Precious metals news

French markets have found some relief after the first round of its latest election, with stocks recovering somewhat and bond yields falling after reaching a 12-year high. But no matter which side wins in France, the market is afraid that an increase in unsustainable spending could be the common denominator. 

Recent studies reveal a concerning trend among Gen Z, showing a higher willingness to engage in digital fraud compared to other generations. This inclination is attributed to persistent financial challenges, including rising costs of living, student debt, and stagnant wages. The "fraud triangle" theory suggests that Gen Z's economic anxiety provides the incentive and rationalization for fraudulent behavior. While most Gen Zers resort to legitimate money-saving tactics, a significant portion admits to considering or participating in first-party fraud, highlighting the severe impact of economic pressures on this generation's ethical boundaries.

China has introduced new measures to strengthen its control over rare earth metals, declaring them state property and implementing a traceability database from October 1. As the world's largest producer and refiner of these critical resources, China's actions have significant implications for global supply chains in technology, automotive, and renewable energy sectors. This move, along with previous export restrictions on related technologies and materials, has prompted concerns about potential supply disruptions and sparked efforts by the US and EU to secure alternative sources of rare earth metals to reduce dependence on China.

Major investment firms like Schroders and UBS Global Wealth Management are advocating for gold as a key safe-haven asset in 2024, citing concerns over excessive US government spending, geopolitical uncertainty, and potential sovereign debt risks. Gold is seen as a preferred hedge against fiscal, geopolitical, and inflation risks, offering better diversification benefits than traditional safe havens like US Treasuries. The precious metal's appeal is further bolstered by expectations of Federal Reserve rate cuts, continued central bank purchases, and its potential to benefit from concerns about US debt and dollar stability.

The idea of ‘wage slavery' unfairly compares today's suffering job market to historical chattel slavery, using outdated 19th-century arguments to criticize modern work. This oversimplification overlooks the significant improvements in workers' freedom and their right to work.  Some will choose to work at a lower wage than accept a worse alternative.

Oil prices increased on Monday, driven by expectations of peak summer demand and OPEC+ production cuts. Brent crude and WTI futures both rose, continuing their gains from June. Analysts predict supply deficits in the third quarter due to increased transportation and air-conditioning demand. However, rising output from non-OPEC+ producers and caution over potential market volatility ahead of upcoming elections have limited price gains. Investors are also closely watching for upcoming economic indicators, including remarks from the Federal Reserve Chair and U.S. employment data, which could influence market sentiment.

US stocks wavered at the start of July as investors digested mixed economic signals and prepared for upcoming reports. The ISM manufacturing index showed continued contraction in June, albeit with moderating prices. Traders are reassessing strategies in light of recent political developments, including the French election and the US presidential race. While European markets rallied on reduced fears of extreme policies in France, US markets remained cautious. Tech stocks, particularly Nvidia, faced pressure, while Treasury yields rose slightly. Investors are now focusing on upcoming economic data, especially Friday's US jobs report, to gauge the market's direction.

Gold prices experienced a slight decline in Asian trading on Monday, despite increased expectations for U.S. interest rate cuts. The precious metal remained within its June trading range, showing limited response to a weakening dollar. Traders are awaiting further economic cues and insights from the Federal Reserve, including a speech by Fed Chair Jerome Powell and the release of June meeting minutes. While the prospect of lower interest rates typically supports gold prices, the market's reaction has been muted, reflecting ongoing uncertainty in the economic outlook.

The Six Billion Dollar Gold Scam podcast, hosted by Suzanne Wilton, delves into the infamous Bre-X Minerals scandal of the 1990s. The story revolves around a Canadian mining company's false claim of discovering a massive gold deposit in Indonesia, which led to soaring share prices and widespread investment. The podcast explores the mysterious disappearance of chief geologist Michael de Guzman, the role of corrupt practices in the remote location, and the devastating consequences for investors when the fraud was exposed. Despite billions in losses, no one was successfully prosecuted for this elaborate deception that captivated the global mining industry.

