Precious metals news

Gold has climbed to its highest level in a month, trading above $2,700 an ounce, driven by a significant shift in market expectations following surprisingly moderate U.S. core inflation data. The consumer price index, excluding food and energy, rose just 0.2% after four consecutive months of 0.3% increases, suggesting the Fed may have more flexibility to cut rates sooner than previously anticipated. This development has caused a notable market reaction, with Treasury yields and the dollar declining, enhancing gold's appeal as a non-yielding asset. Swap traders have adjusted their expectations, now fully pricing in a rate cut by July - a marked change from recent predictions of September or October following strong employment data. While Fed officials express optimism about declining inflation pressures, they maintain a cautious stance about the complete victory over price stability, echoing the conditions that helped drive gold to record highs last year.

A new analysis reveals U.S. stocks have reached their most expensive level in history when measured against workers' purchasing power. According to Leuthold Group's research, manufacturing workers must now work more than 200 hours to afford one unit of the S&P 500, dramatically exceeding the historical median of 33 hours in data going back to 1947. This extreme valuation coincides with other concerning metrics - the S&P 500's forward P/E ratio stands at 21.4 times expected 2025 earnings, and its price-to-sales ratio is at levels not seen since the aftermath of the dot-com bubble. While the market has shown resilience, rising over 50% from its October 2022 lows, these valuation metrics suggest unprecedented disconnection between stock market values and real-world wages, even as recent positive inflation data continues to drive market gains.

December 2024 saw U.S. retail sales increase by 0.4%, reflecting strong consumer spending across multiple sectors, particularly in automobiles (0.7%), furniture (2.3%), and sporting goods (2.6%). This growth, though moderating from November's 0.8%, occurred against a backdrop of positive economic indicators, including a low 4.1% unemployment rate and rising wages. The retail landscape reveals a complex picture where overall sales have risen 3.9% year-over-year, with goods inflation at just 0.3%. However, the market shows a clear bifurcation: wealthy consumers, benefiting from appreciating assets, continue robust spending and home improvements, while lower-income households remain constrained by elevated prices. This dynamic, combined with core inflation holding at 2.7% and expectations of further Federal Reserve rate cuts, suggests a nuanced economic environment where consumer resilience varies significantly by income level.

As both gold and bitcoin reach record highs in 2024, a growing number of investment experts suggest including both assets in portfolios for enhanced diversification. While sharing some characteristics as alternative investments, their distinct behaviors and risk profiles make them complementary rather than competitive assets. BlackRock recommends up to 2% bitcoin allocation in traditional portfolios, while investment managers suggest gold allocations around 10%, highlighting bitcoin's higher risk-reward profile compared to gold's established role as a store of value.

Mali's government has seized three tons of gold worth $245 million from Barrick Gold's Loulo-Gounkoto mine amid an escalating ownership dispute. The seizure, following the arrest of company executives and a warrant for CEO Mark Bristow, has forced Barrick to suspend operations at the mine, which produces 14% of its global output. The conflict stems from Mali's new mining codes, with the military government demanding an increased stake beyond its current 20% ownership and claiming $500 million in back taxes.

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Goldman Sachs doubled its fourth-quarter profits to $4.1 billion, driven by record equity trading performance and strong investment banking results. The bank's shares rose 2% as it exceeded most targets, with revenue reaching $13.87 billion and return on equity jumping to 14.6%. The successful quarter caps a year that saw Goldman's stock rise 48%, making it the best-performing major U.S. bank of 2024.

JPMorgan Chase achieved unprecedented success in 2024, setting a new American banking record with $58 billion in annual profits and a remarkable 50% jump in fourth-quarter earnings to $14 billion. The stellar performance was primarily driven by a revival in dealmaking and strong trading revenues, which rose 21% amid election-related market volatility. While the bank's consumer unit faced challenges with a 6% decline and increased credit card charge-offs, JPMorgan raised its 2025 net interest income guidance to $90 billion. The bank's success was part of a broader trend, with Goldman Sachs and Wells Fargo also reporting significant profit increases. Meanwhile, CEO Jamie Dimon addressed succession plans, indicating he expects to remain CEO for "a few more years" before transitioning to chairman, potentially serving the bank for "4-5 years or more."

