Gold finished unchanged while silver futures prices drifted modestly lower last week. Strength in the U.S. dollar and equity markets diverted some attention from precious metals.

For now at least, no amount of bad economic news is stopping the rally in stock prices. It is a perfect illustration of why deflation is unlikely to prevail over inflation.

The Fed is pouring $4 trillion into asset markets. At the same time, 20 million Americans lost jobs in the span of a month. Both are extraordinary events, one-of-a-kind in the history of the nation.

It is evident which force matters most in determining equity prices.

It also isn’t hard to guess what the Fed will do if collapsing employment and corporate profits should start dragging stock prices lower once again. After all the central planners say there are plenty of “tools” remaining in their box. We are supposed to be reassured.

Judging based on activity in the retail market for bullion, plenty of Americans are not comforted. Buyers continue to vastly outnumber sellers and premiums remain high.

Supply problems are also a factor. The U.S. Mint has temporarily shut down operations for the second time in a month, based on fears of a COVID-19 outbreak among its employees.



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