Gold and Silver Industry & Investing News
Today’s gold and silver market news, curated from the best of GoldSilver's team and around the web. Everything precious metals investors need to know including updates on big price swings, macro analysis, and breaking stories. Check back often or subscribe to get the highlights in your inbox. Monitor live spot prices on our charts page.
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TOP NEWSWhat Pops THE BUBBLE CENTURY?
In this deep dive, Mike Maloney unpacks the complexities of our current economic landscape with sharp precision.
Silver: "A Quadruple From Here Is LOGICAL"
Are you ready to witness the potential explosion in silver prices?
READ MOREChina Gold Reserves Grow for 18th Straight Month
China's central bank added to its gold reserves for the 18th consecutive month in April, though the rate of acquisition has slowed due to soaring gold prices. The People’s Bank of China, a major player in the bullion market, purchased 60,000 troy ounces in April, a significant decrease from the 160,000 ounces bought in March and 390,000 in February. This slowdown occurs as gold prices hit record highs, impacting demand even as first-quarter purchases by central banks globally were the strongest on record, driven in part by these institutions, as noted by the World Gold Council and supported by insights from Goldman Sachs on continued potential in emerging markets.
READ MOREDollar Strengthens Against Yen Despite Japan's Intervention Threats
On Tuesday, the U.S. dollar saw a slight decline overall but gained strength against the Japanese yen amidst ongoing expectations of significant interest rate differentials. Despite recent warnings from Japanese officials about potential interventions to support the yen, the U.S. dollar's resilience highlights the anticipation of continued disparity in monetary policies. Japan's top currency diplomat, Masato Kanda, indicated the possibility of taking action against disorderly, speculative foreign exchange movements, following two suspected interventions last week that totaled nearly $60 billion.
READ MOREOil Prices Climb as Netanyahu Rejects Hamas Cease-Fire Deal
Crude oil futures climbed on Tuesday after Israeli Prime Minister Benjamin Netanyahu dismissed a Hamas-approved cease-fire proposal as "sabotage," committing instead to continue military operations in Rafah, Gaza. Netanyahu critiqued the proposal for falling short of Israel's essential demands. This rejection comes amid ongoing conflict, with Israeli forces taking control of the Rafah border crossing, an action that drew criticism from Egypt, which has been mediating the cease-fire talks. Defense Minister Yoav Gallant asserted that operations in Rafah would persist until their objectives regarding Hamas are met.
READ MOREGoldman Sachs Warns of Copper 'Stockout' as Prices Hit New Highs
Copper prices briefly soared above $10,000 a ton amid investor optimism about potential Federal Reserve rate cuts and a warning from Goldman Sachs about escalating supply shortages. The surge was part of a broader rally in risk assets, sparked by weaker-than-expected U.S. job figures, which fueled speculation of imminent Fed rate reductions. Despite a slight retreat in European trading, the outlook for copper remains bullish, driven by persistent supply-demand imbalances. Goldman Sachs has responded by lifting its year-end copper price forecast from $10,000 to $12,000 a ton.
READ MOREUS Treasuries Boom: Paying Out $2 Million Per Minute Amidst Rising Yields
US Treasuries are generating unprecedented returns, paying out about $2 million per minute in interest, as yields have surged to over 4% from virtually zero just two years ago. This dramatic shift, spurred by rate hikes from the Federal Reserve, has revitalized Treasuries as a stable source of income, reflecting their traditional economic role. Last year alone, interest payments on US government debt nearly doubled the decade's average to $900 billion, with projections from the Congressional Budget Office expecting this figure to continue rising annually.
READ MOREGold's Rally Pauses As Market Consolidates
Gold's price rebound has stalled this week, remaining capped below $2330 as it shows little response to US bond yields, the US dollar, or recent geopolitical developments. The market has entered a phase of consolidation, maintaining a narrow trading range with support near $2286 and resistance at $2330. Despite the general upward momentum, gold has struggled to break above the $2330 mark, largely unaffected by stable US bond yields and the dollar, as well as ongoing geopolitical tensions. For now, traders are favoring a range-bound strategy until a clear directional signal emerges.
