Precious metals news

Silver presents an attractive investment option, thanks to its dual role as both a precious metal, akin to gold, and a critical component in various industrial applications, ranging from solar panels and computing to healthcare. Its value is uniquely positioned to benefit from economic growth, making it particularly responsive to the state of the economy. Currently, silver is considered undervalued when compared to gold, as highlighted by the gold/silver ratio. According to Charlie Morris from ByteTree, the ratio now stands at about 88 ounces of silver for one ounce of gold, against a 30-year average of 67 ounces, indicating silver's potential for growth.

Gold prices experienced a notable increase overnight, nearing $2,200 per ounce, influenced by the market's anticipation of potential interest rate cuts by the U.S. Federal Reserve within the year. This surge in gold values comes as traders keenly await upcoming inflation data, which is expected to play a crucial role in determining the timing of these anticipated rate adjustments.

Federal Reserve Chair Jerome Powell is prepared to lower interest rates to support the job market, despite potential risks of sustained high inflation. This shift, aimed at preventing job losses, marks a notable pivot from the Fed's previous strategy of raising rates to curb inflation. Powell emphasized this potential policy change in light of recent unemployment trends, highlighting the Fed's focus on employment stability over short-term inflation concerns.

In 2024, CEOs see the U.S. national debt as the top geopolitical threat amid global economic turmoil, including rising costs, labor challenges, trade tensions, and geopolitical instability. The Conference Board's survey of 1,247 C-suite executives highlights concerns over debt and deficits, amidst broader issues like AI technology, human capital management, and sustainability. This perspective underscores the need for future-ready leadership amidst global challenges.

Experts say the housing market likely won't see more affordable mortgage interest rates for a while.

The Federal Reserve is anticipated to lower interest rates, which may positively impact President Joe Biden's reelection campaign by potentially easing public concerns over high inflation and increasing housing costs. This move, however, is expected to attract criticism, especially from Republican circles, including Donald Trump, who argue that the Fed's actions could unfairly influence the election outcome. Trump has preemptively suggested that Fed Chair Jerome Powell, appointed by him in 2018, might lower rates to benefit the Democrats.

Iran's currency dropped to an all-time low of 613,500 to the dollar amid the Persian New Year celebrations. The scarcity of open exchange shops during the Nowruz holiday, which spans from March 20 to April 2, exacerbated the situation. High demand for foreign currency, particularly dollars and Euros, due to holiday travel, coupled with limited access to exchange services, significantly influenced the currency's valuation. This event reflects broader economic pressures and the impact of seasonal factors on Iran's financial stability.

In 2024, gold is expected to shine brightly, driven by three pivotal factors: anticipated interest rate cuts by the US Federal Reserve, a weakening US dollar, and ongoing geopolitical tensions. These elements are forecasted to sustain high gold prices, with expert predictions suggesting that the metal will not only remain above $1,950 per ounce but could also surpass the $2,500 mark. This optimistic outlook is supported by several research agencies, which have adjusted their price forecasts upward, indicating a robust period ahead for gold investors.

Recently, gold has responded strongly to real yields, buoyed by significant central bank purchases. With real yields peaking, ongoing geopolitical tensions, sustained demand from central banks, and robust retail jewelry demand, JP Morgan holds a positive outlook on gold. They argue for its inclusion in diversified portfolios for its potential to protect against short-term risks, serve as a long-term store of value, and diversify portfolio risk.

Over the last three years, physical gold has significantly outshined gold-mining company shares, marking one of the most substantial performance gaps in recent decades. Gold's value soared to a new record, surpassing $2,200 per ounce, whereas the PHLX Gold/Silver Index, representative of gold-mining companies, has not seen growth in the same period. This trend suggests that after a phase where gold shares lag behind physical gold, gold-mining shares usually bounce back, outperforming rather than gold bullion's performance declining. Therefore, the historical pattern indicates potential for gold-mining shares to offer lucrative returns in the wake of their underperformance compared to physical gold.

Last week, Peter was interviewed on Speak Up with Anthony Scaramucci. In their conversation, they covered a wide range of important topics, including inflation, the fate of the dollar, and the trade-offs between gold and cryptocurrency. 

Goldman Sachs forecasts a positive returns for commodities in 2024, anticipating a 15% return driven by global central banks lowering interest rates. This monetary policy shift aims to bolster both industrial and consumer demand. The firm highlights potential in copper, aluminum, gold, and oil, emphasizing selective investment due to non-uniform gains across all commodities. The optimism stems from a notable first-quarter performance, with commodities like crude oil strengthening, gold reaching new highs, and copper prices surging.

Not ONE, but TWO European Silver ETFs saw significant increases in silver inventories and investment over the past two weeks.  Who are the entities buying silver in Europe?  Also, it's time to put some light on the lousy analysis by members of our community on the Bitcoin Mining Industry...

Assuming CPI measurements are not understatements, the dollar's value has plummeted by a staggering one-fifth since 2020, yet, rather than acknowledging its role in fueling this economic turmoil, the Biden administration deflects, casting capitalism and corporate greed as the villains. The latest February CPI data show more signs of the upcoming inflation bloodbath.

Please note: the CoTs report was published on 03/22/2024 for the period ending 03/19/2024. “Managed Money” and “Hedge Funds” are used interchangeably.
The Commitment of Traders report is a weekly publication that shows the breakdown of ownership in the Futures market. For every contract, there is a long and a short, so the net positioning will always be zero, but the report shows who is positioned long or short. Historically, Hedge Funds (Managed Money) dominate the price action in both Gold and Silver. That continues to be the case, but it’s possible that there could also be some Hedge Funds looking to stress the Comex by taking physical delivery.

This time Peter tackles Jerome Powell’s speech from Wednesday, in which he announced that the Fed is holding the federal funds rate between 5.25 and 5.5%. He also briefly discusses Bitcoin’s pullback and the media’s lies about Donald Trump. 

The Bank of Japan’s historic move to end the country’s negative interest rate policy after nearly two decades triggered a jolt upward to new all-time highs for gold against the yen. But what are the implications for gold in the medium and longer term? The answer is far from simple. 

Central banks' increasing interest in gold, alongside anticipated Federal Reserve rate cuts, are fueling expectations for a renewed gold bull run. The combination of strong physical demand, substantial official sector purchases, and the Federal Reserve's dovish stance is predicted to push gold prices to an average of $2,250 per ounce in the next quarter and maintain an annual average of $2,113 per ounce for 2024. With traders and investors currently under-positioned in gold, the expected reduction in interest rates could boost speculative interest and ETF demand, potentially driving prices to exceed $2,300 in the coming six months. Moreover, factors such as central banks' record gold purchases, the desire to hedge against inflation and default risks, and geopolitical tensions are likely to support and even amplify the price rally.

Will 2024 be the year of the metals? Gold has just reached a fresh record high driven by strong retail demand and record central bank buying. With the prospect for rate cuts in the US later this year, further strength could lie ahead.

Incrementum is back with their latest chartbook featuring the latest gold and silver charts.