Precious metals news

The U.S. uniquely sets its interest rates and maintains an open capital account without pegging the dollar, exploiting its "exorbitant privilege" as the dominant global reserve currency. This allows the U.S. to print dollars without needing foreign exchange. However, this advantage is increasingly challenged as nations, especially BRICS countries, seek alternatives to the dollar-centric system to avoid dependency and sanctions. This shift signals a potential decline in the dollar's dominance, hinting that its reign might be nearing an end.

Brace yourself for this one.

Cathie Wood, head of ARK Investment Management, predicts deflation across various industries in the United States, leading to significant interest rate cuts by the Federal Reserve. She believes the Fed has been too aggressive with rate hikes and expects the consumer price index inflation rate to potentially turn negative next year. Wood notes the deflationary trend, initially in commodities, is now spreading to airline and auto prices. She attributes this expected era of falling prices to advancements in technologies like AI, electric vehicles, and blockchain, while also warning of the risks of a deflationary bust due to the Fed's policies.

Walmart CEO Doug McMillon expects deflation in the U.S. in the coming months, potentially leading to lower prices for consumers. Despite Walmart's Q3 profit and sales beat, their stock dropped due to lower-than-expected 2023 guidance. McMillon cited high food prices as a concern but noted declining general merchandise prices could benefit Walmart in the holiday season. The Bentonville, Ark.-based retail giant (WMT) posted net income of $453 million, or 17 cents a share, for the third quarter, after a loss of $1.8 billion, or 66 cents a share, in the year-earlier period.

A recent Gallup poll reveals a historic low in American confidence towards key institutions and leaders. Trust in the federal government, big business, media, education system, scientific and medical establishments, big tech, and law enforcement is at an all-time low, highlighting a significant crisis in public faith and confidence in these fundamental societal pillars.

The Federal Reserve's latest study reveals a troubling trend: most American households, especially those not among the wealthiest 20%, have depleted their extra savings accumulated during the COVID-19 pandemic. As of June, these households, adjusted for inflation, have lower bank deposits and liquid assets than before the pandemic. This contrasts sharply with the initial pandemic phase, where government aid and limited spending options led to a build-up of excess savings.

The technical position for gold is looking very positive for higher prices. But technical analysis should be backed by fundamentals.
To a large extent fundamentals are in the eye of the beholder, whose opinions in any situation can vary from positive to negative and everything in between. But even for the economic optimists, there are gathering clouds on the horizon likely to continue undermining the global economic outlook, the dollar, and all financial asset values. Fiat currencies are being downgraded relative to real money, which is gold.
Current thinking is that inflation is a diminishing problem and that the interest rate spike is over. In this article, I point out where inflation expectations err and the mistake of believing that interest rate control is the solution.
It follows therefore that G7 debt traps are a more serious problem than generally realised. Furthermore, China and Russia are aware of the likely impact of current events on G7 currencies, and this i...

US Industrial Production experienced a significant downturn in October, dropping 0.6% month-over-month from a downwardly revised September figure. This decline, the most substantial since December 2022, marks a sharp contrast to last month's surprising bounce. Furthermore, the year-over-year decrease of 0.8% is the most severe since the COVID lockdowns, indicating a notable slump in industrial activity.

Greenlight Capital reported a major increase in its exposure to gold as the hedge fund's founder worries about the direction of the markets. In a Q3 letter to investors, David Einhorn expressed concern about geopolitical uncertainty, the rising price of oil, and inflation.

The number of first-time jobless claims in the US rose to 231,000 last week, marking the highest level since August and signaling a concerning trend in unemployment. Continuing claims also escalated to 1.864 million, the most significant since November 2021. This data, coupled with warnings from Goldman Sachs about seasonal distortions potentially inflating continuing claims by an additional 375,000 by March, paints a grim picture of the labor market's health, indicating worsening conditions.

