Precious metals news

Gold prices slipped on Monday as the dollar firmed after a strong U.S. payrolls report, overshadowing support from prospects that the Federal Reserve would pause its rate hikes this month.

Thirty people could be paid £1,600 a month without any obligation under proposals for the first trial of a universal basic income in England. Researchers from think tank Autonomy are seeking financial backing for a two-year pilot programme to see how it would change the lives of the group.

U.S. regulators are preparing to force large banks to shore up their financial footing, moves they say will help boost the resilience of the system after a spate of midsize bank failures this year.

The Federal Reserve’s June meeting is shaping up to be one of the trickiest in its 15-month campaign to tame inflation: Chair Jerome Powell seems intent on skipping an interest-rate increase, while explaining to the public that officials aren’t done yet.

Morgan Stanley strategists anticipate a sudden pullback in corporate earnings will slam the brakes on a US equity rally, a call at odds with Wall Street estimates.

The BRICS grouping of emerging market economies (Brazil, Russia, India, China, South Africa) now accounts for a larger share of the world’s economic output in PPP dollars than the G7 group of industrialised countries (Canada, France, Germany, Italy, Japan, UK, USA). Their respective shares of global output have fallen and risen between 1982 and 2022 from 50.4 percent and 10.7 percent, to 30.7 percent and 31.5 percent. No wonder another dozen countries are eager to join the BRICS, prompting Alec Russell to proclaim recently in The Financial Times: “This is the hour of the global south.”

A new world order is evidently well underway with BRICS and Shanghai Cooperation Organization (SCO) nations offering ample alternatives to the hegemonic Collective West.

Signs of de-dollarisation are unfolding in the global economy, strategists at the biggest U.S. bank JPMorgan said on Monday, although the currency should maintain its long-held dominance for the foreseeable future.

Argentina has signed a deal to renew its currency swap line with China and double the amount it can access to near $10 billion, the South American country's central bank said in a statement on Friday, a boost to its dwindling foreign currency reserves.

Brazil's central bank chief Roberto Campos Neto expressed his opposition on Friday to the creation of a common currency, stating that in the era of digitalization it is unnecessary to have a shared currency for its purported benefits.

Without question, U.S. consumers have buried themselves under a huge mountain of debt. The latest report from the New York Federal Reserve shows that total household debt has eclipsed $17 trillion for the first time ever. Of this, $12.04 trillion is mortgage debt, followed by $1.60 trillion in student debt, $1.56 trillion in auto debt, and about $1 trillion in credit card debt. Other debt, at $510 billion, and home equity line of credit, at $340 billion, round out the debt pile.

Republicans and Democrats are touting a hastily-written debt ceiling deal that staves off a devastating U.S. default, but does little to slow a massive buildup of total federal debt now on pace to exceed $50 trillion in a decade.

Consumers facing high asset prices and rising interest rates have a few loan options. None are particularly attractive.

With a debt ceiling deal freshly inked, the US Treasury is about to unleash a tsunami of new bonds to quickly refill its coffers. This will be yet another drain on dwindling liquidity as bank deposits are raided to pay for it — and Wall Street is warning that markets aren’t ready.

“No one got everything they wanted, but the American people got what they needed,” said Biden in his twelve-minute address to the nation. “We averted an economic crisis and an economic collapse,” continued the President, seated behind the Resolute Desk.

While a U.S. default on its debt has been averted, the possibility of another credit rating downgrade remains, as 11th-hour debt ceiling negotiations have become an almost regular feature in recent U.S. history.

President Joe Biden on Saturday signed a bill that suspends the U.S. government's $31.4 trillion debt ceiling, averting what would have been a first-ever default with just two days to spare.

The Federal Reserve's policy meeting next week came into sharper focus, after strong jobs data and the passage of the US debt-ceiling bill on Friday gave investors reason for hope, with the major US stock indexes closing higher on Friday. President Joe Biden signed the bill into law at the weekend.

Shares held firm and the dollar edged up on Monday as investors priced in reduced odds of a June rate hike by the Federal Reserve after a mostly encouraging U.S. jobs report, while oil prices jumped after Saudi Arabia pledged big output cuts.

Please note: the CoTs report was published 06/02/2023 for the period ending 05/30/2023. “Managed Money” and “Hedge Funds” are used interchangeably.
Managed money has once again bailed on gold, which drove the price back below $2000 an ounce despite the “Other” group stepping in to absorb some of the selling.