Precious metals news

OCBC Bank economists are optimistic about Gold prices. As the Fed nears the end of its tightening cycle, historical trends suggest that Gold prices could outperform. The potential for lower real yields and its role as a safe haven make Gold an attractive investment, especially in times of slowing global growth or market uncertainty.

Stocks are plummeting once again, with even the NASDAQ experiencing a downturn. Short bets have reached their highest level since April '22, a month that marked the beginning of a significant bear market after a misleading bull-trap rally. Stocks fell sharply for two-and-a-half months, resulting in a deep bear-market pool. Despite attempts at a major bear-market rally, stocks ultimately ended even lower four months later. Many had hoped that the recent steep rally would signal the end of the bear market and the birth of a new bull. However, with stocks falling for four consecutive days, those hopes are wavering.

Both Canada and the United States are facing a mounting debt crisis that poses a significant threat to future generations. In Canada, the debt-to-GDP ratio has surpassed 105%, surpassing countries like Cyprus, Egypt, Ghana, and Zimbabwe. The debt has been steadily increasing for over a decade, with interest payments consuming a significant portion of the budget. Similarly, the United States is burdened by record-high levels of debt, hampering economic growth and confidence in the nation's currency. Both countries need to address this issue by implementing realistic plans to gradually reduce their national debt and avoid leaving behind a ticking time bomb for future generations.

US PMIs for June painted a grim picture as both Manufacturing and Services sectors experienced significant declines. Manufacturing PMI hit a record low of 46.3, while Services PMI dropped to 54.1. The manufacturing industry is contracting, and concerns remain over the tight labor market and rising costs. The global economic downturn is further exacerbated by Europe's weak performance.

Regional banks struggle as Bank Term Funding Program surges due to rising rates and BidenFedflation. Cryptos down, but Bitcoin above $30,000. Oil down, gold and silver up slightly. 10Y-2Y US Treasury yield curve inverts as M2 Money growth crashes.

The dollar gained strength on Friday due to risk aversion triggered by hawkish comments from central banks, including the Federal Reserve. Concerns over aggressive monetary tightening potentially leading to a deeper downturn fueled the flight to safe-haven assets, including the U.S. dollar. Although higher interest rates generally support currencies, the risk of an economic downturn has prompted investors to seek refuge in the dollar.

Across major cities like San Francisco and Hong Kong, the commercial real estate market teeters on a dangerous edge as higher interest rates and declining property values take their toll. In both New York and London, owners of prestigious office buildings are opting to walk away from their debts, unwilling to invest more money into a losing venture. Meanwhile, the largest mall in downtown San Francisco has been abandoned by its landlords, and a newly constructed skyscraper in Hong Kong struggles with a mere 25% occupancy. This unsettling trend in commercial real estate reflects a hidden fault line within the global economy. Despite optimistic stock markets and hopes of a slowdown in interest rate hikes, the challenges in the property sector are expected to persist for years to come.

A commercial real estate crisis looms as distressed properties surge due to building owners defaulting in a high-interest rate environment. According to a report by MSCI Real Asset, distressed assets have risen by 10% in Q1, nearing $64 billion, with a potential to reach $155 billion. Refinancing challenges, tightening credit standards by regional banks, high borrowing costs, declining CRE prices, and soaring vacancy rates in office spaces and malls contribute to this alarming situation.

Private debt in the US economy exceeds public debt and poses a greater economic challenge. As of 2022, public debt was 123% of GDP, while private sector debt reached 165%. The substantial increase in private debt, including student, mortgage, and small business debt, has hindered economic growth by burdening individuals and businesses. The growth of debt outpacing GDP perpetuates the burden on the private sector. While debt is necessary for economic functioning, its excessive use can lead to harmful consequences and potential disaster.

Rising mortgage payments in the UK are straining borrowers, threatening the economy. Inflation persists, leading to an unexpected rate hike to 5%. Markets anticipate further increases to combat prices. The cost-of-living crisis hampers spending, causing a drag on economic growth. Mortgage rates have tripled, and millions of households are at risk as fixed deals expire.

