Precious metals news

On Monday, the stock market experienced a downturn, with the Dow Jones Industrial Average falling 274.30 points (0.71%) to 38,380.12, and the S&P 500 declining 0.32% to 4,942.81, retreating from its recent record high influenced by Big Tech gains. The Nasdaq Composite also saw a slight decrease of 0.2%, closing at 15,597.68. This downward movement was largely attributed to a significant rise in Treasury yields, fueled by concerns that the Federal Reserve might not implement rate cuts as previously anticipated.

Tavi Costa shares insights on smart capital allocation and the potential for silver to outperform.

A growing segment of Americans, particularly those in lower- and middle-income brackets, have depleted their savings and accrued substantial credit card debt due to persistent inflation over the last two years. This financial strain is exacerbated for those also juggling student loan repayments, raising concerns about worsening financial health. Credit card debt in the U.S. reached a record high of over $1.05 trillion in the third quarter of 2023, with expectations for further increases. Moody's has reported rising delinquency and charge-off rates, indicating a significant number of Americans are struggling to manage their debt, with rates surpassing those seen in 2019 and projected to continue rising.

The Yahoo Finance Chartbook reveals through 10 critical charts how the US economy has managed to avoid a recession, showcasing resilience against the backdrop of last year's recession forecasts. A pivotal indicator of this strength is the latest jobs report, which significantly exceeded expectations by adding 353,000 jobs, surpassing the anticipated 185,000. This report, along with analyses from leading Wall Street equity strategists and economists, highlights the underlying economic forces contributing to the economy's durability, even in the face of the highest interest rates seen in over two decades.

In a significant move towards de-dollarization, 20 nations have joined the Russian Payment System as part of the BRICS alliance's efforts to reduce reliance on the US dollar. This step aligns with the BRICS group's broader strategy to challenge Western financial dominance. Russia's System for Transmitting Financial Messages (SPFS), serving as an alternative to the SWIFT system, has garnered over 159 foreign participants, indicating a growing interest in diversifying away from traditional, dollar-centric financial systems. This development was highlighted in a recent announcement by Russia's Central Bank Governor, Elvira Nabiullina, emphasizing the BRICS' commitment to establishing a more independent global financial infrastructure.

Our nation's top financier had it correct 111 years ago: "Money is gold, and nothing else." J.P. Morgan was convinced of this. Still, government agencies have schemed over the centuries to dismantle the gold standard. 
Our guest commenter explains that, even though the Fed still holds gold, there was never a time when the dollar was less backed or less safe than now.

In 2023, Venezuela's central bank reported an 11.5% decline in its gold reserves, totaling 61 metric tons, a decrease reflected in the reserves' value, which dropped to $3.8 billion, $71 million less than the previous year. The central bank, without specifying causes for this decline in its announcement, noted the average gold price on its balance sheet for the latter half of 2023 was $1,959.62 per troy ounce, compared to $1,775.02 the year prior.

Gold's price charts are exhibiting bullish trends, with prices not only maintaining above the long-term moving average but also marking the highest weekly closing prices in recent history. This pattern, featuring a series of reversals over the last 3.5 years all above the long-term moving average—which itself is on an upward trend—indicates strong bullish momentum. Furthermore, a breakout consolidation phase suggests stability after recent gains, signaling investor confidence in gold's long-term value. Despite these positive technical indicators, investor sentiment has not aligned, as gold prices have been fluctuating between $2,000 and $2,070 per ounce for two months, creating a sense of uncertainty and frustration among investors.

UBS predicts a bullish future for gold and silver in 2024, projecting gold to reach $2,200 per ounce by year-end, driven by anticipated U.S. Federal Reserve interest rate cuts. Joni Teves, UBS's precious metals strategist, highlights a potential easing by the Fed and a consequent weaker dollar as key catalysts for gold's rise. This expectation stems from gold's inverse relationship with interest rates; lower interest rates diminish the attractiveness of yield-bearing investments like bonds, thereby enhancing gold's appeal. Additionally, a softer dollar lowers gold's price for international buyers, further boosting demand. This forecast sets the stage for significant gains in the precious metals market, with silver expected to dramatically outperform.

