Precious metals news

Global liquidity is expanding, benefiting stock markets but posing challenges for bond investors. Central banks are expected to resort to quantitative easing again. The US Fed's balance sheet reduction has been ineffective, and unconventional policies are anticipated. Financial markets heavily rely on liquidity to refinance existing debts. Advanced economies face fiscal pressures, and the US government's Treasury issuance requires increased Fed holdings. Limited alternatives to Fed QE exist, while geopolitical tensions may reduce foreign appetite for US debt. Higher interest rates aggravate fiscal deficits and debt problems. The future appears challenging with no easy solutions.

CNBC's Sara Eisen moderates a panel on monetary policy with Jerome Powell, chairman of the Federal Reserve System; Andrew Bailey, governor of the Bank of England; Christine Lagarde, president of the European Central Bank; and Kazuo Ueda, governor of the Bank of Japan, at ECB Forum on Central Banking.

Central bankers globally have hastily escalated interest rates to levels not seen in over a decade in an attempt to quell inflation. However, they admit uncertainty about the effectiveness of their measures, leaving room for doubt and concern.

Bonds rated CCC, the lowest junk tier, suffered their biggest slump since the March banking crisis, losing 0.86% from June 19-23. Investors who took on more risk are now facing a painful reversal. The belief in a central bank-controlled world without harming growth has been shattered. Bullish bets on high-yield corporate bonds unraveled as the Fed prioritized inflation control. Lowest-rated companies are vulnerable to downgrades and defaults as funding costs rise and earnings decline. The rally in CCC bonds relied on low unemployment and recession absence. The recent Fed pause on interest rate hikes and fear of missing out fueled the rally, but sentiment has shifted.

The Japanese yen faced steep declines and reached its weakest level since early November, driven by increased risk appetite and expectations of more US interest rate hikes. The Bank of Japan's dovish outlook on monetary policy further contributed to the yen's weakness. Japanese officials, including Finance Minister Shunichi Suzuki, warned of potential corrective measures to address the currency's decline.

When you buy physical gold, the price you pay will start with the "spot price."
As defined by Investopedia, the "spot price" is "the current price in the marketplace at which a given asset—such as a security, commodity, or currency—can be bought or sold for immediate delivery."
So, how is the spot price for gold determined?

US house prices continue to decline, and economist David Rosenberg has issued a warning about the market. Citing charts showing a drop in median prices for new single-family homes and existing homes, Rosenberg questioned the Federal Reserve's decision to raise interest rates further despite declining home prices, a key component of inflation. He also cautioned stock-market bulls, highlighting historical trends that indicate a recession and bear market following rate hikes. Rosenberg advised investors to play the market cautiously and ensure they have hedges and insurance in place.

The S&P CoreLogic Case-Shiller Home Price Index for the 20 cities showed a significant year-over-year decline of 1.7%, the largest drop since 2012. Despite the spring selling season typically driving up sales volume and prices, the growth this spring was not sufficient. Prices fell further compared to the prior year, indicating a negative trend. Additionally, 10 out of the 20 metropolitan areas covered by the index experienced year-over-year price declines. The housing market in several key cities, such as Seattle and the San Francisco Bay Area, saw continuous declines for multiple months. This data highlights a challenging and declining housing market with decreasing prices in various regions.

Despite elevated borrowing costs, US mortgage applications for home purchases continued to rise for the third consecutive week. The Mortgage Bankers Association reported a 2.8% increase in applications for home purchases, reaching a nearly two-month high. The overall measure of mortgage applications, including refinancing, also climbed to its highest level since early May. However, the contract rate on a 30-year fixed mortgage increased by 2 basis points to 6.75%. The survey, which covers a significant portion of retail residential mortgage applications in the US, reflects the ongoing activity in the housing market.

Credit Suisse Group AG's workforce is set to be cut by more than half as a result of an emergency takeover by BS Group AG. Bankers, traders, and support staff in the investment bank, particularly in London, New York, and parts of Asia, will bear the brunt of the cuts. Expectations are for three rounds of job cuts this year, with the first round anticipated by the end of July. UBS, the acquiring bank, aims to save $6 billion in staff costs and plans to reduce the combined headcount by approximately 30%, or 35,000 people. The job cuts at Credit Suisse contribute to the overall decline in financial sector jobs globally.

