Precious metals news

In the first quarter of 2024, the precious metals market showed significant movements with gold hitting new record highs, silver rallying, and platinum and palladium experiencing declines. As we enter the second quarter, the trend appears to be on an upward trajectory, especially for gold and silver, which are leading the bullish momentum. The focus now shifts to the potential directions gold and silver prices could take for the remainder of the year, suggesting continued interest and speculation in these markets.

Jamie Dimon, CEO of JPMorgan Chase, has issued a cautionary note on the U.S. economic outlook, suggesting that inflation and interest rates may remain higher than currently anticipated by the markets. In his annual letter to shareholders, Dimon highlighted the impact of significant government deficit spending and past stimulus measures on the economy. He underscored the potential for increased expenditure due to transitions towards a greener economy, the restructuring of global supply chains, heightened military spending, and rising healthcare costs. These factors, according to Dimon, could contribute to persistently high inflation and interest rates, challenging the prevailing market expectations which have recently leaned towards anticipating rate cuts by the U.S. Federal Reserve.

Gary Shilling, a well-known financial analyst, has highlighted that while the U.S. economy has managed to stave off a recession thus far, the threat of an economic downturn remains. Shilling points to U.S. small businesses, traditionally sensitive to economic shifts due to their lower capitalization, as showing signs of strain by reducing employment and other activities. Despite these warning signals, a surprisingly robust labor market has played a crucial role in preventing a recession. The competition for workers during a labor shortage has led businesses to retain staff, thereby sustaining labor market strength. Shilling suggests that this resilience in the labor market has delayed, but not eliminated, the potential for a recession.

UBS analysts have revised their gold price forecasts upward, anticipating a surge to $2,500 per ounce by the end of 2024, following a significant rally that has already seen prices reach new highs. The 13% increase in gold prices this year is attributed to geopolitical tensions and inflation concerns, which are influencing the Federal Reserve's interest rate expectations. UBS predicts that gold ETF holdings will grow as the Fed begins to lower rates around mid-year, aligning with past trends where gold demand increases with ETF purchases during periods of rate adjustments. Consequently, UBS now expects gold to hit $2,300 per ounce in June before reaching $2,500 by year-end.

Gold prices reached a new record high above $2,350 an ounce but later pared gains, with investors' attention turning towards the upcoming U.S. inflation data set to be released on Wednesday. The anticipation revolves around the Federal Reserve's stance on interest rates, as higher rates generally have a negative impact on gold, which doesn’t yield interest. Despite the lack of a clear catalyst for gold's rally since mid-February, the precious metal has surged over 18%, partly driven by expectations that the Fed might soon reduce borrowing costs and by consistent demand from central banks, notably the People’s Bank of China, which added gold to its reserves for the 17th consecutive month in March.

Despite reaching new all-time highs amid strong U.S. economic data and ongoing geopolitical tensions, gold's future rally may not be guaranteed, according to veteran advisor Bob Parker of the International Capital Markets Association. Parker points out a "catch-up effect" as a significant driver behind the recent surge. This effect refers to gold's attempt to match its past underperformance relative to global equity markets. Additionally, Parker highlights the debated but acknowledged correlation between gold and Bitcoin as influencing gold's appeal. However, Parker also notes the obscure yet impactful role of central bank purchases, especially from Asia, as a key factor in gold's current standing, suggesting a mixed outlook for the metal's future.

Gold prices have surged to new highs, fueled largely by significant purchases from central banks. On the New York Mercantile Exchange, June futures rose 0.5% to $2,357 per troy ounce, reaching an all-time peak of $2,372.5. This uptick represents a 4.4% gain in the past week and nearly 11% over the past year. A significant factor behind this rally is the consistent increase in gold reserves by central banks, with China's central bank boosting its gold reserves for the 17th consecutive month in March.

Oil prices experienced a decline, with U.S. crude futures dropping as the market anticipates Iran's response to Israel following a missile attack on Iran's consulate in Damascus. West Texas Intermediate (WTI) for May delivery decreased by 60 cents, marking a 0.69% fall, settling at $86.31 a barrel, while June Brent contract dipped by 68 cents, or 0.71%, to $90.96 a barrel. This market movement comes amid warnings from a senior Iranian military advisor to Israel, hinting at possible retaliatory actions against Israeli embassies in response to the attack that resulted in the death of Iranian commander Mohammad Reza Zahedi, for which Tehran holds Israel responsible.

