Precious metals news

Bank of China has opened its first branch in Riyadh, Saudi Arabia, marking a significant step in expanding the use of the yuan in global finance and trade. This move aligns with the BRICS nations' efforts to promote local currency settlements in cross-border trade, reducing dependence on the US dollar. China's growing influence and the yuan's role in BRICS trade make this development noteworthy. It also insulates BRICS countries from potential US dollar-based sanctions. China's status as the largest buyer of Saudi Arabia's crude oil further underscores its global financial influence.

The Fed's reliance on unreliable data with substantial revisions spells trouble. The annual benchmark revision for March 2023 employment estimates indicates a grim -306,000 job adjustment, double the usual size. These revisions, set to appear in February 2024, could drastically alter the economic narrative. Central banks, including the Fed, making decisions based on such shaky data raises concerns about the accuracy of economic assessments, painting a potentially bleaker picture than portrayed by GDP and GDI.

The US debt-to-GDP ratio is on track to surpass WWII levels without a baby boomer-led recovery. The federal budget deficit is estimated to more than double in fiscal year 2023, with revenues down 10% and outlays up 10% compared to the previous year. Medicare's share of deficit spending will grow due to an aging population, while healthcare costs per person are expected to rise. Major healthcare programs, primarily Medicare, will increase from 27% to 38% of total spending. When factoring in interest payments and Social Security, these three categories will account for 74% of total outlays. With no recessions factored in, deficits are likely to rise even further when a recession inevitably occurs.

China's real estate market slump intensifies default fears, risking massive losses for Chinese banks with potential global repercussions. Developers like China Evergrande Group and Country Garden Holdings face negative net worth amid plummeting housing prices. Bad loans to the real estate sector at major Chinese banks surge, especially impacting regional banks. Goldman Sachs estimates potential bank losses of about 1.2 trillion yuan, raising concerns for global financial stability. International investors are growing wary of China, affecting Asian economies.

FDIC Chair Martin Gruenberg warns of significant risks to the US banking industry due to inflation and high interest rates, leading to weakened profitability and credit quality. The second quarter was one of the most tumultuous periods for banking since the 2008 crisis. Deposits continued to decline, adding pressure on banks to raise funding costs. Gruenberg notes these challenges, along with concerns about a softening commercial real estate market, will remain under FDIC scrutiny.

Bank of America warns of a potential "hard landing" for the US economy and a stock market selloff over the next two months due to the lingering threat of higher interest rates. Rising bond yields make stocks less appealing, with the S&P 500 earnings yield trailing behind Treasury bill yields. Michael Hartnett, the bank's strategist, emphasizes the need to "get defensive" and prepare for a "long and hard landing" as yields continue to climb.

Gold and silver prices fell this week in light trade, with US markets closed on Monday for Labor Day. In European trade this morning, gold was at $1925, down $15 from last Friday’s close, and silver was at $23.05, down $1.10.

Rising government debt levels in the U.S. and globally are likely to persist due to divisive politics, increasing spending, and slower growth. Attempts to reduce debt through budget surpluses appear unfeasible, and global economic challenges make the situation even more challenging. The implications include reduced fiscal space to respond to economic downturns in the future, potentially making recessions more severe, especially in emerging markets.

A potential U.S. government shutdown at the end of September could harm the economy, reducing growth by 0.2% per week, according to Goldman Sachs. Past shutdowns had limited impacts on stocks, but this time could be different. It might highlight political gridlock and instability following Fitch's credit rating downgrade, and lead to spending cuts amid other economic challenges.

Fed raised rates in July 2023, hiking credit card interest costs for 82% of adults. US prime rate shot from 3.5% in March 2022 to 8.5% in July 2023, impacting credit card APRs. Average American owns 3.8 credit cards, accounting for 21% of payments. Inflation fuels credit card dependence; balances neared $1 trillion in Q1 2023. Delinquency rates, especially among younger debtors, are rising. Banks are preparing for a recession, increasing contingency funds for loan losses. Consumer optimism falls, and the cost of credit keeps rising as real wages decline. The economy is heading toward a slow-motion default.

