Precious metals news

Gold remains steady as investors await the release of crucial US inflation data, which could influence the Federal Reserve's upcoming interest rate decision. The market anticipates potential rate cuts, with expectations of a 25 or 50 basis point reduction at the Fed's September 18 meeting. Lower interest rates typically benefit non-yielding assets like gold. Additionally, geopolitical tensions, economic uncertainties, and seasonal demand from India and China are expected to support gold prices, with some analysts projecting a rise to $2,600 per ounce by year-end.

HSBC strategists have provided insights into the current precious metals market, highlighting the interconnected dynamics of gold, silver, platinum, and palladium. They suggest that silver's recent rally may not be sustainable without support from gold prices, while palladium faces challenges due to weakening equity markets and economic concerns. Platinum, although potentially undervalued below $900 per ounce, is experiencing sluggish demand, particularly from Asian markets. The analysis emphasizes the distinct factors influencing each metal's performance and the broader economic context affecting their prices.

Gold prices are holding steady around $2,500 an ounce as investors await key US inflation data that could influence the Federal Reserve's decision on interest rate cuts. The precious metal has seen a significant 20% surge this year, driven by central bank purchases and expectations of rate cuts. Upcoming consumer and producer price index figures will be crucial in determining the Fed's next move, with lower inflation potentially encouraging a larger rate cut. Gold's appeal as a non-interest bearing asset and safe-haven investment continues to support its value amid global conflicts and economic uncertainty.

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The Federal Open Market Committee (FOMC) is expected to cut interest rates in its remaining three meetings of 2024, responding to easing inflation and a softening labor market. FOMC policymakers, including Chair Jerome Powell, have signaled a shift towards less restrictive monetary policy. Markets anticipate steady rate cuts through 2025, potentially ending around 3%, though medium-term projections remain uncertain. The key questions now focus on the magnitude of rate cuts and the level at which the FOMC would consider policy no longer restrictive.

Donald Trump, the Republican presidential nominee, has proposed a new economic policy aimed at maintaining the US dollar's global dominance. At a rally in Wisconsin, Trump pledged to impose a 100% tariff on goods from countries that move away from using the US dollar in international trade. This proposal is part of his broader protectionist trade agenda and follows discussions with his economic advisers on ways to penalize nations seeking alternatives to the dollar. Trump argues that the dollar has been "under major siege" for years, despite it still accounting for 59% of official foreign exchange reserves in early 2024.

The Federal Reserve is facing a critical decision on whether to implement a quarter-point or a larger half-point interest rate cut at their September meeting, as recent economic data shows a slowing labor market and cooling inflation. The debate centers on balancing the risk of falling behind the curve and potentially triggering a recession against moving too aggressively. Chair Jerome Powell appears open to a larger cut, while some officials favor a more cautious approach. The decision is crucial for achieving a "soft landing" for the economy and maintaining Powell's legacy. Recent job reports and declining job openings have heightened concerns about the labor market's health, adding urgency to the Fed's deliberations.

China is facing a deepening deflationary spiral that threatens to significantly impact its economy. Consumer prices are barely growing in many sectors, and the GDP deflator is expected to continue declining into 2025, potentially marking China's longest period of deflation since records began. This situation is exacerbated by falling wages and weak demand, leading to concerns about a cycle of reduced spending, decreased corporate revenues, and further wage cuts. The scenario draws parallels to Japan's "lost decades," raising alarms about the long-term economic consequences. Despite official reluctance to acknowledge the issue, some prominent figures, including former central bank governor Yi Gang, are calling for immediate policy action to address the deflationary pressures.

Russia is significantly increasing its gold purchases, leveraging a surge in oil and gas revenue to diversify its financial reserves and reduce dependence on the US dollar. The Russian Finance Ministry plans to allocate 172.9 billion rubles ($1.9 billion) for foreign currency and gold purchases over the next month, representing a sevenfold increase in daily purchases. This move is part of Russia's ongoing strategy to strengthen the link between the ruble and gold, creating a new gold standard and insulating its economy from US dollar transactions. As the world's second-largest gold producer, Russia is well-positioned to accumulate the precious metal, with this latest announcement indicating a more aggressive approach to gold acquisition in the coming months.

Silver prices exhibit seasonal patterns that can be valuable for investors. Analysis of historical data reveals recurring trends in silver's performance throughout the year, with certain months consistently showing stronger or weaker price movements. However, recent years (2020-2024) have shown some shifts in these patterns, highlighting the need for investors to consider both long-term historical trends and recent market dynamics. While months like October and June have maintained consistent patterns over time, others like April and December have shown significant changes in recent years. This suggests that while seasonality can be a useful tool for silver investors, it should be combined with current market analysis for a more comprehensive investment strategy.