US markets surged across the board following December's inflation report, which showed core CPI easing to 0.2% monthly growth after four consecutive months at 0.3%. The S&P 500, Nasdaq 100, and Dow all climbed approximately 1.5%, while Treasury yields tumbled and the dollar weakened against major currencies. While market sentiment improved significantly, with swap traders now pricing in a July rate cut, analysts remain cautious. Goldman Sachs Asset Management notes that while the data strengthens the case for eventual cuts, the strong labor market gives the Fed room to be patient. Morgan Stanley Wealth Management suggests that while a January rate cut remains unlikely, the data should quell recent speculation about potential rate increases. Principal Asset Management adds that consecutive soft inflation prints and weaker payroll data would be needed to put a March cut back on the table.

The latest inflation data showed a welcome moderation in core consumer prices, with December's 0.2% increase marking the first slowdown in six months. Key factors contributing to the cooler reading included cheaper hotel stays, modest rent increases, and slower growth in medical care service costs. However, Federal Reserve officials remain cautious, requiring sustained evidence of inflation progress before adjusting their policy stance. The combination of this data with last week's robust jobs report suggests the Fed will maintain current rates at their January meeting, with markets pushing back expectations for rate cuts. BMO Capital Markets notes that potential tariff implementations could further complicate the inflation outlook.

December's inflation data showed encouraging signs of moderation, with core CPI (excluding food and energy) increasing 0.2% monthly and 3.2% annually, marking the first deceleration since July. While headline inflation met expectations at 2.9% annually, the shelter index showed improvement, rising 4.6% annually - its smallest increase since January 2022. However, certain categories remained problematic, with used car prices rising 1.2%, energy costs jumping 2.6% monthly, and egg prices surging 3.2%. Markets welcomed the data, with Treasury yields falling below 4.7%, though concerns linger about potential inflationary pressures from Trump's proposed policies, including tariffs and tax cuts, as his inauguration approaches.

The latest inflation data showed U.S. consumer prices increased marginally above expectations in December, with the CPI rising 0.4% monthly and 2.9% annually, driven partly by higher energy costs. The figures, while slightly exceeding economists' forecasts of a 0.3% monthly gain, appear to support the Federal Reserve's cautious stance on rate cuts for 2024. Markets interpreted the data optimistically, with S&P 500 futures surging 1.5%, the 10-year Treasury yield dropping 12.1 basis points to 4.667%, and the dollar index declining 0.4% to 108.76, suggesting investors view the inflation trajectory as manageable within the Fed's policy framework.

Global markets advanced cautiously on Wednesday as investors awaited U.S. CPI data that could significantly impact monetary policy decisions. Wall Street futures rose 0.2-0.3%, while European markets gained strength, particularly in UK homebuilders following surprisingly cool British inflation data. The bond market saw some respite from recent selling pressure, with Treasury and German Bund yields retreating. BlackRock's record $11.6 trillion in assets under management highlighted strong financial sector performance, while market expectations for Fed rate cuts have notably decreased, with traders now pricing in only 31.4 basis points of easing compared to 45 basis points a week ago. JPMorgan analysts note that the upcoming CPI report could be a crucial pivot point, potentially reigniting market rallies with a dovish print or pushing 10-year yields toward 5% if hawkish.

US commodity markets are showing notable price divergences from global benchmarks as traders position themselves for Donald Trump's proposed import tariffs. The president-elect's team is considering a gradual implementation of tariffs ranging from 10-20% on foreign goods, with potentially higher rates of 60% or more for Chinese imports. According to Citigroup analysts, platinum faces the highest risk due to significant US import dependence and limited sourcing from free-trade agreement countries. Meanwhile, precious metals like gold and silver may avoid tariffs due to their status as monetary instruments and legal tender. The analysts also warn that potential 25% tariffs on Canadian imports could significantly impact US energy prices, particularly affecting refiners and consumers in regions with limited alternatives.

