Precious metals news

Explore the world of precious metals with Ronnie Stoeferle and Mike Maloney as they delve into the historical performance and potential future gains of gold and silver.

The US is facing a critical financial challenge as its national debt escalates. Capital Group's analysis reveals that within the next five years, the US government's interest payments on this debt are poised to outpace defense spending. Economist Darrell Spence notes a concerning trend: if the debt continues to grow as projected by the Congressional Budget Office, annual net interest payments could skyrocket from below $500 billion to an astonishing $1.4 trillion by 2033. This shift underscores the urgent need for attention to the country's debt dynamics.

Many factors are pushing gold higher. And some charting analysts believe gold will soon reach $2,400. The analysis highlights gold's consistent performance over the past 50 years, maintaining its value against major government fiat currencies. It's suggested that the current economic landscape, marked by inflation, recession, geopolitical tensions, and an overvalued stock market, is ripe for gold's ascendancy. Key factors influencing gold's buy zones include price fluctuations, Asian market demand, COMEX trading activities, interest rate trends, and investor sentiment.

In a year marked by market volatility and a complex array of crises, precious metals, particularly gold, have emerged as a beacon of stability and growth. Steve Jones from The Royal Mint reflects on the challenging landscape of 2023, characterized by economic uncertainty, geopolitical tensions, and environmental risks - a scenario aptly termed the "polycrisis". Amidst the tumultuous markets, with even robust indices like the FTSE100 struggling, gold and other precious metals have proven their mettle as safe-haven assets. These commodities have attracted increased attention from investors seeking to safeguard and diversify their portfolios against the backdrop of global instability. This trend underscores the enduring value and strategic importance of precious metals in modern investment portfolios.

As 2023 draws to a close, a review of the commodity markets reveals a mixed performance across six major sectors. While the majority of sectors witnessed a decline, the soft commodities sector notably defied the trend. Highlighted by the significant price surges in frozen concentrated orange juice and cocoa futures, these commodities have emerged as the top performers of the year. This success is attributed to a combination of fundamental and technical factors that have influenced these markets, standing out in a year where regional production dynamics and varying conditions have played a pivotal role in shaping commodity outputs and prices.

Gold prices maintained stability in Asian trade, following a surge in December driven by expectations of early Federal Reserve rate cuts. Spot gold was steady at $2,064.84 an ounce, while February futures rose slightly. The optimism was fueled by the Fed's signals of pausing rate hikes and potential cuts in 2024, with markets anticipating a possible cut as early as March 2024 due to cooling U.S. inflation. Despite lagging behind risk-driven assets like stocks, gold is poised for strong gains in 2023, with further benefits expected in 2024 as U.S. interest rates decrease and global economic conditions worsen. Copper prices also rose, with moderate gains expected in 2023 and a stronger rebound anticipated in 2024 due to increased demand and supply constraints.

Oil prices have retreated from a one-month high, largely influenced by recent attacks on shipping routes in the Red Sea and the potential for wider geopolitical conflicts. Brent crude is trading near $80 a barrel after a significant rise, but faces volatility due to thin holiday trading volumes. The attack on the vessel MSC United VIII highlights the ongoing risks in key shipping lanes, despite efforts by the US and other nations to secure these routes. The situation is further complicated by tensions in the Middle East, including US strikes in Iraq and the ongoing Israel-Hamas conflict, which could escalate into a larger regional issue. Despite recent strengthening in timespreads, oil is still on track for its first annual decline since 2020, amid fears of a surplus next year and bearish technical indicators like the "death cross" in crude benchmarks. This complex mix of factors makes the oil market a critical area to watch in the coming year.

The Misery Index, a measure combining unemployment and inflation rates, suggests Americans should be feeling less miserable than they report. Created by economist Arthur Okun, this index gained prominence during the 1976 and 1980 presidential elections. In April 2020, the Covid crisis drove the Misery Index to its highest level in nearly four decades, but it has since fallen sharply due to cooling inflation and low unemployment, standing at 6.8 in November with unemployment at 3.7% and a 3.1% rise in consumer prices. Despite this improvement, consumer sentiment remains low. The University of Michigan's index of consumer sentiment only recently increased to 69.7 in December from November's 61.3, still below its pre-pandemic level of 101 in February 2020. This disconnect highlights a complex relationship between economic indicators and public perception.

In Eagan, Minnesota, The Open Door Pantry is experiencing unprecedented demand, indicative of the lasting effects of inflation on American lives. Despite 2023 marking significant progress in curbing high inflation, the cumulative impact of 33 months of rapidly rising prices has heavily burdened many, particularly those with lower incomes. This year has seen a record number of visits to food pantries across Minnesota and beyond, a stark reflection of the challenges faced by many households. The Open Door's Executive Director, Jason Viana, highlights how the benefits of rising wages have been nullified by persistent inflation, underlining the profound and enduring impact of these economic conditions on everyday Americans.

