Precious metals news

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.

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.