Precious metals news

Louis Vuitton Moët Hennessy (LVMH) has reported a remarkable financial year, achieving a record revenue of €86.15 billion, a 9% increase despite a sales slowdown in the latter half. The luxury group's success was bolstered by the reopening of Tiffany & Co's iconic New York store and the acclaim for Louis Vuitton and Christian Dior's fashion collections. Notably, LVMH's watches and jewelry division saw a 3% increase in sales, amounting to €10.90 billion, underscoring the robust appeal and enduring demand for its luxury brands amidst economic and geopolitical challenges.

Morgan Stanley's latest report delves into the future of the U.S. dollar amidst growing global scrutiny, particularly from the BRICS nations aiming to replace it as the world’s reserve currency. The report highlights the increasing challenges to the dollar's hegemony from various fronts, including BRICS, Central Bank Digital Currencies (CBDCs), Bitcoin, and stablecoins. These emerging financial technologies and alliances are pushing to establish their currencies and payment systems, posing a significant threat to the traditional dominance of the U.S. dollar in the global financial system.

This opinion piece from Paul A. London challenges the popular narrative crediting the Federal Reserve for the recent reduction in inflation. While inflation dropped from around 9 percent in mid-2022 to approximately 3 percent by January 2024, the article argues that this decline is largely due to factors outside the Fed's control. Key contributors to this change include the resolution of COVID-related disruptions, such as the normalization of supply chains, the reduction in shipping and trucking costs, and the stabilization of gasoline prices. The article emphasizes that improvements in supply, rather than monetary policy, have been instrumental in moderating inflation. This viewpoint suggests that while the Fed's role is often highlighted, the actual reasons for the decrease in inflation are more complex and rooted in the global economic recovery post-pandemic.

The U.S. economy stands out as a beacon of resilience and growth in a world where other major economies like Europe, China, and Japan are facing challenges. Despite the hurdles of the pandemic, high inflation, and international conflicts, the U.S. has shown a remarkable recovery, eclipsing its major trading partners. The economy not only bounced back from the pandemic but also managed to tame inflation, which has fallen to the Federal Reserve's 2 percent target. Additionally, the country witnessed a robust 3.1 percent economic growth over the past year, significantly outperforming 2022. This positive trajectory highlights the U.S.'s ability to navigate through crises and emerge stronger, effectively quashing fears of a looming recession. The success is attributed not just to chance but to strategic economic management, presenting a model for effective crisis response and recovery.

China's leadership has initiated several policies to stabilize its economy and prevent a financial crisis. These include a series of fiscal and monetary measures, such as freeing up billions for property lending and other spending, cutting bank reserve requirements, and introducing new rules to encourage bank loans to property developers. This move comes as a response to the economic slowdown and challenges faced by China's real estate sector, a key driver of its economy. The Chinese government is acting assertively to prevent a deflationary spiral and stabilize financial markets, crucial for global economic growth.

In the 2024 World Economic Forum in Davos, global leaders grappled with what's termed a "polycrisis," encompassing escalating geopolitical tensions, economic challenges, and climate change impacts. The interconnected nature of these crises, such as the impact of Houthi attacks on global shipping and drought-induced shipping limitations through the Panama Canal, exemplify how multiple crises are exacerbating each other. The situation in Gaza and ongoing conflicts in the Middle East, combined with high-stakes elections worldwide in 2024, add layers of complexity to the global economic landscape. Amidst these challenges, AI's emergence as a pivotal technological advancement was a key focus, highlighting the need for effective regulation and understanding of its global impact.

This week is pivotal for stock markets, with a series of significant events on the horizon. Major tech giants like Microsoft and Apple are set to release their earnings reports, which could influence market dynamics. Additionally, the Federal Reserve's interest rate decision is eagerly awaited, with potential implications for future rate cuts. Moreover, the release of the January jobs report will provide critical insights into the labor market's health, influencing the Fed's rate cut schedule. These events collectively could set the tone for the stock market's direction in the coming weeks.

In a remarkable shift from the grim predictions of a year ago, the Federal Reserve is now weighing the possibility of interest rate cuts. Despite the raised rates to combat inflation, the economy defied expectations by avoiding a recession and maintaining a robust state. This unexpected surge has left Fed officials in a quandary about their next steps. While they previously anticipated rate reductions in 2023, the exact timing remains shrouded in uncertainty. The focus is now on whether these cuts will be announced as early as the Fed's upcoming March meeting or delayed till May or June. The current economic landscape, along with the upcoming presidential election, adds complexity to these decisions. Interestingly, inflation has cooled down, aligning with the Fed's target, fostering speculation about imminent rate cuts.

