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 NEWSGold's STEALTH Institutional Rally...What Happens When the Public Arrives?
Join us in this thoughtful discussion with investment expert Rick Rule, who sheds light on the understated yet steady increase in gold prices
The REAL Reason the South Lost the Civil War
As the Union and Confederate armies faced off during the Civil War, an equally fierce economic battle waged behind the scenes, ultimately deciding the war's fate.
READ MORERay Dalio Advocates for Gold in the Face of Looming Debt and Inflation Threats
Ray Dalio, a prominent billionaire investor and hedge fund founder, recommends owning gold as a safeguard against potential debt and inflation crises. Highlighting the escalating global debt levels, Dalio has repeatedly voiced concerns about a possible U.S. debt crisis, which he believes could thrust the economy into a balance sheet recession — a situation where deleveraging and declining asset prices could impede economic growth.
READ MOREWorld Gold Council: Gold ETFs, Holdings and Flows
The World Gold Council's comprehensive data set covers more than 100 physically-backed gold ETFs and similar products worldwide, providing regional and fund-specific analysis of demand in tonnes and flows in USD over different time periods.
READ MOREFed's Outdated Forecasting Challenged as Economy Defies Predictions
The Federal Reserve's traditional forecasting approach is facing criticism for its inadequacy in reflecting the dynamic economic environment, particularly in the post-pandemic period. While the forecasts have often been inaccurate, the real concern lies in the method's focus on specific projections—like the anticipated three interest rate cuts in 2024—which now seem outdated due to unexpected inflationary pressures. This issue underscores the need for a more flexible and comprehensive forecasting model that can better accommodate the range of potential economic scenarios.
READ MORES&P 500 Nears Worst Month in Over a Year as Rising Yields Signal Inflation Concerns
The S&P 500 is facing its most significant monthly decline since December 2022, with a 5.5% drop in April, effectively halving the gains made earlier in the year. This downturn is attributed to rising bond yields, spurred by ongoing inflation fears that a strong economy might be sustaining. Despite nearing its March 28 record peak, the recent rise in Treasury yields, which accelerated this April, has unsettled the U.S. stock market. Bob Elliott of Unlimited Funds suggests that Treasury rates may need to increase further to temper economic demand sufficiently for the Federal Reserve to be assured that inflation is moving consistently towards its 2% goal.
READ MORERay Dalio's Risk-Parity Strategy Falters, Prompting Massive Investor Pullback
Ray Dalio's renowned risk-parity investment strategy, which gained prominence during the Great Financial Crisis, is experiencing a significant downturn, leading to substantial withdrawals by institutional investors. Over the past five years, risk-parity funds managed by Bridgewater Associates and others have underperformed, prompting public pensions in New Mexico, Oregon, and Ohio to retract substantial investments, reducing the fund sizes by an estimated $70 billion from their peak. Despite calls from these firms for more time to recover, given predictions of a divergent market landscape in the coming decade, investors' patience has worn thin. The strategy's struggle to deliver during the volatile post-pandemic market phases has notably shaken confidence in an approach that emphasizes diversification and often leverages to balance returns against risks.
READ MORERising Delinquencies Among Low-Income U.S. Borrowers Signal Economic Warning
In the U.S., lower-income borrowers are increasingly unable to meet their loan obligations, prompting banks to tighten credit availability for products like credit cards and car loans. This financial strain is partly due to dwindling savings and persistent high interest rates which are exacerbating the budget constraints of households earning under $45,000 annually. The situation is starkly different for higher-income groups, who continue to demonstrate financial resilience. Austan Goolsbee of the Chicago Federal Reserve and Arijit Roy of U.S. Bancorp highlighted concerns about rising consumer delinquencies and default rates, especially among first-time and low-income borrowers, signaling potential worsening economic conditions.
