Precious metals news

The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on. 

Amidst rampant peso inflation and his scathing pro-free market speech at Davos, new Argentine president Javier Milei has taken office with radical proposals to overhaul the country. While his brief month and a half in Argentina’s Casa Rosada isn’t long enough to know if his bark will really match his bite, here’s a summary of some of his biggest actions so far:

Discover the potential influences on oil prices, alarming signs in the real estate market, and key developments in silver, Bitcoin, and the 10-year treasury.

The recent shift from remote to in-office work is causing significant discontent among employees, according to a survey by BetterUp. With the reduction of primarily remote roles and a push for returning to the office to foster connection and culture, employees are facing considerable adjustments. This transition is not only disrupting their routines and work-life balance but also impacting their financial well-being—costing them as much as a month's grocery bill. The survey, which included 1,400 full-time U.S. employees, highlighted increased burnout, stress, and intentions to leave their jobs, alongside decreased trust in their organizations, engagement, and productivity.

The World Gold Council is back with some interesting data on central bank gold buying habits. Reported global central bank gold reserves, via the IMF and publicly available sources, rose by a net 28 tons in December...

The recent U.S. job data presents a complex scenario for the Federal Reserve, as job growth surged unexpectedly with 353,000 new positions created across various sectors, and wages grew by 4.5% year-over-year. This robust employment growth, surpassing pre-pandemic levels, and the acceleration in wage increases could challenge the Federal Reserve's confidence in meeting its 2% inflation target. Despite these developments, the strong job market does not necessarily deter the Fed from considering rate cuts later this year, as it balances between fostering economic growth and controlling inflation.

In this week's Friday Gold Wrap Podcast, JD and Joel discuss why gold is down today, why the Fed could replay 2008, and other market and precious metals news.

The Federal Reserve's latest meeting underscored a robust U.S. economic outlook, with Chair Jerome Powell indicating that while rate cuts are on the horizon, immediate reductions are unlikely. The central bank seeks further evidence of inflation control before adjusting rates, emphasizing a methodical approach to ensure sustained economic stability. This cautious stance aims to balance growth, inflation, and employment metrics.

The International Monetary Fund (IMF) has issued a warning against hasty rate cuts by central banks, arguing that premature easing could jeopardize global economic stability. This cautionary stance reflects concerns over the delicate balance between stimulating growth and controlling inflation, as economies worldwide navigate the complexities of post-pandemic recovery and geopolitical uncertainties.

The VIX, often referred to as ‘Wall Street's fear gauge,‘ is currently portraying a sense of calm among investors, registering well below the 20 level. 

In January, the U.S. economy showcased its resilience by adding 353,000 jobs, significantly surpassing the Dow Jones estimate of 185,000. Meanwhile, the unemployment rate remained steady at 3.7%, defying expectations of a rise to 3.8%. Remarkably, average hourly earnings surged by 0.6% for the month, doubling the forecast and indicating a year-over-year wage increase of 4.5%, which outpaced the predicted 4.1%. The expansion in employment was broad-based, with professional and business services, health care, and retail trade leading the contributions.

Everyday people willingly spend years of their earnings on a mundane object in one of the first market manias in history...

January 2024 saw Europe's bond market shatter records, with over €350 billion in new debt sold. Public sector issuances, particularly from sovereigns, accounted for a staggering 55% of this total, highlighting a bumper month supported by a rush to secure yields before expected central bank rate cuts. Countries like Italy, Spain, France, and Germany led the charge, with Greece making a triumphant return to investment grade, pulling in record orders for its new bonds.

The story of America's job growth is more complex and nuanced than the government wants us to believe. In a world where job numbers wield significant influence over perceptions of economic health, it's crucial to scrutinize the data—and the methods behind their presentation—closely.
In his latest podcast, Peter Schiff delves into the murky waters of government economic reporting.

Jeffrey Gundlach, CEO of DoubleLine Capital, expressed skepticism towards the optimism of a "Goldilocks" economy—a scenario where conditions are just right for growth without triggering inflation. Speaking on CNBC's "Closing Bell," Gundlach voiced his concerns that such a perfect balance is unrealistic, especially after Federal Reserve Chair Jerome Powell's recent remarks, which Gundlach interprets as dampening the hopes for this ideal economic state. Gundlach remains steadfast in his prediction of a looming recession, countering the more optimistic view that the Federal Reserve's aggressive rate hikes over the past year haven't severely impacted economic expansion.

Gold demand reached an all-time high last year and is poised for further growth in 2024, fueled by anticipation of US Federal Reserve interest rate cuts, as reported by the World Gold Council (WGC). In 2023, overall gold consumption surged by approximately 3% to 4,899 tons, marking the highest level recorded since 2010. This increase was driven by robust demand in the less transparent over-the-counter market and continued strong purchasing by central banks. The WGC's annual report highlights the significant role of gold in the current economic climate, suggesting a bullish outlook for the metal's future.

Iran has positioned itself at the forefront of a significant move within the BRICS economic alliance, advocating for the creation of a BRICS digital currency in 2024 as a strategic step towards reducing global reliance on the US dollar. Throughout 2023, the BRICS nations have collectively focused on de-dollarization, alongside efforts to develop a native trading currency. These endeavors are expected to culminate in the launch of a new digital asset this year, marking a pivotal shift in international trade dynamics and currency utilization within the alliance.

Take a look at the analysts' individual forecasts and commentary, revealing their insights behind their forecasts for highs, lows, and average prices for gold, silver, platinum and palladium.

In Sprott Money's upcoming Monthly Wrap-Up video, Craig Hemke and Andrew Maguire will provide a comprehensive analysis of the economic outlook for February, focusing on three critical areas that could influence the trajectory of precious metal prices. They will discuss the impact of geopolitical events, such as political unrest, conflicts, and trade tensions, on investor behavior and the increased demand for safe-haven assets like gold and silver.

Mortgage rates in the United States have seen a modest decrease, offering a glimmer of hope to the housing market. According to Freddie Mac, the average rate for a 30-year fixed mortgage dipped to 6.63%, down from 6.69% the previous week. This slight reduction marks a return to a downward trend in borrowing costs, although significant relief for prospective homebuyers might still be some distance away. The Federal Reserve has maintained a steady approach to interest rates since July, with Fed Chair Jerome Powell indicating that while there is openness to rate cuts within the year, more economic data is needed before such actions can be undertaken.