The Currency Heat Map is a valuable tool for understanding the relative strengths of major currencies in the forex market. It helps in distinguishing between actual currency strength and misleading trends caused by the weakness of other currencies. This perspective is crucial for accurate market analysis and making informed trading decisions

The financial market this week will be influenced by the Federal Reserve's meeting outcomes, key tech company earnings, and the January jobs report. Investors and analysts are closely observing these factors, as they can significantly impact the interest rate environment and overall market trends. The upcoming jobs report is especially critical, with expectations of 175,000 nonfarm payroll jobs added last month in the U.S.​

Mike Maloney has made several moves in his portfolio, one of which he admits could be deemed as ‘completely crazy’.

Federal regulators are plotting a course that could see America's sturdiest banks tied to a sinking lifeboat. This plan, designed to compel banks to use the Federal Reserve's discount window, aims to normalize the act of reaching for this financial lifeline amidst turbulent seas. 
It's as if the Fed is asking the healthiest swimmers to don faulty life jackets first, in a bid to make them seem less alarming to those already struggling to stay afloat. Our guest commentator explains why this strategy, while intended to fortify the banking sector against future storms, would endanger all US banks.

Proverbs 22:7, ‘The borrower is servant to the lender,' has resonated in the background of my financial upbringing.
Akin to other proverbs and parables (Proverbs 1:6), there’s much more beneath the surface worth pondering.

The Federal Reserve's primary inflation gauge, the core personal consumption expenditures (PCE) price index, maintained a steady pace in the fourth quarter, aligning with expectations and supporting a buoyant stock market. The Commerce Department data revealed that the U.S. GDP growth slowed less than anticipated, with the core PCE price index rising at an annual rate of 2% in Q4. This consistency, marking the second consecutive quarter of 2% annualized inflation, aligns with the Federal Reserve's target and follows higher increases earlier in the year. The news, indicating manageable inflation levels, bolstered investor optimism and led to a solid rise in the S&P 500, which achieved another record closing high.

Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), has advocated for the incorporation of foreign exchange markets into the global initiative to shorten trade settlement times. Speaking at an event in Brussels, Gensler proposed reducing the timeframe for finalizing financial market deals, including currency trades, to a single day. This suggestion aligns with comments from Mairead McGuinness, the EU's top financial services official, who indicated the EU's intention to transition securities settlements to a one-day window.

December's core personal consumption expenditures (PCE) price index, the Federal Reserve's favored measure of inflation, indicated a significant easing of price pressures. The index, which excludes the often fluctuating costs of food and energy, showed a slower year-over-year increase of 2.9% in December, as reported by the Bureau of Economic Analysis. This slowdown in core inflation, a key indicator of the economy's health, surpassed expectations and signals a notable shift in the inflationary trend as the year concluded.

American households are facing increasingly heavy debt burdens, with the average monthly debt payment soaring to $1,583, a substantial increase from the $300 monthly average in 2020. This alarming trend, revealed in a recent LendingTree study analyzing anonymized credit reports from mid-2023, encompasses various types of active debt including mortgages, auto loans, credit cards, personal loans, and student loans. The study indicates that mortgages are the predominant component of this debt, with average monthly payments of $1,855. Auto loans follow as the second-largest debt category, with monthly payments averaging $690, a figure that is escalating alongside rising interest rates on these loans. Additionally, personal loans constitute the third-largest debt category, with average payments of $517 per month.

The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, witnesses a shift in currency dynamics as China’s Yuan becomes cheaper than the US dollar for the first time in two decades. This significant development, highlighted in an Atlantic Council report, marks a notable moment in the long-term de-dollarization efforts of these nations. The report sheds light on the changing perception and use of international currencies, indicating a potential decline in the global dominance of the US dollar. This trend is not just confined to the BRICS nations but is part of a broader narrative that could reshape the landscape of international finance and trade, challenging the longstanding supremacy of the greenback.

In this week's Friday Gold Wrap Podcast, JD and Joel discuss why gold is down this week, soaring tech stocks and plummeting gold stocks, and other market and precious metals news.

In the latest episode of the World Gold Council's Unearthed podcast, hosts John Reade and Joe Cavatoni are joined by Dr. Trevor Keel, Director of Material Value Ltd and Consultant for the World Gold Council, for a deep dive into gold's integral role in the evolution of technology. The episode takes listeners through a journey of gold's past, present, and future in technological applications, concluding with intriguing insights into how gold continues to shape research and development, driving forward the frontiers of emerging technologies.