In today’s Gold and Silver Central news, we take you on a sobering look at the U.S. economy—one analysis see’s stagnation in the future unless the Federal Reserve stops doing this one thing…The Philippines has an overabundance of gold that will be sure to attract new customers as the country’s economy continues to open back up after a period of pandemic lockdown measures…and we found a commentary that explains why they think gold could reach a new record price in 2021. That and more awaits your hungry mind.

Let’s dig in…

Economy
U.S. Heading Toward Stagnation—Unless the Fed Curbs its Money Printing

The US Fed is considering lifting its inflation target above 2 percent in order to revive the economy. Contrary to the accepted practice, the Fed is not expected to raise an alarm if the measured price inflation begins to rise. The US central bank is not expected to counter this increase with a tighter monetary stance as in the past. In fact, the idea is to continue robust monetary pumping until the economic data points toward a strong economy.

According to most experts, when an economy falls into a recession the central bank can pull it out of the slump by pumping money. This way of thinking implies that money pumping can somehow grow the economy. The question is, How is this possible? After all, if money pumping can grow the economy, then why not pump plenty of it to generate massive economic growth?

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International
The Philippines Says They Have More Gold Than They Need

In this video, Filipino news agency ANC reports that the Philippine Central Bank is joining the gold rush, with Governor Benjamin Diokno saying the country will take advantage of higher gold prices now at $1900/ounce from just $1400 per ounce. Meanwhile, Diokno is confident loans growth will pick up before the year is over, as the economy continues to open up and people start buying again in the run-up to Christmas.

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Economy
Investors Anxious About Uncertain Recovery Keep Gold Moving Sideways as Stronger Dollar Pushes Price the Other Way

Gold prices slipped downward a bit but the fall was slowed by investor worries on the coronavirus economic recovery. Spot gold was down 0.2% at $1,925.09 per ounce by 0320 GMT US gold futures fell 0.2% to $1,931.20. "Over the past 24 hours we have seen a stronger US dollar that is something that has weighed a little bit on gold," said DailyFx currency strategist Ilya Spivak.

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International
Bank of Thailand Revises Gold Trading Rules to Shield Baht Due Soon

The Thai government aims to revamp the trading policies for gold by the end of the year to prevent bouts of currency strength when the precious metal climbs in value. About 1% of Thailand’s gross domestic product is represented by gold exports, compared to just 0.1%-0.2% in other markets, according to Goldman Sachs Group Inc. Shipments tend to rise alongside…

Commentary
Could Gold Hit a New Peak in 2021?

The gold price could peak in 2021, in our view, as we believe the metal may meet all the key factors in our Gold Price Matrix. The metal’s price momentum is driven by eight elements, including the use of gold exchange-traded funds as a refuge in times of global financial, health or geopolitical crisis; dollar weakness; inflation; and low or negative interest rates. Also on the list are increasing demand from China and India, weak confidence in financial markets and net central bank gold purchases. Gold peaked at $1,921/oz. in September 2011, when it met all eight criteria in our study. Gold’s attribute as a flight-to-quality, safe-haven asset is strengthening amid the Covid-19 pandemic, which we believe may result in rising investor appetite for diversifying portfolios with gold in 2021.

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Stock Market
What is Contango and Backwardation?

For investors in commodities funds that hold futures contracts, the terms Contango and Backwardation are important. Here is what they mean.

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Gold Silver Central