Precious metals news

In this insightful video, Alan Hibbard and Tavi Costa of Crescat Capital delve into the potential impacts of interest rate cuts on gold and silver

The U.S. labor market is showing signs of cooling, raising concerns among economists and Federal Reserve officials about potential economic challenges ahead. Key indicators such as fewer job openings, decreased employee turnover, and a slight uptick in unemployment suggest the end of the post-pandemic tight labor market. While strong hiring has helped the economy withstand aggressive interest rate hikes, there are fears that further softening in labor conditions could jeopardize economic growth. With inflation still above the Fed's target, upcoming labor reports will be crucial in assessing the market's direction and potential implications for monetary policy.

Gold prices have retreated slightly from record highs but remain above $2,400 per ounce, supported by safe-haven demand and expectations of U.S. interest rate cuts. However, China's gold imports have slowed significantly, with April purchases dropping 30% from March due to record prices and seasonal factors. This decline affects both investor and central bank demand in China, a key driver of recent gold strength. Meanwhile, copper prices continue to rise, hitting new records amid supply concerns and M&A activity. Analysts suggest that while more investors are drawn to gold, the market may be due for a correction before further price increases.

As Americans prepare for Independence Day celebrations and the start of the summer travel season, they face significantly higher gasoline prices compared to previous years. Since 2016, gas prices have nearly doubled, and they've almost quadrupled since 2000. Although prices have eased slightly from the record highs of mid-2022, they remain historically high for US standards. This trend is likely to impact travel plans and dampen the enthusiasm for the holiday, as many Americans traditionally embark on long-distance trips during this period. The persistent high fuel costs reflect a broader trend of increasing gasoline prices over the past decade, potentially causing financial strain for travelers during what is typically a festive season.

Dollar loan volumes in Asia (excluding Japan) have plummeted to a 14-year low in the first half of 2024, dropping 44% to $45.5 billion. This decline contrasts sharply with the global trend, where US-currency loan sales increased by 37%. The slump in Asian dollar loans is attributed to higher US interest rates, which have made borrowing in dollars less attractive for Asian companies. As a result, many firms are turning to alternative financing options, such as local-currency bonds and bank financing, which offer more favorable borrowing costs. This shift highlights the growing maturity of local capital markets in some Asian countries and the increasing flexibility of borrowers in choosing funding sources.

Gold prices experienced a slight decline in Asian trading on Tuesday, remaining within a narrow range as investors await key economic indicators and statements from Federal Reserve officials. The precious metal has been under pressure due to concerns about high U.S. interest rates, which have strengthened the dollar and Treasury yields. Traders are particularly focused on Fed Chair Jerome Powell's upcoming speech, the release of June's Fed meeting minutes, and Friday's nonfarm payrolls data. Despite increased expectations for a September rate cut, gold has shown limited response, highlighting the market's cautious approach amid economic uncertainty.

Before the precious metals make another BIG MOVE HIGHER, we will likely see a correction first.  This is especially true with the high commercial net short position in Gold, Silver, and Bitcoin.  However, Bitcoin has already fallen $10,000 from its highs and may have further to go...

French markets have found some relief after the first round of its latest election, with stocks recovering somewhat and bond yields falling after reaching a 12-year high. But no matter which side wins in France, the market is afraid that an increase in unsustainable spending could be the common denominator. 

Recent studies reveal a concerning trend among Gen Z, showing a higher willingness to engage in digital fraud compared to other generations. This inclination is attributed to persistent financial challenges, including rising costs of living, student debt, and stagnant wages. The "fraud triangle" theory suggests that Gen Z's economic anxiety provides the incentive and rationalization for fraudulent behavior. While most Gen Zers resort to legitimate money-saving tactics, a significant portion admits to considering or participating in first-party fraud, highlighting the severe impact of economic pressures on this generation's ethical boundaries.

China has introduced new measures to strengthen its control over rare earth metals, declaring them state property and implementing a traceability database from October 1. As the world's largest producer and refiner of these critical resources, China's actions have significant implications for global supply chains in technology, automotive, and renewable energy sectors. This move, along with previous export restrictions on related technologies and materials, has prompted concerns about potential supply disruptions and sparked efforts by the US and EU to secure alternative sources of rare earth metals to reduce dependence on China.

