Precious metals news

Consumers aren’t the only ones defaulting on their debts: Corporate bond defaults were up massively in 2023, especially for high-risk junk debt, and the trend is continuing this year at a pace not seen since the 2008 global financial crisis. Unsurprisingly, companies selling low-rated junk debt are being hit the worst.

In some Asian markets, the demand for physical gold has declined due to high prices, leading consumers to reduce purchases. This shift has prompted dealers in key markets like India to offer substantial discounts, while in China, gold premiums have fallen to their lowest since July. Although the demand from consumers has weakened, there is still investor interest in gold as a safe haven, particularly in China, amid concerns about an uneven economic recovery. However, the People's Bank of China is expected to keep its import policy unchanged unless there's notable fluctuation in the RMB exchange rate.

The Federal Reserve's recent interest rate hikes have deviated from the historical norm, resulting in a net loss in interest income for U.S. households for the first time in fifty years. While increases in the Fed's rates typically lead to a net gain for households, the interest paid on mortgages, credit cards, and other debts has surged by nearly $420 billion since March 2022, overshadowing the $280 billion rise in interest income. This shift has led to a significant reduction in household net interest income, marking a departure from past trends. Although the impact of Fed policies on employment has not yet mirrored previous cycles, with no significant layoffs or wage stagnation observed, the decrease in net interest income has become a notable burden on consumer spending.

As the Federal Reserve's crucial March meeting approaches, U.S. stock indexes have retreated from record highs in anticipation. The key event on Wednesday will reveal the Fed's latest monetary policy decision and economic forecasts. Investors are keenly awaiting to see if the Fed maintains its projection of three rate cuts in 2024, especially after recent inflation data indicated a slower than expected decline, adjusting market expectations for rate cuts from six to three this year. The outcome hinges on whether the Fed considers recent inflation trends significant enough to alter its monetary policy further.

Gold has shown promising signs of continued momentum, with recent technical indicators reinforcing bullish sentiments. After initially highlighting a bullish reversal in October 2023 and issuing a buy signal, the recommendation was adjusted to neutral in December when gold failed to maintain a close above $2100. The metal's trajectory is now set on breaking out of a four-year base, potentially entering a new bull market with targets of $2400 in the short term and, following a monthly close above $2200, long-term projections range between $3600 to $4000, signaling strong buyer control and diminishing selling pressure.

The price of silver has experienced a pullback, trading around $25.10, after approaching the upper limit of its long-term range. This correction is likely attributed to adjusted expectations for U.S. interest rates, which are now anticipated to stay higher for an extended period. Given silver's status as a non-yielding asset, higher interest rates increase the opportunity cost of holding it, especially in light of recent U.S. inflation data indicating persistently high inflation. This scenario postpones the likelihood of the Federal Reserve cutting interest rates, exerting downward pressure on silver prices.

Despite initial signs of declining inflation and rising consumer confidence at the end of last year, the early months of 2024 have presented a mixed picture. Inflation rates remain above 3%, retail sales have weakened, and wholesale prices have unexpectedly increased. However, these developments haven't significantly shaken investor confidence, with expectations still leaning towards the Federal Reserve reducing interest rates within the year, albeit potentially later than anticipated. This anticipation comes amidst consumers' ongoing frustrations with high prices across various sectors. The Federal Reserve's upcoming meeting is expected to further clarify their stance on inflation and interest rates, providing insight into the economic trajectory for the near future.

Gold has recently hit a record high, attracting the attention of young Chinese investors who are now focusing on acquiring gold beans and jewelry. These gold beans, weighing one gram each and priced at approximately $84.5 (600 yuan), are particularly popular among China's Generation Z for their affordability and the protection they offer against economic uncertainties. The slight premium over the global market price reflects production costs and the closed nature of China's market, making these beans a valuable commodity for investment.

As we move into 2024, gold has seen an impressive rally, breaking the US$2,100 per ounce mark and nearing US$2,200, raising questions about its potential for further gains and increased investor interest. The past year, 2023, was notable for gold's resilience and performance, even amid high interest rates, setting new record levels and outshining most other asset classes except US equities. A key driver of gold demand has been its unwavering appeal in the jewelry sector, particularly in emerging markets like India and China, despite the significant price increase from US$250 in 1999 to US$2,000 now. This enduring interest suggests a market readiness for gold at these high price points.