The US economy is showing signs of strain, particularly in the real estate market. Foreclosure sale notices on commercial properties are surging, with multifamily delinquencies rising sharply in cities like Houston, New York, and Phoenix. In Los Angeles, commercial real estate sales have plummeted due to declining values, higher interest rates, and new taxes on property sales above $5 million. LA apartment sales have also dropped by 50%, exacerbated by a rise in vacant units and construction costs.

Mary Daly of the Federal Reserve Bank of San Francisco acknowledges a slowdown in inflation but remains wary about future interest rate decisions. Despite the current high benchmark rate of 5.25-5.5%, Daly does not rule out further rate increases. She warns against a hasty "stop-start" approach, stressing the need for more data to confirm a return to the 2% inflation target. With the focus on normalizing rates, Daly suggests rate cuts are not on the immediate horizon, indicating continued economic uncertainty.

Walmart's latest earnings report, despite surpassing Wall Street estimates, revealed troubling signs with a noticeable dip in consumer spending towards the end of the third quarter. This decline has cast a shadow over the company's performance, particularly as it braces for the crucial holiday season. The retailer's cautious outlook and lower-than-expected annual forecast have sparked concerns, reflected in a downturn in its share prices after recently hitting a peak. The report signals potential challenges ahead, not just for Walmart but possibly for the broader retail sector as well.

The October CPI came in lower than expected, sparking a rally in stocks, bonds, and gold. Cooling prices reinforced the belief that the Federal Reserve won the inflation fight and the rate hiking cycle is over. In his podcast, Peter Schiff explained why the demise of inflation is greatly exaggerated.

David Stockman, a critic of Keynesian economics and monetarism, argues for the free market's ability to self-regulate without government intervention. He views government efforts to manage the economy through fiscal and monetary policies as ineffective due to global economic interconnections. Stockman also revisits the Great Depression, suggesting it was a necessary market correction and not a failure of capitalism. He criticizes the abandonment of sound money and the negative impacts of inflationary policies, especially on asset inflation in major companies, presenting a strong case against conventional economic theories.

Interestingly, the top four gold miners' costs declined slightly in Q3 2023 but are still much higher than the reported AISC - All-In Sustaining Costs.  Unfortunately, investors continue to be misled by the gold mining industry because the AISC artificially lowers the actual cost of production...

Japanese investors, responding to the yen's historic decline against the U.S. dollar, have driven the price of gold to a record high of ¥300,000. This surge, deviating significantly from the 30-year average of around ¥100,000, reflects a growing trend in Japan to use gold as a hedge against inflation. In response to escalating consumer prices, Prime Minister Fumio Kishida has rolled out a ¥17 trillion ($113 billion) stimulus package, featuring tax cuts, subsidies, and support for low-income households.

In a notable surge, the United States Mint reported significant increases in bullion coin sales for October. The Mint's flagship American Gold Eagles experienced a remarkable triple-digit percentage growth, while the core American Silver Eagles also saw substantial double-digit gains. Impressively, the year-to-date sales totals for both these coins have already surpassed their respective total sales for the entire year of 2022. This spike in demand indicates a growing interest in precious metals as investment assets.

Gold has successfully rebounded from $1935/ounce, with the significant psychological barrier of $2000 now in its sights. The Relative Strength Indicator suggests there's room for further growth without overbuying concerns, indicating the rally could potentially surpass $2000, aiming for October's peak of $2009. Current market sentiment is strongly bullish, evidenced by 65% of traders being net long, anticipating further price increases and reinforcing a bullish outlook for gold.

The US, once a dominant global power post-World War II, is facing significant decline. Its shift from the world's largest creditor to its largest debtor, and reliance on foreign manufacturing, have weakened its economic position. The 2021 decision to confiscate Russian assets has led many countries to align with China and Russia, reducing US global influence. Additionally, overinvestment in outdated military technology and changes in military policies signal further decline. The US is at a critical point, with its superpower status increasingly challenged.