Precious metals news

India bypassed the U.S. dollar in a recent trade with the UAE, raising questions about the dollar's declining global dominance. Indian Oil Corp. purchased 1M barrels of oil from the UAE using rupees, signaling a shift from standard dollar-based transactions. As nations like China and Russia also seek alternatives to the dollar, there's increasing doubt about the greenback's sustained global primacy. Treasury Secretary Janet Yellen remains confident, but these moves suggest potential challenges for the dollar.

The minutes of the Federal Reserve's policy meeting last month may indicate on Wednesday a growing uncertainty among policymakers about the U.S. economy's trajectory. After a rate increase in July to 5.25%-5.50%, Fed Chair Jerome Powell hinted at more hikes, despite recognizing potential deflationary factors. However, the minutes will likely show divided opinions on the necessity of further hikes. Some Fed officials have since indicated no more hikes are needed, while others are considering potential rate cuts. The mixed messaging from the Fed indicates increasing concerns about the stability of the U.S. economy and potential over-tightening of monetary policy.

US stocks fell sharply as part of a global sell-off on Tuesday. The Dow Jones dropped 1% due to potential stricter bank oversight, while both the S&P 500 and Nasdaq Composite decreased over 1%. Home Depot reported strong earnings but anticipated "continued pressure" on consumers, indicating a waning interest in home renovations. China's economic situation worsened, with its central bank cutting key interest rates to stimulate its flagging economy and halting the release of youth unemployment figures after continuous declines.

Target (TGT) slashed its annual profit expectations in its Q2 report, pointing to a troubling economic environment, imminent interest rate hikes, and the anticipated restart of student loan repayments. Despite a modest beginning to the back-to-school season, uncertainty hangs over the major shopping period ahead. Target's Q2 figures reveal a decline: net sales dropped 4.9% YoY, inventory plummeted 17%, and comparable sales saw a 5.4% reduction. Additionally, the company failed to repurchase any stock this quarter, and both the number of transactions and the average check size decreased. The full-year earnings per share forecast has been downgraded considerably.

Concerns are escalating regarding China's economic stability, drawing stark warnings from the West. US Treasury Secretary Janet Yellen labeled China's slowdown a significant "risk factor" for the US, while President Joe Biden described it as a "ticking time bomb." Parallels are being drawn to Japan's financial descent decades ago, suggesting severe repercussions for global economies. If China's decline is drastic, it could force the US Federal Reserve into hasty rate cuts. This paints a troubling picture given the interlinked nature of global economies.

July's housing data disappointed as Housing Starts slightly rose by 3.9% MoM, offset by a stark June downward revision. Building Permits barely increased, underperforming expectations with multi-family units at their lowest since Oct 2020. Meanwhile, despite a lag in Housing Starts, Construction Jobs remain near their 2022 peak. Additionally, mortgage rates have hit their highest since Dec 2001, further dampening home purchase applications.

In another sign the financial crisis continues to bubble under the surface, banks borrowed an additional $3.7 billion from the Federal Reserve's bank bailout program in July.
Currently, there are $106.9 billion in outstanding loans in the Bank Term Funding Program (BTFP).

In another blow to dollar dominance, India and the United Arab Emirates settled an oil trade without converting local currencies to dollars for the first time on Monday, as India's top refiner made a payment for oil in rupees.
Indian Oil Corp. bought a million barrels of oil from Abu Dhabi National Oil Company in a dollar-free transaction.

Since the 2008 Global Financial Crisis, something BIG changed in the "Wonderful World of Diesel Consumption."  Two of the largest diesel-consuming regions in the world... just stopped growing.  But, that didn't stop the rest of the world from expanding... and, "Boy, Did they... LOL.."

Persistently high inflation has led the typical American household to spend $709 more monthly than two years ago, as reported by Moody's Analytics chief economist Mark Zandi. Despite a decline from its 9.1% peak in 2022, the Consumer Price Index (CPI) remains elevated at 3.2% in July. The Biden administration's "Inflation Reduction Act" faces criticism, with core inflation standing high at 4.7%. Many Americans grapple with financial insecurity, reduced savings, limited healthcare access, and increasing credit card debt and delinquency rates.