READ MOREGold Suffers Steepest Daily Plunge in a Year As Geopolitical Fears Ease
Gold prices experienced a significant drop of 2.4%, falling to $2,354.10, marking the most substantial one-day decline in over a year as geopolitical tensions lessened and investors moved towards higher-risk assets like stocks. This shift in investment preference reflects a broader market reevaluation following a temporary peak where the front-month gold for April delivery reached a record high of $2,398.40 just last Friday. Ricardo Evangelista, a senior analyst at ActivTrades, noted that the easing of tensions in the Middle East is prompting a renewed focus on the resilience of the U.S. economy and ongoing inflation concerns.
READ MOREBrent Crude Falls to $86, Market Stabilizes Amid Easing Mideast Concerns
Oil prices declined as the geopolitical risk premium associated with Middle East tensions began to diminish, with Brent crude sliding to near $86 a barrel after experiencing its most significant drop since early February last week. This trend coincides with a decrease in demand for safe-haven assets like gold. The market has stabilized somewhat after volatile trading last Friday, following Iran's minimization of Israel's retaliatory actions to its drone and missile strike. Meanwhile, the U.S. House has recently passed new sanctions targeting Iran's oil sector, with expectations that the Senate will soon follow suit. Additionally, the U.S. has approved more funding to support Ukraine amidst its ongoing conflict with Russia.
READ MORETop Financial CEOs Caution Against Complacency in Face of Global Threats
During their first-quarter earnings calls, major Wall Street leaders, including JPMorgan's Jamie Dimon, Goldman Sachs' David Solomon, and Citi's Jane Fraser, expressed caution about the U.S. economy. Despite suggesting potential drops in inflation and interest rates and a continued economic growth that could avoid a recession, they emphasized the serious threats posed by ongoing high inflation, elevated borrowing costs, the risk of a painful economic downturn, and the impact of international conflicts. BlackRock's Larry Fink and Blackstone's Steve Schwarzman also highlighted the prevailing sense of fear and uncertainty in the markets.
READ MORECopper Miners Face Earnings Squeeze Amid Falling Prices and High Costs
North American copper miners, including Freeport-McMoRan and Teck Resources, are anticipated to show a significant drop in their first-quarter earnings due to declining copper prices and ongoing high operational costs. Despite copper prices reaching multi-year highs last month following capacity expansion limits by major Chinese smelters, the average benchmark prices fell around 5% during the quarter. This decline is attributed to concerns over reduced demand from China, the top consumer of copper, and worries about rising interest rates affecting the market.
READ MOREManufacturing Upswing Propels Copper Toward $10,000 as Supply Struggles Loom
Copper prices are approaching a significant milestone of $10,000 per ton, reaching a new two-year high due to ongoing supply concerns and robust investor interest. The metal's price surge is supported by global manufacturing improvements in regions like the U.S. and China, despite potential setbacks from geopolitical tensions and uncertainties in monetary policy. Originally sparked by disruptions in major mining operations, the rally continues as the market anticipates a recovery in global manufacturing that could stabilize and further boost demand, especially with the seasonal recovery expected in China.
READ MOREDollar Rallies After Volatile Week; Yen Hovers Near Historic Lows
After a notably turbulent week in currency markets, the dollar experienced gains against the euro and yen, propelled by ongoing assessments of policy and geopolitical developments. As traders keep a close watch on the yen ahead of the Bank of Japan's policy review, the currency teeters near a 34-year low against the dollar, sparking speculation about potential intervention. Meanwhile, despite a recent retreat from five-month highs, the dollar's trade-weighted index remains above 106, influenced by Federal Reserve officials’ comments and recent inflation data, which have tempered expectations for imminent rate cuts.
READ MOREOpinion: Do Interest Rates Matter Anymore?
