Precious metals news

As both gold and bitcoin achieved record highs in 2024, investment experts are making the case for including both assets in 2025 portfolios, emphasizing their distinct characteristics and near-zero correlation. Gold, with its 5,000-year history, maintains a 0.03% correlation with the S&P 500 since 1971, providing proven protection against inflation and currency depreciation. Bitcoin, despite Fed Chair Powell's comparison to gold, shows different market behavior with a 0.21 correlation to the S&P 500 since 2014. Investment professionals recommend conservative allocations: BlackRock suggests up to 2% for bitcoin, while portfolio managers like Thomas Martin advocate up to 10% for gold. The key distinction lies in their risk profiles - gold serves as a stable store of value, while bitcoin offers potential for exponential growth but with the risk of total loss. This complementary relationship, rather than competition, makes a strong case for including both assets in diversified portfolios, particularly given e...

Economic experts gathering at the American Economic Association meeting in San Francisco have signaled a major shift in Federal Reserve policy expectations for 2025. The consensus suggests the Fed has entered a "hard pause" phase and may deliver just one rate cut this year, contrary to more aggressive market expectations. Morgan Stanley's Ellen Zentner interprets the Fed's recent communication as notably firmer, indicating a more cautious approach to policy changes. Former Obama administration economist Jason Furman emphasizes that the Fed has transitioned from a "might as well cut rates" mentality to requiring specific justification for any reductions. While Karen Dynan of the Peterson Institute projects three possible cuts, the overall outlook suggests limited Fed action unless labor market conditions deteriorate significantly. The economists maintain a generally positive growth outlook for 2025, citing strong stock market performance and improved confidence levels, though they acknowledge significant r...

The euro is once again nearing a one-to-one exchange rate with the US dollar, a rare occurrence that last happened in 2022 during Europe's energy crisis. This current slide is driven by multiple factors: the threat of Trump's potential tariffs on European exports, persistently weak economic growth in the eurozone, and lower interest rates compared to other developed economies. Political uncertainty in France and Germany adds to the pressure. The broader context includes a remarkably strong US dollar, which gained over 7% in 2024 - its largest annual increase since 2015. While a weaker euro traditionally helps boost exports, this benefit could be nullified by potential US tariffs, creating a particularly challenging situation for European policymakers. The European Central Bank faces a delicate balance, as currency weakness could reignite inflation just as post-pandemic price pressures were settling. The situation also carries political risks, potentially emboldening euro-skeptic movements like Germany's A...

Current market dynamics are flashing warning signals as stocks appear significantly overvalued compared to both corporate bonds and Treasuries. The S&P 500's earnings yield has dropped to 3.7%, marking its lowest level relative to Treasury yields since 2002 and sitting well below BBB-rated corporate bond yields of 5.6%. This inverse relationship is particularly concerning as historically, such patterns have only emerged during economic bubbles or periods of elevated credit risk. The market's current valuation metrics are striking, with stocks trading at 27 times earnings, far above the 20-year average of 18.7. While both equity and corporate bond markets reflect strong optimism about corporate profits, experts including Morgan Stanley strategists warn that higher yields and a strong dollar could pressure both valuations and profits. Though this disparity doesn't guarantee an immediate correction - similar conditions have persisted for extended periods in the past - it suggests increased market fragility, ...

Apollo Global Management's chief economist Torsten Slok is drawing alarming parallels between current market conditions and the 2022 UK crisis that forced Prime Minister Liz Truss's resignation. With Treasury yields reaching 4.6%, the markets face a complex challenge: mounting US debt concerns intersecting with potential Trump-era tax cuts. The situation is particularly concerning as the term premium - the extra yield investors demand for holding long-term debt - has hit its highest level since 2015. Slok emphasizes that about 80% of the yield increase since September appears driven by fiscal policy concerns, suggesting deep-seated market anxiety. This environment eerily mirrors the 2022 crisis that saw UK yields spiral, the pound crash, and pension funds nearly collapse. The potential impact extends beyond the bond market, as sustained high yields could significantly pressure equity markets, reminiscent of 2022's 19% S&P 500 decline. The combination of these factors, alongside "higher for longer" interes...

Treasury yields have surged dramatically, with the 10-year rate climbing nearly 50 basis points to exceed 4.6% - a level not seen since May 2023. This rise has sparked significant market implications, as the correlation between equity returns and bond yields has turned decisively negative. Morgan Stanley's Mike Wilson emphasizes that this shift, combined with the fact that strong economic data isn't driving the yield increase, makes rates the most critical market variable for early 2025. The impact is particularly concerning for small-cap companies facing refinancing challenges and firms with significant foreign exposure, as the strengthening dollar adds another layer of complexity. The situation has reinforced the market's large-cap bias, with analysts suggesting that only softer employment data might provide relief by encouraging the Fed to consider rate cuts. However, this creates a delicate balance between wanting enough economic weakness to lower rates without triggering a broader market downturn.

