Precious metals news

The Federal Reserve and the US government create inflation and then blame everybody else.
President Joe Biden recently finger-pointed at "greedy corporations," saying they need to "lower prices" now that inflation come down. Whether he is really that ignorant or just lying, Biden's comments serve a purpose. As Ron Paul put it, they gaslight the American public into thinking price inflation is rooted in the actions of private individuals and not the fiat money system.

The prevailing investor belief in a 'soft landing' for the U.S. economy is under scrutiny. While most investors anticipate the Federal Reserve will effectively manage inflation without triggering a recession, some Fed officials are cautioning against this optimism. They highlight the potential risk of the economy overheating in 2024 if inflation remains persistent. This skepticism suggests that the market (and individual investors) may not be fully prepared for the economic challenges that could arise in the year ahead.

The Bank of Tanzania plans to buy 12 tons of gold during the fiscal year in an effort to boost its foreign exchange reserves. The East African nation joins a growing number of central banks turning to gold.

Costco sold more than $100 million worth of gold bars in its first quarter, ending November 26. This announcement was made by the company's CFO, Richard Galanti, during an earnings call. These one-ounce gold bars, namely the PAMP Suisse Lady Fortuna (available on GoldSilver.com right now), usually sell out within a few hours on Costco’s website, highlighting strong demand for gold among its consumer base.

The Tanzanian government, through the Bank of Tanzania (BoT), plans to purchase approximately 12 tonnes of gold from local miners and traders this financial year to boost foreign exchange reserves. This initiative is part of the BoT's Domestic Gold Purchasing Programme, which aims to strengthen foreign exchange reserves by acquiring gold. To encourage more sellers to participate, the government is considering revising its legislation to lower the royalty rate from 9.3% to 7.3%, aligning it with the rate charged at gold refineries. This proposal was discussed in a joint meeting between the government and mining sector stakeholders.

Analysts, including those from J.P. Morgan, are bullish about gold and silver for 2024, attributing their optimism to the Federal Reserve's rate cutting cycle and declining U.S. real yields. J.P. Morgan specifically forecasts gold to average $2,175/oz by Q4 2024, highlighting a strong medium-term outlook for these precious metals. This sentiment is echoed by other market experts, like macro fund manager Bruce Liegel, who suggests that gold prices could rise further in response to central banks' easing rates, particularly if a global recession occurs. The extent of the rate cuts, depending on whether the economy faces a hard or soft landing, is seen as crucial to gold's future trajectory. Additionally, geopolitical tensions and efforts by emerging market central banks, especially China and Russia, to diversify away from the US dollar by increasing their gold holdings, are also recognized as significant factors influencing gold prices.

On Tuesday, the yield on the 10-year U.S. Treasury note dipped, reversing its previous trend, as traders evaluated the likelihood of future interest rate cuts by the Federal Reserve. This decline of about 3 basis points brought the yield to 3.928%, continuing its drop from last Thursday when it fell below 4% for the first time since July. Similarly, the 30-year Treasury bond yield decreased by roughly 3 basis points to 4.041%. In the shorter term, the 2-year note's yield also saw a decline, dropping over 1 basis point to 4.439%. It's important to note that yields and bond prices have an inverse relationship, with one basis point equating to 0.01%.

According to Capital Economics' latest report, the commercial real estate market faces further challenges in the coming year. Hindered by slow economic growth and high interest rates, property values in this sector are projected to drop an additional 10%, following this year's 11% decrease. Deputy Chief Property Economist Kiran Raichura, who penned the outlook, highlights the significant scale of these declines. With the market valued at over $5 trillion by the end of 2022, this year's 11% reduction translates to a substantial loss of approximately $590 billion, and next year's anticipated 10% decrease is expected to result in a further $480 billion reduction in value.

In an interview with the Wall Street Journal, San Francisco Federal Reserve President Mary Daly, indicated that the Federal Reserve might need to consider cutting interest rates to avoid excessive tightening as it continues to combat inflation. On Yahoo Finance Live, Santandar Chief U.S. Economist Stephen Stanley discussed the market's reaction to this statement and recent Federal Reserve communications. Post the December FOMC meeting, Stanley observed that investors seemed encouraged to anticipate more rate cuts. Looking into 2024, he noted that while inflation is declining, the extent of this decrease might be somewhat overstated. Stanley expressed concern that if the Fed cuts rates too soon, it could lead to a resurgence in inflation, necessitating another round of tightening. However, he downplayed this scenario as "not the end of the world."

In November, the LBMA Gold Price AM in USD continued its upward trend, while the Shanghai Gold Benchmark PM in RMB experienced a slight decline due to a strengthening yuan. The Shanghai Gold Exchange saw a notable withdrawal of 132 tons of gold, marking an increase both month-over-month and year-over-year. Despite these withdrawals, the local gold price premium in China remained high and stable, indicating tight net gold supply. Chinese gold ETFs experienced minor net outflows, leading to a slight decrease in collective holdings and a 1% drop in total assets under management. Additionally, the People's Bank of China reported its thirteenth consecutive monthly gold purchase, increasing its gold reserves by 12 tons to 2,226 tons.