In a revealing "60 Minutes" interview, Federal Reserve Chair Jerome Powell highlighted the precarious fiscal trajectory of the United States, stating that the nation's debt is expanding at a rate outpacing its economy, and it is unsustainable. The U.S. national debt reached a historic high of over $34 trillion in early January, escalating rapidly from the $33 trillion mark hit just three months prior. Amidst ongoing congressional delays in addressing spending deadlines due to disputes over government funding and the soaring national debt, temporary funding measures are in place until early March for various federal agencies, with broader government funding expiring shortly thereafter.

As China grapples with economic slowdown, its significant pivot towards gold has notably influenced global demand, setting new records. The easing of pandemic restrictions has not alleviated the economic stress from a sluggish manufacturing sector, high debt levels, and a property market crisis. This shift has positioned the People's Bank of China as the largest gold buyer last year, a move highlighted by the World Gold Council's recent report. Despite a 5% drop in global gold demand excluding OTC market trades, the inclusion of OTC transactions reveals an unprecedented total demand of 4,899 metric tonnes (about 5,400 tons) for the year, with the average gold price reaching a record high of US$1,940 per ounce, surpassing the previous year's figures.

Gold prices fell to a one-week low, influenced by strong U.S. employment figures and comments from Federal Reserve Chair Jerome Powell, which diminished expectations of early interest rate cuts. The anticipation of a more robust economic stance pushed the dollar and bond yields up, affecting gold's appeal. By midday GMT on Monday, spot gold had decreased by 0.6% to $2,025.99 per ounce, marking its lowest point since January 29. Similarly, U.S. gold futures saw a 0.6% drop to $2,042.60 per ounce.

The Central Bank of Egypt has announced the launch of $1 billion in one-year treasury bills, aimed at attracting investors amid a landscape of rising global interest rates. This follows a successful auction in January, underscoring Egypt's proactive approach to managing its fiscal responsibilities and attracting global investment.

The OECD has issued a stark warning to central banks globally, urging them not to lower their guard against inflation despite some easing trends. It highlighted that it's premature to conclude whether the aggressive rate hikes have effectively curbed inflationary pressures, with core inflation remaining stubbornly high in many countries. The OECD's cautious stance comes amidst a backdrop of the European Central Bank and the Federal Reserve signaling potential rate cuts, a move viewed skeptically by financial markets anticipating more easing​.

Global green bond sales are set to surge in 2024, buoyed by the anticipated fall in interest rates in the US and Europe. This favorable shift in the debt market is expected to enhance the appeal of green bonds, following a significant increase in sales in 2023. Europe led this growth, accounting for nearly half of the global market, as central banks globally are seen loosening monetary policies amidst reducing inflationary pressures​.

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. 

Amidst rampant peso inflation and his scathing pro-free market speech at Davos, new Argentine president Javier Milei has taken office with radical proposals to overhaul the country. While his brief month and a half in Argentina’s Casa Rosada isn’t long enough to know if his bark will really match his bite, here’s a summary of some of his biggest actions so far:

Discover the potential influences on oil prices, alarming signs in the real estate market, and key developments in silver, Bitcoin, and the 10-year treasury.

The recent shift from remote to in-office work is causing significant discontent among employees, according to a survey by BetterUp. With the reduction of primarily remote roles and a push for returning to the office to foster connection and culture, employees are facing considerable adjustments. This transition is not only disrupting their routines and work-life balance but also impacting their financial well-being—costing them as much as a month's grocery bill. The survey, which included 1,400 full-time U.S. employees, highlighted increased burnout, stress, and intentions to leave their jobs, alongside decreased trust in their organizations, engagement, and productivity.

The World Gold Council is back with some interesting data on central bank gold buying habits. Reported global central bank gold reserves, via the IMF and publicly available sources, rose by a net 28 tons in December...