Precious metals news

JPMorgan has expressed a long-term bullish outlook on gold and silver, citing structural factors that support their value. Meanwhile, palladium prices have continued to rise, driven by strong demand and supply constraints. This positive sentiment towards precious metals comes amid broader market uncertainties and economic conditions that favor safe-haven assets.

U.S. home prices continued to rise in April but at a slower pace, reflecting the impact of high mortgage rates on buyer demand. The S&P CoreLogic Case-Shiller 20-city house price index increased 0.4% from March and 7.2% year-over-year, down from the previous month's 7.5% annual gain. While prices reached new record highs, the deceleration in growth indicates the housing market's struggle with affordability issues due to elevated interest rates and limited inventory. San Diego led with the highest annual price increase of 10.3%, while Portland saw the slowest growth at 1.7%.

Federal Reserve Governor Michelle Bowman cautioned against premature interest rate cuts, citing potential upside risks to inflation. She emphasized the need to maintain current rates due to economic uncertainties, particularly highlighting concerns about immigration policies' impact on the labor market and rental prices. Bowman stressed that current conditions do not warrant a reduction in policy rates and expressed openness to further rate increases if inflation progress stalls or reverses.

McDonald’s new $5 Meal Deal, debuting Tuesday, offers a McChicken or McBurger, chicken nuggets, fries, and a drink for less than a Big Mac, highlighting a shift in the fight against inflation. This promotion comes as the U.S. inflation rate slows, with prices up 3.3% in May compared to 4% the previous year and 8.6% the year before that. Despite this, many Americans still feel the cost of living is too high, leading to reduced consumer spending and declining restaurant visits.

Gold prices are up nearly 14% this year and are approaching record highs. Despite ongoing geopolitical conflicts and expectations for a Federal Reserve rate cut, financial advisors still recommend adding gold to portfolios. According to the latest Gold Perceptions Survey by State Street Global Advisors and the World Gold Council, almost 30% of surveyed advisors plan to increase their gold allocation in the next 12 to 18 months, while nearly two-thirds will maintain their current levels. Less than 10% intend to reduce their gold exposure. Most advisors allocate between 1% and 4.9% of their assets to gold, primarily through physically backed gold ETFs. Gold is valued as a safe haven during turmoil and benefits from a weakening U.S. dollar when the Fed cuts rates.

The message is loud and clear: The Japanese economy has no tolerance for higher interest rates after the Bank of Japan has kept them artificially near zero for decades. Meanwhile, as the largest holders of US Treasury debt, Japan’s economic well-being has become inextricably dependent on the capricious whims of Federal Reserve monetary policy — and both of those chickens have now come home to roost. 

In the final trading week of the month, quarter, and first half of 2024, investors will focus on key inflation data and select corporate earnings. The Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation measure, is expected to show a 0.1% rise in core prices for May, marking the slowest monthly increase since last November. Annual core PCE inflation is projected to be 2.6%, the lowest since March 2021. Earlier CPI data indicated cooling inflation, reinforcing expectations of a Fed rate cut later this year. Earnings reports from FedEx, Micron, and Nike will also be key highlights.

A new analysis reveals that former President Trump increased the national debt by roughly twice as much as President Biden. This fiscal outlook poses challenges for the upcoming election winner, who will inherit high debt levels amidst rising interest rates and demographic pressures on retirement programs. Both presidents contributed significantly to the debt, but Trump's tenure saw a larger increase, mainly due to tax cuts and spending deals. Trump's policies added $8.4 trillion over a decade, while Biden's added $4.3 trillion. Excluding COVID relief, Trump's increase is $4.8 trillion compared to Biden's $2.2 trillion.

Oil prices edged higher on Monday, supported by rising equity markets and a weaker US dollar. West Texas Intermediate crude hovered around $81 per barrel, recovering from Friday's decline. The softer dollar made dollar-denominated commodities more attractive to investors. Despite recent fluctuations, crude remains on track for a monthly gain, driven by increasing gasoline demand in the US and robust air travel volumes. The market structure indicates tightening supply, while geopolitical risks in the Middle East continue to influence price movements. Analysts remain optimistic about the oil market, expecting a deficit in the third quarter to further tighten the balance.

