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CRITICAL GOLD & SILVER METALS UPDATE DEC 8th: After The Extreme Volatility... What's NextDecember 8, 2023
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...
Gold recently hit a record high, reaching $2,135.39 per ounce. But what sets this rally apart from previous gold rallies?
Gold's prices have fluctuated due to a changing dollar, with recent extreme volatility underscoring its status as a safe-haven asset amid geopolitical events. Greg Weldon of Weldon Financial suggests that, with low current investment in gold and expectations of a weakening dollar and rising inflation, now might be an opportune time to invest in gold. He predicts a significant rise in gold prices if they cross the $2,060 threshold, given its inverse relationship with the dollar and real interest rates.
Gold excelled in 2023, outshining other commodities, bonds, and stocks despite high interest rates. For 2024, while a 'soft landing' in the US economy may generally dampen gold's appeal, unique factors such as geopolitical tensions, significant elections, and central bank activity could enhance its attractiveness. Moreover, the uncertainty surrounding the Fed's handling of the economy and the risk of a global recession might drive investors towards gold as a stable hedge.
President Joe Biden was criticized for claiming "0% inflation last month," a statement fact-checked as misleading. Critics noted that, despite this claim, the actual annual inflation rate is 3.2%, with prices having risen nearly 20% under his administration, with over 6.5 million Americans remain unemployed, and the U.S. has lost nearly 40,000 manufacturing jobs.
The American Dream, once accessible to most in the U.S., is now largely unaffordable, with essential elements like education and home ownership out of reach for average earners. It's become a reality only for high-income individuals or those with inherited wealth, straying from its ideal of debt-free success from humble beginnings. Ironically, this dream is more achievable in developing economies, where living costs are lower.
The Federal Reserve's reverse repo (RRP) facility, crucial in supporting liquidity and stocks, is declining and nearing zero, signaling tougher market conditions ahead. This decrease could lead to less support for stocks and potential funding challenges, echoing issues from 2019. The situation calls for continued vigilance in financial markets as the role of RRP diminishes, marking a shift to a less favorable environment for assets.
The labor market is deteriorating, evidenced by ADP and BLS reports showing significant declines in key sectors and slowing wage growth. Job quits have plummeted, signaling a stagnant job market. This downturn is exacerbated by troubles in manufacturing, commercial real estate, and a stressed housing market with unaffordable prices. These factors paint a bleak economic picture, with the Federal Reserve facing a precarious situation and the potential for further policy missteps.
CEO Jamie Dimon Slams Crypto in Senate, Wants it Shut down Despite JPM's Blockchain UseDec 7, 2023 - 07:51:55 PST
In 2017, JPMorgan Chase's CEO harshly criticized Bitcoin, likening it to tulip bulbs and threatening to fire any employee trading it. He continued this stance, calling Bitcoin a "hyped-up fraud" and likening it to a pet rock. Recently, he reiterated his negative view to the Senate Banking Committee, suggesting that the government should shut down crypto, asserting it has no legitimate use.
Join Mike Maloney and Alan Hibbard as they dissect one of the most important articles of 2023.
Gold prices increased on Thursday, driven by a weaker dollar and lower Treasury yields, as investors anticipate key U.S. payrolls data to gauge the Federal Reserve's rate path. Spot gold went up by 0.4% to $2,032 per ounce, and U.S. gold futures saw a 0.1% rise to $2,049.60. With 10-year Treasury yields near a three-month low and the U.S. dollar index dropping 0.3%, gold became more affordable for holders of other currencies.
Jobless Claims Data Surges (And Falls) With Seasonal Hiring At Decade LowsDec 7, 2023 - 05:58:04 PST
Recent labor data reveals concerning trends: jobless claims remain flat but surged non-seasonally, with a sharp rise in California. U.S. employers significantly increased job cuts in November, and seasonal hiring hit a decade low, indicating a cooling labor market. Experts predict further layoffs, suggesting a troubling outlook for employment stability as the year ends.
Dec 7, 2023 - 05:45:23 PST
Biden's reelection bid, potentially aided by dropping oil prices, faces challenges amid a global clash over energy policies. The UN and World Economic Forum's green energy push contrasts sharply with China's significant oil discovery. Amidst this, oil prices fall, the Citi Economic Surprise Index declines, and financial markets show volatility with soaring SOFR rates and increased Federal Reserve Treasury purchases, signaling deepening economic uncertainties.
As Deflation Starts to Show Walmart CEO Says Consumers May Not Be as Resilient Next YearDec 7, 2023 - 05:35:52 PST
Walmart's CEO flags alarming economic trends: rising credit card debts and dwindling household savings, hinting at a sharp decline in consumer spending. Deflation, particularly in merchandise, is exacerbating the situation. With prices dropping, retailers like Walmart face a grim challenge - even increased sales volumes may not offset the revenue losses from lower prices, foreshadowing a severe and widespread retail downturn.
Gold blew through $2,100 and set a record high Sunday night. Then it rapidly sold off on Monday. But gold still held above $2,000. In his podcast, Peter Schiff put the big rally and subsequent selloff into perspective, talked about what's next, and discussed how investors can best position themselves for subsequent moves.
The sudden decline in South Korea's inflation, driven by decreasing food and energy costs, raises alarms about a potential deflationary crisis worldwide. Deflation, with its falling prices, can lead to a dangerous economic spiral, causing reduced consumer spending, business cutbacks, and a looming recession. This scenario also poses a significant risk of destabilizing global financial markets, intensifying economic instability.
Global Bond Rally Hits Pause Amid Speculation of BOJ Rate Hike and U.S. Employment ConcernsDec 7, 2023 - 05:20:28 PST
The global bond rally stalled, with a sharp jump in U.S. and Japanese yields signaling market unease. Investors are bracing for potential negative impacts from upcoming labor market data and central bank meetings, amid speculation of a policy shift in Japan and poor liquidity in Treasury markets. This pause in the bond rally reflects growing concerns about the future of interest rates and economic stability.
Campbell Soup CEO Reports Increasing Economic Pressure on Low-Income HouseholdsDec 7, 2023 - 05:15:59 PST
Campbell Soup Company's latest earnings surpassed expectations, but organic net sales dropped 1% year-over-year. CEO Mark Clouse highlights growing financial strain among lower-income households due to rising interest rates, cuts in SNAP benefits, and resumed student loan payments, pointing to a worsening economic divide.
Dec 7, 2023 - 05:02:06 PST
Investors are increasingly disregarding Federal Reserve signals, risking financial loss in a clash over 2024 interest rates. Despite Fed Chair Powell's warnings, markets expect rate cuts, with yields falling sharply. This defiance, coupled with the Fed's credibility issues, sets the stage for potential market setbacks and higher yields in 2024.
Surging demand for a seldom-used Federal Reserve facility suggests deepening financial distress. On December 5, banks tapped $203 million from the Standing Repo Facility, a stark increase and a sign of brewing liquidity crises as the Fed trims its balance sheet. This spike, amid dwindling excess liquidity and the Secured Overnight Financing Rate hitting a record 5.39%, points to escalating market instability and potential bank vulnerabilities. The New York Fed's silence adds to the growing concerns of an impending financial turmoil.