Precious metals news

Goldman Sachs remains "selectively bullish" on commodities like copper, gold, and oil, citing solid demand growth, structural upside in industrial metals and gold, and a reduced geopolitical risk premium for oil. The bank expects total commodity returns to rise from 13% year-to-date to 18% by year-end. They forecast copper could gain 15% to $12,000 per ton and gold could increase 14% to $2,700 per ounce by the end of 2024. Brent oil prices are expected to remain between $75 and $90 per barrel, with value seen in net long oil positions. Investors can track these commodities through exchange-traded funds.

Gold rebounded to the $2,340s on Thursday due to a weaker US Dollar following a downward revision of US GDP growth to 1.3% for Q1, from an initial 1.6%. This revision implies a weaker economy and potentially lower inflation, which could lead to reduced interest rates by the Federal Reserve, benefiting gold by lowering its holding costs. However, gold faces pressure from Fed officials suggesting rates will remain high and higher-than-expected inflation in Europe, particularly in Germany and Spain, reducing the likelihood of further rate cuts by the European Central Bank.

African governments from Zambia, Zimbabwe, Nigeria, and South Sudan are cracking down on street currency dealers to defend their currencies from speculative trading, resulting in bans, arrests, fines, and revised regulations. Despite these efforts, parallel markets with more widely used exchange rates persist. Recently, Ghana joined the crackdown by imposing new rules on street dealers and setting up a task force to enforce compliance, as announced by Governor Ernest Addison.

The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, rose 0.2% in April, meeting expectations. Annually, core PCE increased by 2.8%, slightly above estimates. Including food and energy, PCE inflation was 2.7% annually and 0.3% monthly, also in line with forecasts. This measure is favored over the consumer price index (CPI) due to its broader scope and ability to account for changes in consumer behavior. Despite the slight rise, Fed officials, including Chair Jerome Powell, are concerned about the persistent inflation range.

Gold prices reached a record high of $2,449.89 per ounce, with silver and copper also seeing significant gains. Although these metals have slightly retreated, they remain near their peaks, with analysts predicting further increases over the next year. UBS Bank raised its gold price forecast to $2,500 per ounce by the end of September and $2,600 by year-end, driven by strong Chinese demand and weak US economic data affecting interest rate expectations. High interest rates usually pressure gold by making Treasury bonds more attractive, but UBS remains bullish, expecting gold to continue setting new records.

As silver holds above $30 per oz, Joel and JD discuss disastrous Chicago manufacturing, Howard Marks, Trump's conviction, and the current shortage in platinum.

American-made weapons will soon be bound for Taiwan, American lawmakers are telling Taiwanese President Lai Ching-te, sending shockwaves of uncertainty through electronics and metals markets this week.

Goldman Sachs predicts record-high prices for copper and gold in 2024 due to increased demand from AI and defense sectors. The bank forecasts copper to reach $12,000 a ton and gold to hit $2,700 an ounce. This surge is driven by a "5D Bull Market" involving disinvestment, decarbonization, de-risking, data centers, and defense spending. Low investment in new production capacity and rising demand from AI, data centers, defense, and green transitions are tightening the market for critical metals.

The U.S. economy grew by 1.3% in the first quarter, the slowest pace in nearly two years, due to reduced consumer spending and a wider trade deficit. Revised figures showed consumer spending increased by 2%, lower than the previously reported 2.5%. Despite the sluggish start, forecasts suggest GDP growth could rebound to 3% or more in the second quarter. Inflation remained steady, with the personal-consumption-expenditures price index rising at a 3.3% rate.

Join Mike Maloney in this urgent update as he dives into the disintegration of the global financial system.

Lingering inflation pressures from the pandemic are prompting the Federal Reserve to maintain high interest rates, dampening hopes for cuts this year. Despite expectations that inflation will eventually cool, Fed officials are prepared to keep borrowing costs elevated to curb rising prices, balancing the risk of economic downturn against the need to control inflation.

U.S. firms have become more pessimistic about the economic outlook despite continued expansion from early April to mid-May, according to a Federal Reserve survey. Weakened consumer demand and modestly increasing inflation are key concerns, as the job market gradually cools. The Fed's Beige Book survey highlights varying conditions across industries and regions, influencing central bankers' decisions on maintaining current interest rates.

The record stock market gains are heavily reliant on a few large tech stocks, primarily driven by excitement around AI. Nvidia, Microsoft, Apple, and Alphabet alone added over $1.4 trillion in value this month, more than all other S&P 500 stocks combined. Nvidia, boosted by AI demand, accounted for half of this gain. While AI has spurred significant growth since the launch of ChatGPT in late 2022, concerns arise that the surge may resemble the unsustainable profit levels seen in the 2007 banking sector rather than a pure stock bubble.

Billions of dollars worth of gold is smuggled out of Africa each year, primarily to the UAE for processing, according to a SwissAid report. The Bern-based NGO analyzed gold import data over a decade, estimating the illicit trade at $23.7 to $35 billion annually. In 2022 alone, over 435 tons of gold were smuggled out, fueling conflicts and financing criminal and terrorist networks. The UAE has acknowledged the issue and reported a significant increase in suspicious activity reports related to the gold sector.

As I warned, U.S. Residential Electricity prices hit a new all-time high this year.  Unfortunately, this is just the beginning of much higher power bills for Americans as energy and capital costs continue to surge.  How much did Residential Electricity Rates increase...

Central bank gold buying has been a significant factor in the yellow metal’s spectacular run-up to new record highs. But with its recent small correction downward, it’s a good time to look at which central banks are selling — and why.

Money Supply is a very important indicator. It helps show how tight or loose current monetary conditions are regardless of what the Fed is doing with interest rates. Even if the Fed is tight, if Money Supply is increasing, it has an inflationary effect.

ConocoPhillips has agreed to acquire Marathon Oil for $22.5 billion, continuing a trend of major mergers in the oil and gas sector aimed at strengthening reserves. This follows a highly active year in the industry, with $250 billion in mergers and acquisitions in 2023, driven by a booming stock market and record U.S. oil production.

UBS has raised its silver price forecasts, projecting the metal to reach $34 per ounce by the end of September, $36 by the end of 2024, and $38 by June 2025, driven by strong industrial demand and potential undersupply. Despite a recent price pullback, UBS anticipates continued silver outperformance, with industrial demand, particularly from the photovoltaic sector, rising significantly. Supply challenges, including mine shutdowns in Peru, are expected to contribute to a market shortfall, supporting higher prices.

UBS predicts a rally in commodities based on strong fundamentals. They raised their gold demand forecast due to record central bank purchases and sustained Chinese buying, expecting prices to reach USD 2,600/oz by year-end. Copper is also expected to see price gains, driven by supply challenges and China's housing policies, with prices forecasted to hit USD 11,500/mt by year-end. UBS projects a 10% return for broad commodity indexes over the next 6-12 months and recommends an active investment approach in commodities like oil.