U.S. Treasury Secretary Janet Yellen has issued a stern warning to China, signaling that the U.S. will not tolerate the destruction of its emerging industries due to an influx of Chinese imports. During her four-day visit aimed at discussions on excessive industrial capacity, Yellen emphasized that the U.S. aims to prevent a scenario akin to the "China shock" of the early 2000s, which resulted in the loss of approximately 2 million American manufacturing jobs. While she stopped short of proposing new tariffs or trade measures against China's substantial state support for sectors like electric vehicles and solar panels, Yellen criticized China's overproduction and its impact on global markets. Her visit underscores a significant concern over China's export practices and their potential threat to U.S. and other nations' industries.

Gold has been experiencing a notable uptrend, now trading at record levels with predictions suggesting it could reach $4,000 per ounce. This optimistic forecast comes after gold demonstrated a solid bullish reversal, notably overcoming the $1,940 mark without dipping below $1,900, which signaled a buying opportunity. Despite a period of stagnation following an inability to sustain a close above $2,100, a bullish reversal in late February marked a significant improvement in gold's technical outlook. The close above $2,200 has further solidified projections that gold prices could soar to between $3,600 and $4,000, backed by its long-term bullish base and higher high-level consolidations.

This week Peter recaps another stellar week for precious metal. He also discusses Friday’s jobs report, commodity prices, and Bitcoin.

As the Democratic Party has shifted away from its traditional base of working-class and middle-class Americans, to an increased reliance on college professors, students, and highly educated but low-paid professions, such as social workers, a new policy has risen to prominence: student loan forgiveness. 

On April 5 1933, Franklin D. Roosevelt abandoned the gold standard, wielding questionable legal power amidst America's dire economic depression. His whimsical approach to monetary policy, including coin flips and lucky numbers, unleashed unprecedented inflation and price increases that have since amounted to nearly 2500%. Our guest commentator explores this tragic history and the legacy of enduring economic turmoil that still plagues America today.

With the silver price hitting a 2-year high, there continues to be very strong investment demand through European Silver ETFs.  There looks to be another large inflow of silver into the European SSLN Silver ETF...

Russia's central bank has announced a shift from its previous stance of purchasing gold at a fixed price, moving to negotiate prices with commercial banks starting April 8, due to significant market changes. This decision alters the March 25 declaration of buying gold at a fixed rate of 5,000 roubles per gram through June 30. The adjustment comes as the rouble has appreciated notably against the dollar, increasing the fixed price's value from about $52 to $63, despite stable international gold prices around $60 a gram ($1,900 an ounce). This change is noteworthy for Russia, a leading gold producer, especially since the country's gold refiners have been excluded from the London market, the global hub for gold trading, following military actions in Ukraine.

Incremenum shares the company's monthly gold compass report.

The BRICS nations (Brazil, Russia, India, China, and South Africa) are significantly increasing their gold reserves, making them the leading gold buyers of 2023, according to the World Gold Council. China has added 225 tons of gold, with the other member countries also making substantial purchases. This accumulation is part of a strategy to potentially back a new BRICS currency with gold, challenging the dominance of the US dollar. Russia, in particular, has announced plans to double its gold and foreign currency reserves from April 5 to May 7, 2024, as confirmed by Finance Minister Anton Siluanov. This move aligns with BRICS' broader goal to shift away from using the US dollar for international transactions, a change that could have significant implications for the US economy.

Gold is currently entering the early phase of a bull market anticipated to extend into the 2030s, marking a significant turning point reminiscent of the breakout in 2005 that led to a six-year period of substantial growth. This optimistic forecast suggests that gold prices could soar to a long-term target of $8,000 to $10,000 by the end of the 2030s. This prediction underscores the strong momentum and positive outlook for gold as an investment, drawing parallels with past cycles of robust growth and investor interest in the precious metal.

Zimbabwe has announced the introduction of a new currency, the Zimbabwe Gold (ZiG), which will be backed by gold, other precious metals, and foreign currencies. This initiative, announced by Central Bank Governor John Mushayavanhu, aims to bring "simplicity, certainty, and predictability" to the nation's financial system. The transition to ZiG starts from April 5, with an initial interest rate set at 20%, a significant reduction from the previous rate of 130%. This change comes in response to the local dollar's drastic devaluation and soaring annual inflation, which reached 55% in March. The central bank's decision follows extensive discussions with the finance ministry, aiming to address the currency's sharp decline and the challenges in providing change in foreign currency transactions.

The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.