Goldman Sachs is strongly recommending gold as the top investment choice in the current economic climate. The bank cites gold's unique position as a hedge against financial instability and geopolitical risks, especially in light of expected Federal Reserve interest rate cuts. Gold prices have already seen significant gains in 2024, reaching record highs, and Goldman Sachs predicts further growth to $2,700 per ounce by early 2025. This recommendation is based on factors including global uncertainty, weakening demand for other commodities, and the anticipated return of Western capital to the gold market following potential Fed rate cuts.

The technology sector is experiencing a dichotomy where enthusiasm for artificial intelligence (AI) is masking broader weaknesses across many tech companies. While AI-focused firms like Nvidia and Microsoft have seen significant gains, many other tech businesses unrelated to AI are struggling to recover from a post-pandemic slowdown. Investors and analysts note that traditional tech areas such as software, IT consulting, and electronic equipment production are facing challenges including weak demand and inventory issues. This disparity has led to slower growth rates for many tech companies, particularly evident in small-cap indices where there's no boost from mega-cap groups. The situation highlights a complex landscape where AI excitement overshadows ongoing difficulties in other tech subsectors.

Gold prices are holding steady as investors await crucial U.S. inflation data this week, which will influence expectations for the Federal Reserve's upcoming interest rate decision. The Consumer Price Index (CPI) due on Wednesday and Producer Price Index (PPI) on Thursday are key indicators that could sway the Fed's decision between a 25 or 50 basis point rate cut. Currently, traders see a 75% chance of a 25-basis-point cut at the Fed's meeting next week. The market's reaction to these inflation figures could potentially push gold to new all-time highs if the data suggests a more aggressive rate cut, while even a 25-basis-point cut scenario is expected to maintain gold's strong position.

The major difference between Gold and Bitcoin is the way these assets are mined, produced, and stored.  Thus, the way Gold and bitcoin are mined and stored affects their future value.  Very few Bitcoin investors understand these important dynamics...

Rethinking 60/40 portfolio — Could Bank of America’s recent note to investors send hundreds of billions of dollars into the precious metals market?

Gold is trading near $2,500, attempting to overcome its historical tendency to decline in September, a pattern that's happened in 9 out of the last 10 years. Despite a recent dip to $2,470, gold has rebounded, buoyed by global economic slowdown concerns. This economic climate has increased risks for growth-dependent assets while simultaneously raising expectations for more aggressive interest rate cuts from the Federal Reserve, whose next meeting is scheduled for September 18. These factors are contributing to gold's resilience against its typical September weakness.

The stock market is experiencing its worst weekly decline since March 2023, with the S&P 500 and Nasdaq falling sharply following a disappointing August jobs report. The labor market data showed fewer job additions than expected and downward revisions for previous months, raising concerns about economic cooling. This has led to increased volatility in both stock and bond markets as investors reassess their expectations for Federal Reserve rate cuts. While the unemployment rate slightly decreased, the overall jobs report has intensified debates about the pace of economic slowdown and the Fed's potential response.

The US economy added 142,000 nonfarm payroll jobs in August, falling short of the 165,000 expected by economists. However, this was higher than July's revised figure of 89,000 jobs. The unemployment rate decreased to 4.2% from 4.3% in July. Wage growth increased to 3.8% year-over-year, up from 3.6% in July, with a monthly increase of 0.4%. While the job additions were lower than anticipated, some economists view the report as consistent with a "soft landing" rather than a recession.

Gold prices are holding steady above $2,500 per ounce as investors eagerly await US economic data, particularly the payrolls report, which could significantly influence the Federal Reserve's decision on interest rate cuts this month. Recent weak job market data has increased expectations for rate cuts, typically beneficial for gold as a non-interest-bearing asset. The precious metal has seen a substantial 20% rise this year, driven by rate cut optimism, strong over-the-counter purchases, and geopolitical tensions, with prices reaching a record high in August.

The upcoming US presidential election is creating uncertainty in the metals market, potentially limiting price gains until after November. Citigroup analysts suggest that factors like Federal Reserve rate cuts, China's economic policies, and global manufacturing sentiment will have a more positive impact on metals prices in late 2024 or early 2025, once the election is over. The election's outcome could affect global risk appetite and influence China's stimulus decisions, which are crucial for metals demand.