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Gold Stays Strong

Gold again had a strong week, remaining above $1,280 all week due to several geopolitical events occurring simultaneously, including the troubled French elections, the recent MOAB (Mother of All Bombs) dropped by the U.S. in the mountains of Afghanistan, saber-rattling by North Korea and Iran, another terrorist attack in France, the coming U.S. federal debt limit crisis, the crackdown on dissent in Turkey and the U.S. air strikes in Syria. Gold did dip below $1,280 on April 24, but it was still up 2 percent ($25) for the month of April.

“Why Gold Could Keep Rising” – Barron’s, Monday April 24

The Commodities Corner column in the April 24 edition of Barron’s featured a piece titled “Why Gold Could Keep Rising.” The column opened by saying:

“After a sharp drop at the end of 2016, gold has regained its luster, and some investors are betting that uncertainty in the U.S. and abroad is likely to keep prices elevated this year. Gold is up nearly 12% in 2017, to $1,289.10 a troy ounce for June contracts on Friday. The precious metal’s appeal reflects concerns that the U.S. economy may have slowed in the first quarter, as well as worries about the outcome of the coming elections in Europe, where populist candidates loom larger than before.”

For April, gold performed as more of a “crisis hedge” than an inflation hedge. While overall there has been a drop in inflation rates, global unrest has worked to buoy the metal’s price. In mid-April, all three major inflation indicators turned negative, yet prices took off that week – mostly due to the outbreak of military action in Afghanistan, Syria and the Korean peninsula. In the past two weeks, oil prices have dropped 6 […]

In 2016, The Tooth Fairy Index Rose By Almost 20 Percent

In 2016, the Tooth Fairy Index Rose by almost 20 Percent
Based on the “Tooth Fairy” index, inflation appears to be heating up again, which should prove positive for gold and silver. The Tooth Fairy index is a remarkably accurate inflation gauge that was originally conceived and sponsored by Delta Dental. According to the index, the average parental payment for a tooth under the pillow in 2015 was $3.91 and rose to $4.66 in 2016 for a 19.2 percent year-over-year gain. Payouts for a child’s first tooth, typically higher that the average, are also up almost 10 percent to $5.72.

The Tooth Fairy index is not a random survey of local parents. It’s actually a scientific poll that includes 1,588 parents of children ages 6-12. Conducted during the week of Jan. 24-31 each year, the resulting margin for error is just plus-minus 2.5 percent.

This poll also indicates a general rise among families of disposable income. Regionally, payments of Tooth Fairy index were highest out West at $5.96 ($6.89 for first teeth), followed by the Northeast ($5.08 and $6.31), the South at $4.57 ($4.88) and finally the Midwest $4.04 ($5.70).
Inflation is Rising Elsewhere in the Economy as Well
After lying relatively dormant for the past five years, inflation is finally returning, and that’s a good sign for gold and silver, which are historic hedges against rising inflation. In the United Kingdom, commodities fund manager James Luke of Schroeders said gold and silver, hedges against inflation, are “under-owned” since the quantitative easing – and the associated printing of money – by central banks around the world portends higher inflation in the future.

As more of the world’s population moves into the middle class and can begin to see the value […]