Precious metals news

"When you go from record-low mortgage rates to levels that we haven't seen for almost 20 years, you've destroyed both demand and supply," El-Erian said. High mortgage rates, with the 30-year fixed rate at 7.48%, have frozen the market, impacting supply and demand. Prospective buyers are priced out, while existing homeowners hold onto low-interest mortgages, keeping prices elevated. The market's caught in limbo, needing significant mortgage rate reductions to improve affordability. El-Erian highlights the central role of the housing market in the economy and the risk of a recession due to Fed's rate hikes.

Over 40 countries applied to join the BRICS Alliance – who's in and who's out. And why Sept 1st could be the best day of the year to buy gold...

At its recent summit, the BRICS economic bloc announced it will add six new members, including Saudi Arabia. Many people believe the growing influence of BRICS could ultimately dent Western economic power and undermine the dollar’s role as the world’s reserve currency.
Many people frame the rise of BRICS as a battle between East and West, but economist Patrick Barron said it's more fundamental than that. It's actually a war between diametrically opposed economic ideas.

Global equities edged up on Wednesday, but August marked their worst month of 2023, reflecting concerns about extended central bank interest rate hikes. MSCI's global index reached a two-week high, boosted by China's investment efforts and weak US jobs data. However, caution prevailed in Europe, leading to softer equity markets. Eurozone bond yields rose due to August inflation data, prompting expectations of a European Central Bank rate hike in September. US futures for S&P 500 and Nasdaq slipped, signaling a potential decline in Wall Street shares. Despite recent job data, MSCI's global stock gauge dropped over 3% in August, driven by hawkish Fed signals.

More downward revisions from the Biden administration: the first Q2 GDP revision cut growth to a meager 2.1% from an initially touted 2.4%. Personal consumption contributed just 1.14%, fixed investment dropped to 0.66%, and private inventories swung negative at -0.09%. Net exports were trimmed lower too. Government consumption, a debated economic metric, surprisingly rose to 0.58%. Inflation indicators painted a mixed picture, with gross domestic purchases prices at 1.7% and PCE prices at 2.5%. Corporate profits, as per the BEA, plunged 0.4%. The widening gap between official data and business realities is concerning. The upcoming Q3 GDPNow estimate is likely to adjust sharply downward.

President Biden might be optimistic about the economy. Federal Reserve Chairman Jerome Powell might be optimistic about the economy. But the average American?
Not so much.

After the JOLTS data suddenly exposing cracks in the 'oh-so-strong' labor market, the latest ADP employment report brought more disappointing news. Job growth slowed notably in August, adding only 177k jobs, the lowest figure since March 2023. This decline was particularly pronounced in the leisure and hospitality sector, which added a mere 30,000 jobs after months of strong hiring. Even across different employment sizes, the gains were modest, with larger companies leading. Wage growth also took a hit, with year-over-year pay increases slowing to 5.9% for job stayers and 9.5% for job changers. This data raises concerns about the impact of tightening measures by the Fed and the overall health of the labor market.

For the first time, gold prices in Japan surged to a record 10,001 yen ($68.31) per gram on Tuesday due to the yen's decline against the dollar. This reflects rising interest in gold as a secure investment amid global economic concerns. The XAU/USD rate remained above $1,920 due to a slight dip in the U.S. Dollar (USD) value. Despite potential factors like Federal Reserve rate hikes and China's economic situation, gold's safe-haven appeal remains strong.

Gold prices reached a three-week peak on Tuesday, buoyed by a drop in U.S. consumer confidence and job openings, which led to a weakening dollar and Treasury yields. This surge in the precious metal's value arrives just before the release of U.S. inflation and labor market data later in the week. As Treasury yields have eased from their 15-year highs, gold prices have seen gains over the past week. A strategist at Morgan Stanley also expressed interest in purchasing gold, highlighting growing optimism for the yellow metal.

Mounting US debt, coupled with persistent deficits, paints a bleak picture of potential dollar inflation turmoil. Uncontrolled deficits could lead to fiscal dominance and soaring real interest rates, triggering a chaotic monetization spiral, with global repercussions. In this grim scenario, desperate measures might eliminate interest on reserves, driving rampant inflation as a revenue source. Consequences include bond market losses and potential banking disintermediation, paving the way for stifling regulations. The recent debt ceiling agreement overlooked ballooning deficits tied to entitlements, signaling a grim future of high inflation and economic stagnation with no remedy in sight.