READ MOREChina’s Aging Population Catalyzes a New Era in Gold Jewelry Demand
China's "silver economy," driven by the middle-aged and elderly populations, is sparking a new gold rush. In 2023, retail sales from large-scale jewelry enterprises soared to 331 billion RMB ($45.7 billion), marking a 13.3% year-over-year increase, one of the highest growth rates across consumer goods. This surge in demand, both for personal adornment and investment, has prompted a significant uptick in new business registrations in the jewelry sector. Over 2.6 million new companies were registered from January to October 2023 alone, demonstrating an 89.9% increase from the previous year.
READ MORE2024 U.S. Election: A Turning Point for Gold and Other Key Commodities
The upcoming 2024 U.S. presidential election is poised to significantly influence the markets for gold, silver, Platinum Group Metals (PGMs), copper, and crude oil. Regardless of whether the current political balance of power remains or shifts, the anticipated policy debates and adjustments in response to public opinion are expected to shape market dynamics. Notably, a potential change in administration could lead to reduced environmental spending impacting copper and silver negatively, while possibly benefiting PGMs and fossil fuels. The election's outcome will also affect America's foreign policy stance, particularly towards China and Iran, further influencing gold and oil prices.
READ MOREGold and Copper Shine Bright: The Start of a Prolonged Bull Market
In the midst of escalating geopolitical tensions, gold and copper have become key commodities, not just weathering market volatility but flourishing. Gold, a long-established safe-haven asset, has seen prices soar to near record highs due to its appeal in uncertain times, with central banks, especially in emerging markets, significantly boosting their reserves—290 tons in the first quarter of 2024 alone, a record according to the World Gold Council. This trend underscores a strategic pivot towards gold as a reserve currency, moving away from the U.S. dollar, and suggests that both gold and copper may be at the start of a prolonged bull market that investors should closely watch.
READ MOREEconomic Reality Check: Six Figures Not Enough for Middle-Class Comfort?
Inflation is reshaping the American middle-class dream. Once believing that a six-figure income would ensure a comfortable lifestyle with regular vacations and the ability to buy a home, many people today with "good jobs" find achieving these goals is nearly impossible. The reality of saving for a house or planning for future financial security feels out of reach for many, reflecting a broader trend where many in the middle class feel financially strained despite growing earnings and stable employment.
READ MOREGold Prices Skyrocket as China Increases Purchases and Speculation Intensifies
China's aggressive gold purchasing has significantly influenced the market, driving prices to over $2,400 per ounce amid global instability from conflicts like Ukraine's invasion and the Gaza war. This trend persists due to diminished confidence in traditional Chinese investments such as real estate and stocks, combined with the nation's central bank increasing its gold reserves and reducing U.S. debt holdings. Additionally, Chinese speculators anticipate further price gains, enhancing China's already substantial impact on the global gold market. This surge continues despite typical deterrents like rising interest rates and a strong U.S. dollar, marking a nearly 50% price increase since late 2022.
READ MOREU.S. Debt Crisis: Gen Z to Face Financial Challenges, Says Ex-White House Economist
The U.S. debt is escalating to unprecedented levels, and according to a former White House economist, Generation Z will bear the financial brunt of this burden, which has been exacerbated by previous generations and worsened by the Treasury Department's missed opportunities to mitigate the impact.
READ MOREOil Volatility Hits Multiyear Low as Threat of Mideast Conflict Lowers
Crude oil's geopolitical risk premium, a surge in price due to fears of a broader Middle East conflict, has disappeared as tensions between Israel and Iran have eased. With the diminished threat of conflict, market volatility has returned to multiyear lows, and the options market now leans towards puts, indicating reduced expectations of price spikes. Factors like interest rates, OPEC+ supply adjustments, and global demand now dominate pricing considerations. According to Tanvir Sandhu from Bloomberg Intelligence, the likelihood of Brent crude reaching $100 by the year's end has dropped significantly, from 17% to just 9%, reflecting a stabilization in the market and creating new trading opportunities.