The Canadian Dollar reached its highest level since August following the release of inflation data showing that Canada's inflation rate remained at 3.1% in November, contrary to expectations of a decline to 2.9%. This persistence of inflation gives the Bank of Canada reason to maintain its policy rate at the highest in two decades. Despite forecasts for a decrease, the consumer price index rose by 0.1% month-over-month. Key annual inflation measures, like the trim and median core rates, stayed unchanged at an average of 3.45% year-over-year, surpassing economists' predictions of 3.35%. A significant factor in the inflation rate is the rising cost of housing, largely influenced by central bank rate hikes and high immigration levels, which have led to increased rents.

The physical silver market has experienced a significant imbalance for the last three years, with annual demand consistently outstripping supply. This has led to a 'structural deficit,' a term used by the Silver Institute to describe the prolonged shortfall driven by underlying structural factors like technological advancements and increasing industrial demand. Consequently, this deficit is being met by depleting the world’s finite above-ground silver reserves. The Silver Institute, a Washington D.C.-based trade association akin to the World Gold Council and composed mainly of silver mining companies and refiners, relies on data from Metals Focus, a London-based precious metals consultancy, for its supply and demand analysis.

Gold prices are consolidating as the US Dollar remains steady near recent lows, with negative impacts from hawkish Federal Reserve (Fed) officials subsiding. The current mild risk appetite, spurred by expectations of an end to the global tightening cycle, is supporting gold. Gold (XAU/USD) has started the week positively, aided by a slight retreat in the US Dollar and low US bond yields. Despite initial effects of hawkish Fed comments last Friday, the Dollar is weakening again at the week's start. Investors are now focusing on upcoming US Q3 GDP data and the Personal Consumption Expenditures (PCE) Prices Index for further clues on potential rate cuts, which could influence US Dollar volatility and help determine gold's short-term trajectory.

During a recent visit to China, Russian First Deputy Prime Minister Andrei Belousov revealed that 95% of trade between Russia and China this year has been conducted using the Russian ruble and Chinese yuan. Additionally, from January to October, 68% of all Russian trade utilized these two currencies, as stated by Russian Economic Development Minister Maksim Reshetnikov. The yuan is also being used by Russia for commercial transactions with several countries, including Mongolia, the Philippines, Malaysia, the UAE, Thailand, Japan, Tajikistan, and Singapore. This shift highlights a growing trend towards de-dollarization, particularly in the economies of the Global South, with 2023 marking a significant acceleration in this process. The politicization and use of the dollar as a political tool are cited as key drivers behind this inevitable trend towards de-dollarization.

The Federal Reserve recently surrendered in its inflation fight. But price inflation is nowhere near the 2% target. Why did the Fed raise the white flag prematurely?
One of the major reasons is debt.
The world is buried under record debt levels and the global economy can't function in a high interest rate environment.

Peter Schiff recently appeared on Real America with Dan Ball to talk about the state of the US economy. He described it as a disaster and said Bidenomics consists of putting lipstick on a pig.

In this eye-opening video, Mike Maloney and Ronnie Stoeferle explore the recent surge in central bank gold buying, pointing to a broader global trend.

Every once in a while, I find some positive news, but unfortunately, today wasn't one of those days.  If you look at what's happening in the Insurance Industry, this situation is rapidly going from bad to worse.  We can see this in the escalating premiums and cancelation of coverage...

Gold prices saw a modest increase on Monday, primarily influenced by a weaker dollar, as investors' attention is now on key U.S. inflation data that might offer insights into the Federal Reserve's future interest rate decisions. Spot gold rose 0.2% to $2,022.19 per ounce, while U.S. gold futures held steady. Market analysts highlight a cautious but bullish sentiment among traders, buoyed by factors such as softer monetary policies, particularly from the Fed, and ongoing geopolitical tensions... With the Fed's recent pause in rate hikes and anticipation of a potential cut in March, lower bond yields and interest rates are making gold more attractive. Investors are keenly awaiting further U.S. economic reports, including the November core personal consumption expenditure index, to gauge future trends, with predictions suggesting gold prices might average around $2,050 an ounce in 2024.

Austan Goolsbee, President of the Chicago Federal Reserve Bank, emphasized on Sunday that the Federal Reserve's battle against inflation is ongoing, despite positive signs of easing inflationary pressures without causing a recession. Last week, the Federal Open Market Committee (FOMC), the Fed's policy-making body, refrained from further rate hikes, maintaining the federal funds rate at 5.25% to 5.5%, a 22-year high. This decision follows a series of aggressive rate increases initiated last year to curb inflation, which had soared to a 40-year peak of 9.1% in June 2022 and has since fallen to 3.1% in November, still above the Fed's 2% goal. Speaking on CBS' "Face the Nation," Goolsbee cautioned that, despite significant progress in 2023, the inflation fight is not yet complete. He highlighted that historical trends show efforts to significantly lower inflation are typically linked with major recessions.