November saw the US trade deficit widen to $78.2 billion as companies rushed to secure shipments amid dual concerns over labor disputes and potential tariff changes. Imports surged 3.4% to $351.6 billion, marking the biggest jump since March 2022, while exports grew at a slower pace of 2.7%. The import spike was widespread across sectors, including consumer goods, capital equipment, and motor vehicles, as businesses sought to safeguard their supply chains ahead of a mid-January dockworkers' strike deadline. This follows October's slowdown in foreign merchandise demand after holiday inventory stocking. The growing trade gap, combined with challenges from weak overseas economies and a strong dollar, suggests continued pressure on US trade balance through the year, with potential implications for GDP growth in the final quarter of 2024.

JPMorgan's analysis, led by Nikolaos Panigirtzoglou, indicates a fundamental shift in investment strategies as both gold and bitcoin gain structural importance in portfolios. The bank notes that gold's recent price movements have surpassed levels typically explained by dollar movements and real bond yields, suggesting a deeper adoption of the 'debasement trade' - where investors seek protection against fiat currency devaluation. This trend is evidenced by growing gold holdings among central banks and private investors through various vehicles including physical gold and ETFs, representing an increasingly significant portion of non-bank global assets. Simultaneously, cryptocurrency markets experienced record capital inflows in 2024, reinforcing bitcoin's role as a hedge against inflation, mounting government debt, and geopolitical instability. JPMorgan's assessment suggests this isn't a temporary phenomenon but rather a lasting change in investment approach as concerns about currency debasement persist.

November 2024 saw continued robust central bank gold demand, with a net addition of 53 tons to global official holdings. The National Bank of Poland emerged as the dominant buyer, adding 21 tons to reach 448 tons total, approaching its 20% reserves target. Other significant purchasers included Uzbekistan (9t), India (8t), and China, which resumed buying with a 5-ton addition after a six-month break. The buying trend reflects emerging markets' growing preference for gold as a stable asset amid global economic uncertainties. India solidified its position as 2024's second-largest buyer with year-to-date purchases of 73 tons, while smaller players like the Czech Republic continued consistent monthly acquisitions. However, some institutions moved in the opposite direction, with Singapore selling 5 tons and Finland announcing a strategic 10% reduction in its gold reserves to strengthen its foreign exchange position. The post-US election price dip in November appears to have provided an attractive entry point fo...

Oil markets show strong momentum entering 2025, with Brent crude and WTI posting monthly gains of over 7% and 9% respectively, despite slight retreats to $76.13 and $73.59 per barrel in early European trading. The strength stems from multiple factors including potential Chinese stimulus measures, higher winter fuel demand, and Asian buyers' increased interest in Middle Eastern oil grades amid sanctions on Russian and Iranian crude. However, ICICI Securities presents a more cautious outlook for 2025, citing potential market surpluses and demand concerns. The brokerage highlights expected production growth from non-OPEC countries and significant OPEC spare capacity as bearish factors. Additionally, possible trade tensions during Trump's second term could impact economic growth and oil demand, suggesting potential downward pressure on prices despite the strong start to the year.

The dollar experienced a 1% decline after the Washington Post reported that Trump's team is considering a more targeted approach to tariffs, focusing only on sectors deemed critical to national or economic security. This marks a significant shift from expectations of comprehensive tariffs, leading to a broad rally in global currencies. The dollar index fell to 107.86 from Thursday's two-year peak of 109.54, while the euro surged to a one-week high of $1.0433. The market response reflects relief that Trump's second-term trade policies might be less aggressive than feared, triggering reversals in recent dollar strength. The impact extended across major currencies, with sterling rising 0.95%, the Australian dollar gaining 1.13%, and China's offshore yuan appreciating 0.5%. Economists note that while broad tariffs would likely boost U.S. inflation and limit Federal Reserve rate cuts, this more targeted approach might allow for greater monetary policy flexibility. The news particularly benefits China, whose on...

German inflation posted a surprise increase to 2.9% in December 2024, up from 2.4% in November and surpassing all analyst estimates. This acceleration, primarily driven by energy and food costs, has immediate market implications, pushing German two-year yields up by four basis points to 2.2% and prompting traders to scale back ECB rate cut expectations. The inflation surge follows Spain's higher-than-anticipated 2.8% reading, with eurozone figures expected to rise to 2.4%. Looking ahead, several factors suggest continued inflationary pressures in Germany, including increased public transport costs and a higher national carbon price. The Bundesbank projects inflation will only gradually decline to 2.4% in 2025, reaching the ECB's 2% target by 2026. Service sector inflation remains a particular concern, holding at 4.1%, driven by wage increases. While markets still anticipate about 100 basis points of ECB rate cuts in 2025, this latest data reinforces the central bank's preference for a measured approach to...

