Precious metals news

Gold prices have surged over 26% in the past year to reach $2,476 per ounce, driven by several key factors that are expected to continue supporting higher prices. According to Robin Tsui of State Street Global Advisors, four structural and cyclical factors will likely push gold prices even higher going forward. These include ongoing geopolitical tensions, central bank gold buying, expectations of interest rate cuts, and increased safe-haven demand amid economic uncertainty. While gold has already had an impressive run, these underlying drivers suggest there may be further upside potential for the precious metal in the near future.

- China experienced a significant surge in gold investment during the second quarter of 2024, with gold ETF inflows reaching a record high of 14 billion yuan ($2 billion). - Investment in gold bars and coins also increased by 62% year-on-year, marking the strongest second-quarter performance since 2013. However, gold jewelry demand hit a low not seen since 2009, impacted by rising gold prices and economic slowdown. - The World Gold Council's CEO for China expressed cautious optimism for the second half of the year, citing potential increased demand for safe-haven investments due to declining domestic interest rates and pressure on local assets.

- Federal Reserve Chair Jerome Powell signaled that interest rate cuts could begin as early as September, provided the U.S. economy continues on its expected path. - While keeping rates steady at 5.25%-5.50%, the Fed's statement indicated a softening stance on inflation and a more balanced view of employment risks. Powell emphasized that rate cut decisions would be based solely on economic data and progress towards the 2% inflation target, not political considerations. - This potential shift in monetary policy comes after more than two years of battling inflation and could have significant implications for the economy and the upcoming presidential election.

- Hamas leader Ismail Haniyeh was assassinated in Tehran, sparking fears of retaliation against Israel and escalating the conflict in Gaza into a broader Middle East war. - The attack, presumed to be carried out by Israel, occurred hours after Haniyeh attended Iran's presidential inauguration. Israel has neither confirmed nor denied involvement. Haniyeh, who was based in Qatar and involved in ceasefire negotiations, was killed by a missile strike in a state guesthouse. - Gold is up above $2,450/oz as of Thursday morning

- Federal Reserve Chair Jerome Powell indicated that the central bank is likely to cut interest rates in September, provided inflation continues to show improvement. - This decision is influenced by growing concerns about potential weakening in the labor market. While Powell expressed confidence in the Fed's readiness to reduce borrowing costs from their current two-decade high, he emphasized that any rate cut would depend on favorable economic data in the coming months. - The Federal Open Market Committee has kept the federal funds rate at 5.25% to 5.5% since July last year, balancing inflation control with labor market stability.

First Majestic and Endeavour Silver saw their shares plunge today as rising costs eroded the higher metals prices received during the quarter. First Majestic was down over 15%, while Endeavour Silver fell more than 20% after today's earnings release...

The Federal Reserve maintained its benchmark interest rate at a 23-year high of 5.25% to 5.5% but hinted at potential rate cuts in the near future. While no immediate changes were made, the Fed's statement and Chair Jerome Powell's comments suggest that recent progress in lowering inflation could pave the way for rate reductions, possibly as soon as September. The Fed is closely monitoring both inflation trends and labor market conditions to determine the timing and pace of future rate cuts.

Gold prices remain resilient despite broader commodity sector declines, driven by strong demand from family offices, wealthy individuals, and central banks. The World Gold Council reported record Q2 demand, with gold reaching new price highs. While consumer demand in the West has weakened, Eastern markets show robust interest in bars, coins, and ETFs. The prospect of earlier US interest rate cuts has reignited investor interest, leading to increased ETF holdings. This combination of factors supports gold's current strength and positive outlook for the remainder of 2024.

Gold prices rose by about 1% on Tuesday, driven by investor optimism that the U.S. Federal Reserve may hint at future interest rate cuts during its policy meeting this week. Spot gold increased to $2,403.47 per ounce, while U.S. gold futures settled at $2,451.9. Analysts suggest that potential rate cuts in the U.S. and Europe, along with economic uncertainties, are supporting gold prices. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, making it more attractive to investors. The market is also closely watching upcoming U.S. employment data for further cues.

Israel conducted a strike in Beirut, Lebanon, claiming to have killed Hezbollah's top military commander, Fu'ad Shukr. The Israeli Defense Forces (IDF) stated that Shukr was responsible for recent attacks on Israel, including a deadly rocket strike in the Golan Heights that killed 12 people, mostly children. T his action marks a significant escalation in the ongoing tensions between Israel and Hezbollah since October 7, 2023. The strike resulted in at least three deaths and 74 injuries, according to Lebanese authorities. While Israel asserts the strike was retaliatory, Hezbollah had previously denied involvement in the Golan Heights attack. The incident has raised concerns about potential further escalation in the region.