Central banks worldwide are facing a daunting challenge in their battle against inflation, with economists warning that recessions may be necessary to achieve their 2 percent targets. While headline inflation rates have decreased, core inflation rates, which exclude volatile categories like energy and food, remain stubbornly high. This predicament has raised concerns about the ability of central banks to curb inflation without sacrificing economic growth. Experts predict that further pain, including potential recessions, will be required to bring inflation under control.

US government bonds endured a brutal sell-off on Thursday, reflecting mounting concerns about inflation and the need for more interest rate hikes. The two-year Treasury yield spiked to its highest level since March, indicating escalating market anxiety. Fed Chair Jay Powell's testimony hinted at the possibility of two additional rate increases, further adding to the gloom. European stocks also suffered losses as multiple central banks in the region unexpectedly raised interest rates, signaling a deepening battle against inflation. The overall market sentiment remained grim, overshadowed by fears of an economic slowdown and persistent inflationary pressures.

Investors sought refuge in bonds while stocks experienced a decline as concerns over higher interest rates and weak euro-area activity intensified. Worries grew that aggressive central bank policies could push economies into recession.

Argentina turns to the yuan amid a dwindling supply of dollars, highlighting the country's financial struggles and China's ambitions. The US-China rivalry and global fragmentation erode the dollar's dominance in trade. Brazil also seeks alternatives to the dollar, while Argentina sees the yuan as a short-term solution amidst inflation and policy uncertainties. China supports Argentina with a significant portion of a currency swap line, strengthening their bilateral ties since 2009.

Investors rejoice as Joe Biden and Kevin McCarthy strike a debt ceiling deal, fueling optimism. However, this optimism is short-lived as the impending torrent of US Treasury issuance threatens to overwhelm markets, leaving stock investors vulnerable. Concerns about liquidity and the fragility of the banking system intensify, reminiscent of the 2008 financial crisis. The Federal Reserve's ability to address the situation is questioned, and the prospect of a liquidity crisis looms, with September being a potential flashpoint. Stock investors are warned of the lurking danger as Uncle Sam dominates the scene.

Central bankers' deepening concerns over undefeated inflation are locking economies into a new phase of stringent monetary measures. The official start of summer in the northern hemisphere coincides with an alarming UK report revealing stubborn price gains. Adding to the gloom, Federal Reserve Chair Jerome Powell issues a stark warning that two additional borrowing cost increases may be necessary, further exacerbating the economic strain.

Euro Zone Faces Uncertain Recovery Amid Rising Recession Threat and ECB's Monetary Policy Tightening. S&P Warns of Challenges Ahead for Euro Zone as Manufacturing Weakness Persists. Deteriorating Order Books and Slowing Service Sector Add to Euro Zone's Economic Struggles.

Investors are fleeing from tech stocks as a "baby bubble" reminiscent of 1999 forms, warns Bank of America's Michael Hartnett. In the past five trading days, the technology sector saw its largest outflow in 10 weeks, totaling $2 billion. Despite the Nasdaq 100 Index's 38% year-to-date increase, concerns arise as the US stock market rally slows down and the Federal Reserve hints at potential interest rate hikes. Analysts warn of a higher downside risk this summer, with the S&P 500 potentially seeing a maximum upside of 100-150 points and a downside of 300 points before September.

Fed Chair Jerome Powell went to Capitol Hill this week and talked. His open-mouth operations dominated the financial news and drove gold lower. In this episode of the Friday Gold Wrap, host Mike Maharrey digs into Powell's comments, reads between the lines, and points out a couple of things Powell got completely wrong. He also talks about some actual economic news that most people just ignored.

US stock futures plunged on Friday as investors grappled with the bleak prospect of relentless interest-rate hikes. The Fed's determination to raise rates, combined with global economic concerns, sparked anxiety and led to a steep decline in futures for major benchmarks. The situation was exacerbated by mounting inflation pressures and limited policy options.