Precious metals news

Treasury yields saw a significant drop on Thursday, driven by a continued downturn in U.S. financial stocks, which fueled trader speculation of an accelerated timeline for Federal Reserve interest rate cuts. The five-year U.S. Treasury yield decreased by up to 9 basis points, reaching its lowest point since June at 3.75%. This movement reflects a growing anticipation among traders for a more substantial total reduction in Fed interest rates throughout the year, with swap contracts even hinting at the possibility of rate cuts commencing as early as March. This shift in expectations comes despite Federal Reserve Chair Jerome Powell's recent remarks suggesting such moves were unlikely in the near term.

The price of US West Texas Intermediate crude oil experienced a significant drop, falling more than 2% to dip below $75 a barrel. This decline came amid emerging reports of a possible ceasefire between Israel and Hamas, potentially easing recent geopolitical tensions. Bloomberg has indicated that negotiations aimed at halting the conflict and securing the release of civilian hostages held by Hamas are making progress, though these talks are still in the preliminary stages without immediate expectations for a resolution. Concurrently, Al Jazeera reported Qatar's announcement that Israel has consented to a ceasefire proposal, introducing a hopeful outlook for an end to the hostilities. These developments have influenced oil markets, as traders react to the potential for decreased geopolitical risk in the region.

New York Community Bancorp experienced a significant drop in stock value, marking a record plunge as market concerns grew over the bank's exposure to commercial real estate risks. This downturn comes despite the bank previously benefiting from the struggles of other regional lenders. The decline was triggered by investor apprehension that the bank could signal upcoming challenges within the commercial real estate sector. In response to these lending risks, which include problematic loans associated with a co-op complex and office space, New York Community Bancorp has increased its cash reserves and faces heightened regulatory scrutiny due to its size. The bank also reported a substantial rise in its provision for loan losses, totaling $552 million, which took analysts and investors by surprise, indicating a cautious approach to potential future defaults.

Genesis Global Holdco LLC has reached a settlement with U.S. regulators to conclude a lawsuit alleging violations of securities laws via its discontinued Gemini Earn program. As part of the settlement, Genesis, a branch of Barry Silbert's Digital Currency Group, will pay a $21 million fine to the U.S. Securities and Exchange Commission (SEC). However, this payment is contingent upon the company's ability to fully reimburse its customers and other creditors under its Chapter 11 bankruptcy proceedings. The deal, pending approval from a bankruptcy judge, addresses the SEC's claims that Genesis unlawfully solicited funds from investors through the Gemini Earn program, in collaboration with Gemini Trust Co.

There's been a noticeable uptick in Americans seeking jobless benefits, with applications hitting the highest level in nearly three months. Last week, filings for unemployment benefits jumped to 224,000, marking an increase of 9,000 from the week prior. Despite this rise, the broader context shows that layoffs are still significantly low by historical standards. The less fluctuating four-week average of claims also saw a rise, moving up by 5,250 to reach 207,750. This indicates a slight shift in the job market dynamics, though the overall health of the employment sector remains robust.

Gold prices have been on a tear, with bullion prices ripping upward since the outbreak of war in the Middle East late last year. While mining stocks have gone up as well, physical gold has been leaving them in the dust:

The U.S. commercial real estate sector, already shaken by the pandemic's onset, faces renewed distress as New York Community Bancorp and Aozora Bank report significant financial setbacks. This turbulence sent New York Community Bancorp's shares tumbling and raised alarms across global banking sectors, from New York to Tokyo. The industry struggles with depreciating property values, challenges in loan repayment, and a bleak outlook from investors, signaling potentially widespread defaults and financial strain on lenders.

In January, U.S. job cuts surged to the highest level in 10 months, with a 136% increase from December. This spike was primarily seen in the financial and technology sectors due to restructuring efforts. Despite this monthly jump, the year-on-year figures show a 20% decrease in job cuts from January 2023. The financial industry, in particular, experienced a significant rise in layoffs, announcing 23,238 job cuts, more than double compared to the same period last year.

Join Mike Maloney in an insightful conversation with Russ Gray about the current state of the financial system.