U.S. regulators unveil plans for regional banks to issue debt and enhance living wills, aiming to protect against failures. Banks with over $100 billion in assets must hold long-term debt for absorbing losses during government seizures. These measures stem from the regional banking crisis earlier this year. New requirements are expected to increase funding costs, potentially impacting earnings and credit ratings. The proposal reflects a response to sudden collapses and emerging risks in the banking system.

Over $10 trillion spent on Covid overreaction, with Trump and Biden contributing $6 trillion and $4 trillion respectively. Massive debt/contrived money added, but effects overlooked amidst panic and distraction. Funds created and distributed electronically, while most received stimulus checks. Vast sums remain unpaid and stolen due to fraud. Giveaways continue, but their profound and lasting effects are ignored. Hundreds of new billionaires created, hospitals and pharma companies profited, inflation surged. Inflation's ratchet effect worsens economic disparity. Lockdowns, masks, tests, and shots showed minimal differences in health outcomes. The toll: wealth loss, missed experiences, social stratification. A broken reality with irreparable losses.

The Jackson Hole symposium highlighted central banks' uncertainty in a shifting global landscape. Discussions centered on changing R* (neutral short-term interest rate) due to deflation concerns, labor market shifts, energy transition, and geopolitical shocks. The acknowledgment of errors and lack of guidance marked a shift towards wisdom in central bank narratives. Market forecasts still struggle to accept central banks' reduced control and the potential for deflation.

China's major banks are set to cut interest rates on existing mortgages and deposits, a move not seen since 2009's global financial crisis. State-owned lenders like Industrial & Commercial Bank of China and China Construction Bank are expected to reduce rates on most of the nation's $5.3 trillion outstanding mortgages, primarily on first-home loans. These measures aim to stimulate consumer spending, attract funds to the stock market, and ease pressure on banks' profit margins. However, skepticism remains about their effectiveness in boosting investor confidence and the overall economy.

Contrary to the expected slight decline to 9.5 million, the July job openings report delivered a significant surprise. The Bureau of Labor Statistics revealed a startling figure of just 8.827 million job openings, marking the first instance of sub-9 million since March 2021. This shocker ranked as the third largest miss on record. What makes matters worse is that, if not for the BLS's considerable reduction of the May count from 9.582 million to a questionable 9.165 million, the drop would have been nearly 800,000 job openings. This pattern of downward revisions has become a recurrent theme during the Biden administration, leading to skepticism about data accuracy and raising concerns of deliberate data manipulation.

After reaching two year highs in July, The Conference Board consumer confidence survey was expected to show a very modest decline in August. Instead it plunged from the best in two years to the weakest since May (July was revised down from 117 to 114 and then August printed 106.1, dramatically below the 116.0 exp).

San Francisco and Seattle are down near 10% year-over-year (YoY) while Chicago and Cleveland lead in price gains. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 0.0% annual change in June, up from a loss of -0.4% in the previous month. The 10-City Composite showed a decrease of -0.5%, which is an improvement on the -1.1% decrease in theprevious month. The 20-City Composite posted a year-over-year loss of -1.2%, up from -1.7% in the previous month.

The federal government has added $1.3 trillion to the national debt in just three months.
When the fake debt ceiling fight ended and Congress suspended the federal government’s borrowing limit for two years in June, the national debt stood at $31.46 trillion. As of Aug. 26, the debt had surged to $32.81 trillion.
And with the Biden administration running massive deficits month after month, there's no reason to think the borrowing is going to slow down anytime soon.

China's economic troubles, including a real estate slump and high Gen Z unemployment, are causing deflation and sluggish growth, which experts like Brendan McKenna of Wells Fargo fear could infect the U.S. and lead to a global economic downturn. Key challenges include structural imbalances, inadequate social security, and unstable international relations. While some believe China's troubles may not significantly impact the U.S., the situation underscores the complexity and interconnectedness of the global economy, posing a threat to the global economy.

The Japanese government has signaled economic recovery with increasing prices and wages, but there is growing concern over higher living expenses. Despite the highest pay offers in decades and core inflation exceeding the Bank of Japan's target, the government did not officially declare an end to deflation, indicating continued uncertainty. This underscores the deeply rooted deflationary mindset of households and companies, despite significant fiscal spending and ultra-loose monetary policy, highlighting the ongoing struggles of the Japanese economy.