Goldman Sachs anticipates the Bank of Japan (BOJ) will increase interest rates at its next meeting, marking the first rate hike since 2007. This prediction follows recent developments, including stronger wage outcomes and speculation fueled by news articles. The expected policy shift suggests the BOJ will abandon its negative interest rate policy, cease yield curve control, maintain current government bond purchase levels, and keep its exchange-traded fund holdings unchanged. This shift is backed by recent wage negotiations and diverges from previous expectations of a rate change in April.

The American office real estate market is experiencing significant challenges post-Covid-19, with vacancy rates soaring to 17%—higher than during the 2008 financial crisis. Despite this, forced sales of office buildings remain rare, with only 3.5% of office deals in 2023 involving distressed sellers. This is partly because a still-strong economy has allowed tenants to continue paying rent. However, as leases expire, many companies are downsizing their office space by 30% to 40%, suggesting that the market may face more stress in the future.

Looking Deep Inside The Workings Of Bitcoin Mining Engine... it's much worse than I first realized.  While I reported last month that the Bitcoin Mining Industry really didn't make money in the previous year and a half, the situation moving forward is totally unsustainable...

The Federal Reserve is often viewed as a neutral guardian of the economy, tasked with safeguarding employment and ensuring stable prices. However, the Fed is run by individuals who, like anyone else, are swayed by certain motivations. Do the people behind the Fed truly have the incentive to remain impartial? Our guest commentator demystifies the notion of ‘Fed neutrality,' revealing the intersections of politics and policy within its operations.

To truly understand the troubling "Dislocation" between higher gold and silver prices and the hemorrhaging of the Wholesale-Dealer Industry, you must watch this roundtable discussion with Bob Coleman and I, hosted by Tom from Palisades Radio...

In this episode, Peter reacts to a hotter-than-expected CPI report, big trades in Bitcoin, and the federal bill that would ban the popular social media app TikTok. He also notes silver’s historically low price, which is nearly 50% of its 2011 high.

Global silver production is on track to rise by 4.1% to 916.1 million ounces in 2024. This growth is mainly due to the restart and increase of operations that paused in 2023. Expected production boosts in Mexico, the US, China, and Russia in 2024 will compensate for decreases in Peru, Argentina, and Kazakhstan. Mexico, which contributed 24.1% (211.6 million ounces) to the global silver supply in 2023, anticipates a recovery to 224 million ounces in 2024 after a 3.2% drop due to 2023's operational challenges.

Silver is currently near the $25 mark, signaling a potential upward breakout. This interest is partly due to expectations of the Federal Reserve's supportive monetary policies, which typically benefit precious metals. Unlike gold, silver's identity fluctuates between an industrial and a precious metal, influenced by current market trends. Presently, it's acting more as a precious metal, though green initiatives worldwide could also push its price. The $26 resistance level is significant, suggesting strong market defense against further increases.

In Florida, an increasing number of homeowners are looking to sell their properties quickly due to the deepening insurance crisis. Currently, Zillow lists 204,833 properties for sale, with 5,244 flagged by "motivated sellers" ready to accept offers below their listed prices. This surge indicates a notable shift in the market dynamics.

Treasury Secretary Janet Yellen has expressed regret for previously labeling the 2021 inflation spike as "transitory." This term, used by both Federal Reserve and Biden administration officials, was meant to indicate that the pandemic-induced price increases would be short-lived. Yellen admitted in a FOX Business Network interview that "transitory" may have been interpreted by the public to mean a matter of weeks or months, acknowledging that the situation has extended beyond those expectations.

Despite a slowdown in inflation, US consumers continue to struggle with high prices, spotlighting inflation as a key political challenge ahead of the upcoming elections. It's proving to be a major hurdle for the Federal Reserve's goal of achieving a gentle economic descent. In terms of voter priorities, inflation trails only immigration and the broader economic landscape, but it leads issues like foreign policy, climate change, taxes, healthcare, and crime, as found in a recent Wall Street Journal poll. This sentiment is echoed in President Joe Biden's approval ratings on inflation management, with a striking 60% of voters expressing disapproval in a late February survey of over 1,700 registered voters.