Precious metals news

Consumer sentiment in the U.S. has hit a distressing low, dropping to 60.4 in November, the worst level since May and continuing a four-month downward trend. This decline reflects deepening worries over high interest rates and escalating global conflicts. Inflation expectations have risen to alarming levels not seen in over a decade, intensifying concerns about the economy's future. Despite stagnant recent CPI figures, the Federal Reserve acknowledges that the battle against inflation is far from over, underscoring the persistent economic hurdles ahead.

The American consumer, traditionally the pillar of the U.S. economy, is teetering on the brink of a debt crisis. With household debt escalating to an alarming $17.29 trillion and credit card balances hitting $1.08 trillion, the situation is dire. Rising interest rates are exacerbating the burden, particularly for those aged 30 to 39, who are increasingly falling behind on payments. This precarious financial landscape casts a shadow over the future stability of the U.S. economy, heavily reliant on consumer spending, now fueled by unsustainable debt levels.

The US government faces a daunting $1 trillion in interest payments this year, a symptom of growing debt and rising interest rates. This financial strain is prompting discussions about radical policies like yield curve control, historically used in wartime, to manage debt costs. Such extreme measures highlight the gravity of the fiscal situation and the potential for market dysfunction, especially in the crucial US Treasury market. With political deadlock and no easy solutions in sight, the financial stability of the US is increasingly under threat, raising global concerns about the implications of a meltdown in the Treasury market.

This week, gold and silver extended their correction of October’s sharp rise. In European trade this morning, gold was $1953, down $24 from Last Friday, and silver was $22.54, down 66 cents. Comex volume in both contracts was moderate.
Open Interest in both Comex contracts has been on the low side for some considerable time, evidenced in the two charts below.

At the same time, prices have broadly maintained their levels represented by the widening visual gap between prices and Open Interest in the charts above.
Furthermore, gold’s technical chart below is immensely bullish.

Having tested the psychologically important $2000 level, gold has backed off requiring some further consolidation perhaps before another attempt. It could easily decline to test support at $1910—1925, which is where the two moving averages are presently. A move of that sort would certainly wash out weak paper bulls, creating the platform for the next move higher.
Interestingly, the r...

The Great Game of geopolitics faces a new challenge. The new hotspot is Israel and the Muslim Middle East. Ukraine is all but over, and the US is likely to abandon her to her fate — like Afghanistan.
We shall have to see how both will play out. Meanwhile, energy prices are set to keep inflation and interest rates high, undermining governments, banking systems, and businesses dependent on cheap credit.
This article concentrates on the consequences for currencies, which are simply unbacked credit valued by the public’s faith in them. To assist a proper understanding of money, the relationship between gold, which is universally accepted as legal money, and detached fiat currencies is explained as an objective/subjective relationship.
There are a number of moving pieces behind a gathering fiat currency crisis. Putting this jigsaw together reveals an increasingly certain crisis for G7 currencies. There is little doubt that both China and Russia are fully aware of this danger ...

The once unshakable belief in the US Treasury market as the deepest and most liquid is now faltering. With foreign buyers retreating and the U.S. grappling with huge deficits amid high interest rates, the Treasury market is showing signs of distress. This shift is significant, marking a potential breakdown in a critical component of the global financial system, and raising serious concerns about the future stability of what were once considered 'risk-free' US Treasury bonds.

Jamie Dimon's decision to sell $1.2 billion of his JPMorgan Chase stock next year signals a troubling trend among banking executives, breaking a longstanding tradition of holding shares. This shift points to a lack of confidence among top bankers in the face of rising lending rates and uncertain market conditions. Dimon's move, unprecedented in his career, aligns with a wave of executives cashing in on their holdings, raising serious concerns about the stability and future prospects of major financial institutions.

Investors are fleeing corporate bond ETFs, with a record $9.4 billion exodus in October, and are massively shifting to lower-risk government bond ETFs. This move, driven by fears of an economic slowdown and persistent high interest rates, marks a stark shift to risk aversion in the market. The trend is further underscored by significant outflows from emerging market assets, reflecting widespread investor uncertainty and a cautious approach in a volatile financial landscape.

Retail traders sold off nearly $16 billion in stocks last month, indicating a significant decline in market enthusiasm. This broad sell-off, nearly double that of September, spanned most sectors, reflecting growing caution among investors as the S&P 500 struggles amid high interest rates and increasing geopolitical risks. While institutions also reduced their equity holdings, hedge funds took a different approach, buying into the weakening U.S. stock market.

