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Last Thursday the U.S. Labor Department announced weekly unemployment claims numbered a mind-blowing 3.3 million due to pandemic-related issues. That’s an increase of more than 1,000% and the largest number of jobless ever recorded in a single week. And now the Federal Reserve says the national unemployment rate could reach 32%.
- In spite of that and all the worsening news at this time, however, there are a few bright spots for retirement savers who are willing to see them. One of those bright spots is the reinvigorated performance of precious metals, especially gold. Metals already had been showing resiliency throughout the panic-induced volatility that was overwhelming markets. But now, after a Fed commitment to unlimited stimulus, gold could be at the beginning of another historic run. This week’s Touchpoint is another all-coronavirus special edition. It begins with a look at last week’s stunning performance by both gold and silver during the pandemic.It is understandable if you were focused last week on the frightening unemployment numbers. If that was the case, you might have overlooked what was a remarkable week for precious metals. As reported by MarketWatch, gold posted its best weekly performance since December 2008, climbing an impressive 8.2%. Also, silver registered its biggest weekly rise in nearly 33 years – a whopping 17.3%! Experts believe the Federal Reserve’s commitment to unlimited quantitative easing (QE) could continue sending metals skyward. Purchasing physical gold – not paper gold – could be the best way for you to capitalize. For further insight on gold performance during the pandemic and which form of gold to choose, review the latest Pandemic Economics video by Augusta Precious Metals’ analysts Devlyn Steele and Clint Doll.
- Advocates for liberty and privacy fear the potential for governments to use sudden crises to encroach on citizens’ freedoms. On that note, there’s a serious legislative effort underway to create digital dollars as a way to distribute stimulus money. CoinDesk notes it took just eight days for the digital dollar proposal to reach Congress. At one point, the digital dollar was a component of two House coronavirus relief bills. Ultimately, the feature was stripped from both. However, as the World Economic Forum’s Sheila Warren noted, “The fact that it even got that far means there’s already a lot of behind-the-scenes action happening that’s already working on this.” Many politicians remain undeterred by the absence of a digital dollar in the CARES Act signed by the president. One of them, Sen. Sherrod Brown (D-Ohio), has introduced dedicated digital dollar legislation that’s now in front of the Senate Banking Committee. Discussing his bill, Sherrod said, “At the height of this pandemic we must do more to protect the financial wellbeing of hardworking Americans and consumers.” There are plenty of Americans concerned about the privacy implications of a digital dollar. They might disagree with the senator over its capacity to “protect” their “financial wellbeing.”
- Interest rates as set by the Federal Reserve are now effectively at zero. Savers have been swarming fixed-income assets in a flight to safety. The result is that we’ve now seen negative-yielding government debt in U.S. financial markets for the first time in history. Last Wednesday, the yields on both 1-month and 3-month Treasury bills fell below zero. In the middle of that afternoon, 1-month bills were trading at minus 0.053% while the 3-month traded at minus 0.033%. It should be emphasized that these negative yields are not a function of central bank policy. Based on current market dynamics, however, official bank policy may quickly become irrelevant. Negative yields could spread to other instruments. As Kim Rupert of Action Economics puts it, “There’s no telling anymore in this environment. They [negative yields] could spread.” Rupert adds, “The whole bias is for yields to go lower. I would not rule out the front end of the curve going negative.” Visit CNBC for more.
- Gold remains a time-honored safe-haven asset. That said, the metal has struggled somewhat to shake off the infectious, panic-driven volatility roiling markets for weeks. Gold has demonstrated great resilience through the turmoil and held up far better than risk assets. However, the price “choppiness” has left some precious metals watchers scratching their heads. Not to fear, says one of the world’s most famous investment banks. According to Goldman Sachs, gold is showing signs of repeating its legendary performance during and after the 2008 financial crisis. Precious metals prices were volatile during the initial panic, then they achieved an epic rise sparked by the Federal Reserve’s first quantitative easing announcement. For more on Goldman’s projection, read the latest blog article from Augusta Precious Metals.
Just a couple of weeks ago, many observers were optimistic that the virus would be contained quickly and the economy “reopened.” Much of that optimism has since turned to worried uncertainty. Experts are even predicting the U.S. will see unemployment levels in excess of those registered during the Great Depression.
First Step To Portfolio Protection: Act on Gold Performance During Pandemic
It is understandable for retirement savers to be worried – even frightened – about the security of their portfolios. However, that anxiety should not prevent you from taking steps to help protect your vulnerable hard-earned savings. Call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com. Let our knowledgeable customer success agents answer all of your questions about gold performance during the pandemic and which form to choose. Find out how easy it is to put the protective power of gold on your side by requesting our free precious metals guide. Also, ask about reserving your seat for the Profit & Protect Web Conference hosted by senior economic analyst Devlyn Steele. This is the presentation that convinced Hall of Fame quarterback Joe Montana to become both an Augusta customer and our company ambassador.
We look forward to hearing from you.