Precious metals news

U.S. labor costs surged by 1.2% in the first quarter, marking the largest increase in a year and exceeding economists' forecasts, according to the Bureau of Labor Statistics. This rise in the employment cost index, a key indicator of wage and benefit costs, suggests ongoing wage pressures that contribute to persistent inflation. The data, which surprised markets, led to a drop in stock-index futures, an increase in Treasury yields, and a strengthening of the dollar.

In the first quarter of this year, the pace of pay and benefits growth for American workers increased, potentially heightening inflation concerns for the Federal Reserve. According to the Labor Department's Employment Cost Index, compensation rose by 1.2%, up from 0.9% in the previous quarter. This steady year-over-year growth rate of 4.2% could influence the Fed's decisions on interest rates, particularly with inflation fears looming as they conclude their latest policy meeting.

Patrick Gruhn, a German fintech entrepreneur and former FTX executive, purchased a gold pocket watch recovered from the Titanic for nearly $1.5 million at an auction, setting a record for Titanic memorabilia. The watch, which once belonged to American tycoon John Jacob Astor IV, was bought as a gift for his wife, Maren Gruhn, and will be displayed in museums. This sale was conducted by Henry Aldridge & Son, a renowned auction house specializing in Titanic items.

Last week Peter appeared on the Futures Radio Show podcast with Anthony Crudele. In their interview, they discuss the factors affecting gold’s price, why the Fed can’t control inflation, and the viability of Bitcoin.

Global gold demand reached its highest first quarter level in eight years, with a 3% increase to 1,283.3 metric tons, the strongest since 2016. This surge was driven by robust investments in the over-the-counter market, where trades more than tripled to 136.4 metric tons from last year's 42.7 metric tons, and record-breaking purchases by central banks. Joe Cavatoni of the World Gold Council highlighted the significant ongoing role of gold in emerging-market central banks' reserve portfolios, suggesting a strong outlook for the remainder of the year.

China's recent accumulation of a $170 billion gold reserve, following a record 27-tonne purchase that raised its total to 2,262 tonnes, has sparked concerns over its preparations for potential conflict regarding Taiwan. The People’s Bank of China's strategic buying, which began in October 2022 and marks the longest gold stockpiling period since 2000, appears to be a precaution against Western sanctions in case of escalating tensions with Taiwan.

Despite record-high prices, India's gold demand rose by 8% to 136.6 tonnes in the March quarter, according to the World Gold Council's "Gold Demand Trends Q1 2024" report. This increase was driven by both a rise in the quarterly average prices by 11% and a volume growth that led to a 20% surge in value terms to Rs 75,470 crore. Jewelry demand grew by 4% to 95.5 tonnes, and investment in gold bars and coins jumped by 19% to 41.1 tonnes, compared to last year.

Despite an 8% increase in India's gold demand in the March quarter, the World Gold Council (WGC) warns that soaring gold prices may reduce the country's total 2024 gold consumption to a four-year low. Sachin Jain, CEO of WGC's Indian operations, indicated that if prices keep rising, demand might drop to the lower end of the projected 700 to 800 metric tons range.

Japan is actively prepared to address foreign exchange issues, emphasized Masato Kanda, a top currency official, in light of recent market data indicating a possible $35 billion intervention by the finance ministry to support the depreciating yen. Although Kanda did not confirm Monday's sudden yen rise as an intervention, traders and a former official suggested it was. Additionally, central bank projections expect increased yen receipts, hinting at substantial yen purchases, which usually settle in two days.

As interest rates rise, America’s largest banks, including Wells Fargo, JPMorgan Chase, and Citi, are paying more in depositor fees than they are earning in interest income—a first since the Federal Reserve began rate hikes two years ago. Wells Fargo's deposit costs increased by $594 million this quarter, overshadowing a $1 million rise in interest income. Both JPMorgan Chase and Citi experienced similar trends, each paying about $350 million more to depositors than they earned. U.S. Bancorp also reported a decrease in net interest income, emphasizing the strategic financial adjustments clients are making in response to a prolonged high-rate environment.

