Precious metals news

The latest Consumer Price Index (CPI) report shows that US inflation has continued to moderate, reaching its lowest annual rate since early 2021. In August, consumer prices rose 2.5% compared to the previous year, down from 2.9% in July. This deceleration in inflation, driven by falling gasoline and used car prices, aligns with economist expectations and brings the rate closer to the Federal Reserve's 2% target. While core inflation, which excludes volatile food and energy prices, remained steady at 3.2% annually, the overall trend suggests that the Fed may consider rate cuts in the near future. However, the timing and extent of these cuts remain uncertain, as policymakers weigh the moderating inflation against other economic factors.

Former President Donald Trump and Vice President Kamala Harris engaged in their first presidential debate on Tuesday in Philadelphia, clashing on various economic issues. The candidates sparred over topics such as tariffs, inflation, and energy policies, presenting their contrasting visions for America's economic future. Their statements on these matters were subjected to fact-checking, revealing a mix of accurate claims and exaggerations from both sides as they sought to appeal to voters ahead of the upcoming election.

Brazilian authorities conducted a major operation against illegal gold mining in the Amazon, targeting a criminal organization that laundered over 3 tonnes of illegally extracted gold using fraudulent documentation. The operation, centered in Para state, involved arrests, search warrants, asset seizures, and the suspension of companies and licenses. This crackdown highlights the ongoing struggle to combat illegal mining and its associated environmental and social impacts in the Amazon rainforest.

Gold's recent strong performance, driven by a 20% year-to-date increase, is likely to continue regardless of the US election outcome due to several factors. These include fiscal concerns, safe-haven appeal during economic uncertainty, potential Federal Reserve rate cuts, geopolitical tensions, and de-dollarization efforts by central banks. Both major US political parties are expected to maintain or expand deficit spending, which could boost inflation and support gold prices. Additionally, gold's historical role as a hedge against economic instability and its consistent outperformance of inflation make it an attractive option for investors seeking to preserve wealth in an uncertain political and economic climate.

Vice President Kamala Harris and former President Donald Trump are set to face off in their first-ever debate in Philadelphia, with economic issues expected to dominate the discussion. The event promises to be contentious, with Trump likely to label Harris as a communist, while Harris is expected to criticize Trump's economic plans as potentially recessionary. Both campaigns have engaged in pre-debate tactics, with Harris's team using billboards and ads to provoke Trump, while Trump's advisors emphasize Harris's inexperience and the unpredictability of debating Trump. The debate's outcome could significantly influence voters' perceptions of both candidates' economic policies and overall fitness for office.

OPEC has revised its global oil demand growth forecast downward for both 2024 and 2025, citing recent data and economic challenges, particularly in China. The organization now expects demand to increase by 2.03 million barrels per day in 2024, down from its previous estimate of 2.11 million bpd. This adjustment reflects concerns about China's economic growth, the real estate sector, and the increasing adoption of cleaner energy alternatives. The downward revision underscores the challenges OPEC+ faces in balancing the oil market and comes amid recent price declines, with Brent crude trading near its lowest levels since March 2023.

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Bank of America has announced an increase in its minimum hourly wage to $24, effective next month, as part of its plan to reach $25 per hour by 2025. This raise, up from $23, translates to an annual salary of approximately $50,000 for full-time employees and reflects the bank's commitment to competitive pay, having raised its minimum wage significantly from $15 in 2017. The move aims to attract and retain talent amid a tightening labor market, with Bank of America emphasizing its role as a leader in employee compensation and benefits.

Gold remains steady as investors await the release of crucial US inflation data, which could influence the Federal Reserve's upcoming interest rate decision. The market anticipates potential rate cuts, with expectations of a 25 or 50 basis point reduction at the Fed's September 18 meeting. Lower interest rates typically benefit non-yielding assets like gold. Additionally, geopolitical tensions, economic uncertainties, and seasonal demand from India and China are expected to support gold prices, with some analysts projecting a rise to $2,600 per ounce by year-end.

HSBC strategists have provided insights into the current precious metals market, highlighting the interconnected dynamics of gold, silver, platinum, and palladium. They suggest that silver's recent rally may not be sustainable without support from gold prices, while palladium faces challenges due to weakening equity markets and economic concerns. Platinum, although potentially undervalued below $900 per ounce, is experiencing sluggish demand, particularly from Asian markets. The analysis emphasizes the distinct factors influencing each metal's performance and the broader economic context affecting their prices.

