Precious metals news

Gold prices have remained steady in Asian trade, fluctuating within a $2,000 to $2,050 an ounce range established over the past week. This stability comes amidst market speculation regarding the timing of the Federal Reserve's interest rate reductions. While dovish signals from the Fed initially propelled gold above $2,000 an ounce, further gains were limited due to improved risk appetite and doubts about early rate cuts. Comments from several Fed officials, suggesting that expectations for an early rate cut might be overly optimistic, have also contributed to the dollar's recovery from recent lows and restrained significant gains in gold prices.

Richmond Federal Reserve President Tom Barkin has expressed cautious optimism about the progress in reducing inflation, noting a decline to a 3% rate. Despite this, Barkin, who will be a voting member of the Fed's rate-setting committee next year, emphasized the need for consistent data before considering rate cuts. This statement follows the Federal Reserve's hint at a potential peak in rates, with a forecast of three rate cuts next year. However, Barkin refrained from confirming these cuts, underscoring the importance of monitoring inflation and economic trends.

The US stock market had a potentially significant day on Wednesday. Markets have been rallying on the hope of interest rate cuts in the near future. But Fed officials have been trying to walk back those expectations. Did the central bankers manage to steal the Santa Claus rally? In his podcast, Peter Schiff talks about the recent moves in the stock market.

Despite a drop in today's pre-market trading, gold's recent dramatic weekly reversal remains a key context. This reversal, characterized by gold skyrocketing above $2,100 and then plunging to nearly $2,000 on significant volume, marks one of the most notable weekly shifts in years. It echoes similar reversals seen in May 2023 and March 2022, both of which initiated major declines. The significance of this reversal, amidst day-to-day price fluctuations, cannot be overstated and is expected to heavily influence gold's trajectory in the coming weeks.

Mike Maloney and Alan Hibbard analyze the intriguing book "The Great Taking", which offers a sobering account of the potential consequences of the next financial crisis.

In the precious metals market, while gold has traditionally been the dominant choice, attention is shifting towards silver as we head into 2024. Despite experiencing volatility in 2023, silver shows potential for growth. As of December 2023, silver's price stood at $24.38 per ounce or $783 per kilogram, marking a significant increase of over 5% from the previous year and 3.5% from the previous month. This suggests a recovery from earlier price fluctuations within the year, indicating an emerging trend that could be of interest to investors.

In a recent podcast episode, hosts John Reade and Joe Cavatoni are joined by Tina Fordham from Fordham Global Foresight to discuss the evolving global geopolitical landscape. They examine whether current tensions hint at a long-term escalation and the trend of emerging market central banks diversifying their reserves beyond the U.S. dollar, potentially challenging Western dominance. The conversation also touches on the effectiveness of geopolitical risk indices, changing Western-China relations, and the influence of upcoming U.S. and global elections in 2024.

U.S. stocks, including the Dow Jones Industrial Average, faced a downturn, potentially ending a 10-day winning streak, influenced by a mix of economic data and market dynamics. The recent rally, driven by hopes of a dovish Federal Reserve and lower inflation, hit a pause as investors weighed future economic slowdown and consumer spending trends. Key economic indicators, such as existing-home sales and the consumer-confidence index, showed mixed signals, while company-specific news like FedEx's lowered forecast and Tesla's compensation changes also impacted market sentiment. The market's future direction hinges on upcoming economic reports, including revised GDP figures and the Fed's inflation report.

Global stocks reached their highest levels since March 2022, driven by a significant drop in UK inflation and a rally in government bonds. UK inflation fell to 3.9%, much lower than expected, prompting increased expectations of interest rate cuts by the Bank of England next year. Consequently, British bond yields declined sharply. In contrast, oil prices surged due to concerns over disruptions in the Red Sea following attacks by Yemen's Houthi militants. The anticipation of rate cuts also bolstered riskier assets like equities, with the MSCI global equity index achieving a record high since March 2022.

The Federal Reserve and the US government create inflation and then blame everybody else.
President Joe Biden recently finger-pointed at "greedy corporations," saying they need to "lower prices" now that inflation come down. Whether he is really that ignorant or just lying, Biden's comments serve a purpose. As Ron Paul put it, they gaslight the American public into thinking price inflation is rooted in the actions of private individuals and not the fiat money system.

The prevailing investor belief in a 'soft landing' for the U.S. economy is under scrutiny. While most investors anticipate the Federal Reserve will effectively manage inflation without triggering a recession, some Fed officials are cautioning against this optimism. They highlight the potential risk of the economy overheating in 2024 if inflation remains persistent. This skepticism suggests that the market (and individual investors) may not be fully prepared for the economic challenges that could arise in the year ahead.

The Bank of Tanzania plans to buy 12 tons of gold during the fiscal year in an effort to boost its foreign exchange reserves. The East African nation joins a growing number of central banks turning to gold.

