Email of the day - on what a vaccine will mean for gold
In your opinion, will the introduction of a vaccine(s) be a headwind for the precious metals?
David Fuller and Eoin Treacy's Comment of the Day
Category - Precious Metals / Commodities
Eoin's personal portfolio: new investment positions opened
Email of the day - on how best to buy precious metals:
Hello Eoin, I suggest that in today’s video you specify how close in terms of price and timing you believe we are away from the optimal opportunity to buy (again) gold, silver and miners. Thank you! All the best.
And
Eoin, is there any particular reason why your most recent trades have fallen off of the daily commentary? Until very recently we were able to keep track of your last trades, even if some were a little dated. This has stopped now, and don't know whether it's an error or change in tack.
On precious metals, you exited Gold and Silver but stuck with the underlying stocks which are being heavily sold off today after an already bruising month (I am involved in them too). What is the rationale for that knowing the stocks are leveraged plays on the metals? Finally, at which point do you intend to step back into Gold and Silver with Silver already having sold off by nearly 30% from the peak at 30 dollars.
Eoin's personal portfolio: last updated on August 11th
Fed Officials Warn of Economic Risks in New Plea for Fiscal Help
This article from Bloomberg may be of interest to subscribers. Here is a section:
Federal Reserve policy makers on Wednesday highlighted the importance of fiscal stimulus for an economic recovery that recently has outperformed forecasts. Chairman Jerome Powell continued to wave the fiscal flag carefully at a congressional hearing -- amid a political stalemate over a new package -- saying that more support was likely to be necessary. Others were more full-throated, with Cleveland Fed President Loretta Mester saying it was very much needed given the “deep hole” the economy is climbing out of.
Chicago Fed President Charles Evans expressed concern the stimulus he penciled in won’t be forthcoming, while Boston Fed President Eric Rosengren suggested it’ll take another wave of infections to prompt action, and likely not until next year.
Declines in the stock market, until recently attributed to a reversal of excessive tech-share gains, have increasingly been attributed in part to worries about the recovery and the need for more stimulus. The S&P 500 Index was down 1.7% as of 2:22 p.m. in New York, the fifth drop in six days.
“The most difficult part of the recovery is still ahead of us,” Rosengren said in remarks Wednesday, saying he was more pessimistic than his colleagues over how many Americans will return to work over the next 15 months.
Email of the day on the traditional portfolios and investment trusts
I have a couple of questions for Mr. Treacy which I would be most grateful if he could answer:
1) Traditional portfolios have managed risk by allocating % to stocks and bonds. The closer to retirement someone is and presumably more risk averse one allocated proportionally more to bonds. Given that interest rates are at historical lows is this formula still appropriate? Should we look at allocation to gold instead of bonds? Thank you
2) Earlier this year Mr. Treacy shared the performance, dividend yields and length of time these dividend yields have been awarded for key Investment Trusts. I would be grateful (and perhaps other investors as well) if he could share growth performance, dividends and chargers of key ETFs. Thank you.
Fiscal Cliff + Peak Fed = Second Leg of Correction
Thanks to a subscriber for this report from Mike Wilson at Morgan Stanley. Here is a section:
CME's First Water Futures Contract Is Coming With West on Fire
This article by Elizabeth Elkin for Bloomberg may be of interest to subscribers. Here is a section:
“It’s really a unique mechanism for investors themselves and California to be able to at the very least understand and price the risk and potentially hedge the risk of water price volatility,” said Carter Malloy, founder and chief executive officer of AcreTrader, a farmland investing platform.
“The crucial thing is right now we have very little visibility” on what water prices will look like in the future, he said.
Water preservation and distribution could become increasingly attractive as investors like Jeff Ubben, who recently launched Inclusive Capital Partners, look to tackle problems ranging from environmental damage to food scarcity through their funds.
Climate advocates have warned in recent years for the potential of water wars as competition increases between needs from agriculture, energy and growing cities. Food production in particular could be vulnerable as drought makes it increasingly difficult to grow crops in many parts of the world and farmers balance water and land needs with protecting forest in places like Brazil’s Amazon.
“Food is going to be a flash point” in the world going forward as climate change makes production more challenging, Carter Roberts, chief executive officer of World Wildlife Fund, said in an interview at the Bloomberg Green Festival this week.
Australia Unemployment Drops as Half of Jobs Lost Recovered
This article by Michael Heath may be of interest to subscribers. Here is a section:
The data’s strength was surprising because the period spanned Melbourne’s shift to Stage 4 restrictions and a curfew to contain a rapidly spreading outbreak, as well as nervousness in neighboring New South Wales that it was headed down the same path. The labor market’s ability to absorb this weakness and maintain its recovery is testament to the government’s signature JobKeeper employment subsidy -- that will extend into 2021 -- and central bank stimulus.
Self-employed workers drove the monthly jobs increase. As part-time jobs returned at twice the pace of full-time, the ubiquitous food delivery services, with its riders pedaling the streets of Australia’s cities, are expected to be responsible for much of this rise.
“The upshot is that the unemployment rate is now unlikely to climb to 8.5% over the coming months as we had anticipated, let alone the 10% predicted by the RBA and the Treasury,” said Marcel Thieliant, senior economist for Australia at Capital Economics. “Indeed, with restrictions in Victoria set to be loosened toward year-end, employment should continue to rise.”
The Reserve Bank of Australia, which has kept its benchmark interest rate near zero since March, when it began buying government bonds to ensure the yield on three-year remained around 0.25%, had predicted the jobless rate would climb to around 10% later this year.
Bull Case for Chinese Commodities Enhanced by Stronger Yuan
This article from Bloomberg may be of interest to subscribers. Here is a section:
Elsewhere, Shanghai is taking steps to promote hydrogen vehicles, with a plan to get 10,000 cars on the road by 2023. Just this week, Sinopec has flagged its intention to include hydrogen in retail fuel stations, while top vehicle-maker SAIC Motor said it’s accelerating its push into the alternative energy source.
And also in the news, Cargill has bought a new soy-processing plant in China as the nation’s pig herd recovers from the ravages of swine fever. Hog numbers expanded for the seventh consecutive month in August, signaling growing confidence among breeders, according to the farm ministry.