Precious metals news

Gold prices edged higher as the U.S. dollar and Treasury yields fell, fueling investor optimism that the Federal Reserve might pause interest rate hikes. Spot gold rose 0.3% and U.S. gold futures were up 0.5%, benefiting from a weaker dollar and lower bond yields that increase the metal's allure. With the Fed's decision to maintain rates and traders betting on a continued pause, gold remains attractive in the face of economic and geopolitical uncertainty.

U.S. jobless claims rose unexpectedly to a two-month high of 217,000, exceeding estimates and indicating potential instability in the job market. Continuing claims worsened, surpassing 1.8 million for the first time since April, hinting at a more concerning upward trend in ongoing unemployment. This rise in continuing claims suggests economic challenges may be intensifying.

Ronnie Stoeferle Shares a MINDBLOWING Chart With Mike

JPMorgan CEO Jamie Dimon suggests the Federal Reserve might not be done raising interest rates, potentially by another 75 basis points, given persistent inflation. Speaking after the Fed's rate hold decision, he acknowledges the possibility of stickier inflation and advises businesses to prepare for this tougher scenario. Dimon's comments reflect his ongoing concerns about the risks of higher rates and the effects of quantitative tightening.

UN reports suggest potential war crimes in the Israel-Gaza conflict, with a focus on the human toll. In contrast, Wall Street eyes profit, with analysts discussing financial gains from the conflict, raising ethical concerns given the contradiction with their public human rights commitments. The UN's call for accountability and adherence to human rights principles in business practices stands at odds with the observed financial opportunism amid the violence.

Global leaders warn of a perilous geopolitical landscape, the most hazardous in decades. Financial forecasts are clouded by the risk of conflicts from Ukraine to the Middle East, and the wide-ranging impacts of climate crises and pandemics. Mark Wiseman views it as a uniquely challenging investment climate. Amidst this, speculation about inflation and interest rates pales in comparison to the broader uncertainties that could culminate in a conflict as severe as World War III.

Escalating tensions in Israel and Gaza threaten to spark a wider conflict, undermining global economic stability. This comes amid already strained conditions from past crises, with the world grappling with fragile growth and potential spikes in energy and food costs. Increasing debt, stagnant trade, and higher interest rates raise the specter of defaults, while US-China tensions impede global cooperation. The human cost mounts as the risk of disrupted oil supplies stokes fears of stagflation, posing serious risks to the worldwide economy.

The boom in AI could mean a boom in industrial demand for precious metals in 2024.
Metals Focus, an independent precious metals research consultancy, released a note recently that said it expects the increased demand for chips powering AI technology to drive "widespread support for a range of precious metals bearing components."

Chalk one up for the status quo.
As expected, the Federal Reserve held interest rates steady in a range between 5.25 and 5.5% for the second straight month, and chairman Jerome Powell was intentionally noncommital about future Fed moves.

Barry Eichengreen, professor of economics and political science at the University of California, Berkeley, and Chima Simpson-Bell, economist in the African Department at the International Monetary Fund, joined Taylor Pearce, senior economist at OMFIF, to discuss the rise of gold as a central bank reserve asset. OMFIF’s Global Public Investor 2023 report revealed a resurgence in demand for traditional reserve assets, including gold. The podcast explores the structural trends behind the increase in gold accumulation and offers insight into emerging markets’ motivations for acquiring it.

Global debt has ballooned to a staggering $235 trillion, a ticking time bomb for the world economy. This 32% surge over the past 15 years, fueled by cheap borrowing costs, leaves nations from the U.S. to China teetering on the brink of financial peril, with less developed countries already struggling under the crushing weight of debts they can't afford. As interest rates soar, the era of easy money ends, threatening to burst the global debt bubble and plunge economies into turmoil.

Inflation in the eurozone is decelerating more significantly than forecasted, plunging to 2.9% in October from 4.3% in September, signaling a potential shift towards a deflationary trend. This stark decline is propelled by a substantial 11% year-on-year reduction in energy costs, hinting at a broader economic cooldown. With food prices and core inflation also on a downtrend, there are mounting concerns that deflationary pressures could throttle economic growth, complicating the European Central Bank's policy path amid a weakening economy.

The FOMC held policy rates steady with the federal funds rate target range at 5.25%-5.5%. This pause follows a cumulative 525 basis point hike in the current cycle. While the Fed left the door open for future hikes, it continues quantitative tightening, capping Treasury roll-offs at $60 billion and MBS at $35 billion monthly. The next economic projections in December will clarify expectations for potential rate cuts, as current projections delay cuts until the second half of 2024. Concerns persist about the impact of tighter credit on the economy.

Join Mike Maloney and Alan Hibbard as they dissect the latest news for gold, silver, and the stock markets.

Larry Summers warned that the U.S. faces an unprecedented economic challenge with a federal budget deficit of $1.7 trillion, or 5.3% of GDP, significantly higher than the 40-year average. He emphasized the criticality of tax law enforcement, especially when fiscal deficit is skyrocketing. The deficit issue is graver than ever, and despite support for the Inflation Reduction Act aimed at addressing this through IRS funding increases, there's concern that proposed cuts in IRS funding could exacerbate the deficit situation further.

Stanley Druckenmiller lambasted U.S. fiscal policies, citing the government's failure to capitalize on past low interest rates and its "reckless spending," which has ballooned the deficit to nearly $1.7 trillion. He pointed to the increase in government spending from 20% to 25% of GDP as unsustainable, emphasizing the dire need for financial discipline in the face of a national debt nearing $34 trillion. Druckenmiller's disapproval extends to recent requests for an additional $56 billion in government expenditure.

Mortgage applications fell 2.1% from the previous week, with refinancing down 4% and purchase applications down 1% seasonally adjusted. Year-over-year, refinancing is down 12%, and purchase activity is 22% lower, hitting a level not seen since 1995. Refinancing is at its lowest since 2001. Meanwhile, two-year yields have increased by 5%, but there's a pause in rate hikes expected for now.

September's JOLTS report showed a slight rise in job openings by 56,000 to 9.553 million, slightly above expectations but with significant revisions to prior data. Despite higher job openings, hires increased marginally, and quits remained stable, not reflecting the optimism of previous months. The report's credibility is questioned due to a record low response rate of 31%, suggesting that most job opening data is estimated. The market largely ignored the JOLTS data, influenced more by other negative labor market indicators.

U.S. manufacturing is contracting, with the ISM survey dropping to 46.7 in October, hinting at a potential GDP decline. Firms face weak demand, leading to the first job cuts in over two years and reduced output forecasts. Rising costs are driving up inflation in the sector, and tightening financial conditions suggest further deterioration ahead.

Gold remains steady, with the market anticipating Federal Reserve Chair Jerome Powell's insights on future rate adjustments, maintaining investor interest in the metal as a potential hedge against economic uncertainty. Despite a slight pullback from recent highs above $2,000, the precious metal's value is buoyed by government debacles and geopolitical tensions.