Precious metals news

~$2.5 Billion in Liquidity in #Silver Futures trading as the price moves into what appears a significant breakout mode:

The UK reported a welcome decline in inflation to its lowest since September 2021, exceeding analysts' predictions. This news comes as the Federal Open Markets Committee convenes to discuss US interest rates, with the outcome to be announced later today. While no change in rates is anticipated, the Committee’s projections on future rate changes, known as 'dot plots', are highly anticipated and could signal significant market cues.

Fed Chair Jerome Powell said Wednesday that the January and February consumer price index and the January personal consumption expenditures price index were “quite high, but there's reason to think that, at least for the first month of the year, that “seasonal effects” were at play. “We don't want to be completely dismissive of it,” Powell said. “I always try to be careful about dismissing data that we don't like—so you need to check yourself on that.”

Analysts at PIMCO say that for the Fed to reach its goal of lowering inflation to 2%, we need fewer people to be employed. Reduced incentives to offer raises and bonuses and less spending from the “resilient” American consumer can help cool down inflationary pressure. But there’s an elephant in the room: Why do we let a handful of unelected central planners decide what’s best for markets (and human beings) to begin with?

According to Wharton Professor Kent Smetters and insights from notable hedge fund managers Mark Spitznagel and Ray Dalio, the US is on the verge of a severe economic downturn, potentially culminating in the worst stock market crash since 1929 due to an unsustainable debt trajectory. Federal spending has significantly outstripped tax revenue, a trend exacerbated by the global financial crisis and further intensified during the pandemic. To hedge against an economic downturn, Smetters recommends buying bonds that adjust for inflation.

Lisa Shalett, the Chief Investment Officer at Morgan Stanley Wealth Management, is highlighting the potential risks to US stocks from the increasing trend of de-dollarization. She notes that the US dollar's dominance in global trade and its status as a primary reserve currency are being challenged, putting structural pressure on the dollar that could negatively impact US equities. Shalett advises investors to brace for a shift in the US dollar regime, citing factors such as the surge in gold and bitcoin prices, the termination of Japan's yield curve control, and deteriorating US-China relations. These developments threaten to reverse the benefits the US has enjoyed from the dollar's strength, including low import inflation and affordable energy costs, which have been fundamental in supporting high liquidity and financing for US deficits and debt.

According to U.S. Attorney's Office, Northern District of Illinois, a 52-year-old from Houston, Texas, has been charged with federal fraud for leading a digital currency scheme swindling investors out of over $10 million. From 2018 to 2023, Dunlap and associates falsely marketed the Meta-1 Coin, claiming it was backed by an art and gold portfolio valued at approximately $44 billion. The indictment reveals Dunlap manipulated the Meta-1 Coin's market price using automated software, inflating its trading volume on a fabricated exchange platform. If convicted, he faces four counts of mail fraud and was arrested in Virginia, with orders for his removal to Chicago for trial.

UK inflation experienced a significant drop to 3.4% in February, reaching its lowest level since September 2021 and falling below economists' expectations. This decline from January's 4% rate marks a continuation of the trend towards easing inflation, particularly noted in the costs of food, restaurants, and cafes. Despite the overall reduction, housing and fuel prices applied upward pressure on the inflation rate. Notably, food and non-alcoholic beverage prices have risen at the slowest annual pace since January 2022, highlighting an eleventh consecutive month of slowing inflation rates from a 45-year peak in March 2023.

Despite historically high interest rates set by the Federal Reserve, the anticipated US recession has surprisingly failed to materialize. This anomaly has left economists scratching their heads, especially given the typical downturns following past rate hikes aimed at curbing inflation. The resilience of the US economy is attributed to several factors: homeowners benefiting from exceptionally low mortgage rates during the pandemic, robust household finances, and a job market that remains strong despite aggressive monetary tightening.

The massive cost pressure that hit the primary silver mining industry pushed the group's total breakeven higher than the silver market price. The market seems to be now understanding this dynamic, which may be the motivation and driver of recent higher silver prices...

