Precious metals news

Goldman Sachs warns of a conflict between anti-inflation efforts and surging debt loads, emphasizing US debt challenges. Rising rates to combat inflation increase government interest costs. Central bank actions limit debt reduction via inflation. Countries prone to high inflation and fiscal laxity are especially vulnerable. As the US faces a forecasted $2 trillion overspending in 2023 and $7.6 trillion of its debt maturing within a year, pressures on rates intensify.

Gold and silver drifted lower this week, before a modest recovery this morning which can be put down to bear closing. In European trading this morning, gold was $1918, unchanged from last Friday’s close after testing the $1900 level yesterday. Silver was $23.05, down 3 cents, after testing $22.30. Comex volumes in gold were moderately healthy, and they picked up in silver yesterday on the sell-off.
The performance of gold and silver has been disappointing for dollar bulls, but looking at it from the bears’ point of view prices refused to go lower yesterday when the ECB raised its deposit rates and the dollar’s TWI powered ahead. The TWI is next.

Perhaps the bears need a little more time. Their hopes will devolve on interest rates and bond yields going higher or at least remaining firm, which is seen to be bearish for gold. The short positions of the Swaps on Comex have reduced in value, but probably not enough. The next chart is of their net position, and it can be seen...

Griffin highlighted the U.S. government's continued reliance on significant fiscal deficits to boost the economy, foreseeing increased future fiscal burdens. The White House is still throwing money at stimulating the economy. This approach places Fed Chairman Powell in a no-win situation. The projected U.S. fiscal deficit was 3% of GDP for the year, but it now approaches 6%. With forecasts suggesting a near 5% deficit in coming years, market jitters are increasing due to the unsustainable nature of such deficits. Griffin suggests that these economic challenges will negatively impact the stock market.

Despite growing confidence in Wall Street and Washington that the Federal Reserve can stabilize the economy, the Treasury market tells another story. For 212 consecutive days, 10-year yields have remained below 3-month yields, a pattern which has historically preceded the last eight recessions. On Thursday, this trend broke a record from 1980, marking the longest such stretch since Bloomberg began tracking in 1962. This contrasts starkly with the resilience of the economy, highlighting the uncertainty since the Fed's aggressive rate increases in March 2022.

Billionaire investor Ray Dalio warned of potential issues in the global bond market, emphasizing the oversaturation of US debt. He highlighted that the US must offload large amounts of bonds due to soaring federal deficits, creating a worldwide concern. If bonds don't offer sufficient real interest rates, investors might sell them, leading to rising interest rates. Dalio believes long-term bonds aren't a wise investment. With $7.6 trillion in US debt maturing within a year, the cost of debt servicing could further increase rates.

French grocery chain, Carrefour, has labeled products that shrunk in size but increased in price, spotlighting suppliers who raised costs despite stable raw material prices. This "shrinkflation" tactic, which is more prevalent in inflationary periods, was applied to items like Pepsi, Lipton Iced Tea, and Lindt chocolates. Carrefour's move intends to urge manufacturers to reevaluate their pricing strategies, especially as brand negotiations with retailers are imminent.

Oil prices are nearing their highest level this year, with the potential to reach $100 per barrel soon, due to tightening supply. Brent crude futures traded at $93.90, while U.S. West Texas Intermediate futures stood at $90.41. These surges are largely attributed to decisions by Saudi Arabia and Russia to cut oil production through the end of the year, leading to significant global inventory drawdowns and added inflationary pressures.

Around 13,000 U.S. auto workers went on strike after failing to reach an agreement on union demands with Detroit’s three major automakers. For the first time in its 88-year history, the United Auto Workers union simultaneously walked out on General Motors, Ford, and Stellantis. This strike comes at a critical juncture for the U.S. auto industry, which is transitioning to electric vehicles, signaling major challenges for the sector's future.

The economy is in a slow burn. You can't even see the flames. But you can smell whiffs of smoke every now and then if you're paying attention. In this episode of the Friday Gold Wrap, host Mike Maharrey calls attention to that smoke with a breakdown of August's CPI  and some other data that came out this week. He also busts a myth about silver.