With most Economists and the Fed suggesting continued growth next year, one important indicator suggests quite the opposite.  Unfortunately, it seems that the U.S. Economy enjoyed its "Soft Landing" this year and is setting up for a Deep Recession in 2024...

Gold prices in 2023 have witnessed a significant 12% gain, a notable shift from the stagnant performance in 2022. This rise mirrors broader risk themes in the market, paralleling trends in stocks with a rally that persisted through the year, despite some pullbacks. As 2024 approaches, the focus shifts to the Federal Reserve's potential policy changes, especially in the context of the U.S. election year, which may induce further volatility in the gold market. The turning point for this bullish trend in gold occurred in Q4 of 2022, coinciding with the S&P 500 hitting a three-year low and market anticipation of the Federal Reserve easing its aggressive rate hikes. This period saw gold bouncing back from around $1650, fueled by speculation of policy changes. The optimism was reinforced following the December FOMC rate decision, where Jerome Powell hinted at possible rate cuts. Despite some retractions from other Fed members, gold's bullish movement remains evident, with the weekly chart highlighting its impac...

In a landmark event, the Bank of China's Shanghai branch has completed the first-ever cross-border precious metal transaction using the digital yuan, or e-CNY. On December 20, a 100 million yuan (approximately $14 million) settlement was made for a gold purchase through the Shanghai Financial Exchange International Board. This significant move not only enhances Shanghai's role in the global trade market but also aligns with China's strategy to promote its digital currency in international trade. The Bank of China Shanghai, a frontrunner in e-CNY pilot projects, has also been involved in importing iron ore using the digital currency. With President Xi Jinping's endorsement, the digital yuan is gaining international traction, evidenced by partnerships with foreign banks and its acceptance in countries like Singapore and the United Arab Emirates. This development signals a potential shift in the dynamics of global trade and currency usage.

Fitch Ratings anticipates a surge in home prices following a predicted Federal Reserve interest rate cut in 2024. Despite the central bank's expected reduction of 75 basis points, the housing market, with 88% of metro areas overvalued, might offer limited relief. Home prices are projected to increase by 0%-3% in 2024 and by an additional 2%-4% in 2025. This rise could further strain affordability, especially for first-time and entry-level buyers, thereby potentially dampening demand. The overvaluation of homes has also intensified, with a 9.4% overvaluation in the second quarter of this year, up from 7.8% at the end of 2022. However, this view isn't universal; for example, Realtor.com predicts a decrease in home prices by 1.7% in 2024, citing lower mortgage rates and decreased buyer urgency.

2023 has been a challenging year for many Americans like Kyle Connolly, a newly single parent who faced job loss and rising living costs. This personal struggle mirrors a broader economic sentiment, despite ostensibly strong economic indicators. Inflation has significantly impacted everyday expenses, forcing people like Connolly to cut back on simple pleasures and rethink their lifestyles. This shift is visible in her Florida community, where luxury vehicles and leisure activities have become less common. While economists point to a stabilizing inflation rate and a robust labor market, the consumer sentiment remains low.

A recent survey conducted by Business Insider, in collaboration with YouGov, reveals a surprising financial struggle among Generation X. Despite the widespread focus on other generations, it's Gen X, aged between 43 to 58, who are facing significant financial insecurity. The survey, which included over 1,800 Americans across five generations, found that half of Gen Xers do not feel financially secure, a rate higher than their younger and older peers. This puts them at a unique disadvantage in the current economic landscape, overshadowed by the financial challenges and successes of other generations.

Two days before Christmas in 1923, Woodrow Wilson gave the United States a Christmas gift that keeps taking. On that day, he signed the Federal Reserve Act into law, creating the US central bank.
Since that inauspicious day, the US dollar has lost 96% of its value.

What's going on with US banks?
Over the last month, loans outstanding in the Federal Reserve bank bailout program increased by $17.24 billion. It was the second month we've seen borrowing from the Bank Term Funding Program (BTFP) surge. And the pace of borrowing is increasing.

Bills filed in Florida and Oklahoma for the 2024 legislative session would create state precious metals bullion depositories. State-run bullion depositories would not only create a place to store precious metals; they could also encourage the use of sound money in those states and set the stage to undermine the Federal Reserve’s monopoly on money.

If history is any indication, January will be a good month for gold.
According to analysis by the World Gold Council, gold tends to perform well in the first month of the year.

What's the Future of Global Energy??  I sat down with Jesse Day for the Vancouver Resource Investment Conference and discussed energy with Brian Gitt.  While Brian believes the world has a tremendous amount of oil reserves remaining, I believe this is vastly overstated...