Usage of the Fed's emergency bank funding facility hit a record $108 billion, signifying growing financial stress. Money-market funds surged by $42 billion to a record $5.625 trillion. Institutional fund assets rose by $24 billion, and retail funds grew by $17.7 billion. The gap between fund assets and bank deposits widens, reflecting distrust in traditional banking. The Fed's balance sheet shrank by $20 billion, signaling potential economic challenges. Fed Quantitative Tightening (QT) continues with $18.4 billion sold last week, adding to market uncertainty.

We're fed up — fed up with the Federal Reserve. After all, it is the engine that drives the biggest government in history. In this episode of the Friday Gold Wrap, host Mike Maharrey explains what the Fed is, how it came to be, and how it enables reckless government borrowing and spending. He also talks about one reason why the recent drop in the CPI is likely transitory.

Over the past year, the Silver Mining Stocks have significantly underperformed the silver price.  Why?  Well, it looks like something changed for the silver miners in 2022 and continues to negatively impact them.  However, there is some light at the end of the tunnel...

The global shift away from the U.S. dollar in international trade is gaining momentum, with major trading partners increasingly opting to use their local currencies for global transactions. Recent formal agreements among the BRICS nations, including the admission of Saudi Arabia, signal this trend's acceleration. By admitting Saudi Arabia, the BRICS now include two of the world's top three oil producers (Russia and Saudi Arabia), along with UAE, Iran, Russia, and others. This new alignment grants them significant influence over oil output and prices. The BRICS, now representing 30% of global GDP, are positioning themselves to challenge the existing global order dominated by the G7. This shift also raises questions about the dollar's role as the world's reserve currency and opens the door for alternative assets like gold to gain prominence.

China's official gold reserves have steadily increased for ten consecutive months, reaching 69.62 million ounces at the end of August. Over the past ten months, China added 6.98 million ounces to its gold reserves, setting a new record high. Analysts suggest that this trend is likely to continue as China seeks to diversify its holdings away from US debt, making gold an attractive option as a high-quality credit asset. While short-term gold prices may face pressure from a strong US dollar, the long-term outlook remains positive due to growing gold holdings by China and other developing economies.

Decades of alleged silver price manipulation could be giving way to a new era of higher prices. Silver has been suppressed for years due to extensive short selling, causing an artificial scarcity. The emerging physical shortage, coupled with the reluctance of major commercial shorts to add aggressively to their positions, may drive silver prices significantly higher. This represents a potential turning point in the silver market's dynamics.

Gold investment has surged in the past year, fueled by central bank acquisitions. JPMorgan Chase & Co. analysts report that implied allocations to gold by non-bank investors are at their highest since 2012. This trend, which began during the pandemic, has led to historically high implied allocations to gold. The rate of central bank buying is now the key factor influencing the future direction of gold prices, surpassing the importance of ETF flows, which held sway before the pandemic.

Boomers, born between 1946 and 1964, could see their Social Security Cost of Living Adjustment (COLA) drop to 3.1% in 2024 from this year's 8.7%. Smaller COLA increases may make it harder for boomers to pay off debt accumulated during periods of high inflation. This could impact those with median incomes of $41,000 to $44,000, as boomers often have fewer pensions to rely on than the Silent Generation.

Silver is much more than just a precious metal... It’s a marvel that has fascinated humanity for thousands of years.

The U.S. records a shocking 11% increase in homeless individuals living on the streets, reaching almost 600,000 rough sleepers. This spike is the largest since tracking began in 2007, with places like Oakland, San Francisco, Los Angeles, and Seattle becoming hotspots for homelessness. The issues of crime, drug abuse, lack of housing, and the end of pandemic relief programs exacerbate the problem. In downtown LA, tent cities struggle with an opioid crisis, while Seattle faces criticism for leaving hundreds of tiny homes meant for the homeless locked up.