Instead of Taco Tuesday, today’s news could be called “Macro Tuesday”, as we have delivered some spicy economic news for you. We do like tacos, don’t get us wrong—but Gold and Silver Central delivers precious metals news—not tacos (but that sure is sounding good right now). Maybe you can read today’s news over your lunch break? Hey, don’t feel bad if you can’t have tacos today—there’s always tomorrow. Meantime, check out the four reasons why the coronavirus recession has triggered inflation…why the stock market rally isn’t going to last…and much more.

Let’s dig in…

Economy
Four Reasons Why the Coronavirus Recession Triggered Inflation

Morgan Stanley’s chief economist Chetan Ahya, does not agree with analysts who are not seeing any signs of a significant increase in inflation. Ahya recently wrote that the COVID-19 Recession (GCR) has left an “indelible mark” on the global economy which has resulted in a structural shift in inflation dynamics, “in the case of the GCR, the consensus is of the view that it will be an amplified version of 2008, where deleveraging dynamics took hold and the rebuilding of saving across balance sheets meant that it resulted in weak aggregate demand and persistent disinflationary pressures. Moreover, considering the magnitude of the shock, they also perceive that it will be a long time before we get back to the pre-crisis levels of output.”

Stock Market
Don’t Expect the Stock Market Rally to Last—Here’s Why

Legendary investor Mark Mobius doesn’t think the August stock market rally will continue much longer. He’s a veteran of emerging markets, and Mobius has been warning investors about the recent stock market gains—a performance driven by optimistic news reports on a coronavirus treatment. He says the stock rally “is not significant,” and thinks the market volatility will continue for the foreseeable future. Mobius advises investors just starting to build a hedge position in gold to start small. “If they haven’t bought already…

Commentary
Gold and Silver Are Not Looking So Good Now

Todd “Bubba” Horowitz on the Kitco blog says gold and silver are in danger with their current price action. The markets are quickly turning bearish. Based on the current market, gold looks ready to test the 1900 level in December futures. Meanwhile, silver looks headed for 25.50 in September futures. The current price action is pretty apparent where its going. At this time, we are short, both gold and silver, based on our algorithm. The general direction for gold and silver will be lower until it is not. Rallies will occur within the pattern and a down-trending market, but overall, investors will be sellers of rallies. Platinum has been able to hold off the recent bearish action in gold and silver and is still a long position in our portfolio. There are many warning signs with platinum. READ MORE

Commentary
Here are some Precious Metals Correction Targets

Precious metals started their expected correction a few weeks ago, but it was slightly interrupted by news of Warren Buffett buying a stake in Barrick Gold. This “Buffett bounce” has since passed and the correction could then renew again as the path of least resistance remains on the downside. This weekly chart posted by the Kitco blog helps the writer, Jordan Roy-Byrne of The Daily Gold, identify the likelihood of a reversal to the downside which can help investors spot strong support levels and a potential low.

SEE THE CHART ALONG WITH THE CONTINUED ANALYSIS

Stock Market
Dundee Precious Metals Stock Performance has Investors Looking Closer at Company Fundamentals

This stock has had a great run over the last three months—Dundee Precious Metals (TSE:DPM)—up by 35%. As most savvy investors know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company’s key financial indicators to determine if they play a role in the recent price movement. In this article on Yahoo Finance, they specifically study Dundee Precious Metals’ ROE. Return on Equity, or ROE tests how effective a company is growing its value and managing investors money. This technique of analysis is a profitability ratio which measures the rate of return on the capital provided by the company’s shareholders. HERE’S HOW TO CALCULATE RETURN ON EQUITY

Economy
Gold’s Price Surge in 2020 Created by New and Old Money

This year’s gold price rally is being supported by both new and old money, according to Standard Chartered and their recent quarterly filings. “Latest quarterly filings show established investors and newcomers added sizeable allocations in Q2-2020,” Standard Chartered precious metals analyst Suki Cooper said on Monday. READ MORE

Thanks,
Gold Silver Central