Major investment firms like Schroders and UBS Global Wealth Management are advocating for gold as a key safe-haven asset in 2024, citing concerns over excessive US government spending, geopolitical uncertainty, and potential sovereign debt risks. Gold is seen as a preferred hedge against fiscal, geopolitical, and inflation risks, offering better diversification benefits than traditional safe havens like US Treasuries. The precious metal's appeal is further bolstered by expectations of Federal Reserve rate cuts, continued central bank purchases, and its potential to benefit from concerns about US debt and dollar stability.

The idea of ‘wage slavery' unfairly compares today's suffering job market to historical chattel slavery, using outdated 19th-century arguments to criticize modern work. This oversimplification overlooks the significant improvements in workers' freedom and their right to work.  Some will choose to work at a lower wage than accept a worse alternative.

Oil prices increased on Monday, driven by expectations of peak summer demand and OPEC+ production cuts. Brent crude and WTI futures both rose, continuing their gains from June. Analysts predict supply deficits in the third quarter due to increased transportation and air-conditioning demand. However, rising output from non-OPEC+ producers and caution over potential market volatility ahead of upcoming elections have limited price gains. Investors are also closely watching for upcoming economic indicators, including remarks from the Federal Reserve Chair and U.S. employment data, which could influence market sentiment.

US stocks wavered at the start of July as investors digested mixed economic signals and prepared for upcoming reports. The ISM manufacturing index showed continued contraction in June, albeit with moderating prices. Traders are reassessing strategies in light of recent political developments, including the French election and the US presidential race. While European markets rallied on reduced fears of extreme policies in France, US markets remained cautious. Tech stocks, particularly Nvidia, faced pressure, while Treasury yields rose slightly. Investors are now focusing on upcoming economic data, especially Friday's US jobs report, to gauge the market's direction.

Gold prices experienced a slight decline in Asian trading on Monday, despite increased expectations for U.S. interest rate cuts. The precious metal remained within its June trading range, showing limited response to a weakening dollar. Traders are awaiting further economic cues and insights from the Federal Reserve, including a speech by Fed Chair Jerome Powell and the release of June meeting minutes. While the prospect of lower interest rates typically supports gold prices, the market's reaction has been muted, reflecting ongoing uncertainty in the economic outlook.

The Six Billion Dollar Gold Scam podcast, hosted by Suzanne Wilton, delves into the infamous Bre-X Minerals scandal of the 1990s. The story revolves around a Canadian mining company's false claim of discovering a massive gold deposit in Indonesia, which led to soaring share prices and widespread investment. The podcast explores the mysterious disappearance of chief geologist Michael de Guzman, the role of corrupt practices in the remote location, and the devastating consequences for investors when the fraud was exposed. Despite billions in losses, no one was successfully prosecuted for this elaborate deception that captivated the global mining industry.

Amid growing economic uncertainty and currency instability in Southeast Asia, consumers in Vietnam and Thailand are flocking to buy gold as a safeguard against inflation and currency devaluation. This surge in demand, driven by fears of economic instability and geopolitical tensions, has led to long queues outside banks and rising gold prices in the region. Experts view this trend as a protective measure against the weakening of local currencies against the US dollar and the impact of inflation on purchasing power.

Few are aware of a surprising development taking place in the U.S. Shale Oil Industry.  I plan to do a Metals Update tomorrow when the new month and quarters start, but I wanted to share this because it reveals an interesting situation happening in the U.S. Shale Oil Industry...

Please note: the CoTs report was published 06/28/2024 for the period ending 06/25/2024. “Managed Money” and “Hedge Funds” are used interchangeably.
The Commitment of Traders report is a weekly publication that shows the breakdown of ownership in the Futures market. For every contract, there is a long and a short, so the net positioning will always be zero, but the report shows who is positioned long or short. Historically, Hedge Funds (Managed Money) dominate the price action in both Gold and Silver.

While the Federal Reserve's inflationary policies are publicized as protecting the American people, they are causing the American dream of homeownership to slip away. By raising the federal funds rate to combat their self-inflicted inflation, the Fed has driven up mortgage costs, making it harder for aspiring homeowners to secure a place in the housing market. These policies have resigned aspiring homeowners to a future of perpetual renting.