Gold prices gained momentum as both the U.S. dollar index and Treasury yields retreated, with spot prices rising 0.4% to $2,687.59 per ounce and futures climbing over 1% to $2,710.00. Markets are particularly focused on upcoming CPI data, expected to show annual inflation increasing to 2.9% from November's 2.7%. According to Saxo Bank's Ole Hansen, market uncertainty is heightened by both the pending inflation data and political considerations, including Trump's proposed import tariffs that could impact inflation and complicate the Federal Reserve's rate decisions. Despite Tuesday's moderate PPI increase, analysts suggest rate cuts may not materialize until the second half of the year.

Gold futures advanced 1.1% to $2,711.90 per troy ounce, building on momentum from Tuesday's soft PPI data and benefiting from dollar weakness. The December CPI reading of 2.9%, up from November's 2.7%, aligned with market expectations and moderately strengthened the case for Federal Reserve monetary easing. While this development enhanced the appeal of non-interest-bearing bullion, StoneX analysts maintain a cautious near-term outlook, citing persistent bond yields as a limiting factor. However, they remain bullish on gold's longer-term prospects, forecasting a rise to $3,000 per ounce later in 2024.

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Gold prices are showing strength, rising 0.3% to $2,668.79 per ounce, driven by a combination of a weakening dollar and strategic responses to the incoming Trump administration's trade policies. The market's positive reaction stems from reports suggesting a gradual approach to implementing new tariffs, which could help manage inflationary pressures. This development has led to declining Treasury yields and a retreat in the dollar from its two-year high, making gold more attractive to international buyers. Market attention is now focused on crucial economic indicators, including PPI and CPI data, with economists projecting annual inflation to reach 2.9%, up from November's 2.7%. Analysts at Heraeus Precious Metals warn that increased inflation from Trump's policies could potentially eliminate the possibility of Fed rate cuts, while UBS predicts significant supply constraints in the platinum market for 2025, projecting a deficit of 500,000 ounces.

Global oil markets are experiencing significant upheaval as prices touch five-month highs near $79 per barrel, driven by the US government's most ambitious sanctions yet against Russia's energy sector. The measures, targeting major exporters, insurance companies, and numerous tankers, are creating ripple effects across global supply chains, with EU nations planning additional restrictions on natural gas and stricter enforcement of oil price caps. The situation is further complicated by warnings from Alberta's Premier about potential 25% tariffs under the incoming Trump administration, particularly significant given that Canada supplies over half of US crude imports. The market disruption is especially acute in Asia, where Chinese refiners have held emergency meetings to address delivery concerns, and Indian officials anticipate up to six months of major disruptions. Morgan Stanley analysts note these sanctions exceeded market expectations, creating significant downside risks to oil supply. This comes at a...

The dollar's strength continues to dominate currency markets, approaching its highest levels in more than two years as investors reassess Federal Reserve rate cut expectations. Following strong jobs data, markets have significantly scaled back predictions for monetary easing in 2024, now anticipating only 28 basis points of cuts compared to the Fed's December projection of 50 basis points. The euro, while slightly up at $1.0257, has already lost over 6% in 2024 due to monetary policy divergence between the Fed and ECB. The currency market's attention is split between upcoming U.S. inflation data (PPI and CPI) and the potential impact of Trump's economic policies, particularly regarding tariffs. Meanwhile, other major currencies face their own challenges: the British pound continues its decline amid fiscal concerns, the yen weakens ahead of a crucial Bank of Japan meeting, and China's yuan faces persistent depreciation pressure despite central bank support measures. UBS Global Wealth Management predicts th...