Precious metals news

Paul Dietrich, chief investment strategist at B. Riley Wealth Management, warns that the S&P 500 could plummet by 48% when the current stock-market bubble bursts and a recession hits. He attributes this potential crash to an overvalued market, persistent inflation, high interest rates, and rising taxes. Dietrich compares the current hype around AI to the dot-com bubble and highlights the Buffett Indicator's surge to 188%, nearing a dangerous level. He also notes that gold prices have soared as institutional investors seek safe-haven assets in anticipation of a major market correction. Dietrich points to high price-to-earnings ratios and low dividend yields as further evidence of an impending downturn.

Sixteen Nobel Prize-winning economists have issued a warning about the potential economic consequences of a second Trump presidency. In a letter obtained by Axios, they argue that Trump's proposed policies, including new tariffs on imports and Chinese goods, could reignite inflation and harm the global economy. The economists collectively endorse Joe Biden's economic agenda as "vastly superior" to Trump's. This intervention aligns with the Biden campaign's strategy to shift focus from defending the current economic situation to highlighting the potential risks of Trump's economic plans. The economists' statement aims to lend academic credibility to the argument that inflation would worsen under Trump, addressing voter concerns about the economy and inflation.

Americans have been increasingly investing in cash-like assets, such as Treasury bills and money-market funds, due to high interest rates. However, as the Federal Reserve is expected to cut rates, investors face a dilemma: continue holding cash with diminishing returns or redistribute their funds into other investments. This decision is challenging and depends on individual circumstances, but experts warn that remaining in cash risks missing out on potential long-term gains from a diversified portfolio. J.P. Morgan Asset Management refers to this situation as the "cash trap," highlighting the need for investors to consider future market conditions rather than past performance when making investment decisions.

A new study by the Atlantic Council's GeoEconomics Center reveals that the U.S. dollar remains the world's dominant reserve currency, with neither the euro nor BRICS countries making significant progress in reducing global reliance on the dollar. The "Dollar Dominance Monitor" highlights the dollar's continued supremacy in foreign reserve holdings, trade invoicing, and currency transactions. Despite efforts by BRICS to shift towards other currencies, particularly accelerated by Western sanctions on Russia, the group has not advanced in its de-dollarization initiatives. The robust U.S. economy, tighter monetary policy, and geopolitical risks have further solidified the dollar's dominant role.

China's 10-year government bond yield has fallen to its lowest level since 2002, reaching 2.22%, as investors seek safe-haven assets amid concerns about the country's economic growth. This trend reflects ongoing economic challenges, expectations for further stimulus measures, and ample liquidity in the banking system due to weak loan demand. The bond rally persists despite increased government borrowing for fiscal stimulus. While this reflects a subdued risk sentiment and anticipation of monetary policy support, some analysts caution against chasing long-term yields lower, suggesting they may be disproportionately low compared to potential GDP growth.

Gold ownership among North American professional investors has significantly increased, with 85% reporting an allocation to gold investments, up from 69% in 2018. This trend is driven by gold's recent strong performance and record-high prices. Over half of the surveyed investors hold at least 1% of their assets under management (AUM) in gold, with 24% allocating 3% or more. Investors view gold as an excellent portfolio diversifier, inflation hedge, and risk reducer.

Los Angeles is facing a severe housing affordability crisis, with only 2.8% of non-homeowner households able to afford a typical mortgage. This crisis is driven by high mortgage rates, extreme lack of housing supply, and soaring home prices. The median home price in LA has surged to $1,050,000, more than double the national median. Factors contributing to this crisis include strict zoning laws, high construction costs, limited land availability, and wage growth that hasn't kept pace with housing costs or inflation. The situation is so dire that the household income needed to afford a median-priced house in California is $197,057, more than twice the average household income in the city.

Sunny Verghese, CEO of Olam Agri, warned that the world is on the brink of "food wars" due to geopolitical tensions and climate change, which are straining food supplies. Speaking at a recent conference, Verghese highlighted that government-imposed trade barriers, intended to protect domestic food stocks, have exacerbated food inflation. He noted that the proliferation of non-tariff trade barriers in response to the Ukraine war has created an exaggerated demand-supply imbalance, driving up prices. Wealthier nations stockpiling strategic commodities have further intensified this issue, leading to higher global food prices and deepening food insecurity, especially in poorer countries.

In this eye-opening and potentially polarizing video, Mike Maloney dives deep into the foundations of prosperity and the economic laws that drive it.

