Precious metals news

Gold prices dropped over 1% on Monday due to increased risk appetite in the equity markets and profit-taking by investors following a sharp rally. Spot gold fell to $2,357.88 per ounce, while U.S. gold futures settled at $2,363.50. The decline comes after gold reached its highest level since May 22 on Friday, driven by expectations of potential interest rate cuts by the U.S. Federal Reserve in September. Bob Haberkorn, a senior market strategist at RJO Futures, attributed the drop to profit-taking and strong performance in equities, which hit record highs. Despite the current dip, Haberkorn anticipates higher gold prices based on predictions of further Fed rate cuts later in the year.

Bitcoin has experienced a significant drop of over 10% in the past week, falling from around $63,000 to just under $54,000. Despite this decline, Grayscale's Head of Research, Zach Pandl, suggests that a rebound may still be possible. Factors influencing Bitcoin's price include Germany's ongoing sale of seized Bitcoin, which continues to exert downward pressure, and potential bullish catalysts such as a dovish shift from Fed Chair Jerome Powell and the anticipated debut of Ethereum ETFs. While investors have shown interest in buying the dip, pouring over $140 million into Bitcoin ETFs, the continued sell pressure from Germany's remaining $2 billion Bitcoin stash could lead to further downside movements, potentially affecting newer Bitcoin buyers who entered at higher price points.

Federal Reserve Chair Jerome Powell is set to testify before Congress this week, facing pressure from lawmakers on multiple fronts. He will likely defend the Fed's stance on maintaining high interest rates to combat inflation, despite growing impatience for rate cuts. Powell will also address concerns about the Fed's plan to increase capital requirements for major banks. As his last scheduled public address to Congress before the presidential election, Powell must navigate these issues while asserting the Fed's political independence. Recent economic data showing a slowdown in inflation may influence the discussion, but Powell is expected to maintain a cautious approach to potential rate cuts.

The International Monetary Fund (IMF) reports a gradual decline in the US dollar's share of global foreign reserves as numerous countries, particularly those in the ASEAN and BRICS alliances, adopt 'de-dollarization' strategies. These nations are moving away from the US dollar in favor of alternative currencies for various political, economic, and geographical reasons. The article lists 12 countries actively reducing their reliance on the US dollar, signaling a shift in the global financial landscape and potentially challenging the dollar's long-standing dominance as the world's primary reserve currency.

Citi Research analysts predict an aggressive series of interest rate cuts by the Federal Reserve, starting in September 2024 and continuing through July 2025. They anticipate eight consecutive 25 basis point cuts, totaling a 200 basis point reduction, which would lower the benchmark rate from 5.25%-5.5% to 3.25%-3.5%. This forecast is based on recent economic indicators suggesting a slowdown, including a reversal in the service sector gauge and rising unemployment. Citi cites dovish comments from Fed Chair Powell and various signs of economic weakness, particularly in the job market, as supporting their prediction. They also warn of the potential for a sharper economic downturn and the possibility of triggering the "Sahm Rule" recession indicator if unemployment continues to rise at its current pace.

The upcoming U.S. inflation report for June, set to be released on Thursday, is poised to be a pivotal event for financial markets. This report could significantly influence the Federal Reserve's decision on interest rate cuts, potentially impacting the timing of the first cut. A lower-than-expected inflation reading might encourage Fed Chair Jerome Powell to signal a rate cut in September, or even open the possibility of a cut as early as July. Conversely, a higher-than-anticipated inflation figure could halt the current stock market rally. The report's importance is heightened by its potential to affect various market sectors, including stocks, Treasury debt, and even the presidential election race, making it a focal point for investors and economists alike.

BCA Research's chief global strategist, Peter Berezin, predicts a 32% drop in the S&P 500 by 2025 due to an impending U.S. recession. Berezin argues that the Federal Reserve's delayed approach to cutting interest rates will fail to prevent an economic downturn, which he expects to begin in late 2024 or early 2025. This bearish outlook challenges the prevailing "soft-landing" narrative, suggesting that rising unemployment and tightened credit conditions will curb consumer spending, exacerbating the recession. Berezin anticipates that the Fed will only significantly loosen financial conditions once the recession becomes evident, by which time it may be too late to avert a market crash.

Consumer debt in the United States has continued to rise, reaching $17.1 trillion in 2023, up from $16.38 trillion in 2022, according to an Experian study. This trend persists across all regions and generations, despite a brief decrease during the COVID-19 pandemic. However, experts like Joseph Mayans from Experian suggest that when adjusted for recent rapid income growth, overall debt loads remain below pre-pandemic levels and are historically low. While the growth rate of consumer debt slowed in 2023, it still indicates an ongoing pattern of increased borrowing among Americans, with credit card debt being a particular area of concern for some analysts.