Amid growing economic uncertainty and currency instability in Southeast Asia, consumers in Vietnam and Thailand are flocking to buy gold as a safeguard against inflation and currency devaluation. This surge in demand, driven by fears of economic instability and geopolitical tensions, has led to long queues outside banks and rising gold prices in the region. Experts view this trend as a protective measure against the weakening of local currencies against the US dollar and the impact of inflation on purchasing power.

Few are aware of a surprising development taking place in the U.S. Shale Oil Industry.  I plan to do a Metals Update tomorrow when the new month and quarters start, but I wanted to share this because it reveals an interesting situation happening in the U.S. Shale Oil Industry...

Please note: the CoTs report was published 06/28/2024 for the period ending 06/25/2024. “Managed Money” and “Hedge Funds” are used interchangeably.
The Commitment of Traders report is a weekly publication that shows the breakdown of ownership in the Futures market. For every contract, there is a long and a short, so the net positioning will always be zero, but the report shows who is positioned long or short. Historically, Hedge Funds (Managed Money) dominate the price action in both Gold and Silver.

While the Federal Reserve's inflationary policies are publicized as protecting the American people, they are causing the American dream of homeownership to slip away. By raising the federal funds rate to combat their self-inflicted inflation, the Fed has driven up mortgage costs, making it harder for aspiring homeowners to secure a place in the housing market. These policies have resigned aspiring homeowners to a future of perpetual renting.

UBS analysts predict a potential short-term decline in silver prices due to a strong US dollar and reduced speculative positions, but expect a rebound within 6-12 months. This optimism is based on strong industrial demand, particularly from the photovoltaic sector, and a slight contraction in mine output. The anticipated Federal Reserve rate cuts later this year are expected to weaken the dollar, potentially boosting silver prices. UBS suggests that investors less bullish on silver consider selling downside risks from $26.1/oz over three months.

The Federal Reserve's preferred inflation measure, the core personal consumption expenditures (PCE) price index, showed a slowdown in May, increasing by just 0.1% month-over-month. This deceleration, coupled with rebounding household spending and solid income growth, suggests that inflation might be cooling without significantly impacting consumer activity. This data supports the possibility of interest rate cuts later in the year and provides some reassurance to Fed officials amid recent signs of economic slowdown.

U.S. oil prices are approaching a two-month high and are set for a third consecutive weekly gain, driven by growing concerns of a potential conflict between Israel and Hezbollah. This situation has raised fears of a direct confrontation with Iran, an OPEC member, leading to increased market volatility. The Pentagon's move to position military assets near Lebanon for potential American evacuations has further heightened tensions. As a result, both U.S. crude (West Texas Intermediate) and global benchmark Brent have reached their highest levels since late April.

Gold prices are showing a slight increase and are on track for their third consecutive quarterly gain. Investors are closely watching upcoming U.S. inflation data for insights into the Federal Reserve's future interest rate decisions. Despite some fluctuations, gold has maintained its strength, supported by various factors including rate cut expectations, China's economic stimulus, and geopolitical tensions. Analysts remain optimistic about gold's potential to reach higher levels by year-end, barring any significant negative data.

Gold prices remained relatively stable around $2,300 an ounce in Asian trading on Friday, with slight fluctuations as traders awaited key inflation data. The market's focus is on the upcoming PCE price index, the Federal Reserve's preferred inflation gauge, which could influence future interest rate decisions. Gold's performance has been rangebound due to uncertainty over U.S. interest rates, with high rates generally unfavorable for non-yielding assets like gold.

The May 2024 economic data shows a mixed picture of the U.S. economy. While inflation, as measured by the PCE price index, rose 2.6% year-over-year, meeting expectations, personal income and spending saw modest increases. The Core PCE, excluding food and energy prices, also rose 2.6% annually, indicating persistent inflationary pressures. Despite these challenges, real consumer spending grew, suggesting continued economic expansion, albeit at a moderate pace. These figures present ongoing challenges for policymakers as they balance growth with inflation control.

As housing affordability declines due to rising home prices, many potential buyers are turning to the rental market. Bruce McNeilage, CEO of Kinloch Partners, notes that people are postponing home purchases until interest rates decrease, leading to increased demand for rentals. This trend is causing longer rental periods for many individuals.