READ MOREU.S. Treasuries Yield $2 Million Per Minute as Rates Soar
U.S. Treasuries are generating substantial income for investors, marking a significant turnaround from nearly two decades of low returns due to zero-rate policies. As benchmark rates climbed from nearly 0% to over 5% within just two years, investors now see a reliable source of income in these government bonds. Last year, investors earned nearly $900 billion from U.S. government debt, a figure that's double the average of the previous decade. Moreover, over 90% of Treasuries now offer coupons of at least 4%, providing a strong buffer against potential rate hikes. This resurgence highlights Treasuries’ renewed role as a dependable economic staple, capable of delivering consistent annual returns.
READ MOREGold Rebounds on U.S. Economic Uncertainty and Softening Job Market
Gold prices are up as mixed economic signals emerged from the U.S., prompting optimism about a potential "soft landing" for the economy amid ongoing Federal Reserve efforts to combat inflation. The metal saw a 1% rise on Monday, recovering after two consecutive weeks of losses—the first since February. This rebound reflects investor reactions to a recent U.S. jobs report, which suggested a slowing economy and alleviated fears of a recession coupled with high inflation. Chicago Fed President Austan Goolsbee indicated that such data trends could support a case for easing monetary policy this year. Despite these challenges, gold has surged approximately 12% this year, bolstered by central bank purchases, demand from Asian markets, and safe-haven buying due to geopolitical tensions.
READ MOREWeak U.S. Jobs Report Boosts Gold Prices As Many Speculate About Fed Rate Cuts
Gold prices rose on Monday due to a weakening U.S. dollar, following a disappointing U.S. jobs report that raised the possibility of the Federal Reserve cutting interest rates. Spot gold increased by 0.8% to $2,320.33 per ounce, while U.S. gold futures rose by 0.9% to $2,329.10. The underwhelming job growth and slowing wage increases suggest room for potential rate reductions by the Fed in 2024, according to Ricardo Evangelista, a senior analyst at ActivTrades.
READ MORERising Interest Rates Challenge Long-Standing Pro-Debt Economic Policies
Over the last decade, many economists have promoted the use of debt to finance government spending, dismissing concerns about potential debt overhangs as advanced economies enjoyed low interest rates. However, the past two years have seen a significant shift in this perspective due to rising inflation and a return to normal long-term real interest rates. A recent reassessment by senior IMF economists highlights that with average debt-to-income ratios in advanced economies projected to rise to 120% of GDP by 2028 and higher borrowing costs becoming the norm, there is a pressing need for these nations to rebuild fiscal buffers and ensure the sustainability of their debt.
READ MOREExpect Continued High Interest Rates as Fed Seeks More Progress on Inflation
On Wednesday, the Federal Reserve maintained its interest rates, emphasizing the need for "greater confidence" that inflation will consistently approach the 2% target. Despite earlier hopes, inflation in early 2024 has exceeded expectations, leading to predictions that even if the Fed were to cut rates later this year, high interest rates on credit cards and mortgages are likely to persist through the end of 2024. Given the declining APYs on longer-term CDs and some high-yield savings accounts, now is an opportune moment to secure higher savings rates.
READ MOREYen Predicted to Weaken to Lowest Since 1986 Amid Rate Disparities
Alvin Tan, head of Asia FX strategy at RBC Capital Markets and the top currency forecaster, predicts the yen could weaken to 165 per dollar, a level last seen in 1986. Despite Japan's potential interventions to support its currency, the significant interest rate gap between Japan and the U.S. continues to drive the yen's decline. Tan suggests that effective intervention would require coordination with the U.S., as the currency is expected to breach the 160 level and possibly reach 165 amid sustained bearish sentiment.
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