Precious metals news

Political parties and precious metals – is there any correlation between election cycles and metals prices?

The Fed's pause on interest rate hikes signals uncertainty, with all eyes on forthcoming economic data. Should upcoming reports indicate a sustained drop in inflation and a slowdown in the robust US economy, the door opens for discussions on rate cuts, a scenario that could significantly undermine the Dollar's strength.

Target CEO Brian Cornell reports that consumers are cutting back on spending across the board, including essentials like groceries. The retailer has seen a consistent decrease in sales of non-essential items for seven quarters straight, and now even the quantity of food items sold is dropping. Despite some economists backpedaling on recession predictions and signs of inflation slowing, Target is bracing for a tough holiday season, having already lowered its sales and profit forecasts earlier in the year.

Janet Yellen's Treasury is set to auction off $1.6 trillion in debt, with surging interest rates poised to hike the government's annual interest bill to an unsustainable $1.7 trillion. This massive outflow, siphoning off 6% of US GDP, could cripple economic growth and hamper effective monetary policy. As the US pivots to longer-term debt issuance, liquidity concerns mount, overshadowing the Fed's rate decisions and compounding risks in an already fragile global financial system. With traditional debt buyers like China and Japan potentially stepping back, the burden of absorbing this debt remains a looming question.

Wolf Richter at Wolf Street views the Fed's recent meeting as another "Hawkish Hold," signaling that rate hikes could still be on the table, while the end of hikes seems to lead to a 'higher for longer' plateau. Despite Powell's assertion that the Fed isn't considering rate cuts, the general stance from the meeting suggests a hold bias rather than a tightening bias. The stock market, after initial uncertainty, seems to have interpreted this as signaling the end of hikes. Upcoming jobs reports and economic data will be crucial in shaping the Fed's next moves, with recent ISM figures hinting at a potential cooling in the economy. I think hikes are done.

Markets reacted positively to Jerome Powell's comments, as he suggested that rising bond yields could reduce the need for further rate hikes. This led to a drop in Treasury yields, easing financial strain but also potentially leading to looser financial conditions than the Fed desires, which could undermine their efforts to combat inflation. Powell's message has raised concerns that it might prematurely signal the end of the Fed's tightening cycle, creating a challenging situation for the central bank.

The day of reckoning for unproductive credit is in sight. With G7 national finances spiralling out of control, debt traps are being sprung on all of them, with the sole exception of Germany.
Malinvestments of the last fifty years are being exposed by the rise in interest rates, increases which are driven by a combination of declining faith in the value of major currencies and contracting bank credit. The rise in interest rates is becoming unstoppable.
Do not be surprised to see a US Government deficit exceeding $3 trillion this fiscal year, half of which will be interest payments. And in the run up to a presidential election, there’s every sign of deficit spending increasing even further.
We now face America and her allies being dragged into another expensive conflict in the Middle East, likely to drive oil and natural gas prices higher; far higher if Iran becomes a target. With the Muslim world united against western imperialism more than ever before, do not discount th...

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.