Precious metals news

At the end of 2022, investors all around the world who had bet big on cryptocurrency and had their cryptocurrency stored by the crypto exchange, FTX, received bad news. Sam Bankman-Fried and other leaders of the exchange had been using cryptocurrency that was supposedly stored by the exchange to make bets on financial markets. And the FTX leadership was bad at trading and racked up huge losses. FTX declared bankruptcy and many of FTX leaders were convicted of financial crimes. For the investors of FTX, it was a painful experience that came from betting on cryptocurrency and the viability of crypto institutions that managed such assets. Expected losses were claimed to be in the billions.

Reuters this week reported that the divergence between IEA and OPEC demand numbers is the largest in 16 years. The IEA predicted last year that oil demand would peak before 2030. OPEC has a vested interest in stronger global demand, so there may well be an overestimation bias in its outlooks.

JPMorgan Chase & Co. tags gold as its top commodity pick, forecasting a potential surge to $2,500 per ounce this year, fueled by market enthusiasm. Natasha Kaneva, the bank's lead commodities researcher, highlighted the metal's recent peak at $2,195.15, suggesting a climb to $2,500 is within reach if inflation moderates and job growth stabilizes. Additionally, the Federal Reserve's expected shift to a more accommodative monetary policy could further elevate gold's attractiveness against yield-generating investments, pending evidence of inflation aligning closer to the Fed's 2% goal.

In a significant move, India has now permitted its Reserve Bank (RBI) to import gold without incurring import levies, a late Tuesday government notification revealed. Traditionally, gold importers in India, the world’s second-largest consumer of the metal, face charges like the basic customs duty and Agriculture Infrastructure and Development Cess (AIDC). The RBI's gold reserves stood at 800.79 metric tonnes as of September 2023, with holdings both within the country and abroad, highlighting the central bank's substantial investment in gold.

Gold's price soared to an unprecedented $2,195 per troy ounce, marking a significant breakout from its decade-long stagnation. This rally, partly fueled by a buying spree from China, is also getting a boost from traditional market drivers aligning favorably. With these factors in play, gold's journey to new heights is well underway, signaling a bullish trend for the precious metal.

At the MIPIM property conference in Cannes, Brookfield Asset Management's Bradley Weismiller revealed a striking issue: the U.S. office market is now the most oversupplied globally. According to Weismiller, this imbalance is a product of excessive construction in certain areas, coupled with a shift in how these spaces are utilized. He highlighted that the U.S. market's overexpansion and its impact on property investors, who are now grappling with heightened levels of debt, underscore a pressing need for strategic reassessment in the real estate sector.

JPMorgan CEO Jamie Dimon suggests the possibility of a US recession remains, advising caution against prematurely cutting interest rates. Speaking at the Australian Financial Review Business Summit, Dimon noted that while a "soft landing" is anticipated by many, he believes its likelihood is significantly lower, raising concerns of potential stagflation. He also mentioned the distortion of economic indicators by COVID-19, advocating for a wait-and-see approach from the Federal Reserve for clearer signals before making rate adjustments.

Morgan Stanley's oil strategist, Martijn Rats, cautions that investors might be surprised by a significant oil price rally this summer. This warning follows a recent increase in oil prices, driven by concerns over supply disruptions after drone attacks on Russian refineries and optimism that the Federal Reserve might lower interest rates, potentially boosting demand. As of midday in London, Brent crude for May delivery climbed to $83.23 a barrel, and West Texas Intermediate (WTI) for April was up at $78.95, indicating a bullish trend in the market.

Even as digital payments gain traction, counterfeit currency remains a significant issue. In 2023, the U.S. Secret Service confiscated $21.8 million in fake bills, leading to almost 200 arrests. While this figure represents a decrease from previous years ($41.5 million in 2022 and $51.4 million in 2021), the proliferation of counterfeit currency continues to pose a threat to the financial system. Beyond their well-known role in protecting high-profile officials, the Secret Service also plays a crucial part in safeguarding the nation's financial infrastructure.