The Bank of Israel kept its key interest rate steady at 4.5%, reflecting persistent inflationary pressures from the ongoing military conflict. Military mobilization has created labor shortages while reduced airline service has disrupted economic activity, pushing inflation to 3.4%, above the government's 1-3% target range. The central bank has revised its 2025 growth forecast upward to 4% from 3.8%, though 2024 saw subdued growth of 0.6%. Despite these challenges, recent developments show some economic stabilization. The shekel emerged as the top performer among major currencies in late 2024, while credit default swap prices have declined significantly. However, new fiscal measures, including a 1% VAT increase and higher utility costs, could temporarily boost inflation. The central bank projects rates to remain between 4-4.25% over the next 12 months, with Governor Amir Yaron suggesting monetary easing is unlikely before the second half of 2025. This stance reflects the need to balance market stability wi...

2024 marked a banner year for Latin American debt markets, with issuance reaching $127 billion - a 42% increase from 2023, fueled by record government bond sales and first-time borrowers. Mexico and Brazil led with historic deals, while Argentina saw increased corporate activity. However, the outlook for 2025 is complicated by multiple factors that could disrupt this momentum. Key challenges include uncertainty around Fed rate cuts (now expected just twice in 2025), potential Trump administration policies that could spark inflation, and China's economic concerns. Regional political risks in Brazil and Colombia add another layer of complexity. Despite these headwinds, leading underwriters JPMorgan and Citigroup project 2025 volumes to match or slightly exceed 2024 levels, though likely remaining below 2021's $153 billion peak. The market has already shown signs of shifting sentiment, with emerging market bond funds experiencing significant outflows of $24 billion in 2024, marking a stark contrast to the st...

2024 marked a banner year for Latin American debt markets, with issuance reaching $127 billion - a 42% increase from 2023, fueled by record government bond sales and first-time borrowers. Mexico and Brazil led with historic deals, while Argentina saw increased corporate activity. However, the outlook for 2025 is complicated by multiple factors that could disrupt this momentum. Key challenges include uncertainty around Fed rate cuts (now expected just twice in 2025), potential Trump administration policies that could spark inflation, and China's economic concerns. Regional political risks in Brazil and Colombia add another layer of complexity. Despite these headwinds, leading underwriters JPMorgan and Citigroup project 2025 volumes to match or slightly exceed 2024 levels, though likely remaining below 2021's $153 billion peak. The market has already shown signs of shifting sentiment, with emerging market bond funds experiencing significant outflows of $24 billion in 2024, marking a stark contrast to the st...

Fed Governor Lisa Cook indicates the Federal Reserve will take a more measured approach to future interest rate cuts, citing stronger-than-expected labor markets and persistent inflation. While the Fed reduced rates by 1% in late 2024, Cook suggests a more gradual easing approach moving forward, with rates currently at 4.25-4.5%. Despite some inflation challenges, Cook views the U.S. economy as fundamentally sound, though noting potential risks in private lending and AI adoption in financial systems.

So, is Bitcoin heading to $1 Million???  This seems to be the new target by THOSE IN THE KNOW.  However, what I see is a totally Dysfunctional Market, as the Bitcoin Miners are basically buying all the total Global Bitcoin Mine Supply... LOL.  How long can the Charade Last?  Good Question...

As we head into the new year, there is a Massive Bearish Wedge in Tech stocks that won't correct sideways.  The amount of leverage and insanity in the markets today is unreal.  When a new meme crypto called Fartcoin has a higher market cap than the SIL - Silver Miners ETF, you know something is seriously wrong...

Tax-free precious metals trading comes to NJ, while banks project record gold prices. Plus: Alan Hibbard's "explosive" 2025 prediction.

India's gold market faces continued headwinds as domestic prices surge to 77,947 rupees per 10 grams, driven by the rupee's record depreciation. Dealers maintain $14/oz discounts while religious observances (Khar Mass) further dampen demand. Conversely, Chinese markets show optimism with premiums jumping to $4.50-$10/oz, up from $2-$5, as Lunar New Year approaches. Despite regional jewelry sales slowdown, physical bullion demand remains strong, indicating a shift from ornamental to investment purchases. Other Asian markets show varied activity, with Singapore seeing festive buying and Hong Kong/Japan trading near spot prices.