Investors across the U.S. are increasingly anxious about the upcoming presidential election, where President Biden may face former President Donald Trump again. Concerns are mounting about how the election's outcome could impact financial markets, including stocks, interest rates, and oil prices. Financial advisors are fielding numerous questions, while Wall Street strategists assess potential scenarios of a Democratic or Republican victory. BNP Paribas' chief U.S. economist, Carl Riccadonna, suggests this election could be one of the most consequential in recent history, influencing major policy decisions on immigration, Federal Reserve leadership, and international relations amid global tensions.

In this week’s episode, Peter covers the dismal figures released Thursday and Friday, horrible tax policies, and the appalling lack of transparency in our government.

Amid concerns over America's surging $34.6 trillion debt, the BRICS nations are moving away from the dollar in their trading practices. China and Russia, key members of the alliance, plan to execute $260 billion in trade exclusively using the Russian ruble, Chinese yuan, and some euros, sidestepping the American dollar entirely. This strategy, expected to be adopted by other BRICS members soon, has prompted a mixed response of diplomacy and threats from the U.S.

According to Mark Spitznagel, the renowned "Black Swan" investor and CIO of Universa Investments, the Federal Reserve is unlikely to cut interest rates unless it faces a severe economic downturn and market instability. In a recent Reuters interview, he highlighted that while investors anticipate one to two rate cuts in 2024, these would only occur in response to a significant economic weakening, suggesting that a market plunge and recession could precede any such rate adjustments.

Nearly 40 million U.S. families, or 29% of households, are categorized as ALICE (Asset Limited, Income Constrained, Employed), a term created by United Way to describe those earning above the poverty line but insufficient to meet basic needs. This statistic highlights the growing financial vulnerability amid sluggish wage growth and rising costs, with these families being just one emergency away from poverty. This is in addition to the 37.9 million Americans, or 11.5% of the population, already living below the poverty line according to the U.S. Census Bureau.

The surging price of gold, recently hitting a record high of $2,400 per ounce, has sparked a modern gold rush. People are discovering valuable assets in their homes, from old jewelry to gold coins, with just four one-ounce coins now valued at nearly $10,000. At places like Main Street Coin, numismatist Clay Wallen finds himself busier than ever, as customers like Chris Reynolds and Jim Payne cash in items such as old gold bracelets, reaping benefits like $200 for just a few pieces.

Oil prices fell to below $83 a barrel as progress towards a ceasefire between Israel and Hamas lessened the geopolitical risk associated with crude oil. West Texas Intermediate crude dropped 1.6% after reports of Israel's willingness to negotiate a truce, potentially starting with the release of 33 hostages. The momentum for peace is supported by U.S. Secretary of State Antony Blinken's efforts to broker a ceasefire during his regional visit, with Israel pausing any further military actions in Rafah ahead of discussions with American officials.

The US rate options market, sensitive to inflation trends, is cautiously pricing in potential Federal Reserve interest rate hikes for this year and next. Options on Secured Overnight Financing Rate (SOFR) futures, a key indicator used by bond investors to predict Fed policy, suggest a modest likelihood of rate increases. Despite current SOFR rates at 5.31%, market consensus is mixed, with some anticipating a possible single rate cut rather than multiple hikes, reflecting a strategy of maintaining higher rates longer amidst persistent inflation and a strong labor market.

US regulators have closed Republic Bank, marking 2024's first bank failure. The FDIC is safeguarding $10 billion, comprising $6 billion in assets and $4 billion in customer deposits, transferring them to Fulton Bank. Republic Bank’s 32 branches across New Jersey, Pennsylvania, and New York will resume operations under Fulton Bank this weekend or Monday, depending on regular branch hours. Customers can access funds through checks, ATMs, or debit cards. This transition follows significant bank failures in the previous year and comes amid ongoing concerns about the banking sector's stability due to its connections with the volatile commercial real estate market and US Treasuries.

Gold prices rose modestly, rebounding from a 2% drop last week, in anticipation of the upcoming Federal Reserve meeting expected to maintain a policy of high interest rates for an extended period. Despite the broader anticipation of rate cuts this year diminishing due to recent inflation data, gold has gained over 13% this year, reaching record highs earlier this month. The upcoming U.S. jobs report will also play a crucial role in shaping market expectations.