Precious metals news

Gold prices are surging, approaching all-time record highs despite initial concerns over China's reserve holdings. The precious metal has gained $51, reaching $2422, driven by a combination of factors including potential rate cuts, economic growth concerns, large deficits, political instability, and geopolitical tensions. This rally demonstrates gold's enduring appeal as a safe-haven asset in times of uncertainty. While the current price is nearing the all-time high closing level, it remains just shy of the intraday record of $2449 set in May, suggesting further potential for growth in the near future.

The latest Consumer Price Index (CPI) report reveals a significant cooling in US inflation for June 2023. For the first time since May 2020, the monthly headline CPI showed a negative value, decreasing by 0.1%. The annual inflation rate slowed to 3%, the lowest since March 2021, beating economists' expectations. Core inflation, which excludes volatile food and energy prices, also showed moderation, rising just 0.1% monthly and 3.3% annually. This data suggests a continued trend of easing inflationary pressures in the US economy, leading to positive market reactions, including a notable drop in Treasury yields.

Treasury yields experienced a significant decline following the release of favorable inflation data, which has increased market expectations for at least two Federal Reserve interest rate cuts in 2024. The drop in yields was observed across all maturities, with short-term rates particularly affected due to their sensitivity to Fed policy changes. Traders have now priced in a high probability of a rate cut in September, with some analysts predicting up to three cuts by year-end. This shift in market sentiment has led to a rally in Treasury bonds, potentially impacting upcoming auctions and reflecting growing investor confidence in a more dovish Fed stance in response to cooling inflation.

Uganda has announced plans to purchase domestic gold to bolster its foreign exchange reserves and mitigate investment risks, joining a growing trend among African nations. This strategy, which also aims to support local miners and reduce raw gold imports, mirrors similar initiatives in Nigeria, Zimbabwe, and Ghana. These countries are turning to gold as a means to stabilize their currencies, combat inflation, and address economic challenges stemming from the COVID-19 pandemic and global economic pressures. Uganda's approach is part of a broader effort to strengthen its economy, which has shown resilience due to proactive monetary policies and strategic currency management.

An inverted Treasury yield curve has historically been associated with economic downturns, preceding every recession since the late 1960s. Earlier this year, it set a new record for remaining inverted for more than 624 days, which was the 1978 record.

U.S. economic data is hitting headlines yet again—this time, due to serious concerns about its continued reliability.
“Federal statistical agencies face increasing challenges to their ability to produce relevant, timely, credible, accurate, and objective statistics,” researchers of the American Statistical Association revealed. “Immediate action is needed to put the agencies … on a firmer footing so that federal statistics remain widely trusted and useful….”

With the Gold and Silver Prices surging higher today, news of a Chinese trader taking on JP Morgan hit the Alt-Media airwaves today.  So, is there a Big Chinese Trader taking on JP Morgan?  If so, why are precious metals investors selling rather than buying metal...

Federal Reserve Chair Jerome Powell, in his recent congressional testimony, acknowledged progress in curbing inflation but emphasized the need for more consistent data before considering interest rate cuts. While expressing some confidence in inflation's downward trend, Powell remains cautious about declaring it sustainably approaching the Fed's 2% target. He highlighted the delicate balance between addressing inflation and maintaining employment, noting that the risks of acting too quickly or too slowly on rate adjustments are now more evenly balanced. Powell's stance suggests a cautious approach to monetary policy changes, with the Fed closely monitoring economic indicators before making any decisions on rate cuts.

The S&P 500 has reached a historic milestone, surpassing 5,600 points for the first time, driven by a strong rally in major technology stocks. This surge comes amid growing investor optimism for potential Federal Reserve rate cuts, bolstered by Fed Chair Jerome Powell's congressional testimony. The market's upward trajectory is further supported by positive news from tech giants like Apple and Nvidia, as well as stable Treasury yields. While the rally is broad-based, with the Nasdaq 100 also showing significant gains, some sectors like banking are underperforming. This record-breaking performance occurs as Wall Street anticipates key economic data and the start of the earnings season, highlighting the current bullish sentiment in the market

Social Security faces an unsustainable future due to prolonged deficits and demographic shifts. With an aging population and decreasing workforce, the program may struggle to meet its obligations to retirees as early as 2035. Both major political parties acknowledge the issue, but proposed solutions vary, ranging from increasing taxes on high-income earners to stimulating economic growth. The next administration will face difficult decisions to ensure the program's long-term viability, potentially involving spending cuts, tax increases, or a combination of both.

Sprott Inc. has launched the Sprott Physical Copper Trust on the Toronto Stock Exchange, holding over 10,000 metric tons of copper, mainly in Asia. Despite plans to raise an additional $500 million to acquire 50,000 more tons, Sprott asserts the fund is too small to impact the global copper market, which produces 22 million tons annually. Unlike past controversial copper-backed funds from BlackRock and JPMorgan Chase, Sprott’s CEO John Ciampaglia believes their fund provides an alternative investment without significantly affecting market availability or prices.

