The COVID-19 virus sweeping the globe is having dramatic impact on asset and commodity prices. Particularly gold.
Contango, also sometimes called forwardation, is a situation where the futures price (or forward price) of a commodity is higher than the spot price of the contract today. Such is the case for gold futures where the futures price for gold exceeds the spot price.
This will not be the Last Contango for Gold.
And good luck finding physical gold in the form of gold bars. Gold coins, on the other hand, are available.
RIP, Honor Blackman.
We are in a Sea of Red.
Brent Crude is down 12.38% today while agriculture prices are down too.
US, Europe and Asia are in red territory. With the Dow down 3,000 points or nearly 13%.
It seems like a good time to hedge the stock market.
A scene at your local grocery store.
Volatility is spiking in virtually all asset classes.
Even gold the most in over three decades.
Wow. No where to run, no where to hide … from volatility. At least in terms of risky assets. Cash and Treasuries are the places to hide.
The coronavirus continues to scare investors as the death toll mounts. Sporting events cancelled, university classes going online, hoarding at grocery stores (although not in my neighborhood), etc.
Seemingly, investors are dumping gold for US dollars. Who woulda thunk?
(Bloomberg) — As panic engulfs global financial markets, the dollar stands out as a haven.
Investors are betting on the greenback as the only safety net amid growing concerns about a liquidity crunch and a global recession. Even gold is losing its luster and the rush out of emerging-market debt has been swift and brutal.
“It’s shock after shock that’s now prompting people to liquidate even gold to make sure they’re keeping cash in pockets,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “Holding U.S. dollars as a safety buffer cannot be underestimated.”
Gold is down again today but silver is getting blasted.
Gold volatility is skyrocketing.
Equities are on the rise with the prospect of more monetary and fiscal stimulus.
Death and a consumer discussing why so much toilet paper is being hoarded.
Its a wonderful day in the financial neighborhood! … NOT!
Gold trading hits record high.
As gold keeps on rising.
S&P 500 futures are down 3.201%.
USD Swaption vol is escalating.
The US Treasury 10-year yield is down another 20 bps.
Fannie Mae’s 30-year current coupon just fell below 2%.
What up with that?
It is the night before Monday opening.
And it is ugly.
The Dow Jones mini is down 346 points as of 7:30pm EST on Sunday evening.
Bond market futures are up, meaning yields are down.
Oil futures are down 2.55%. And GOLD is up 1%!
Yes, it is the coronavirus impact global supply chains.
Or it was Tyson Fury licking Deontay Wilder’s neck in their rematch fight on Saturday night.
The coronavirus is ravishing China … and may soon ravish the USA as well. As a result, the inverse correlation between gold and the US dollar is weakening and resembles the weakening that occurred during the financial crisis.
Yes, gold is rising again in the face of coronavirus fears ravaging the Chinese economy.
The CFTC’s Gold Non-commercial long contracts/futures remains near an all-time high.
Here is the gold/US dollar volatility surface.