Pakistan is preparing to launch a new series of currency notes, incorporating advanced security features to tackle counterfeiting issues. The State Bank of Pakistan's Governor, Jameel Ahmed, announced that the updated currency will feature distinctive security identifiers and modern designs. This initiative is intended to enhance the credibility and reliability of Pakistan's monetary system, and foster confidence among businesses and citizens. The introduction of these new notes will be gradual, progressively replacing the existing ones in circulation.

Global commodity markets are experiencing a "super squeeze," as noted by HSBC's chief economist Paul Bloxham. This situation, characterized by higher prices due to supply constraints rather than a surge in demand, is poised to intensify due to geopolitical and climate risks. This super squeeze is driven by factors such as political uncertainties, climate change impacts, and insufficient investment in green energy transition.

Fed Chairman Jerome Powell indicated on Wednesday that a rate cut by the Federal Reserve is unlikely by their March meeting. Powell expressed the committee's need for more confidence in the inflation trajectory before considering a rate reduction. This statement followed the Fed's January meeting, where they kept the benchmark interest rate unchanged. However, Powell did mention the possibility of rate cuts later in the year. Following his comments, stock markets reacted negatively, with the Dow Jones Industrial Average dropping by 300 points, as traders' hopes for an early rate cut, potentially pre-empting a recession, were diminished.

New York Community Bancorp (NYCB), known for rescuing assets of the faltering Signature Bank in 2023, is now facing its own challenges. This week, NYCB's stock took a dramatic 46% dive, following an unforeseen net loss report. If this leads to more issues in banking industry, many could look to assets like gold as a safe haven.

The World Gold Council is back with gold demand trends for 2023. Last year, gold demand reached a record high, driven by strong central bank purchases and sustained jewelry demand, despite significant outflows from Exchange-Traded Funds (ETFs). The total annual gold demand, excluding over-the-counter (OTC) transactions, was 4,448 tons, slightly lower than the robust demand seen in 2022. However, including substantial OTC and stock flows, which amounted to 398 tons, the total demand for gold in 2023 escalated to an unprecedented 4,899 tons.

The Federal Reserve is signaling a cautious approach to adjusting interest rates, emphasizing the economy's resilience and the potential risks of re-igniting inflation. Despite the market's anticipation for rate cuts, the Fed's stance remains grounded in ensuring sustained economic health and stability. This decision comes amidst a backdrop of robust economic growth and consumer confidence, suggesting a strategic patience in monetary policy adjustments.

An International Monetary Fund (IMF) official highlighted concerns over potential 'disorderly' sovereign debt defaults due to delays in the debt restructuring processes for low-income countries. The G20's Common Framework, aimed at facilitating these processes, faces criticism for its slow pace and disagreements among creditors. The IMF's call for acceleration comes amid rising defaults and challenging economic conditions in several countries.

The Federal Reserve is anticipated to maintain current interest rates at its Wednesday meeting, with investors keenly observing for hints of future reductions. Speculation exists that the Fed might adjust its statement to reflect a neutral stance, potentially setting the stage for rate cuts. There's also anticipation around Fed Chair Jerome Powell's press conference, where he may begin to set expectations for easing monetary policy, while managing market predictions about the extent and timing of these changes.

Following an 8% correction at the start of 2024, silver has captured investor attention as a long-term value play. The March Silver contract is highlighted for its potential upside, attributed to China's economic recovery measures and the anticipation of U.S. interest rate cuts. With silver's high beta nature and its historically low valuation compared to gold, the metal presents a compelling case for investment ahead of potential market shifts.

Ten-year Treasury yields have dropped towards 4%, the lowest in two weeks, amid expectations of potential interest rate cuts by the Federal Reserve. This comes as the U.S. sees signs of strong economic growth, low unemployment, and inflation nearing the Fed's target. The market's optimism is also buoyed by substantial earnings from U.S. megacaps, with the S&P 500 nearing new milestones. However, contrasting fortunes are seen in China, where market sentiment wanes amidst ongoing real estate challenges.

Barry Sternlicht, the billionaire CEO of Starwood Capital, has forecasted a massive $1 trillion loss in the U.S. office market, attributing the decline to the permanent shift towards remote work post-COVID-19. According to Sternlicht, the U.S. office market, previously valued at $3 trillion, has plummeted to around $1.8 trillion. He described this downturn as an "existential crisis" for the office segment of the commercial property market and criticized the Federal Reserve for exacerbating issues within capital and real estate markets.