Investors withdrew $6 billion from open-end funds and ETFs tracked by Morningstar Direct, signaling ongoing challenges for Credit Suisse's asset management unit. This marks the fifth consecutive quarter of client outflows and is a key concern for the merged entity with UBS. The investment unit's assets under management have steadily declined, dropping from 477 billion Swiss francs to 399 billion francs by the end of the first quarter.

The current scenario of inverted yield curves and tight credit spreads is likely to exacerbate the decline in lending, raising concerns about an impending recession. Based on historical patterns, a recession could strike as early as Thanksgiving, reflecting the typical 16-month timeframe from inversion to economic downturn. It is crucial to be cautious and acknowledge the unprecedented economic impact of the pandemic recession and recovery. Despite the likelihood of a recession, the lingering effects of previous stimulus measures on the economy remain uncertain and difficult to assess, adding to the gloomy outlook.

Some European Central Bank officials are considering ways to speed up the reduction of the institution's bond holdings, adding to the tightening of monetary policy and inflation control measures. This includes potential sales of securities from the ECB's portfolio and phasing out reinvestments of pandemic-era bonds. No formal discussions or decisions have been made, and the ECB declined to comment. Euro-area inflation remains a concern, despite a slowdown, and policy makers received favorable inflation data from Italy. The ECB has already reduced net asset purchases and will halt reinvestments under the Asset Purchase Program next month.

China is expected to cut interest rates and increase fiscal stimulus to boost its slowing economy, according to economists surveyed by Bloomberg. The People's Bank of China is likely to reduce its one-year policy loan rate and lower the reserve requirement ratio for banks. On the fiscal side, tax breaks for consumers and increased financing for infrastructure investment are anticipated. China faces pressure to counter a slowdown caused by a weak property market, subdued consumer spending, and a decline in export demand. The timing of further rate cuts may be cautious due to growth targets and concerns over the currency's depreciation.

President Biden will present his case for "Bidenomics" on Wednesday, highlighting economic recovery and low inflation as evidence of success. However, critics point to less flattering numbers on inflation and voter dissatisfaction with his handling of the economy. While Biden's policies have contributed to positive economic indicators, such as solid labor market and GDP growth, initial inflation concerns remain.

Tech stocks faced pressure due to concerns about restrictions on AI chip exports, leading to lower futures for Nasdaq Composite. S&P 500 futures also fell, while Dow Jones futures remained unchanged. Nvidia declined after reports of potential restrictions on AI chip sales to China. Investors are awaiting Federal Reserve Chair Jerome Powell's remarks for insights into the central bank's next steps following strong economic data.

Silver demand set a record in every category in 2022 and is expected to continue growing. Meanwhile, silver production flatlined. Record global silver demand and a lack of supply upside contributed to a 237.7 million ounce market deficit in 2022.
The trends indicate that this deficit will expand in the next several years as demand continues to surge as supply begins to shrink, and there are some concerning trends indicating supply may contract rapidly in the coming years.

There has been a lot of economic data this month that looks strong. But when you dig a little deeper, you find that this "strength" is an illusion.
Following is a breakdown of several of these data points with some help from our friends at Passant Gardant.

If you listen to the mainstream financial media, you might think gold has fallen out of favor. Most people remain fixated on the surging stock market or the next move by the Federal Reserve. But perception doesn't always line up with reality - especially mainstream perception.
While the trendy kids are ignoring the yellow metal, there are plenty of people buying gold. In fact, gold demand hit an 11-year high in 2022.
So, what do these folks know that the mainstream might be missing? Are there good reasons to buy gold now?

As the world continues racing toward the coming ENERGY CLIFF, these regions are the most vulnerable.  This is an update for 2022, as the 2023 Statistical Review of World Energy Report was just released.  Amazingly, Economists and MSM are totally clueless...