Precious metals news

In 2023, gold continues to be a valuable asset for diversified portfolios, showing resilience even with market shifts. The World Gold Council reported a 20% year-over-year increase in gold investments, mainly driven by bar, coin, and OTC market growth. Historically, gold thrives during financial turmoil, offering portfolio diversification and liquidity. Since 1971, gold has matched equities in returns and surpassed bonds. Over the past 20 years, it has outperformed most major assets with a 15% annual increase in global investment demand. High demand from institutional investors, central banks, and markets like China bolster gold's value, emphasizing its portfolio benefits.

In Q2 2023, global gold reserves peaked at 38,764 tonnes, surpassing the 1965 record. This shift suggests a new gold era, with central banks diversifying from the US dollar, especially since the 2008 crisis. As gold's value has grown by 66% and its share in international reserves rises, it's clear that its significance in the global monetary system is increasing.

The SEC's 2012 rule for a Consolidated Audit Trail has raised significant privacy concerns. Originally intended to monitor trading activity following the 2010 flash crash, the rule now mandates tracking of every trade order, modification, and execution across U.S. markets. Alarmingly, it also collects personal information like account and Social Security numbers, accessible to multiple organizations, 3,000 outside contractors, and susceptible to hacking attempts from international cyber threats.

The Fed's latest quarterly data reveals significant wealth disparities in the US. The top 0.1% of households hold nearly 13% of total wealth, while the top 10% possess 56%. In contrast, the majority of Americans, falling between the top 10% and bottom 50%, have an average net worth of $807,000. Although many in the bottom 50% have some assets, the lower 20% are near or at the poverty line.

US 10-year Treasury yields are nearing 4.50%, the highest since 2008, risking a third consecutive year of negative performance, unprecedented in history. Mortgage rates have increased by 156% to 7.3% since Biden took office, with the US Treasury 10y-2y yield curve staying inverted. US debt is projected to reach 181% of GDP, far surpassing previous concerns of an 80% threshold.

China and Russia lead in global gold production. Historically, gold has been significant in money systems and may become crucial again, countering central bankers' habits of money printing since 1914. Critics have dismissed gold, ignoring its historical prominence. Nixon's departure from the gold standard underscores its value. Many anticipate the decline of the Petrodollar and consequently, the U.S.'s global dominance. The shift away from the U.S. dollar in trade is evident, and groups like BRICS aim for a multipolar world.

The traditional link between gold prices and interest rates seems to be breaking. Previously, low rates meant high gold prices, and high rates led to a drop in gold prices. However, despite recent hikes in inflation-adjusted rates, gold prices remain steady. Factors like central bank buying and bets on a US economic slowdown are keeping gold prices up, challenging conventional wisdom.

Is the canary in the coal mine signaling trouble in China?

The U.S. economy is facing simultaneous threats: potential auto worker strikes, a possible government shutdown, the resumption of student loan payments, and rising oil prices. Together, these could exacerbate an already cooling economy due to high interest rates. Predicted economic growth for the fall shows a sharp decline. Strikes might stall auto sector recovery, while a government shutdown could reduce economic output. Resuming student loan payments may also impact consumer spending.

Despite a reported slowdown in inflation, Americans are still grappling with high prices for essential items like gas and food. This ongoing financial strain is contributing to a growing discontent towards the Biden administration's economic policies, with many individuals struggling to manage their daily expenses. The perceived economic relief is not aligning with the public's lived reality, leading to increased frustration and financial stress.

Goldman Sachs reports that credit card companies are facing their fastest rate of losses since the 2008 recession. With current losses at 3.63% and U.S. credit card debt exceeding $1 trillion, these losses are expected to rise to 4.93%. Analyst Ryan Nash finds this trend unusual as it's occurring outside of a recession, and he predicts the peak won't be reached until late 2024 or early 2025.

The pandemic severely affected mall retailers. The mall's occupancy plummeted from 96% to below 50%. Owners Unibail-Rodamco-Westfield and Brookfield Properties ceased mortgage payments, and by August, major brands like Nordstrom exited. The mall's declining foot traffic led Westfield to revert the property to the lender. Surging interest rates negatively impacted real estate values, and tenants like Affirm Holdings, facing increased borrowing costs, considered breaking leases. The future of San Francisco's commercial property market remains uncertain.

China's capacity for monetary policy easing is limited, said Liu Shijin, an adviser to the People's Bank of China. He warned of increasing side effects if China relies solely on macro policies to stabilize growth, emphasizing the need for structural reforms. Liu's comments come as China's economic recovery post-COVID falters due to weak consumption, decreasing exports, and a growing property debt crisis.

US and UK policymakers are at odds over decisions. The Bank of Japan downplays potential rate hikes. US hospitality faces challenges adapting to post-pandemic cost-efficiencies. Europe is on a downturn; the Bank of England freezes rate hikes amidst looming recession fears, and UK inflation drops unexpectedly. Globally, central banks are wary, with the world economy poised for a slowdown. Rising crude prices complicate matters. Japan's aging population issue is set to burden other Asian countries. China sees a reverse migration due to global tensions. Brazil, despite some positive growth, remains cautious about inflation.

Last week, a federal grand jury indicted Democrat Senator Bob Menendez and his wife Nadine Arslanian Menendez on bribery charges. According to the indictment, the senator and his wife took bribes, including 13 gold bars, from three New Jersey businessmen with Egyptian ties.

Everybody knew that the Federal Reserve wasn't going to hike rates at the September FOMC meeting. And yet everybody waited with bated breath to hear what Jerome Powell would say. In his podcast, Peter Schiff explained why people hang on Powell's every word. It's not because they think he knows what inflation or interest rates will be next year. They realize that Powell is just guessing. So, why do people care what he thinks?
Meanwhile, inflation is strong — not the economy.

I am heading to the Silver Symposium this weekend and look forward to explaining why "Energy" is the most crucial factor to invest in silver.  While most analysts at the Silver Symposium have their own opinions on why investing in silver is essential, I believe they overlook the most important factor...

The current price of silver might not truly represent its actual market demand, suggesting potential long-term manipulation. Evident physical shortages and the overly extended short positions in silver derivatives further reinforce this notion. Considering the impossibility of short sellers acquiring the necessary physical silver to offset their positions, the risks of shorting silver are amplified. Thus, the silver market's dynamics underscore its potential undervaluation and high risk for those betting against it.

Amid deteriorating European economic data and wary central bank decisions, gold stands firm. France's services sector contraction intensifies concerns, prompting experts to scrutinize upcoming central bank actions. While central banks hint at maintaining high interest rates to combat inflation, global policy tightening sends jitters across markets. The rising dollar and treasury yields further cloud the outlook. Yet, amidst this turmoil, gold's stability shines, reinforcing its role as a safeguard in uncertain times. Observers infer that central banks are more fearful of halted global growth than inflation.

Commodities faced a minor decline last week due to hawkish moves by the FOMC and other market corrections. Despite rising bond yields, silver and other precious metals unexpectedly rose, possibly as a hedge against the FOMC's uncertain outcomes, whether that's a soft landing, hard landing, or stagflation.