Investors are totally unprepared for the coming Major Non-Linear Financial & Economic events because they continue to listen to analysts who focus on a BUSINESS AS USUAL WORLD.  Unfortunately, those days are over, especially when we see the massive debt being used to prop up the system...

Famed Author and investor Robert Kiyosaki highlighted on X that silver remains the "Biggest Investment Bargain," Still trading 50% below its all-time high and being crucial for the green revolution in solar and EVs. Esteemed for its inherent value, silver, like other precious metals, offers an age-old protection against inflation, outshining fiat money that central banks can print limitlessly.

China's gold is trading at a record premium due to Beijing's efforts to defend its weakening currency. This premium, over US$120 an ounce, is the highest in over two decades, reflecting the strength of gold amidst economic instability. The central bank's intervention strategies, including limiting gold imports, highlight the metal's significance. As global investors observe China's currency struggles, they are increasingly turning to gold

Argentina experienced a shocking inflation rate of 124.4% in August, the highest since 1991, leading to widespread hardship. Daily, consumers scramble to find affordable options amid drastically varying prices. With monthly inflation at 12.4%, poverty rates have surged beyond 40%, fueling discontent globally. Such economic instability serves as a stark warning for countries worldwide.

n the past three months, the US has seen an average monthly increase of $500 billion to its national debt. Over the last five years, there's been a 54% rise in US debt. As of now, the year-to-date interest expense has exceeded $800 billion. These numbers are so large it’s hard to believe.

The expiration of U.S. pandemic-era programs in 2021 resulted in a sharp increase in poverty in 2022, with inflation exacerbating the situation. The child poverty rate doubled to 12.4%, and the overall rate rose to 12.4% from the previous year. This uptick was largely due to the cessation of stimulus payments and enhanced child tax credits. Experts highlight the need for political action to address escalating inequality.

When the precious metals bull market arrives history suggests silver has more upside potential than just about any other asset...

In March 2023, I highlighted the link between high inflation and subsequent unemployment. Historical data suggests a two-year lag between inflation peaks and unemployment surges. With a 9.1% inflation peak in June 2022, we might expect rising unemployment by June 2024. The recent 3.7% CPI increase warns of more employment challenges around 2025. Worryingly, the Federal Reserve's 2% inflation target, diverging from a 1978 Congressional mandate of zero, exacerbates the issue, pointing to a bleak job market future.

Jobless claims have alarmingly risen to 220k from 215k, despite Ohio's attempts to rectify its fraudulent filings. These efforts have only marginally reduced the national figure. Ohio, once plagued with the most significant fraudulent claims, now showcases a decline. However, continuing claims remain precariously close to the worrying 1.7MM mark. Goldman Sachs warns of seasonal distortions that could pull down continuing claims, potentially impacting 375k by September's end. The unemployment rate is ominously at its peak since February 2022.

Mortgage applications plummeted 0.8% in just a week, as per the Mortgage Bankers Association. Even after Labor Day adjustments, a concerning 12% slump was observed from the prior week. Refinancing took a nosedive by 5%, and the year-on-year data shows a startling 27% decline in purchase applications.

Russia and the Saudis are driving up oil and diesel prices. But these moves are likely to undermine the rouble more than they undermine the dollar, euro, and other major currencies. Therefore, higher energy prices will rebound on the Russians this winter: if they shiver in Germany, they will freeze in Russia. If the dollar is king of the fiats, the rouble is just a lowly serf.
There is little doubt that Putin and his advisers are aware of this problem. Plan A was to introduce a new gold-backed BRICKS currency which might be expected to weaken the dollar and euro relative to the rouble. Plan B was more drastic: to back the rouble itself with gold. This is the financial equivalent of dropping a hydrogen bomb on the dollar and the global fiat currency system upon which it is based.
As well as demonstrating why there is no option for Russia but to back her currency with gold, this article shows why it is perfectly possible for Russia to do so during wartime and explains how it c...