Precious metals news

UBS predicts a bullish outlook for gold in 2024 and beyond, forecasting prices to reach $2,600 per ounce by the end of 2024 and potentially exceeding $2,800 over the next two years. This optimistic projection is based on strong central bank purchases, sustained physical demand, and ongoing macroeconomic and geopolitical uncertainties. UBS analysts believe these factors have effectively raised gold's trading range and will continue to support higher prices, even as they expect some seasonal quietness during the summer months. The bank also sees potential upside catalysts in the second half of 2024, including the U.S. elections and concerns about the U.S. fiscal deficit.

In July 2024, central bank gold demand surged, with net purchases more than doubling to 37 tonnes despite rising gold prices. The National Bank of Poland led the buying, followed by Uzbekistan and India's central banks. This marked the highest monthly total since January, indicating a strong commitment by central banks to accumulate gold. The ongoing demand is expected to continue, as central banks seek to bolster their reserves amidst economic uncertainties.

Ukrainian President Volodymyr Zelenskiy has renewed his plea for air defense systems following a devastating Russian missile attack that killed at least 41 people and wounded over 180 in Poltava. The strike, which targeted a military educational facility and a nearby hospital, is one of the deadliest since Russia's invasion began in 2022. Zelenskiy emphasized the urgent need for air defense systems and long-range strike capabilities to protect Ukrainian civilians from further Russian attacks, highlighting the human cost of delays in providing such support.

The Argentine province of La Rioja has introduced its own currency, the "chacho," to combat economic hardships resulting from President Javier Milei's austerity measures. Governor Ricardo Quintela implemented this quasi-currency to stimulate the local economy after federal funding cuts led to provincial default. The chacho, distributed to government employees as bonus payments, is accepted by local businesses at a 1:1 ratio with the peso. While the move has provided some economic relief, it also highlights the financial struggles of provinces under Milei's strict fiscal policies and raises questions about the sustainability of such local currency initiatives.

The August jobs report, set to be released on Friday, is a crucial economic indicator that could influence the Federal Reserve's decision on interest rate cuts in September. Following a volatile month in the markets, investors are eager to see if July's weaker-than-expected job growth was an anomaly or the start of a broader economic slowdown. Economists expect the U.S. economy to have added 163,000 jobs in August, with the unemployment rate potentially decreasing to 4.2%. The report will be closely watched for signs of labor market resilience and its implications for monetary policy.

Canadian stock futures declined on Tuesday due to falling oil prices and investor focus on the upcoming Bank of Canada policy decision. The energy sector faced pressure from lower oil prices linked to China's sluggish economic growth, while the materials sector was affected by easing gold prices and falling copper prices. Investors are anticipating a potential third consecutive rate cut by the Bank of Canada, with attention also on upcoming economic data including Canadian manufacturing PMI and U.S. jobs reports. These factors are influencing market sentiment and expectations for both Canadian and U.S. monetary policy decisions.

Argentina's central bank has sent a portion of its gold reserves abroad for financial validation, potentially to use as collateral for future financing. This move could provide the country with much-needed financial flexibility amid low international reserves and economic challenges. The central bank confirmed the transfer but did not disclose specific details, citing confidentiality. This action underscores the ongoing economic difficulties faced by President Javier Milei's administration, including the struggle to lift currency controls and manage debt obligations.

Earthquakes may be the key to forming large gold nuggets through a process involving piezoelectricity in quartz. When quartz is subjected to seismic stress, it generates electric fields that can extract gold from surrounding fluids. This process causes gold to accumulate on existing particles, potentially explaining how substantial nuggets form despite low gold concentrations in underground fluids.

Gold prices remain stable as investors await U.S. employment data, which could influence the Federal Reserve's decision on interest rate cuts. The market is split between expectations of a 25 or 50 basis point reduction in September. Upcoming economic indicators, particularly Friday's payrolls report, will be crucial in determining gold's trajectory. A weaker jobs report could fuel recession fears and support gold prices, while stronger data might lead to a decline. Gold typically performs well in low-interest-rate environments and is seen as a hedge against economic uncertainty.