Ocean shipping prices are surging towards pandemic-era highs due to a combination of factors, including vessel diversions around the Red Sea, port congestion, and the approaching peak shipping season. The Houthi rebel attacks in the Red Sea have effectively closed the Suez Canal since late last year, causing disruptions that extend voyage times and strand containers at ports worldwide. This has led to growing ship backups off the coasts of several Asian countries and in European ports. The average global cost of shipping a 40-foot container has more than tripled since last June, reaching $4,119 in mid-June 2024. While not yet at pandemic peak levels, rates from Asia to the U.S. East Coast have doubled from normal levels, causing concern among importers and exporters about potential further increases as demand picks up in the coming months.

Canada's main stock index, the S&P/TSX composite, started the week on a positive note, rising 1.2% on Monday. The increase was primarily driven by gains in materials and utilities stocks, with the energy sector also contributing due to stronger oil prices. Investors are closely watching for upcoming domestic and U.S. inflation data, as well as commentary from Federal Reserve officials. The market's performance reflects anticipation of potential interest rate cuts, with gold prices benefiting from this sentiment as a hedge against the U.S. dollar.

Gold prices edged up on Monday as U.S. Treasury yields eased, with investors focusing on upcoming inflation data that could influence the Federal Reserve's interest rate decisions. Spot gold rose 0.3% to $2,327.58 per ounce, while U.S. gold futures increased 0.4% to $2,340.00. Analysts suggest that if U.S. economic data confirms a soft landing, it could allow the Fed to cut interest rates, potentially supporting gold prices to reach $2,600 per ounce by year-end.

Bank of America analysts predict that gold prices could reach $3,000 per ounce within the next 12-18 months, driven by factors such as increased non-commercial demand, potential Federal Reserve rate cuts, and ongoing central bank purchases. They note that while current market conditions support an average price of $2,200 per ounce, a significant rise in investment demand could push prices higher. Additionally, concerns about the US Treasury market may lead to further diversification into gold by central banks and private investors.

If Americans are worried about more electric grid shortages or blackouts... don't be.  The U.S. plans to more than double its utility-scale battery storage this year to save the day... or will it?  I was pretty surprised to find out the amount of planned utility-scale battery storage to be added...

The Comex report for last month correctly identified a potential big move in silver while the same report two months ago preceded a massive up move for the price of gold. The data this month is not as obvious or compelling, but it is clear the stress on the Comex continues to build.

Gold closed this week slightly down but remains up 12.5% year-to-date. Silver is up 25% year-to-date. This week's political news show governments around the world moving right and central banks adding on more gold.

While demand for Gold as an investment has risen greatly historically, and particularly over the past year, recent technological discoveries provide powerful potential for Gold to increase in prominence as an industrial resource. While gold does provide an excellent and relatively safe store of value, its industrial use could rapidly increase its price and universal desirability. Critics of gold have often commented that its prices may be higher than their “market value” because of human convention and tastes. They have created the idea that the use of gold as an investment is regressive and little more than a callback to a bygone era. Their concerns are increasingly neutralized as gold becomes far more widely used in many crucial industries.

The next week is important for the precious metals as it could set the stage for the trend over the next several months.  Interestingly, Jeff Christian of CPM Group believes gold and silver could rally briefly until the end of June...

The U.S. abandoned the gold standard in 1933. But ninety-one years later, in the midst of an inflation crisis, investors are flocking back to the original.
The U.S. government is set to print about $200 billion in bills in 2024. That’s $548 million for every day. Despite the rampant inflation reducing consumer purchasing power around the country, the Fed continues to exacerbate the existing crisis by flooding the money supply. Following inflation peaks during COVID-19, rates remain high at a projected 2.3% in 2024. With an average savings account interest rate of only .45%, dollarized savings are steadily losing their value. But while the dollar loses its worth, the value of gold is skyrocketing due to a critical distinguishing factor: natural scarcity.

India's gold market saw a 12% year-to-date increase in prices, with demand slowing after the Akshaya Tritiya festival. The gap between domestic and international gold prices narrowed, and the RBI increased its reserves by 30.6 tons, reaching a record 834.2 tons. Gold ETFs saw positive inflows in May, and imports consistently rose. While gold hit an all-time high in mid-May before slightly correcting, it remains one of the best-performing assets. Future demand is expected to focus on the festival season in Q3, with continued interest in bars and coins.