Precious metals news

Gold consumption over the extended Chinese New Year holiday in 2024 demonstrated a strong market appetite, reflecting a positive start to the year. Despite a vibrant start, expectations for the year suggest a more tempered outlook for gold jewelry demand, anticipated to grow but at a slower rate compared to 2023, owing primarily to a slowdown in economic expansion. Meanwhile, sales of bars and coins are expected to remain robust, although they may not achieve the remarkable growth seen in 2023.

Gold consumption over the extended Chinese New Year holiday in 2024 demonstrated a strong market appetite, reflecting a positive start to the year. Despite a vibrant start, expectations for the year suggest a more tempered outlook for gold jewelry demand, anticipated to grow but at a slower rate compared to 2023, owing primarily to a slowdown in economic expansion. Meanwhile, sales of bars and coins are expected to remain robust, although they may not achieve the remarkable growth seen in 2023.

Former Federal Reserve President Thomas Hoenig expressed surprise at the prospect of the Federal Reserve cutting interest rates three times in 2024, considering the current economic landscape. Speaking on CNBC's "Squawk on the Street," Hoenig suggested that, based on the resilience of the economy, persistent inflation above 3%, strong consumer spending, and low unemployment rates, one or two rate cuts would be more probable than three. His comments reflect skepticism about the need for such aggressive monetary policy easing given the economy's enduring strength.

On Thursday, the Commerce Department is set to release the January figures for the personal consumption expenditures (PCE) price index, which is highly regarded by the Federal Reserve as a key measure of inflation. Economists surveyed by Dow Jones anticipate a monthly increase of 0.3% and a year-over-year rise of 2.4%. This upcoming release is drawing significant attention due to its potential implications for Federal Reserve policy decisions. Economist Mark Zandi has expressed concern that if the Federal Reserve maintains its current stringent economic policies, it could significantly risk the ongoing economic expansion. This report, often overlooked in the past, is now in the spotlight as investors and policymakers alike assess its impact on future monetary policy.

The longstanding dominance of the US dollar in global markets is being challenged by the rising prominence of the Chinese Yuan. For years, the dollar's status as the world's reserve currency made it a cornerstone of international finance, but recent trends towards de-dollarization, spurred by high inflation and geopolitical tensions, have begun to erode its stability and prestige. In this climate, China is aggressively promoting the Yuan, positioning it as a formidable contender capable of reshaping global financial dynamics. This shift reflects broader changes in the economic landscape, where the potential for a new leading currency emerges amidst the complexities of international relations and economic policies.

The collapse of Chinese real estate giant Evergrande is being called, by some, China’s “Lehman Moment.” Whether or not it will be enough to trigger a cratering of China’s broader economy, it’s a massive reality check for a country that has transformed itself over the decades with unprecedentedly massive urbanization and economic growth. Evergrande, since its creation in 1996, has been at the forefront of that rise.

For the past 16 months, one of Wall Street's most trusted indicators for predicting recessions, the inverted yield curve, has been signaling a potential economic downturn. This phenomenon occurs when the interest rates on short-term bonds exceed those of long-term bonds, traditionally seen as a harbinger of recession. However, despite this alarm, the actual economic performance has remained robust, leaving analysts puzzled over the apparent contradiction. DataTrek Research highlights that while the inverted yield curve is a critical component in forecasting economic slowdowns, it is not the sole factor. The absence of other key recession indicators means that the economy has yet to fulfill all the traditional criteria for a downturn, suggesting that while caution is warranted, a recession is not yet a foregone conclusion.

The Billion-Dollar Sell-Off: This month, notable figures including Jeff Bezos, Leon Black, Jamie Dimon, and the Walton family have collectively divested $11 billion worth of their company shares, marking a first for some in this high-profile group. Do they know something we don't?

Harmony Gold, South Africa's largest gold miner by volume, has announced a record interim dividend following a significant increase in both gold production and profits for the six-month period ending in December. The company's strategic operations, including the enhancement of mine grades and the augmentation of gold output, have culminated in a 35% revenue boost and a remarkable 220% surge in net profit to nearly 6 billion rand. With a 14% increase in gold production, totaling approximately 832,000 ounces during this period, and an anticipated annual output of about 1.48 million ounces, Harmony has found success in some of the world's most challenging mining conditions.