Federal Reserve Chair Jerome Powell's recent testimony to Congress signals a potential shift in the Fed's approach to monetary policy. While acknowledging progress in combating inflation, Powell highlighted the cooling job market and the risks of maintaining high interest rates for too long. This balanced perspective suggests the Fed is moving closer to considering rate cuts, possibly as early as this year. Powell emphasized that while inflation remains above the 2% target, it has eased notably over the past two years. The Fed now faces the challenge of balancing its inflation fight with concerns about potentially weakening economic activity and employment, indicating a more nuanced approach to future rate decisions.

The gold market maintains a positive outlook, with analysts anticipating continued upward pressure. Technical analysis suggests that the recent consolidation may lead to further gains, potentially targeting the $2,425 level and beyond. Several factors support this bullish sentiment, including ongoing central bank gold purchases, potential Federal Reserve rate cuts if inflation eases, and persistent geopolitical concerns. The upcoming U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) releases are expected to be crucial in determining gold's short-term direction. Despite potential volatility, the $2,300 level has shown resilience as support, indicating that any dips may present buying opportunities for investors looking at gold's long-term bullish prospects.

Citi analysts project a rebound in physical gold demand for the latter half of 2024, despite a slight softening in the second quarter. They maintain a bullish outlook with a $3,000 price target, expecting spot prices to average between $2,400-$2,600 per ounce in H2 2024. This optimism is fueled by anticipated record Chinese gold imports, stable official sector demand, and potential increases in central bank purchases. The analysts also predict improved gold ETF inflows as the Federal Reserve begins its rate-cutting cycle. These factors combined suggest a strong upward trajectory for gold prices, with Chinese retail imports potentially representing 47% of world gold mine output in 2024.

Recent surveys reveal a concerning trend in American financial health, with a significant majority of the population living paycheck to paycheck. A 2023 Payroll.org study found that 78% of Americans fall into this category, marking a 6% increase from the previous year. This means over three-quarters of Americans struggle to save or invest after covering monthly expenses. Corroborating these findings, a Forbes Advisor survey in the same year showed that 69% of respondents either live paycheck to paycheck (40%) or don't earn enough to cover their basic expenses (29%). These statistics underscore the growing financial strain on Americans across all generations as living costs continue to rise faster than wages.

A Bank of America study reveals that Gen Z adults in the U.S. are struggling financially due to inflation and rising living costs, with nearly half relying on parental support. The survey of 18-27 year-olds shows that 50% are not on track to buy a home within five years, 46% are unprepared for retirement savings, and 40% are not ready to start investing. To cope with increasing expenses, two-thirds of respondents are making lifestyle changes, including budgeting, reducing dining out, and opting for cheaper groceries. Bank of America's president of retail banking emphasizes the importance of budgeting for this generation facing economic challenges.

Global gold ETFs experienced a significant downturn in the first half of 2024, with a net outflow of $6.7 billion, marking the worst first-half performance since 2013. Total holdings decreased by 120 tonnes (-3.9%) to 3,105 tonnes. While Asian funds attracted a record $3 billion, they were overshadowed by $9.8 billion in outflows from North America and Europe. This trend is attributed to high interest rates and a risk-on sentiment driven by the AI boom in Western markets, which outweighed the typical positive correlation between gold prices and investment flows. Conversely, Asian investors were drawn to gold due to weaknesses in non-dollar currencies and gold's strong performance in those currencies.

Many Americans are accumulating debt to finance their summer activities, with a significant portion still paying off last year's summer expenses. This trend is particularly concerning given the current high credit card interest rates, which have risen substantially since the pandemic. Young generations, especially Gen Z and millennials, are more likely to take on debt for summer fun, with some expecting to accrue over $4,000 in debt. While 36% of respondents are willing to use various forms of credit for summer vacations, experts warn of a potential "summer debt hangover." This situation is exacerbated by the fact that credit card debt, though a small portion of overall household debt, carries higher interest rates, making it particularly expensive for consumers.

Japan's wholesale inflation accelerated in June, driven by a weakening yen that increased import costs, rising global commodity prices, and the phasing out of fuel subsidies. The corporate goods price index rose 2.9% year-on-year, reaching a record high for the seventh consecutive month. This data, along with a 9.5% increase in the yen-based import price index, suggests growing inflationary pressures that could influence the Bank of Japan's decision on interest rates at its upcoming policy meeting. Economists anticipate that these trends, particularly the yen's decline, may lead to further inflation acceleration towards autumn, potentially prompting the BOJ to consider rate hikes as it continues to normalize its monetary policy following the end of negative interest rates in March.

China's June economic data reveals persistent weak demand despite government efforts to boost consumption. Consumer inflation rose marginally by 0.2% year-on-year, falling short of expectations, while factory-gate prices continued their 21-month deflation streak, declining by 0.8%. These figures underscore the ongoing challenges in China's economic recovery, particularly in the property sector and domestic consumption. Despite initiatives to stimulate spending, consumers remain cautious, as evidenced by declining car sales. Economists suggest that more aggressive fiscal and monetary policies may be necessary to drive a meaningful recovery, with some speculating that potential U.S. Federal Reserve rate cuts could provide room for China to implement its own monetary easing measures.