Gold prices are holding steady around $2,500 an ounce as investors await key US inflation data that could influence the Federal Reserve's decision on interest rate cuts. The precious metal has seen a significant 20% surge this year, driven by central bank purchases and expectations of rate cuts. Upcoming consumer and producer price index figures will be crucial in determining the Fed's next move, with lower inflation potentially encouraging a larger rate cut. Gold's appeal as a non-interest bearing asset and safe-haven investment continues to support its value amid global conflicts and economic uncertainty.

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The Federal Open Market Committee (FOMC) is expected to cut interest rates in its remaining three meetings of 2024, responding to easing inflation and a softening labor market. FOMC policymakers, including Chair Jerome Powell, have signaled a shift towards less restrictive monetary policy. Markets anticipate steady rate cuts through 2025, potentially ending around 3%, though medium-term projections remain uncertain. The key questions now focus on the magnitude of rate cuts and the level at which the FOMC would consider policy no longer restrictive.

Donald Trump, the Republican presidential nominee, has proposed a new economic policy aimed at maintaining the US dollar's global dominance. At a rally in Wisconsin, Trump pledged to impose a 100% tariff on goods from countries that move away from using the US dollar in international trade. This proposal is part of his broader protectionist trade agenda and follows discussions with his economic advisers on ways to penalize nations seeking alternatives to the dollar. Trump argues that the dollar has been "under major siege" for years, despite it still accounting for 59% of official foreign exchange reserves in early 2024.

The Federal Reserve is facing a critical decision on whether to implement a quarter-point or a larger half-point interest rate cut at their September meeting, as recent economic data shows a slowing labor market and cooling inflation. The debate centers on balancing the risk of falling behind the curve and potentially triggering a recession against moving too aggressively. Chair Jerome Powell appears open to a larger cut, while some officials favor a more cautious approach. The decision is crucial for achieving a "soft landing" for the economy and maintaining Powell's legacy. Recent job reports and declining job openings have heightened concerns about the labor market's health, adding urgency to the Fed's deliberations.

China is facing a deepening deflationary spiral that threatens to significantly impact its economy. Consumer prices are barely growing in many sectors, and the GDP deflator is expected to continue declining into 2025, potentially marking China's longest period of deflation since records began. This situation is exacerbated by falling wages and weak demand, leading to concerns about a cycle of reduced spending, decreased corporate revenues, and further wage cuts. The scenario draws parallels to Japan's "lost decades," raising alarms about the long-term economic consequences. Despite official reluctance to acknowledge the issue, some prominent figures, including former central bank governor Yi Gang, are calling for immediate policy action to address the deflationary pressures.

Russia is significantly increasing its gold purchases, leveraging a surge in oil and gas revenue to diversify its financial reserves and reduce dependence on the US dollar. The Russian Finance Ministry plans to allocate 172.9 billion rubles ($1.9 billion) for foreign currency and gold purchases over the next month, representing a sevenfold increase in daily purchases. This move is part of Russia's ongoing strategy to strengthen the link between the ruble and gold, creating a new gold standard and insulating its economy from US dollar transactions. As the world's second-largest gold producer, Russia is well-positioned to accumulate the precious metal, with this latest announcement indicating a more aggressive approach to gold acquisition in the coming months.

Silver prices exhibit seasonal patterns that can be valuable for investors. Analysis of historical data reveals recurring trends in silver's performance throughout the year, with certain months consistently showing stronger or weaker price movements. However, recent years (2020-2024) have shown some shifts in these patterns, highlighting the need for investors to consider both long-term historical trends and recent market dynamics. While months like October and June have maintained consistent patterns over time, others like April and December have shown significant changes in recent years. This suggests that while seasonality can be a useful tool for silver investors, it should be combined with current market analysis for a more comprehensive investment strategy.

Goldman Sachs is strongly recommending gold as the top investment choice in the current economic climate. The bank cites gold's unique position as a hedge against financial instability and geopolitical risks, especially in light of expected Federal Reserve interest rate cuts. Gold prices have already seen significant gains in 2024, reaching record highs, and Goldman Sachs predicts further growth to $2,700 per ounce by early 2025. This recommendation is based on factors including global uncertainty, weakening demand for other commodities, and the anticipated return of Western capital to the gold market following potential Fed rate cuts.

The technology sector is experiencing a dichotomy where enthusiasm for artificial intelligence (AI) is masking broader weaknesses across many tech companies. While AI-focused firms like Nvidia and Microsoft have seen significant gains, many other tech businesses unrelated to AI are struggling to recover from a post-pandemic slowdown. Investors and analysts note that traditional tech areas such as software, IT consulting, and electronic equipment production are facing challenges including weak demand and inventory issues. This disparity has led to slower growth rates for many tech companies, particularly evident in small-cap indices where there's no boost from mega-cap groups. The situation highlights a complex landscape where AI excitement overshadows ongoing difficulties in other tech subsectors.