E Tuesday Talk: COVID Summer, Take 2

It's take 2 for COVID this summer, with vaccinations and the Delta variant sharing the billing. Positive signs on the job front clashing with inflation and continuing corona concerns have left some investors chewing popcorn till something happens.

Popcorn, Food, Carton, Container, Movies


Monday, the markets didn't move much. The S&P 500 closed at 4,432, down 4 pts, the Dow Jones closed at 35,102, down 106 pts, while the Nasdaq Composite closed at 14,860, up 24 pts. Currently S&P futures are down 1 pt, Dow futures are down 20 pts and Nasdaq futures are up 12 pts. None of this is to say there was no action on the street, yesterday. Moderna (MRNA), the vaccine superstar jumped 17%, while Ball Corp. (BLL) a maker of aluminum cans, as well as defense and aerospace related hardware and systems, jumped 2.5% on strong Q2 earnings.

Chart: The New York Times

2020 saw many investors savvy and unsavvy alike, get into precious metals. The results seemed to be pretty good, where as 2021 is proving to be somewhat bumpier. TalkMarkets contributor Clint Siegner in his article Bullion Investors Hang Tight urges investors to hang tight and be mindful of history both past and future. More of an Op-Ed than a news piece, here is some of what he has to say:

"Officials introduced paper gold and silver contracts specifically to increase price volatility and discourage physical ownership of metals. After nearly 50 years (since Nixon moved America off the gold standard), it is safe to say their strategy was a success. It is often excruciating to own metal when the short-run price action is completely disconnected from fundamentals.

The price smash in the last couple of trading days is a case in point. Nobody can make a coherent fundamental case for the move lower. It is best to simply remember there are very good reasons to own physical metal even when it feels like you are being punished for doing the right thing."

Some of the reasons Siegner gives for owning physical gold or silver are these:

"Paper money always dies. The U.S. dollar’s reign as world reserve currency is long in the tooth, and the greenback looks set to lose its privileged status in the years ahead...Coins, rounds, and bars are private, portable, and off the grid. It is possible to put a million dollars’ worth of gold coins into a suitcase and travel anywhere in the world. When you arrive, those coins can quickly and easily be converted into the local currency...Precious metals do perform well over the long term, even if it often doesn’t feel that way in the short term. Two years ago, silver was priced below $15/oz. Twenty years ago silver was under $5/oz (SLV). Gold (GLD) has outperformed stocks over the past two decades."

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