Correlation Economics Backup

Gold demand went up (H1 2019 2,181.7t) due to central bank buying and I expect this one to grow. However, H1 2019 supply was 2,323.9t, so we still have more supply than demand.

The Fed has halted QT, so the balance sheet will stay at $3.8 trillion. This is bullish stocks and gold. "The Fed also said it was ending the program to shrink its balance sheet, known as quantitative tightening, on Aug. 1" This is 2 months earlier than the end of September. This was also the reason why everyone was buying bonds on that day.

Expect GDP to crash.

If you've been following my correlations, a PMI below 50 means that GDP growth is going down.

Reminder that we are in August now.

Bullionstar reported that the Central Bank Gold Agreement will end in September 2019. I cannot stress enough how important this is. Here is the press release from the ECB. European countries will now be able to buy gold again. Western central banks have not been buying gold since 1966. Since the crisis in 2008 started, the eastern central banks have been buying gold but the western central bank purchases were capped. You can see in this chart how eagerly these western central banks are to start buying gold. Finally, in September 2019, they will be able to buy gold again, especially when gold is now a Tier 1 monetary asset (Basel III). They will scramble to buy it. I expect gold prices to move up after September 2019, especially when the ECB and the FED are resorting to QE again after September 2019.

Just an update that China silver whale is still buying silver.

Both the ECB and the Federal Reserve are expected to resort to QE and rate cuts in September 2019. Make your own conclusion.

If I don't have any ideas anymore what to buy, I use the  stock screener . Almaden Minerals is a speculative play on higher gold and silver prices. What you want to do is filter on 4 attributes: market cap, P/E, dividend yield and percentage change. 1) Market Cap: do not choose small companies as they are mostly fraudulent or don't have sustainable earnings. Don't choose big companies because these are not volatile enough to get fast profits from. I'd filter between 200 million and 4 billion. 2) P/E ratio: choose the companies with the lowest P/E ratio, these companies are dirt cheap while still having earnings. Cheap is below P/E of 5. But do not choose below P/E of 2 because those are mostly companies that are going bankrupt or have bad growth. 3) Dividend yield: always choose companies that have dividends, because these companies have real earnings and can prove they have sustainable earnings to reward investors. The higher the better of course, but don't pu...