Precious metals news

UBS analysts predict a potential short-term decline in silver prices due to a strong US dollar and reduced speculative positions, but expect a rebound within 6-12 months. This optimism is based on strong industrial demand, particularly from the photovoltaic sector, and a slight contraction in mine output. The anticipated Federal Reserve rate cuts later this year are expected to weaken the dollar, potentially boosting silver prices. UBS suggests that investors less bullish on silver consider selling downside risks from $26.1/oz over three months.

The Federal Reserve's preferred inflation measure, the core personal consumption expenditures (PCE) price index, showed a slowdown in May, increasing by just 0.1% month-over-month. This deceleration, coupled with rebounding household spending and solid income growth, suggests that inflation might be cooling without significantly impacting consumer activity. This data supports the possibility of interest rate cuts later in the year and provides some reassurance to Fed officials amid recent signs of economic slowdown.

U.S. oil prices are approaching a two-month high and are set for a third consecutive weekly gain, driven by growing concerns of a potential conflict between Israel and Hezbollah. This situation has raised fears of a direct confrontation with Iran, an OPEC member, leading to increased market volatility. The Pentagon's move to position military assets near Lebanon for potential American evacuations has further heightened tensions. As a result, both U.S. crude (West Texas Intermediate) and global benchmark Brent have reached their highest levels since late April.

Gold prices are showing a slight increase and are on track for their third consecutive quarterly gain. Investors are closely watching upcoming U.S. inflation data for insights into the Federal Reserve's future interest rate decisions. Despite some fluctuations, gold has maintained its strength, supported by various factors including rate cut expectations, China's economic stimulus, and geopolitical tensions. Analysts remain optimistic about gold's potential to reach higher levels by year-end, barring any significant negative data.

Gold prices remained relatively stable around $2,300 an ounce in Asian trading on Friday, with slight fluctuations as traders awaited key inflation data. The market's focus is on the upcoming PCE price index, the Federal Reserve's preferred inflation gauge, which could influence future interest rate decisions. Gold's performance has been rangebound due to uncertainty over U.S. interest rates, with high rates generally unfavorable for non-yielding assets like gold.

The May 2024 economic data shows a mixed picture of the U.S. economy. While inflation, as measured by the PCE price index, rose 2.6% year-over-year, meeting expectations, personal income and spending saw modest increases. The Core PCE, excluding food and energy prices, also rose 2.6% annually, indicating persistent inflationary pressures. Despite these challenges, real consumer spending grew, suggesting continued economic expansion, albeit at a moderate pace. These figures present ongoing challenges for policymakers as they balance growth with inflation control.

As housing affordability declines due to rising home prices, many potential buyers are turning to the rental market. Bruce McNeilage, CEO of Kinloch Partners, notes that people are postponing home purchases until interest rates decrease, leading to increased demand for rentals. This trend is causing longer rental periods for many individuals.

Gold closed the week about the same at $2,326 as silver closes down $0.40 at $29.13.  JD and Joel explain what's behind the institutional demand for gold, recent upswing in money supply, and the catastrophic presidential debate.

With rising interest rates, Americans are now paying a record amount of interest, which is cutting into their household expenditures.  U.S. Households now spend $1.1 trillion a year to service their mortgage, credit card, and other commercial debt...

President Joe Biden is expected to argue in tonight's debate that Donald Trump's proposed policies could exacerbate inflation and harm the U.S. economy. This "Trumpflation" concept has gained traction in academic and political circles, with 16 Nobel Prize-winning economists recently warning that Trump's plans for tariffs, tax cuts, and strict immigration policies could slow economic growth and reignite inflation. However, it remains uncertain whether voters will find this argument convincing. The Biden campaign is leveraging this narrative, emphasizing that Trump's policies would benefit the wealthy at the expense of working Americans.

Jefferies Financial Group's recent earnings report, showing a 59% increase in investment banking revenue, signals a potential resurgence in dealmaking activity on Wall Street. This positive trend is expected to extend to larger banks like JPMorgan Chase and Citigroup, with executives from these institutions forecasting significant increases in investment banking fees for the upcoming quarter. The revival in investment banking comes at a crucial time, offsetting the impact of higher interest rates on traditional consumer banking margins. This upturn in dealmaking activity is seen as a welcome development after two years of uncertainty and false starts in the sector.

