31/10/20: Gold Coins Market is Still Hedging Residual Covid Risk

Sales of the U.S. Mint gold coins have moderated off their pandemic highs, but remain elevated by historical standards, especially controlling for higher gold prices:

Since hitting a pandemic-period high of 216,500 oz in March 2020 (the highest sales volume since April 2013), the demand has moderated through June, topped 145,000 in July and 149,000 oz in August, and has been around 91,500 through the four weeks of October. This puts October sales above the last three years' average.

Average gold weight per coin sold remains relatively elevated and is co-trending with price per oz, most likely indicating lasting FOMO effect (herding by investors). The correlation is weaker than during prior episodes of major crises and recessions, suggesting that the pandemic-period demand is probably less influenced by the herding effects than in prior crises.

Annualized data through October also confirms precautionary, but not 'flight to safety' type of demand:

As the pandemic re-accelerates, it will be interesting to see how seasonality (uplift in end-of-year sales) plays out against the pandemic-related hedging positioning of investors.

25/7/20: Markets and COVID19: Unwinding Restrictions

My column for Manning Financial on the direction of the markets in the period of COVID19 restrictions unwinding: https://cfc.ie/2020/07/10/where-to-mr-market/.

13/6/20: Gold Coins Sales are Up, and the Markets are Screaming Something New

Some interesting movements in demand for gold coins in recent months, worth watching:

Price is up, and volume of sales is quite volatile. Still, sales are hitting highs.

• Following weaker y/y January and February, March 2020 sales rose almost x10 y/y in volume and average coin sold size rose from 0.5 oz in March 2019 to 0.674 oz in March 2020. 
• April 2020 sales were x3.25 times sales in April 2019 by volume, with average coin size rising to 1.0 oz. May saw a major fall-off in demand m/m but still posted sales x2.26 time those of May 2019, with average coin sold size down to 0.538 oz per coin. 
• Through June 13, June monthly sales are already x2.75 times higher than sales for the entire month of June 2019, with average coin size sold so far this June running at 0.985 oz per coin, against 0.625 oz per coin in June 2019. 

It seems investors still showing little signs of moderating safe haven demand for gold, despite robust performance in the financial markets until this week profit-taking blowout. 

Gold can be seen as both a hedge and safe haven against a range of key financial and political risks, but it can also be viewed as a long-run wealth storage tool, and, given its liquid nature, as a precautionary savings instrument for tail risks. If the current demand remains robust in the face of rising gold prices, we are likely witnessing a risk-return relationship/expectations shift amongst the savers and investors, away from considering trend-driven investment strategy of thee recent years and in favour of investing against a major concern for significant tail risks driving the markets in months and years ahead.

6/5/20: S&P500 Earnings and Revenues Growth 1Q 2020

With early effects of COVID19 pandemic in:

Both charts via Factset.