Precious metals news

Join Mike Maloney and Alan Hibbard for their weekly wrap-up on gold and silver markets.

Colombia is urgently advancing the recovery of an estimated $20 billion in treasure from the 1708 San Jose shipwreck. President Petro is pushing for quick action through a partnership to salvage the bounty, including gold, silver, and gems, before his term ends. Despite legal wrangling with a U.S. firm claiming half the treasure, the government aims to exhibit the artifacts in a national museum after an extensive archaeological process.

Silver's current underperformance compared to gold since 2011 is a positive indicator of market sentiment shifting from seeking safety to recognizing potential growth opportunities. Historically low prices, when adjusted for inflation, signal that silver is undervalued, offering an attractive entry point for investors. The charts suggest that silver is poised to break out from its long-term consolidation pattern, making it a compelling investment especially as concerns over a potential stock market correction grow. The silver-to-gold ratio further supports the view of silver's substantial upside, positioning it as a prudent hedge in an environment where traditional safe havens like Treasuries may falter.

Ferdinand Lips' book "Gold Wars" and Jim Rickards' insights reveal a persistent battle by central banks to control gold prices. The Gold Anti-Trust Action Committee (GATA) has been highlighting this covert manipulation, with recent data from the Bank for International Settlements (BIS) supporting their claims. Central banks use gold swaps and leases to influence the market, a tactic confirmed by bankers' own admissions. Despite limited media coverage, the tide is turning in favor of gold's integrity in the financial system.

The House recklessly passed a resolution endorsing military action against Iran to thwart its alleged nuclear ambitions, despite U.S. intelligence reports negating Iran's pursuit of nuclear weapons. This aggressive stance ignores facts and flirts dangerously with the prospect of unnecessary war, while hypocritically overlooking Israel's unacknowledged nuclear capabilities. The vote showcases a disturbing eagerness for conflict over diplomacy.

Major U.S. banks including U.S. Bank, Bank of America, Chase, and Wells Fargo are grappling with widespread direct deposit failures, sparking customer outrage. With systems down since early morning, paychecks and transactions hang in limbo. Wells Fargo has confirmed the glitch, offering apologies but no solid timeline for a fix, exacerbating the financial uncertainty for countless individuals.

Corporate leaders are sounding the alarm: today's geopolitical turbulence could rival the chaos preceding World War II. With a string of crises from Afghanistan's fall to Ukraine's invasion, they see a world on the edge. An assertive bloc of autocratic nations challenges U.S. hegemony, raising stakes over Taiwan's fate and threatening global economic stability. History's grim warnings echo, urging decisive U.S. action amidst growing dangers.

The Fed's aggressive Quantitative Tightening is slashing its balance sheet significantly, dropping by $89 billion in October alone to a low not seen since May 2021. Despite inflation easing slightly, it's still stubbornly high, nearly double the Fed's comfort zone, as the Fed unwinds the massive liquidity unleashed during the pandemic. This sharp reduction, totaling $1.1 trillion since the peak, is a drastic shift from previous, more cautious attempts at balance sheet normalization and indicates a tough stance that could have stark repercussions for the economy.

The writing of this market report was at a time of great volatility, due to it coinciding with the speech of the Hezbollah leader, Hassan Nasrallah. The drift of it appears to be that Hezbollah will support Hamas. If so, it means an intensification of the Palestinian crisis Which would presumably drive gold and silver prices higher. This market report should be read in this context.

Duke finance professor Campbell Harvey, creator of the inverted yield curve recession indicator, warns that the Fed's rate hikes based on an overestimated inflation are steering the economy towards recession. Despite halts in rate increases, the recent uninverting of the yield curve signals impending economic troubles, as witnessed before past recessions.

Yellen's defense falls flat against Druckenmiller's sharp critique. Despite touting an extended maturity for the Treasury's portfolio, she misses the mark on seizing historic low rates, a blunder highlighted as potentially the worst in Treasury history by Druckenmiller. Her strategy is now questioned, undermining confidence in her role.

Globally, democracy is in serious decline, with a Swedish study highlighting widespread backsliding on civil liberties, judicial independence, and electoral integrity across nations including the U.S. Political distractions like wars and climate change are overshadowing this erosion. Established democracies are not immune, with countries like the U.S. and Britain facing notable setbacks. The rise of informal watchdogs offers some hope against authoritarianism, but the overarching trend is grim, with fundamental democratic principles under threat worldwide.

China has eclipsed the US and the West in trading with developing nations, signaling a shift towards a bipolar global economy and heightened tensions. As the US enforces tighter controls on China, both sides face the potential drawbacks of decoupling, such as disrupted supply chains and slower growth, despite some job gains for Americans and Europeans. China is diversifying, sourcing more from within and other developing countries, further solidifying new economic blocs.

The October jobs report was abysmal, with jobs added plummeting to 150K—a massive 50% drop from September and a grim indicator of economic health. Widespread job revisions suggest previous data was overstated, likely for political optics. Unemployment ticked up, wage growth faltered, and manufacturing took a significant hit, eroding faith in a labor market recovery. The figures point unmistakably towards an impending recession.

Amid a grim global economic downturn, Møller-Maersk, a shipping behemoth, is taking drastic action by axing 10,000 jobs in response to plummeting demand. The Danish giant, once thriving, has already eradicated 6,500 positions and plans to ruthlessly cut 3,500 more by 2024. This stark 10% workforce reduction is a desperate measure to counter collapsing prices and rampant overcapacity. It's a bleak indicator of the post-pandemic "new normal" that's crippling global trade.

The Bank of Japan's continued loose monetary policy is creating serious global market imbalances, risking a sudden surge in volatility. Ignoring rising inflation and market cues to tighten policy, the BOJ's stance is primed to trigger a sharp yen rally and a destabilizing shake-up in asset prices worldwide. Japan's delay in policy normalization may lead to abrupt, wide-reaching financial consequences.

Central banks globally are aggressively purchasing gold, with China leading the charge, reflecting a strategic move to lessen reliance on the U.S. dollar. Amid geopolitical tensions and diversification efforts, central bank gold acquisitions have surged by 14% this year, with China contributing 181 tonnes to the 800 tonnes total. This shift comes as nations respond to the economic weaponization of the dollar, exemplified by sanctions against Russia, prompting a wider trend of de-dollarization.

Federal Reserve Chairman Jerome Powell said he's not confident interest rates are high enough to slay price inflation. He also said he's not confident they aren't. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey wonders out loud why we should have any confidence if Powell doesn't. Along the way, he breaks down the November Fed meeting and talks about the "colossal" year for central bank gold buying.

When a country peaks in its liquid fuel demand, this typically points to the inevitable plateau in "Real Economic Growth."  This seems to be true for Americans, as U.S. gasoline and diesel consumption per capita peaked more than 15 years ago... regardless of the massive money printing by the U.S. Government...

Public Law 93-373, an unremarkable one-page bill, revolutionized U.S. financial policy by allowing private gold ownership after four decades, reflecting a stark transformation from Roosevelt's 1933 gold ban. With gold prices escalating from $35 to $850 per ounce between the Nixon Shock and 1980, the law acknowledged gold's crucial role as a safeguard against economic instability. Today, with a $33.7 trillion national debt and potential fiscal crises looming, gold's status as a financial bastion endures, hinting that its current valuation may just be the floor for future appreciation.