February 2024 saw consumers facing persistent inflation, though slightly cooler from its peak in 2022. The Bureau of Labor Statistics reports a 3.2% annual increase in the consumer price index (CPI), with a 0.4% rise over the month, hinting at inflation's steady presence above the Federal Reserve's 2% target. Despite a more positive economic outlook among Americans, as per a Gallup survey, the cost of living continues to challenge many. This month's inflation was notably influenced by higher gasoline and shelter costs, while food prices remained unchanged, according to Bankrate’s Mark Hamrick.

Is the stock market on the brink of a major correction?

At the BMO Capital Markets 33rd Annual Global Metals, Mining & Critical Minerals Conference, WGC CEO David Tait emphasized ongoing reforms aimed at enhancing trust in the gold market. Initiatives like the Gold247 project, launched last year, seek to modernize the trading of gold, making it more efficient, transparent, and easily exchangeable.

A recent poll reveals a grim perspective among American renters on homeownership, highlighting affordability and livability issues in their areas. Despite the aspiration to own a home one day, a significant 61% of renters fear that achieving this cornerstone of the American dream is out of their reach, feeling that no matter their effort, homeownership remains an unattainable goal.

Mortgage demand climbed this week, following a drop in interest rates to 6.84% from 7.02% for 30-year fixed-rate loans. Refinancing applications jumped 12%, showing a 5% increase from the same period last year. Meanwhile, home purchase applications grew by 5% week-over-week, though they remain 11% lower than last year's figures.

Economists warn of possible layoffs as firms grapple with rising interest rates. Despite current strong job market indicators, David Rosenberg of Rosenberg Research anticipates a hiring slowdown, projecting unemployment could reach 5% by year-end. This reflects underlying economic vulnerabilities masked by seemingly robust employment figures.

In a significant escalation, Ukraine launched a large-scale assault on Russian territory, deploying dozens of drones and rockets to strike a major oil refinery and other critical infrastructure, marking a bold attempt to challenge Russia's land borders. This attack, part of the ongoing conflict that has seen both nations utilize drones for strategic hits against military and infrastructure targets, caused considerable damage to Lukoil's NORSI refinery among others. This move comes amid a series of Ukrainian strikes on Russian energy facilities and refineries, underlining the intensifying tactics in the more than two-year war between the two countries.

The U.S. government's budget deficit ballooned in February, driven by a significant increase in spending due to the tax refund season and escalating interest costs on the national debt, according to the U.S. Treasury Department. The deficit reached $296 billion for the month, marking a 13% increase from February 2023's $262 billion gap. This uptick comes as expenditures hit a record $567 billion for February, a jump of 8%, while income rose modestly by 3% to $271 billion. This development slightly surpassed economists' forecasts, who had anticipated a $299 billion deficit.

As central banks are amassing gold, South Korea's reserve bank remains noticeably inactive, holding its gold reserves constant at 104.4 tons since 2013. This inaction comes at a time when, according to the World Gold Council, global central banks have significantly increased their gold holdings, adding 39 tons in January alone. This continues the trend of heavy gold acquisitions, with over 2,000 tons purchased in the past two years.

This analysis takes the BLS inflation data and recalculates the percentage changes at the category level to get unrounded numbers. The total number ties to the BLS, but it gives more detail at the granular level.

The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, is on a notable path of expansion and de-dollarization, raising concerns for the United States and the European Union. After welcoming several new members in January 2024, BRICS plans to extend further invitations within the year, signaling its growing influence and appeal. This expansion is part of a broader strategy to reduce dependency on the US dollar, with the bloc and its new members moving towards settling trades using their local currencies. Such moves are indicative of BRICS's commitment to de-dollarization, demonstrated by India, China, Russia, and the UAE's shift away from the greenback in their transactions. This evolving dynamic presents a potential challenge to the dominance of the US dollar in global trade and could reshape international economic relations.