Florian Grummes from Midas Touch Consulting believes gold's price could reach $2,535 per ounce by summer 2024. This forecast follows gold ending a 13-year correction, with its price previously fluctuating between $1,900 and $2,075 an ounce. Despite potential short-term pullbacks, Grummes views any dips as buying opportunities, attributing the rally to strong demand from Chinese investors and central bank purchases, alongside a favorable macroeconomic environment for gold.

The market for commercial real estate collateralized loan obligations (CRE CLOs), a lesser-known financial instrument that funds high-risk real estate projects, is experiencing significant strain. CRE CLOs, which package speculative debt into bonds with various risk and return profiles, have seen a sharp increase in troubled assets. Over the past seven months, the proportion of these assets considered problematic has quadrupled, reaching over 7.4%. Some CRE CLOs are facing delinquency rates in the double digits, causing major stakeholders in this $80 billion industry to seek loan restructurings.

As Americans grapple with the financial strain from elevated loan costs across the board, all eyes are on the Federal Reserve's upcoming meeting. There's widespread speculation about whether the Fed will signal a shift from its recent series of interest rate hikes to potential cuts. The consensus among economists is that rate reductions could occur several times in 2024, but recent revisions, like Goldman Sachs' adjustment from four to three anticipated cuts, suggest a more cautious outlook. This reassessment reflects the complex economic landscape the Fed navigates as it balances inflation control with economic growth stimulation.

After 17 years of maintaining a negative interest rate policy, Japan's central bank has taken a historic step by raising its key interest rate from -0.1% to a range of 0%-0.1%. This move marks a significant shift in Japan's economic strategy, reflecting a response to rising consumer prices and increased wages. In 2016, Japan had lowered its interest rate below zero, aiming to invigorate its stagnant economy by encouraging spending over savings.

A recent Bankrate report reveals that 56% of Americans are financially unprepared to handle a $1,000 emergency expense. The survey found that only 44% could rely on their savings in such situations, with the majority having to resort to credit cards or borrowing from friends and family. According to Bankrate's senior economic analyst, Mark Hamrick, this situation emphasizes the broader issue of a consumer-based society that emphasizes spending over saving.

Japan's Government Pension Investment Fund (GPIF) is exploring the potential inclusion of illiquid assets, including forests, farmland, gold, and bitcoin, into its investment portfolio. This move, aimed at diversifying its holdings, marks a significant shift as these assets were previously not considered for GPIF's investments. In addition to seeking basic information on these unconventional assets, the GPIF is also gathering data on the markets, evaluation methods, and incorporation strategies of other illiquid assets like infrastructure, real estate, and private equity, which are already part of its investment landscape.

The Federal Reserve is contemplating slowing down the process of "quantitative tightening" (QT), which involves reducing its $1.5 trillion balance sheet accumulated from buying Treasury and mortgage bonds during the pandemic. This method, aimed at tightening financial conditions to combat inflation, allows the bonds to mature without renewal, indirectly raising long-term interest rates as the market absorbs the supply. As inflation begins to subside, the central bank faces the challenge of decelerating the balance sheet reduction without causing market disruptions similar to those experienced in the previous decade when it last attempted to unwind its holdings.

Thirteen miners became trapped following a rock fall at the Pioneer mine, one of Russia's largest gold mines located in the Amur region of Eastern Siberia, near the China border. The incident was reported by Russia's Ministry of Emergency Situations, which is currently working on restoring communications and clearing the transport slope to reach the miners. The situation underscores the risks associated with mining operations, especially in such large-scale facilities.

The proposal for a BRICS grain exchange, championed by Russian President Vladimir Putin, is gaining momentum. This initiative would enable buyers to purchase grain directly from producers within the BRICS countries—Brazil, Russia, India, China, and South Africa—and potentially include other nations like Egypt, Ethiopia, Iran, and the United Arab Emirates. With China and India being the largest wheat producers and Russia the leading wheat exporter, the establishment of such an exchange could significantly impact the global grain market. Eduard Zernin, the head of the Russian Union of Grain Exporters, anticipates that organizational details will be finalized by the upcoming BRICS summit in Kazan, Russia.

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