic slowdown look like.

Ayn Rand said:
Within the last 2 weeks gold and silver have shined. Does anyone think that this has to do with it becoming a medium of exchange in times of panic? Especially in Asia.

I do not have the volume numbers associated with price changes. Has volume numbers been on the high side?

Related is how you think mediums of exchange would erode with economic collapse?

Example

1st all electronic means of exchange would fail - 1-2 weeks
2nd actually currency would collapse in another week
3rd gold and silver would perhaps hold up for an additional 2-3 weeks
4th after about a month to a month and a half it would all be guns and roses.
More...
 
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Martin Pring explained it in his book 'Technical Analysis Explained' in the first 2-3 pages. which I bought in 1994

Stocks go up in expectations of better economic activity.

after it has gone up for a substantial time and the market expectations of a business boom come about, investors worry that all the economic activity will increase demand and inflation will increase.so gold goes up.

Gold follows stocks. It does not go opposite.

because gold follows stocks, if stocks make a U-TURN, for some time, it will seem that they move in opposite directions.

This is the layman's perception -that stocks and gold move opposite- but it is not fully correct and the adage: 'a little knowledge is dangerous', comes from numerous examples like these.

the fact that gold is going up, means that stocks are going up.

but ironically, it may also mean that stocks may make a U turn
 
ET180 said:
The move today had more to do with unexpected very weak PMI readings and a record-low on the 30 year treasury (it's never been lower in history). At this point, looks like Fed will be forced to cut, virus or no virus. Fed cuts, even in the greatest economy ever, are good for gold.
More...

I agree with this. Its worth noting, if you believe the rally in gold is due to an expectation of a rate cut then there's a high probability gold will continue to rally for a number of months. The CME Group runs probabilities based on the pricing of fed fund futures. Theres an 11% chance the fed will cut rates on 3/18. 39% chance by 4/29, and 60% chance by 6/10. Gold will likely continue to rally until that rate cut happens. These percentages are based on current price of the fed fund futures, so they could change instantly with news coming out.

Probability Rate Cut.PNG
 
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