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Gold Heads for Biggest Drop in Seven Years on Rising U.S. Yields

Gold Heads for Biggest Drop in Seven Years on Rising U.S. Yields This article by Justina Vasquez for Bloomberg may be of interest to subscribers. Here is a section: “Today real rates clearly moved higher and that’s clearly what moved gold lower,” Michael Widmer, head of metals research at Bank of America Merrill Lynch, said by phone from London.

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Comments of the Day

12 August 2020

 

 

Video commentary for August 11th 2020

 

Eoin Treacy's view

 A link to today's video commentary is posted in the Subscriber's Area

Some of the topics discussed include: precious metals pull back sharply. TIPS and Treasury yields rebound, stocks pause amid short-term overbought conditions, election risk yet to be priced in.   

 

 

Eoin's personal portfolio: profits taken in commodity positions

 

Eoin Treacy's view

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.

 

 

Gold Heads for Biggest Drop in Seven Years on Rising U.S. Yields

This article by Justina Vasquez for Bloomberg may be of interest to subscribers. Here is a section:

“Today real rates clearly moved higher and that’s clearly what moved gold lower,” Michael Widmer, head of metals research at Bank of America Merrill Lynch, said by phone from London.

“You had stronger PPI data out and I think when that data came out the market had another look at rates and expectations.” Exchange-traded fund investors also took a breather, seeing back-to-back outflows for the first time since June. On Friday, State Street Corp.’s SPDR Gold Shares, the largest gold-backed ETF, saw its biggest outflow since March. Meanwhile, a Bloomberg Intelligence gauge of senior gold miners dropped the most intraday since March, down as much as 5.7%.

 

Eoin Treacy's view

From a medium-term perspective gold does best in a negative real interest rate environment. The inverse correlation between TIPS yields and gold over the last two months has been very tight because investors have been actively seeking a hedge against devaluation of purchasing power.

 

 

Moderna Wants to Transform the Body Into a Vaccine-Making Machine

This article by Robert Langreth and Naomi Kresge for Bloomberg may be of interest to subscribers. Here is a section:

The excitement around mRNA goes beyond the pandemic. Proponents hope it can become a wide-ranging platform that will lead to vaccines for other difficult-to-treat infections, as well as customized cancer shots and even heart disease treatments. “It’s a big moment for mRNA therapeutics in general, because now it’s a household word and everybody knows about it,” says Derrick Rossi, a stem cell biologist who was a co-founder of Moderna in 2010 but is no longer affiliated with the company. “For Moderna, it’s the first time on the global stage.”

Interest in using genetic material to turn the body’s cells into vaccine factories dates to a series of experiments in the early 1990s. In 1993 researchers at Merck & Co. injected lab mice with loops of DNA that contained instructions for influenza proteins. To the surprise of the scientists, the mice generated an immune response that protected against the flu. The concept, so elegant it seemed almost too simple to be true, produced a surge of excitement among vaccine experts.

But though DNA vaccines worked in animals, they weren’t successful in initial human trials. It was difficult to get sufficient amounts of DNA into human cells, and when scientists overcame that, the vaccines turned out to be less potent than needed. (They were tried on the most challenging diseases, including HIV.) Over the years research into DNA vaccines has continued, but none has made it to market for humans. Inovio Pharmaceuticals Inc., a dark horse in the Covid-19 vaccine race, is testing a DNA-based approach. It uses a hand-held device to zap the skin with electric pulses after an injection, opening up holes in cell membranes to allow in more DNA.

A few lonely scientists pursued mRNA therapies for years. In 2005, University of Pennsylvania researchers Katalin Kariko and Drew Weissman found that a slight modification to the mRNA molecule could reduce the immune reaction, making it much more amenable for use in drugs or vaccines. (Since then, scientists have found ways to reduce mRNA’s other vulnerability inside the body, protecting it from enzymes by encapsulating it in lipid nanoparticles.)

 

Eoin Treacy's view

The world is betting big on new technology providing solutions to an intractable problem in record time. So far, results are positive and there is reason to be hopeful a treatment effective enough to improve consumer confidence will be available in the near-term.

 

 

On Target August 2020

Thanks to Martin Spring for this edition of his ever-interesting letter. Here is a section on the coronavirus:

Some of the biggest countries are recording amazingly low figures. In India the virus has killed only two people per hundred thousand. In Brazil less than 4 per cent of those infected are dying. Nowhere is Covid-19 much worse than a bad outbreak of flu. That’s why I call the extreme policies of lockdowns and border closures the Self-Inflicted Disaster.

You may remember that I suggested months ago that the extraordinarily low infection rates and deaths in East Asia could be because people of Mongoloid race have strong genetic resistance to the virus. Till now nobody has wanted to say that could be so, because of fear of being accused of racism. However now I see that the New York Times, in an article about Thailand’s amazing success fighting Covid-19, suggests there could indeed be a genetic component in the immune systems of Thais and other peoples of the Mekong River region. Thailand has experienced only 58 deaths from the virus; Vietnam none at all; China’s southwestern province of Yunnan fewer than 190 cases.

 

Eoin Treacy's view

There is an alternative interpretation of the fact that cases in Yunnan, Cambodia, Laos, Thailand, Myanmar and Vietnam has been so low. What if these populations already had herd immunity because they have been exposed to similar diseases in the past?

 

 

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