Costco sold more than $100 million worth of gold bars in its first quarter, ending November 26. This announcement was made by the company's CFO, Richard Galanti, during an earnings call. These one-ounce gold bars, namely the PAMP Suisse Lady Fortuna (available on GoldSilver.com right now), usually sell out within a few hours on Costco’s website, highlighting strong demand for gold among its consumer base.

The Tanzanian government, through the Bank of Tanzania (BoT), plans to purchase approximately 12 tonnes of gold from local miners and traders this financial year to boost foreign exchange reserves. This initiative is part of the BoT's Domestic Gold Purchasing Programme, which aims to strengthen foreign exchange reserves by acquiring gold. To encourage more sellers to participate, the government is considering revising its legislation to lower the royalty rate from 9.3% to 7.3%, aligning it with the rate charged at gold refineries. This proposal was discussed in a joint meeting between the government and mining sector stakeholders.

Analysts, including those from J.P. Morgan, are bullish about gold and silver for 2024, attributing their optimism to the Federal Reserve's rate cutting cycle and declining U.S. real yields. J.P. Morgan specifically forecasts gold to average $2,175/oz by Q4 2024, highlighting a strong medium-term outlook for these precious metals. This sentiment is echoed by other market experts, like macro fund manager Bruce Liegel, who suggests that gold prices could rise further in response to central banks' easing rates, particularly if a global recession occurs. The extent of the rate cuts, depending on whether the economy faces a hard or soft landing, is seen as crucial to gold's future trajectory. Additionally, geopolitical tensions and efforts by emerging market central banks, especially China and Russia, to diversify away from the US dollar by increasing their gold holdings, are also recognized as significant factors influencing gold prices.

On Tuesday, the yield on the 10-year U.S. Treasury note dipped, reversing its previous trend, as traders evaluated the likelihood of future interest rate cuts by the Federal Reserve. This decline of about 3 basis points brought the yield to 3.928%, continuing its drop from last Thursday when it fell below 4% for the first time since July. Similarly, the 30-year Treasury bond yield decreased by roughly 3 basis points to 4.041%. In the shorter term, the 2-year note's yield also saw a decline, dropping over 1 basis point to 4.439%. It's important to note that yields and bond prices have an inverse relationship, with one basis point equating to 0.01%.

According to Capital Economics' latest report, the commercial real estate market faces further challenges in the coming year. Hindered by slow economic growth and high interest rates, property values in this sector are projected to drop an additional 10%, following this year's 11% decrease. Deputy Chief Property Economist Kiran Raichura, who penned the outlook, highlights the significant scale of these declines. With the market valued at over $5 trillion by the end of 2022, this year's 11% reduction translates to a substantial loss of approximately $590 billion, and next year's anticipated 10% decrease is expected to result in a further $480 billion reduction in value.

In an interview with the Wall Street Journal, San Francisco Federal Reserve President Mary Daly, indicated that the Federal Reserve might need to consider cutting interest rates to avoid excessive tightening as it continues to combat inflation. On Yahoo Finance Live, Santandar Chief U.S. Economist Stephen Stanley discussed the market's reaction to this statement and recent Federal Reserve communications. Post the December FOMC meeting, Stanley observed that investors seemed encouraged to anticipate more rate cuts. Looking into 2024, he noted that while inflation is declining, the extent of this decrease might be somewhat overstated. Stanley expressed concern that if the Fed cuts rates too soon, it could lead to a resurgence in inflation, necessitating another round of tightening. However, he downplayed this scenario as "not the end of the world."

In November, the LBMA Gold Price AM in USD continued its upward trend, while the Shanghai Gold Benchmark PM in RMB experienced a slight decline due to a strengthening yuan. The Shanghai Gold Exchange saw a notable withdrawal of 132 tons of gold, marking an increase both month-over-month and year-over-year. Despite these withdrawals, the local gold price premium in China remained high and stable, indicating tight net gold supply. Chinese gold ETFs experienced minor net outflows, leading to a slight decrease in collective holdings and a 1% drop in total assets under management. Additionally, the People's Bank of China reported its thirteenth consecutive monthly gold purchase, increasing its gold reserves by 12 tons to 2,226 tons.

The Canadian Dollar reached its highest level since August following the release of inflation data showing that Canada's inflation rate remained at 3.1% in November, contrary to expectations of a decline to 2.9%. This persistence of inflation gives the Bank of Canada reason to maintain its policy rate at the highest in two decades. Despite forecasts for a decrease, the consumer price index rose by 0.1% month-over-month. Key annual inflation measures, like the trim and median core rates, stayed unchanged at an average of 3.45% year-over-year, surpassing economists' predictions of 3.35%. A significant factor in the inflation rate is the rising cost of housing, largely influenced by central bank rate hikes and high immigration levels, which have led to increased rents.