Despite the Federal Reserve's aggressive interest rate hikes—increasing rates 11 times from zero to 5.5% between March 2022 and January 2024—the U.S. economy has shown resilience with growth near 3%, stable unemployment, and strong performances in commodities and stock markets. However, the outlook for interest rates remains uncertain; while initial predictions favored six rate cuts in 2024, recent inflation trends have adjusted expectations to possibly only two cuts, as noted by Goldman Sachs. Federal Reserve Chair Jerome Powell has suggested that it may take longer than anticipated to curb inflation sufficiently to lower rates, with former Treasury Secretary Lawrence Summers even hinting at the possibility of another rate hike.
READ MOREEconomic Worries Fuel Gold Rush in China Despite Rising Costs
Despite the challenges posed by a faltering economy and a depreciating yuan, Chinese consumers and the central bank are increasingly investing in gold, driving the price to record highs above $2,400 an ounce. The allure of gold, a traditional safe-haven asset, has intensified amid global economic and geopolitical instability. Additionally, anticipations of interest rate cuts by central banks, which tend to reduce yields on bonds, are making gold an even more attractive investment. The weakening yuan, which has dropped about 5% against the US dollar over the past year, further exacerbates the cost for Chinese buyers, yet does not deter their demand.
READ MOREGold Prices Dip as Middle East Conflict Cools, Market Eyes Upcoming U.S. Economic Indicators
Gold prices fell more than 2% to approximately $2,345 per ounce, reversing a five-week upward trend—the longest in over a year—as tensions in the Middle East began to subside. The decrease in geopolitical risk followed Iran's understated reaction to recent Israeli strikes, indicating a lower likelihood of immediate retaliation. This shift has reduced the market's risk premium, particularly as bullish sentiment on oil also receded on Monday, further reflecting easing tensions in the region. These developments come as traders eagerly anticipate upcoming U.S. economic data, which is expected to provide clearer insights into future monetary policy directions.
READ MOREDefying Conventional Thinking: Gold Gains Against Rising Rates and a Robust Dollar
Despite conventional expectations, gold prices have remained resilient in the face of rising interest rates and a strengthening U.S. dollar, traditionally negative factors for the metal. Typically, higher interest rates draw capital towards bonds due to their attractive yields, diminishing gold's appeal as an investment. Simultaneously, a strong dollar usually suppresses gold prices, as it increases the metal's cost in other currencies, encouraging selling. However, current market trends show that gold has diverged from these historical patterns, maintaining its value despite these adversarial conditions.
READ MOREFederal Reserve Reveals Over 1,800 Banks Accessed Emergency Funds Post-SVB Collapse
The Federal Reserve reported that 1,804 depository institutions, representing 20% of all eligible entities, accessed its emergency lending facility following the collapse of Silicon Valley Bank last March. According to the semi-annual Financial Stability Report, most of these institutions—95% in fact—were smaller entities with assets under $10 billion. The Bank Term Funding Program was established to counteract a liquidity crisis triggered by a sudden surge in withdrawals, which led to the failures of major banks like SVB and Signature Bank, necessitating a swift governmental intervention to stabilize the financial sector.
READ MOREGold Climbs for Fifth Week as Middle East Tensions Heighten Market Uncertainty
Gold prices are on pace for a fifth consecutive weekly increase, driven by heightened tensions between Iran and Israel, which spurred safe-haven buying. As of Friday afternoon, spot gold rose 0.7% to $2,395.15 per ounce, with earlier peaks reaching $2,417.59. Over the week, prices climbed by 2.2%. Meanwhile, U.S. gold futures also saw a similar uptick, closing 0.7% higher at $2,413.8 per ounce. This trend reflects investors' concerns over escalating geopolitical risks and their impact on financial markets.
READ MORECostco Offers Gold, But Reselling Proves Challenging
Buying a gold bar at Costco is as easy as adding it to your cart, but selling it involves more effort and can be less lucrative. Adam Xi, a 33-year-old from Philadelphia, experienced this firsthand. After purchasing a gold bar for $2,000, he struggled to resell it without a loss, contacting five different dealers before settling for a price just $20 below market value at $1,960. Many are discovering that gold is not as liquid an asset as they hoped, facing challenges when they decide to liquidate their investments.
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