Join Alan Hibbard of GoldSilver.com and Tavi Costa from Crescat Capital as they dive deep into the implications of a rapidly evolving AI-driven world

The Federal Reserve's annual stress tests have resulted in unexpected increases in capital requirements for several major banks, according to JPMorgan analyst Vivek Juneja. Banks like Goldman Sachs, Wells Fargo, Bank of America, and others face significant boosts to their stress capital buffers, which will raise their overall capital requirements. This outcome has surprised the market, contradicting expectations of a routine "copy and paste" scenario. The results have led to mixed reactions in bank stocks, with some rising slightly while others dipped. Banks are required to wait until Friday to announce any dividend or stock buyback plans resulting from these stress tests.

Poland has experienced a surge in gold investments, driven by geopolitical tensions and economic uncertainties. The trend began during the COVID-19 pandemic and intensified following Russia's invasion of Ukraine. Many Poles view gold as a safe-haven asset, offering both financial security and psychological comfort in troubled times. The ongoing war in Ukraine and migration issues at the Belarus border have sustained this demand. While NATO membership provides some reassurance, concerns persist about potential Russian expansion. Gold's appeal lies in its portability and perceived stability, with some investors allocating a portion of their assets to precious metals as a precautionary measure.

The Global Precious Metals MMI (Monthly Metals Index) rose by 2.57% month-over-month but remained largely sideways overall. Platinum and silver saw price increases in May before retreating in early June, which pulled the index down. Gold and palladium prices stayed flat. Palladium has been trading sideways since Q2, failing to surpass its March 2024 high. Platinum also declined back to its spring levels after a brief rise in late May, though recent trends suggest a potential short-term uptrend. Overall, uncertainty persists in the precious metals markets regarding long-term trends.

Goldman Sachs Research highlights commodities as a robust hedge against inflation, outperforming stocks and bonds during inflationary periods. A 1 percentage point surprise increase in US inflation typically results in a 7 percentage point real return gain for commodities, while stocks and bonds decline by 3 and 4 percentage points, respectively. Commodities provide protection against negative supply shocks and lower stock returns due to rising prices and slowing GDP growth. Historical analysis of five inflationary periods over the past 50 years shows that commodities consistently outperformed equities and bonds, regardless of the inflation drivers.

A recent survey by the Federal Reserve Bank of Philadelphia reveals growing financial concerns among US consumers, including high earners. Over a third of respondents expressed worry about making ends meet in the next six months, up from 28.7% a year ago. Notably, even among those currently able to pay their bills in full, more than a quarter are concerned about the near future. High earners, particularly those making $150,000 or more, showed the highest levels of concern, with about 30% worried about their finances in the coming six months. The survey also indicates that many consumers, including high-income earners, have resorted to cutting back on spending to manage financial stress.

The latest US labor market data shows a mixed picture, with recurring jobless claims rising to 1.84 million in mid-June, the highest since late 2021, suggesting longer job search periods for the unemployed. While initial claims slightly decreased to 233,000, the overall trend indicates a softening labor market. The unemployment rate has increased to 4%, and hiring has slowed significantly compared to the post-pandemic recovery period. Economists and Federal Reserve officials are closely monitoring these trends to assess the labor market's resilience and potential future developments.

As President Joe Biden and former President Donald Trump gear up for the 2024 presidential debates, a significant disparity exists between the actual health of the U.S. economy and the public's negative perception of it. Despite the Federal Reserve's aggressive interest rate hikes, the economy is thriving with low unemployment, rising real wages, and strong GDP growth. Wall Street reflects this optimism with booming tech, low equity volatility, and record-high stock markets. However, public sentiment remains pessimistic, with surveys showing Americans favoring Trump's economic approach over Biden's.

Zimbabwe's central bank has maintained its key interest rate at 20%, anticipating that inflation will remain subdued and fall below 5% by year-end, thanks to its new bullion-backed currency, the ZiG. Governor John Mushayavanhu stated that the monetary policy committee aims to sustain current economic stability. The ZiG, introduced in April, has helped reduce monthly consumer prices, which fell by 2.4% in May. Despite this, the currency weakened to a record low of 13.68 against the dollar.