The Bank of Japan (BOJ) has taken a significant step towards normalizing its monetary policy by raising its short-term interest rate to 0.25% and announcing plans to gradually reduce its bond-buying program. This decision, made unanimously at the end of a two-day policy meeting, marks a shift from the bank's long-standing ultra-loose monetary policy. The BOJ plans to halve its monthly bond purchases to 3 trillion yen by early 2026, signaling a move towards quantitative tightening. While this move is seen as more aggressive than expected, some analysts suggest it may not be enough to significantly strengthen the yen, especially in light of potential Federal Reserve decisions.

Today, Mike Maloney dives deep into the shocking reality of US debt, revealing that each taxpayer owes around $750,000.

Home prices in the US continued to rise in May 2024, driven by tight housing supply despite high mortgage rates. The S&P CoreLogic Case-Shiller national measure showed a 5.9% annual increase, with New York experiencing the largest gain among 20 cities at 9.4%. While price growth has slowed slightly from April, the market remains competitive due to limited inventory. The ongoing affordability challenges, combined with interest rates near 7%, are impacting buyer activity and slowing home sales. Future price trends will likely depend on potential Federal Reserve rate cuts and seller behavior.

The Conference Board's Consumer Confidence Index rose unexpectedly to 100.3 in July 2024, up from 97.8 in June, despite ongoing concerns about inflation and high interest rates. While consumers remain positive about the labor market, they express worries about elevated prices and economic uncertainty. The Present Situation Index declined, but the Expectations Index improved, though it remains below the recession threshold. Inflation expectations held steady at 5.4%, and consumers' assessments of their current and future financial situations weakened slightly.

Silver prices are currently under pressure, but UBS analysts expect a rebound due to anticipated improvements in the macroeconomic environment. Despite recent declines, they predict silver will rise as high as 18% in the coming months, driven by factors such as falling interest rates, a peaking US dollar, and increasing industrial demand, particularly in renewable energy sectors like photovoltaic cells.

Despite a slump in jewelry demand due to soaring gold prices, wealthy Asian investors are driving significant gold purchases, particularly in the over-the-counter market, leading to the highest second-quarter demand in 25 years. The World Gold Council reported a 4% year-over-year increase in total gold demand, largely fueled by concerns over credit and financial conditions. While jewelry consumption fell sharply, investment in gold bars and coins rose, indicating a shift in consumer behavior. Central banks also continued to buy gold, contributing to the overall demand despite rising prices.

China recently held a gold conference that highlighted significant challenges in its gold market, including a slight increase in domestic gold production and a notable decline in jewelry consumption due to rising prices. While gold imports surged, the People's Bank of China has not made recent purchases, raising questions about its future buying strategy. The report indicated that overall gold consumption fell by 5.61% year-over-year, with jewelry purchases plummeting by 27% in the first half of 2024. Despite these challenges, investment in gold bars and coins increased, reflecting ongoing interest amid economic uncertainty.

The World Gold Council's Q2 2024 report shows mixed trends in gold demand. While overall demand increased by 4% year-over-year to a record high for Q2, driven by over-the-counter investment and central bank purchases, consumer demand weakened. Jewelry consumption fell sharply due to record gold prices, but technology sector demand increased. Regional differences persisted, with stronger investment demand in Eastern markets contrasting with declines in the West. Despite these variations, gold supply grew, with mine production reaching a Q2 record and recycling supply responding to higher prices.

This week, three major central banks will make policy announcements, with the Bank of Japan's decision potentially having the most significant market impact. Traders are focused on the BOJ's potential interest rate hike and reduction in bond purchases, which could strengthen the yen and affect global markets, particularly U.S. tech stocks. However, experts suggest that the BOJ may disappoint hawkish expectations, potentially limiting market volatility. The outcomes of these central bank meetings, especially the BOJ's, could influence currency markets, carry trades, and global stock market sentiment.

The U.S. national debt has surpassed $35 trillion for the first time as debates over taxes and spending loom. Despite this growing debt, presidential candidates have offered few solutions, and deep political divisions make it difficult to address the primary drivers of the debt, such as Social Security and Medicare. Rising interest rates and unexpected costs from federal programs have exacerbated the situation, with projections indicating the debt could reach $56 trillion by 2034.