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TGIF?
As the markets are about to close for the week, we can’t help but notice how all the GameStop ruckus is affecting precious metals. We begin today with a look at this taking place on Reddit, where the WallStreetBets forum is now getting excited about silver.
Also, there’s a CEO, an analyst by trade, who see’s a silver-gold asset ratio collapse coming. Be sure to check that one out.
Have a great weekend. We’ll see you on Monday!
Let’s dig in…
Latest News
[VIDEO] Silver Surges Thanks to GameStop Traders
Silver futures prices and shares of silver miners climbed on Thursday after a user in Reddit’s popular WallStreetBets forum posted about executing a “short squeeze” on the precious metal. Silver futures on the Comex exchange rose by as much as 6.7% to $27.1 an ounce. WallStreetBets is the same investor board that started the wild short squeeze on Gamestop Corp. and other companies. Shares of the US videogame retailer have soared about 17-fold since January 12 as small investors, organizing on social media, have piled in and forced professional short-sellers to abandon their positions with heavy losses.
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Commentary
Here’s a Precious Metals Outlook for 2021 from U.S. Global Investors
Precious metals in general did very well in 2020, and I expect them to keep pace in 2021, supported by heightened efforts in the U.S. and elsewhere to transition from fossil fuels to renewable energy. Gold bullion gained more than 25%, its best year since 2010. The surge in money supply due to pandemic stimulus helped fuel the rally. The amount of M1 money moving around the U.S. economy skyrocketed 66% from last year. 2020 marked the fifth straight year of positive gains for the yellow metal. In the past 15 years, gold has been up 80% of the time, a remarkable track record.
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Commentary
CEO Investor See’s a Silver-Gold Ratio Collapse Coming
Silver Bullion TV interviews Keith Neumeyer, founder and CEO of First Majestic Silver. Keith shares invaluable insights into the behind the scenes workings of the silver mining industry, the challenges, and why the perfect storm for a collapse of the silver-gold ratio is now upon us.
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Economy
How Asset Allocation Could Be Affected by Reflation or Stagflation
After the November elections through the start of the year, we were filled with endless reports to be long the recovery/reflation trade. Basically, to be long underperforming "value" sectors looking past the near-term weakness into 2H21 when the world would slowly normalize back to pre-Covid levels post vaccine distribution. It was easy to make that call when every politician is touting numbers as high as $2 trillion or $3 trillion to give to the people (of course more lining up the pockets and their subsidiaries than going to the economy), but a fiscal boost no doubt. A recovery was inevitable. It is also easy to make that call when looking at the past 10 years, these stocks have been such laggards. With new vaccine rollouts, and sell side upgrading all their commodity price forecasts calling for an inflationary recovery, investors have priced in all the good news of 2021 in a matter of weeks. What could
possibly go wrong?
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International
Will Gold Rebound This Year in Pandemic Pummeled India?
Gold consumption in India, the world’s second-biggest buyer, is expected to rebound in 2021 after plunging to the lowest in more than two decades, according to the World Gold Council.
Demand is expected to jump closer to the 690 tons bought in 2019 as the country’s economy shows signs of recovery, P.R. Somasundaram, managing director at the council for India, said in an interview. Goldsmiths had one of the worst years in 2020, when demand slumped by more than a third to 446.4 tons, the lowest since 1994, as coronavirus-related lockdowns, curbs on movements, record high prices and lower incomes slashed spending on jewelry, WGC data showed.
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Price
Reuters Polls Metals Analysts—Here’s What They Think the Gold Market Will Do This Year
Analysts and traders have downgraded their forecasts for gold but still expect prices to recover from current levels and many see it achieving record highs this year, a Reuters poll showed on Wednesday. Traditionally seen as a safe place to store wealth, gold surged to a record level of $2,072.50 an ounce last summer as the coronavirus swept the globe. But prices have since dipped to around $1,850 as the rollout of vaccines encourages investors to channel more money into assets such as equities that benefit from economic growth.
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