BlackRock experts predict prolonged economic stagnation for the U.S., marking it as "the weakest such period in the postwar era outside the Global Financial Crisis." Despite prior recession warnings, the real concern is now a labor shortage due to demographic shifts and early retirements, which could reignite inflation. The U.S. workforce is 4 million workers short compared to pre-COVID growth rates. This “full-employment stagnation” will negatively impact company profits and likely curb business investment. BlackRock emphasizes that this is not just a cyclical downturn but a significant structural shift that the Federal Reserve must address.

China's leader, Xi Jinping, made an unexpected move by replacing senior leadership in China's Rocket Force, responsible for most of China's nuclear warheads. These changes, combined with other military officer disappearances and suicides, hint at a major upheaval. While some speculate this was due to corruption, others believe it's because Xi is preparing for war, removing any opposition within the military. Xi's recent actions and rhetoric about war, military build-up, and threats to countries including the U.S. and Taiwan, suggest an aggressive shift. Amidst China's economic decline and Xi's unpopular policies, war might be a way for him to rally national support. The international community is now faced with the alarming possibility of China's aggressive intentions.

U.S. economic fundamentals and technicals are predominantly negative, with only unemployment and stock market figures appearing positive. Despite this, financial media often focuses solely on stocks and jobs. Searching for economic resilience in countries like China, Japan, and Germany also proves fruitless, as they face their own downturns. With signs pointing to a potential global recession, investors are advised to diversify, favoring cash, precious metals, and resilient sectors like energy and agriculture.

China's worsening economic downturn is negatively impacting major American businesses operating in the country, especially those linked to its declining manufacturing, construction, and export sectors. Notable companies like DuPont, Dow, and Caterpillar are reporting weaker sales, and some are revising their future sales projections downwards. Danaher CEO, Rainer Blair, highlighted a significant drop in orders, with June seeing a 50% decrease. This slump is attributed to decreased foreign investment and post-pandemic overcapacity. The economic slowdown in China is having ripple effects globally, with other regions experiencing reduced demand and revenue.

Former US Treasury Secretary Larry Summers warns of a dangerous fiscal trajectory for the US, with the budget deficit reaching $1.613 trillion. In an interview with Bloomberg, Summers suggests the deficit could approach 10% of GDP, casting doubt on the Congressional Budget Office's more conservative projections. Citing underestimated revenues, unrealistic expectations on defense spending, and skepticism about the phasing out tax cuts, Summers believes the true fiscal picture is more dire. Latest Treasury data reveals a $221 billion deficit for July 2023, with $67 billion spent on debt interest alone, equivalent to the total annual expenditure on education and transportation.

Silver is significantly undervalued right now. One analyst called the current price in the $22 an ounce range "inexcusably low."
But many analysts are bullish on silver in the medium term with projections of prices climbing to $50 to $100 an ounce over the next two to five years.
The question is when will we finally start to see this correction?

Bankers, including JPMorgan Chase & Co.'s CEO Jamie Dimon, warn that the Federal Reserve's proposed stricter capital rules may divert more risks from regulated banks to less-regulated financial entities, often referred to as "shadow banks". These shadow banks can experience tumultuous runs akin to traditional bank runs, threatening the stability of the financial system. Despite efforts to make the banking system more robust post the 2008 crisis, shadow banking has grown in significance and bears similarities to traditional banking. The Fed's interventions, such as the standing repo facility, aim to provide support to this system, but it underscores the risks and complexities that shadow banking brings into the financial landscape.

Global household wealth declined by 2.4% last year, marking the first drop since the 2008 financial crisis and resulting in a loss of $11.3 trillion in assets. North American and European households bore the brunt of this decrease, losing $10.9 trillion. The global number of millionaires also reduced by 3.5 million, and the world's top 1% saw their wealth share drop to 44.5%. The downturn was attributed to inflation, rising interest rates, and currency depreciation.

Retail sales in July grew by 0.7%, outpacing Wall Street's expectations of 0.4%. Most categories experienced growth, particularly online retailers, which saw a 1.9% increase from June, driven by events like Amazon Prime Day. However, furniture and home furniture stores faced a 1.8% decline. Notably, Home Depot signaled a downturn in spending on high-value items, with its CEO, Ted Decker, highlighting continued pressure on specific high-ticket categories.

Turkey's love affair with gold has had a major impact on global gold flows, especially through the first half of 2023.
Turks have historically held a lot of gold, both in jewelry and investment form. The country ranks as the fifth-largest gold market in the world. But with recent economic turmoil in the country demand for gold has exploded.