Economist Mohamed El-Erian foresees credit risk becoming the market's primary concern in 2024, overtaking interest-rate risk. With the Federal Reserve's intense rate hiking cycle ending, the focus shifts to economic growth and debt challenges. El-Erian warns of a more difficult global economy ahead, impacted by dwindling savings and high interest rates. He predicts continued volatility in the market, influenced by debt issuance and a softening economy. This shift poses significant threats to market stability and the U.S.'s financial standing, with corporate and government debt issuance playing a crucial role in shaping future yields.

Mainstream pundits and government officials keep talking about the strong economy and resilient consumers while ignoring what's driving them - borrowing. To listen to them, you would think the road to prosperity is paved with credit cards. In this episode of the Friday Gold Wrap host Mike Maharrey breaks down the recent household debt data and explains why this isn't the sign of a strong economy. He also highlights some interesting silver demand news.

Money-market funds have reached a record $5.71 trillion, marking a significant shift away from bank deposits. The Federal Reserve's reverse repo facility usage has notably dropped below $1 trillion, signaling a decrease in excess liquidity. Concurrently, the Fed's balance sheet contraction is minimal, and its quantitative tightening is faltering. Alarmingly, banks' dependence on the Fed's emergency funding has hit a new high, suggesting deeper financial issues. Despite a temporary uptick in equities, the escalating borrowing costs and financial challenges faced by regional banks indicate ongoing economic instability.

Federal Reserve Chairman Jerome Powell, speaking at the IMF, expressed uncertainty about whether current monetary policies are enough to continue slowing inflation. Despite some progress, Powell emphasized that inflation remains high and the journey to the 2% target is far from over.

The wind power industry's death by a thousand cuts will result from the massive increase in "service cost inflation."  We are just beginning to see the first troubling signs: utilities that purchased wind power units now face increasingly high service costs...

M2 money supply is enduring its first meaningful drop in 90 years. A rarity with only five such occurrences in history, is sounding alarms for a potential economic downturn. With a 3.17% year-over-year drop and a more significant fall since July 2022, this contraction in available capital hints at reduced consumer spending and possible deflationary pressures. Historically, similar declines have preceded severe depressions and high unemployment. While modern monetary policy may mitigate some risks, the current shrinkage in money supply poses a stark threat to the economy and stock market stability.

Amid a global economic slowdown signaled by China's faltering exports, oil prices have plunged over 4%, with the world's largest oil consumer pulling back on imports. This drop reflects deepening concerns of a widespread demand collapse, overshadowing OPEC+'s production cuts. Suspicions of Russia exceeding export quotas add to the market's unease, while a stronger U.S. dollar further depresses oil prices, intensifying the gloom enveloping the global energy sector.

Mario Draghi, the former ECB head, has painted a grim picture of the Eurozone's future, forecasting an almost certain recession by the end of 2023. Meanwhile, ECB Governor Pierre Wunsch's admission of looming stagflation points to a deeper economic malaise. The Eurozone appears to be on a dismal trajectory towards not just recession but a potentially prolonged period of economic stagnation and financial distress.

Today's 30-year Treasury auction was an absolute debacle, with the worst tail on record since 2016 and the lowest bid-to-cover ratio since December 2021. Indirect (foreign) participation plummeted, leaving dealers to absorb nearly a quarter of the offering, signaling distress and hinting at imminent Federal Reserve intervention. This fiasco sent shockwaves across financial markets, causing Treasury yields to soar, stocks to plunge, and the dollar to surge, all amidst crumbling Treasury liquidity. The Federal Reserve faces a significant challenge ahead.

The U.S. government's financial situation is bleak with soaring debt and entitlements that the nation cannot afford. Misguided policies have led to increased dependency, eroded personal responsibility, and put the country on a path to economic collapse. Defense spending inflates the budget without clear benefits, and the massive national debt, exacerbated by rising interest costs, is unsustainable. Without radical and politically unviable reforms, a fiscal implosion seems inevitable.

The US is heavily burdened by debt, with federal debt at $33.71 trillion and unfunded liabilities at a staggering $211 trillion. This implies severe future financial challenges, possibly resulting in more debt, higher taxes, or cuts in social benefits. Federal debt costs are escalating as the government fights inflation. Additionally, consumer credit card debt has surged as people grapple with the rising cost of living.