Precious metals news

Join Mike Maloney and Alan Hibbard as they discuss the biggest news in gold, silver, and the economy.

Gold is defying usual market trends by rising amidst increasing U.S. Treasury yields and Federal Reserve rate hikes, signaling potential economic disconnects. Geopolitical tensions and a gradual global shift away from the U.S. dollar further bolster gold's value. Central banks are set to buy record amounts of gold in 2023, reinforcing its strength in the market.

Gold's surge, despite cooling inflation, is attributed to the anticipation of US interest rate cuts in 2024, which lowers gold's opportunity costs and may weaken the dollar. A crucial factor is the increasing US federal debt, with a $1.7 trillion annual fiscal deficit and a rising interest bill, potentially leading to more debt ceiling raises and money printing.

Total demand for silver for use in Hydrogen Fuel Cell cars, trucks, vans, ships, barges, yachts, ferries, boats, and HVAC will be 10 Times Greater than silver in Solar Panels. By 2027, silver's use in hydrogen fuel cells is expected to be 10 times greater than its current use in solar panels. This significant increase is driven by a groundbreaking innovation that replaces platinum with silver, making sustainable energy solutions more accessible and efficient. This advancement is set to revolutionize industries, emphasizing silver's crucial role in promoting eco-friendly technologies.

The latest Commitment of Traders report shows changes in future positions by hedge funds and speculators across commodities, forex, and bonds as of November 28. During a week marked by a bond market rally and a weaker dollar, there was a general uplift in market risk sentiment. However, the commodity sector experienced broad losses, particularly in energy and grains, despite ongoing purchases in gold and silver.

Mongolia's central bank has bought 16.1 tons of gold in the first 11 months of this year, a strategy to bolster economic stability. With an average purchase price of 219,514.35 Mongolian tugriks per gram, this effort contributes to the country's foreign exchange reserves, which stood at $4.124 billion in the third quarter. After reaching a record $4.9 billion in April 2021, the bank aims to acquire at least 22 tons of gold by year-end, following last year's purchase of 22.9 tons.

The US is facing a grim economic outlook with stagflation reminiscent of the 1970s, characterized by rising prices, stagnant wages, and falling production. The current situation is exacerbated by a massive national debt, now over $33.8 trillion with a debt-to-GDP ratio of 120%. Despite hopes for Federal Reserve intervention, the likelihood of significant policy shifts to address these challenges seems slim. This scenario points towards either a deflationary crisis with widespread job losses or unchecked inflation, both outcomes fueled by the country's overwhelming debt burden.

The shift of key nations like Saudi Arabia and the UAE to trade oil in currencies other than the US dollar, notably the Yuan, signals a significant move towards global de-dollarization. This trend, driven by the BRICS alliance and reinforced by Russia's deepening ties with major oil nations, challenges the longstanding dominance of the US dollar in international trade.

It's not a good idea to argue about things you don't know anything about. Most people realize this — until it comes to economics. A lot of people argue economics from a position of ignorance. President Biden is one of those people. In this episode of the Friday Gold Wrap, host Mike Maharrey dissects a couple of comments Biden made last week and teaches some economics along the way. He also talks about the significance of gold's record-breaking week.

UMich inflation expectations for the coming year dramatically dropped to a low not seen since March 2021, signaling deepening economic pessimism. Despite a 13% rise in consumer sentiment, largely based on these deflated inflation expectations, the overall outlook remains bleak, well below pre-pandemic standards. This stark decline in inflation outlook, juxtaposed with a superficial boost in sentiment, poses a troubling conundrum for the Federal Reserve's policy .

US household wealth declined in the third quarter by the most in a year, falling by $1.3 trillion to $151 trillion, primarily due to a $1.7 trillion decrease in stock holdings, despite a rise in real estate values. Economic concerns, Fed rate hikes, and a retreat in the S&P 500 contributed to this decline. Elevated home prices persisted due to high mortgage rates and limited property listings, while consumer and business borrowing saw a significant slowdown, along with a decrease in state and local government debt.

The Biden administration aims to assist 500,000 households in achieving homeownership through the Neighborhood Homes Investment Act. This initiative is part of a broader effort to reduce housing costs and increase the supply of affordable homes in the U.S.

The November jobs report, showing 199K new jobs and a drop in unemployment to 3.7%, surpassed expectations but raises accuracy concerns. Past reports have seen downward revisions, suggesting this month's figures may also be adjusted later. The report includes a significant portion of returning strikers, skewing the job growth data, and highlights a 0.4% increase in average hourly earnings. However, the overall reliability of these figures remains questionable due to the pattern of subsequent corrections.

JPMorgan forecasts that by mid-2024, nearly all Americans, except the wealthiest 1%, will be financially worse off than before the pandemic. Excess savings accumulated during COVID-19 have been largely depleted, with rising delinquencies in credit and loans signaling increasing financial strain. Despite current stability in housing, the real estate market faces challenges due to high borrowing costs and significant commercial debt.

The assertion by Treasury Secretary Janet Yellen that the U.S. economy is strong enough to fund conflicts in Ukraine and Israel starkly contradicts Treasury data, highlighting a troubling disconnect in the understanding of the nation's financial situation by those in power. This discrepancy raises serious concerns about the competence of America's ruling class in managing the country's economic affairs and their grasp on fiscal realities.

Central bankers are increasingly alarmed by the potential for surging wages to trigger a dangerous wage-price spiral, threatening global efforts to tame inflation. The forecasted higher wage increases in key economies raise fears of destabilizing economic cycles, challenging the efficacy of traditional inflation control measures and intensifying financial uncertainties worldwide.

The Federal Reserve's Quantitative Tightening has significantly reduced its balance sheet to $7.74 trillion, marking a sharp retreat from pandemic-era measures. This downsizing, involving a steep $129 billion drop in November, signals a shrinking Fed influence in the bond market amid a ballooning national debt. These changes reflect a challenging and uncertain economic landscape, with potential implications for financial stability.

The Federal Reserve's upcoming economic projections will glaringly exclude crucial details on its balance sheet strategy, reflecting a deep uncertainty within the Fed about its role and impact on the economy. This omission underlines a lack of clarity and confidence in handling quantitative easing and tightening, raising significant concerns about the Fed's grasp of its own monetary tools and their effects on the financial system.

On a day marked by a significant drop in the Japanese yen, driven by speculative news about a potential Bank of Japan rate hike, the focus shifts to Japan's larger, more troubling economic picture. According to Deutsche Bank's chief FX strategist George Saravelos, Japan's economy is trapped in a precarious situation. It faces a stark choice between hyperinflation with a currency collapse or a market crash leading to social unrest. This dilemma is rooted in Japan's massive $20 trillion carry trade, which complicates any attempts at monetary policy normalization and underscores the deep-seated challenges facing the Japanese economy.

After several weeks of highly volatile precious metals prices, investors are curious about what comes next.  While the gold price BROKE OUT above the critical $2,000 level, it has come all the way back in just a matter of days.  The next few weeks are important for the price trend of the precious metals into 2024...