Is the United States natural gas market heading into a supply deficit by the end of the year?  And why do I believe the next six months will be Critical for Bitcoin but not precious metals?  What happens to Bitcoin could have a direct and positive impact on gold and silver...

A potential oil spill stretching 2.2 nautical miles has been detected near the Sounion tanker in the Red Sea, following an attack by Houthi rebels earlier this month. The Greek shipping authority reported this finding to the UN maritime agency, based on satellite imagery from the European Maritime Safety Agency. While the exact nature of the spill is unclear, with US officials stating the main cargo remains intact, there are concerns about potential fuel leakage from the damaged engine. The situation poses a significant environmental threat to the Red Sea, prompting Greece to call for international assistance in addressing the hazard and resolving the crisis involving the Greek-flagged vessel carrying 150,000 tons of crude oil.

Vice President Kamala Harris has firmly stated that she will not ban fracking if elected president, despite her previous support for such a ban in 2019. This shift in stance reflects her evolving perspective on balancing environmental concerns with economic realities, particularly in key swing states like Pennsylvania where fracking is a significant industry. Harris emphasizes that while her position on fracking has changed, her commitment to addressing climate change remains strong, pointing to the Biden administration's investments in clean energy through the Inflation Reduction Act. This stance aims to appeal to both environmentally conscious voters and those concerned about energy sector jobs and costs.

Bank of America strategists are recommending investors consider replacing bonds with commodities in the traditional 60/40 investment strategy. They argue that commodities may offer better returns in a high-inflation environment, with annualized returns of 10-14% since the decade's start, compared to significant losses in 30-year US Treasuries. The strategists believe a long-term commodity bull market is beginning, driven by factors like debt, demographics, and inflationary policies. However, they still view bonds as the best hedge against a potential economic hard landing in the US.

South Africa's platinum mining industry is facing a significant downturn due to declining prices, reduced demand, and years of underinvestment. Northam Platinum CEO Paul Dunne predicts a 10% drop in South African platinum output over the next five years, from 3.9 million to 3.5 million ounces annually. This decline is attributed to aging mines, lack of new investments, and the growing popularity of electric vehicles, which don't require platinum-based catalytic converters. The industry's struggles are exemplified by Northam's 81.6% drop in headline earnings per share and an overall slump in platinum, palladium, and rhodium prices.

As gold breaks records, silver quietly positions itself for a potential breakout. Here's why some see $50/oz on the horizon.

The average rate on a 30-year mortgage has decreased to 6.35%, its lowest level in over a year, providing some relief for potential homebuyers facing high housing prices. This decline, attributed to expectations of a Federal Reserve rate cut, marks the second consecutive week of easing rates. While 15-year fixed-rate mortgages also saw a decrease, experts suggest that a significant rebound in purchase activity may require further rate reductions. This trend offers a glimmer of hope for the housing market, though home prices remain near all-time highs.

The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, rose 0.2% in July and 2.5% year-over-year, slightly below expectations. Core PCE, which excludes volatile food and energy prices, increased 0.2% for the month and 2.6% annually. These figures suggest a gradual easing of inflationary pressures, potentially influencing the Fed's future monetary policy decisions.

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John Ciampaglia, CEO of Sprott Asset Management, expresses surprise at the current undervaluation of silver compared to gold's recent all-time high. He believes silver has significant potential for price appreciation, potentially reaching $50 per ounce in the future, despite currently trading below $30. Ciampaglia suggests that silver's price should increase substantially to align with gold's performance, highlighting the disconnect between the two precious metals' valuations in the current market.

Gold prices have remained relatively stable this week due to a lack of significant market-moving events. Investors are holding their positions as they await crucial economic data releases in the coming week, including ISM PMIs and U.S. labor market statistics, particularly the Non-Farm Payrolls (NFP) report. These upcoming reports are especially important as the Federal Reserve has emphasized its focus on maintaining a strong labor market. The data will likely influence the Fed's decision on whether to implement a standard 25 basis point interest rate cut in September or opt for a more aggressive 50 basis point reduction. This period of consolidation in gold prices reflects the market's anticipation of these key economic indicators and their potential impact on monetary policy.