The Green Energy Industry took another BIG HIT when Enviva, the world's largest wood pellet company, filed for bankruptcy in March.  This is terrible news for power plants in Europe and Asia that have converted to burning wood pellets instead of coal...

An article in yesterday’s Washington Post assured readers that no matter who wins the 2024 US presidential election, we can count on massive expansion of the national debt to be among the common denominators. The article looked at a recent report from the Committee for a Responsible Federal Budget, or CRFB, analyzing the debt increases of both the Trump and Biden administrations.

A-Mark Precious Metals, Inc. has increased its ownership stake in Silver Gold Bull, a prominent online precious metals retailer in Canada, becoming the majority owner. This strategic move expands A-Mark's presence in the Canadian market and strengthens its position in the precious metals industry. The investment aligns with A-Mark's growth strategy and is expected to enhance its distribution capabilities while leveraging Silver Gold Bull's established customer base and market expertise.

Citigroup and Bank of America have issued bullish forecasts for gold prices, predicting they could reach $3,000 per ounce within the next year. This optimistic outlook is driven by expectations of increased investor inflows and anticipation of the Federal Reserve cutting interest rates. Citigroup analysts, led by Aakash Doshi, have revised their 2024 average price prediction to $2,350 and significantly increased their 2025 forecast to $2,875. They expect gold to frequently challenge and surpass the $2,500 mark in the second half of this year.

JPMorgan has expressed a long-term bullish outlook on gold and silver, citing structural factors that support their value. Meanwhile, palladium prices have continued to rise, driven by strong demand and supply constraints. This positive sentiment towards precious metals comes amid broader market uncertainties and economic conditions that favor safe-haven assets.

U.S. home prices continued to rise in April but at a slower pace, reflecting the impact of high mortgage rates on buyer demand. The S&P CoreLogic Case-Shiller 20-city house price index increased 0.4% from March and 7.2% year-over-year, down from the previous month's 7.5% annual gain. While prices reached new record highs, the deceleration in growth indicates the housing market's struggle with affordability issues due to elevated interest rates and limited inventory. San Diego led with the highest annual price increase of 10.3%, while Portland saw the slowest growth at 1.7%.

Federal Reserve Governor Michelle Bowman cautioned against premature interest rate cuts, citing potential upside risks to inflation. She emphasized the need to maintain current rates due to economic uncertainties, particularly highlighting concerns about immigration policies' impact on the labor market and rental prices. Bowman stressed that current conditions do not warrant a reduction in policy rates and expressed openness to further rate increases if inflation progress stalls or reverses.

McDonald’s new $5 Meal Deal, debuting Tuesday, offers a McChicken or McBurger, chicken nuggets, fries, and a drink for less than a Big Mac, highlighting a shift in the fight against inflation. This promotion comes as the U.S. inflation rate slows, with prices up 3.3% in May compared to 4% the previous year and 8.6% the year before that. Despite this, many Americans still feel the cost of living is too high, leading to reduced consumer spending and declining restaurant visits.

Gold prices are up nearly 14% this year and are approaching record highs. Despite ongoing geopolitical conflicts and expectations for a Federal Reserve rate cut, financial advisors still recommend adding gold to portfolios. According to the latest Gold Perceptions Survey by State Street Global Advisors and the World Gold Council, almost 30% of surveyed advisors plan to increase their gold allocation in the next 12 to 18 months, while nearly two-thirds will maintain their current levels. Less than 10% intend to reduce their gold exposure. Most advisors allocate between 1% and 4.9% of their assets to gold, primarily through physically backed gold ETFs. Gold is valued as a safe haven during turmoil and benefits from a weakening U.S. dollar when the Fed cuts rates.

The message is loud and clear: The Japanese economy has no tolerance for higher interest rates after the Bank of Japan has kept them artificially near zero for decades. Meanwhile, as the largest holders of US Treasury debt, Japan’s economic well-being has become inextricably dependent on the capricious whims of Federal Reserve monetary policy — and both of those chickens have now come home to roost. 

In the final trading week of the month, quarter, and first half of 2024, investors will focus on key inflation data and select corporate earnings. The Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, is expected to show a 0.1% rise in core prices for May, marking the slowest monthly increase since last November. Annual core PCE inflation is projected to be 2.6%, the lowest since March 2021. Earlier CPI data indicated cooling inflation, reinforcing expectations of a Fed rate cut later this year. Earnings reports from FedEx, Micron, and Nike will also be key highlights.