Tags
Bespoke gold investing, Borris Johnson, Brexit, Dr Mahathir's standard gold currency, Invest in Gold now, petro-yuan
The U.S. stocks are up on 19.6.19, with the Dow Average above 26,500 points – having risen by 397 points in 2 days. World gold price surprisingly hovered above $1360 on 20.6.19.
Sitting out since March 2019 because for 12 months gold prices could not break out of the $1350 per ounce area, we increased our gold holdings by 2 grams on 24.5.19 as world developments became favorable to precious gold prices. It was like the health of the body restoring its euthyroid state and the EP value (MYR equivalent price per gram) has risen above the 22.11.16 base of 176.65.
Borris Johnson lead for the UK premiership is one outrageous development but he is popular among common political fans. He has promised to leave the European Union by October 31. Despite some optimism about trade negotiations at the Osaka G20 meeting end of this month other world new order developments will support a surge in gold prices.
The world of of cryptocurrencies will dent the U.S. currency supremacy with the latest development of Sweden’s new official coin starting price of just €0.30 cents, announced on 17.6.19. Dr Mahathir end of May called for a new currency based on gold as it is more stable as opposed to the current currency trading which is manipulative. Malaysia already has a bilateral trade payment in ringgit with China.
An increase use of the renminbi in global financial trade would support the yuan vis-a-vis the mighty dollar and more significant, it is freely convertible to gold. A reformed world order in global reserve currency will soon take hold.
If the Ringgit strengthens against the greenback in coming weeks we can expect gains from the local gold prices too. Crude oil price increase supporting the ringgit rose on 20.6.19.
The pending cash out quote spread is now MYR6.00 at MYR180.90 cimb gold acct buy quote, justifying a 1 gram additional investment. Now our average holding cost is MYR191.32 per gm. The gold stock bal of 4 gm represents expended 38% of our MYR2000 hold money.
Update 11 July 2019
It was no brainer to add 1 gram to our gold holdings on 21.6.19 because the local gold price of RM187.80 remained through the trading day whereas our record of the morning world gold price of USD1393.85 increased to USD1407 (+0.94% or close to 1%).
On 8.7.19 we bought at RM188.10 when the morning world gold price was circa USD1397. It peaked at USD1406.50 (+0.68% based on our record) after the Malaysian trading day. It meant that we would have missed the buying opportunity if we had not speculatively bought before the Malaysian trading day closed. The 21.6.19 perfect storm investing scenario seldom repeated.
Nonetheless the price dipped to USD1394.40 and as low as USD1391.50 on 9.7.19. Our gold holdings now was 6 grams and prudence must take hold.
Around MST 9pm on 10.6.19 world gold price just above USD1392 moved north to reach USD1410 in thirty minutes. It hovered above USD1408 from GMT14 (MST 10pm). Que sera sera.
Our EP (MYR per gram) values for 5 grams holdings on 25.6.19 recent high world gold price) and 6 grams holdings on 11.7.19 are depicted as follows:
Our second gold surging foray from 24.5.19 (gold circa USD1283), vindicated by a 10% world gold price increase in less than three weeks, came about as the price advanced quickly once again over the $1400 mark.
The above EPs must be seen against the actual values of 21.6.19 and 9.7.19 when the world gold prices we recorded were USD1393.85 and USD1394.22.
In fact the world gold prices had dipped to USD1388 on 21.6.19 and USD1391.50 on 9.7.19. All said and done these prices are not far below USD1394 and USD1397 when we transacted our last buys on 21.6.19 and 8.7.19.
As it turned out on 10.7.19 world gold price closed circa USD1420. When the benchmark S&P 500 breached the 3,000 points mark for the first time on hopes of an interest rate cut later this month gold remained above USD1410 at MST 12.45am 11.7.19. The robust gold price could set the stage for gold to push higher, potentially topping $1,500 an ounce by end of August as interest rates head lower, central banks extend purchases, and demand is fanned by uncertainty surrounding geopolitics and cryptocurrencies.
The glitter of gold will be greater when China begin unloading its very large hoard of U.S. debt as part of their larger global de-dollarization puzzle. The level of overall U.S. debt ownership grew proportionately over time from 1970 in concert with the overall issuance of U.S. debt until 2015, when it began to fall off. Foreign investment in U.S. Treasuries is on the wane and troubling is that the retreat has come at a time when U.S. borrowing needs are expected to consistently exceed $1 trillion per year.
The Treasury Department has been using so-called extraordinary measures to meet debt obligations since March 2019, when the U.S. reached its $22 trillion limit on borrowing. There is renewed interest in gold with prices reaching their highest since early 2013 at about $1,440 an ounce because gold tracks fairly closely with U.S. budget deficits. The highs of 2009-2011 roughly corresponded with the large deficits that reached 10% of GDP during the Obama administration, which included the stimulus spending during the Great Recession and a sharp depreciation in the value of the dollar.
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