In January, inflation rates aligned with expectations, spotlighting the Federal Reserve's key inflation metric as it contemplates interest rate adjustments. The core personal consumption expenditures (PCE) price index, which excludes volatile food and energy costs, rose by 0.4% for the month and 2.8% from the previous year, matching Dow Jones consensus estimates. This follows a modest 0.1% monthly increase in December, with a yearly rise of 2.9%. The overall PCE index, including food and energy, saw a 0.3% monthly increase and a 2.4% rise on a year-over-year basis, as anticipated.

Did you know the IRS taxes gold at a higher rate than securities? But there’s a little-known, perfectly legal, way around that...

Join Mike Maloney and Alan Hibbard in this insightful discussion on the performance of precious metals versus mining stocks.

Even as central banks buy more gold than ever, coin premiums have been driven lower throughout the retail precious metals market. One of the big factors: is disappointing sales from the US Mint.

Federal Reserve Governor Michelle Bowman has expressed a stance of caution regarding the adjustment of U.S. interest rates, emphasizing the ongoing risks of inflation that might undermine the progress in stabilizing prices. In her speech prepared for a Florida Bankers Association event in Miami, Bowman highlighted her expectation that inflation would continue to decrease if the policy rate remains unchanged. She stressed the importance of a careful approach towards any future policy changes, signaling no immediate inclination towards cutting interest rates due to the potential inflationary risks.

Morgan Stanley's chief US economist, Ellen Zentner, says a hard-landing recession for the US economy is basically guaranteed. Zentner says the full impacts of the Federal Reserve's tightening hadn't been fully felt in the economy. It could take 18 months after the last rate hike to feel the full weight of higher rates.

Despite a strong job market and diminishing inflation, American sentiment towards the economy remains deeply pessimistic. Researchers suggest this malaise may be attributed to the recent end of low borrowing costs. This perspective is pivotal as it highlights that the public's dissatisfaction stems not only from inflation but also from the primary method used to combat it: raising interest rates. This strategy has made loans for credit cards, vehicles, and more expensive, affecting consumer sentiment in ways not fully captured by conventional inflation metrics. The study implies that as the Federal Reserve starts to lower interest rates, possibly within the year, we might see an uplift in consumer sentiment.

The once straightforward strategy of borrowing has become a complex decision for CFOs, thanks to soaring interest rates. This shift is largely due to the Federal Reserve and other central banks increasing interest rates to the highest levels in decades, which has significantly raised the cost of debt financing. Companies across the spectrum—from smaller firms like Myriad to larger entities like Campari and Aston Martin, as well as startups such as Reddit—are turning their gaze towards equity markets as a more viable option for raising capital, especially given that share prices are near record highs. While debt continues to be a critical component of corporate finance due to its cost-effectiveness and tax-deductible interest, the trend towards equity financing could herald substantial changes in corporate finance strategies and the broader market dynamics

While inflation has shown signs of easing over the past year, housing costs remain stubbornly high, marking a significant outlier in the trend. In January, the cost of shelter surged by 6 percent compared to the previous year, even accelerating from December, a development that contributed notably to the rise in overall consumer prices. This situation presents a conundrum for the Federal Reserve as it weighs the timing for rolling back interest rates. Given that housing represents the most substantial monthly outlay for the majority of families, its impact on inflation calculations is profound.

Oil prices traded within a narrow range as the market balanced concerns over rising U.S. crude inventories with the anticipation that OPEC+ might prolong its supply reduction strategy. West Texas Intermediate (WTI) experienced a slight decrease, hovering around $78 per barrel, influenced by a broader risk-averse sentiment among traders. This reaction came after the Energy Information Administration reported a 4.2 million barrel increase in U.S. crude stockpiles last week, a figure that was less than half of what an industry report had previously estimated.

In the last quarter of the year, the U.S. economy expanded at a solid 3.2% annual rate, slightly less than the initial 3.3% growth estimate by the Commerce Department. This growth, spurred by robust consumer spending, marks a deceleration from the 4.9% growth experienced in the third quarter but continues the trend of the U.S. economy growing over 2% for six consecutive quarters. This performance has notably surpassed expectations that high interest rates might drive the world's largest economy into recession.