India's central bank has significantly increased its gold reserves in June, adding over nine tons, which marks the largest addition in nearly two years according to World Gold Council analyst Krishan Gopaul. This brings India's total gold reserves to 841 tons, reflecting a 37-ton increase in 2024. The substantial purchase aligns with a broader trend of central banks accumulating gold due to heightened geopolitical and financial risks. This move by India, a major gold buyer alongside China and Turkey, contributes to the ongoing rally in gold prices, which reached record highs in May. The trend is expected to continue, with about 20 central banks planning to increase their gold holdings in the coming year.

Gold prices have retreated slightly after a strong weekly rally, with the market focusing on central bank purchasing activities. While the People's Bank of China paused its gold buying for a second consecutive month, India and Poland have added to their reserves. Despite this mixed signal, gold remains near $2,375 an ounce, supported by long-term investor confidence due to economic uncertainties and geopolitical tensions. The market is now anticipating Federal Reserve Chair Jerome Powell's testimony and upcoming U.S. inflation data, which could influence expectations for interest rate cuts and, consequently, gold prices.

Gold prices experienced a slight dip from one-month highs in Asian trading on Monday as investors await key indicators on U.S. interest rates, including Federal Reserve Chair Jerome Powell's testimony and upcoming inflation data. Despite this minor retreat, gold remains near the $2,400 per ounce mark, buoyed by growing expectations of a Fed rate cut in September. The precious metal's recent gains have been driven by weak labor market data, which has increased the likelihood of rate cuts. Traders are now pricing in a 72% chance of a 25 basis point cut in September, up from 59% last week. The market's focus this week will be on Powell's two-day testimony and additional economic cues that could further influence rate expectations and gold prices.

China's central bank has announced the introduction of temporary bond repurchase agreements and reverse repos to enhance open market operations and maintain ample banking system liquidity. This move is seen as a step towards establishing a new interest rate corridor, with the seven-day reverse repo rate as the central guide. The new tools will have overnight tenors and interest rates set 20 basis points below and 50 basis points above the seven-day reverse repo rate. This adjustment aims to give the central bank more flexibility in managing cash conditions and interest rates, particularly in response to high demand for bonds. The change aligns with the central bank governor's recent statement about the seven-day rate's role as the main policy rate.

When the ENERGY CLIFF begins, the Regions and countries with the highest net energy imports will be negatively impacted the most.  In this update, I discuss significant the changes in production and net exports in 2023 vs 2022.  There was clearly one BIG WINNER...

In 2023, the U.S. spent 1.04 trillion dollars on Medicare, which is over $3,000 per citizen. For an inefficient, problem-ridden program, that number is difficult for Americans to stomach.

The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.

Amid record tax receipts, the U.S. still faces a dire fiscal future, with deficit spending predicted to climb from $1.9 trillion in 2024 to a staggering $2.8 trillion by 2034. This unsustainable financial trajectory threatens to cripple the economy with higher taxes, stunted growth, and a devalued currency. The overwhelming debt burden will be passed onto Americans and their families, including the next generation.

In this compelling video, Mike Maloney dives into the controversial actions of central banks and their impact on global wealth distribution.

Gold prices have surged in 2024, reaching record highs despite typically unfavorable conditions such as high interest rates and a strong dollar. This rally is driven by multiple factors, including geopolitical tensions, central bank purchases (especially from emerging economies like China), and anticipated interest rate cuts by the Federal Reserve. The metal's appeal as a safe-haven asset has been bolstered by ongoing conflicts and global uncertainties. Central banks, particularly those in emerging markets seeking to diversify away from dollar-denominated assets due to concerns over potential sanctions, are expected to continue robust gold purchases. This sustained demand, coupled with macroeconomic factors, suggests the gold rally may continue in the near future.

Credit assessment companies S&P Global Ratings and Scope are raising concerns about the continuously increasing debt levels across G-7 nations, particularly in the United States. S&P warns that only significant market pressure could alter the current trajectory of debt accumulation in countries like the US, Italy, and France. This warning comes at a critical time, with two G-7 nations facing elections and following a caution from the Bank for International Settlements about governments' vulnerability to sudden loss of market confidence. The analysts suggest that while sharp market pressures might push governments towards fiscal consolidation, such conditions would also increase the difficulty of implementing necessary budgetary adjustments.

Bitcoin has fallen to its lowest level since February, marking its fourth consecutive decline, due to a combination of factors. These include concerns about potential selling by governments, creditors of the failed Mt. Gox exchange, and struggling crypto miners. The cryptocurrency is now down about 25% from its March record, with the initial excitement around US exchange-traded funds giving way to fears of prolonged high interest rates and political uncertainty. This downturn occurs despite advancing stock markets, highlighting the unique challenges facing the crypto industry. Analysts note a lack of positive buzz in the crypto market and suggest that more dovish monetary policy from the Federal Reserve could help revive the sector.