Some big challenges are forecasted for the global economy, and these hurdles will tend to help raise prices in gold and silver, so says today’s news items we picked out for you on this Tuesday. There is more to the story than just a struggling U.S. dollar—a looming banking industry crisis and growing fears of inflation are some of the additional matters at hand now, according to these informative articles.

Let’s dig in…

International
Gold-Backed Yuan Poised to Challenge Flagging Dollar

As the U.S. continues to make policy decisions that depreciate the dollar, China has put itself in position to seize a “golden opportunity.” The yuan could be ready to seriously contend with the dollar for the title of “global currency.” According to an article in the Asia Times, Asian central banks are now focusing on actual debt, and their brainstorming on strategies to seize the day doesn’t include any past sentiments of gratitude. The fact is that the recent gold rally and corresponding resurrection of Bitcoin is not about inflation, but instead reflects waning trust in the U.S. dollar. That waning trust may be good news for America’s number 1 competitor—China—where hints of an upcoming…

Commentary
The Obvious Systemic Banking Crisis Everyone is Ignoring

According to this startling take on the global economy, the recent downturns in bank credit expansion will once again lead to systemic problems. We are on the edge of such a downturn—and the coronavirus is distracting us so much that these coming problems will surprise everyone. The commercial banks globally are massively leveraged and their exposure to bad debts and a cyclical banking crisis is now certain to wipe many banks out. This article looks at the global systemically important banks—the G-SIBS—as proxy for all commercial banks and identify the ones most at risk on a market-based analysis.

Price
Will Gold & Silver See a Correction or Crash?

Not long ago, the meteoric rise of gold and silver prices looked unstoppable—but last week saw the often-predicted correction come in HARD! What we had was too many big players holding short positions that were vulnerable to collapse if gold and silver prices continued rising at that rate. As Lawrie Williams writes in his column on Sharps Pixley—even the strongest of bull markets seldom rise continuously. They see a price setback at some point. SEE WHAT LAWRIE SAYS

Price
Can the Gold Price Rally Keep Going?

Over on the Refinitiv blog, an analysis was done where they looked at the reason’s behind gold’s impressive rally in recent weeks which included the price of gold to reach beyond the $2,000/ounce mark in early August, and the article looks at the prospects for a sustained rally. The Metals Research team at Refinitiv believes that the gold price will remain supported by unprecedented stimulus measures, low to negative interest rates, the global economic downturn, and ongoing geopolitical tensions.

SEE THE PROSPECT FOR A SUSTAINED GOLD RALLY

International
Gold Demand Dwindles in Asia, Pushing Chinese Discounts to Record Highs

Chinese discounts for physical gold scaled yet another record peak versus global spot rates this week as the coronavirus pandemic continued to hurt retail demand even with a price dip to lure consumers in India. China is normally the world’s top bullion consumer; however, gold has been sold at discount in China since February. Discounts widened to between $75 and $100 an ounce over the global benchmark, up from last week’s $70-$60. “Even with the price dip, there’s hardly any consumer demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals. While jewelry fabricators did buy more ahead of an August 25 festival, selling was… READ MORE

Economy
Fears of Inflation Increase Demand in Precious Metals

As gold prices rise over time (and nothing indicates the price has topped out here long-term), we can expect to see more $100 daily price swings. 100-point moves in the Dow Jones Industrials used to be rare but are now commonplace as the blue-chip average trades near 28,000. Just as the Nasdaq tends to be more volatile than the Dow, silver trades with greater volatility than gold. The grey metal was slammed last week for a trading loss of more than… READ MORE

Thanks,
Gold Silver Central