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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READ MOREIndia's Gold Demand Eases Post-Festival, Prices Remain Strong
India's gold market saw a 12% year-to-date increase in prices, with demand slowing after the Akshaya Tritiya festival. The gap between domestic and international gold prices narrowed, and the RBI increased its reserves by 30.6 tons, reaching a record 834.2 tons. Gold ETFs saw positive inflows in May, and imports consistently rose. While gold hit an all-time high in mid-May before slightly correcting, it remains one of the best-performing assets. Future demand is expected to focus on the festival season in Q3, with continued interest in bars and coins.
READ MOREGold's Long-Term Strength Predicted to Persist
Gold's long-term strength is expected to continue due to its perceived value rather than practical use. Unlike other commodities like oil, gold's price is primarily influenced by supply and perceptions of currency value. Recent global inflation has driven gold prices up, and even as inflation cools and central banks prepare to cut interest rates, gold has seen only minor price declines.
READ MOREChina Resumes Gold Buying
China has resumed buying precious metals, boosting bullish sentiment in the market. The Shanghai Futures Exchange holds significant positions in gold and silver, and Chinese Gold ETFs continue to see inflows. In the West, traders are cautious, waiting for more certainty on Federal Reserve rate cuts. Commodity Trading Advisors are expected to increase their net long position in platinum by 16%, further supporting the bullish trend.
READ MORE97% of Salaries Have Failed to Keep Up with Inflation Over Past 5 Years
Over the past five years, salaries in most occupations have not kept up with inflation, which has averaged 5.6% annually, the highest since the early 1980s. Despite significant salary reductions across many industries, including a 10.4% drop in sanitation and environmental conservation jobs, housing prices have surged by 56%. Data from the Bureau of Labor Statistics, the Federal Housing Agency, and Redfin show that if these trends continue, purchasing power will continue to erode, impacting future earnings. The accompanying table provides detailed projections for median salaries adjusted for inflation through 2028.
READ MORERising Non-Bank Reliance Could Amplify Financial Shocks for Big Banks
Non-bank financial institutions are increasingly posing risks to America's big banks, as highlighted by economists in a New York Fed blog post. During market stress, non-banks' demand for liquidity from banks can amplify financial shocks, potentially necessitating mass intervention by authorities. With non-banks operating under less stringent regulations, the interconnectedness between banks and non-banks has intensified, with risk correlation rising from 65% pre-2008 to over 80% now. The commercial real estate sector, with significant upcoming mortgage maturities amid rising vacancies and high interest rates, exemplifies this growing risk.
READ MOREGold Eyes Second Weekly Gain Amid U.S. Rate-Cut Hopes
Gold prices are set for a second consecutive weekly gain, driven by optimism over potential U.S. interest-rate cuts following recent weak economic data. Spot gold rose 0.3% to $2,366.83 per ounce, reaching a two-week high, and has gained over 1% this week. U.S. gold futures increased by 0.5% to $2,380.80. Softer economic indicators, including a slowdown in housing and tepid retail sales, have bolstered hopes for a rate cut, reducing the opportunity cost of holding non-yielding bullion. Meanwhile, China's yuan hit a seven-month low, further boosting gold demand.
READ MOREJamie Dimon Warns of U.S. Debt Crisis as Nation Adds $2.1 Trillion in Three Months
America's escalating public debt has reached $34.7 trillion, and experts like Jamie Dimon and Jerome Powell are alarmed by the rapid increase, with an additional $2.1 trillion added in just three months. The Congressional Budget Office (CBO) reports the deficit will rise from $1.5 trillion this year to $2.6 trillion by 2034, with the debt-to-GDP ratio expected to surge from 99% to 122%. The rise is fueled by recent legislation, including $95 billion in aid to Ukraine, Israel, and Indo-Pacific countries, along with ongoing funding obligations.
READ MORECBO Report: U.S. National Debt to Exceed $56 Trillion by 2034
A Congressional Budget Office report projects that the U.S. national debt will exceed $56 trillion by 2034, up from just under $35 trillion currently. The growing debt is fueled by higher spending than tax revenues, with a $1.9 trillion deficit expected in 2024. Key contributors to the rising deficit include student loan debt cancellation, aid to Ukraine and Israel, and increased Medicaid costs.
READ MOREGoldman Sachs Recommends Gold to Mitigate Inflation Risk from U.S. Elections
Goldman Sachs strategists suggest that gold can hedge against inflation risks linked to a Republican sweep in upcoming U.S. elections, citing potential higher import tariffs, reduced immigration, tighter Iranian oil sanctions, lower taxes, and possible influences on Fed policy. A Democratic sweep could also pose risks due to potential significant corporate tax increases.
READ MOREThe Real Story Behind China's Gold Demand and Reserves
Despite speculation that China's People’s Bank of China (PBOC) drove gold prices to an all-time high in May, its official gold reserves, though growing, are not exceptionally large compared to other countries. China's gold reserves constitute less than 5% of its total forex reserves. However, China remains the world's largest gold importer and producer, highlighting strong overall demand for gold.
READ MOREHistory Warns: Recession Looms as Fed Maintains High Interest Rates
Despite falling inflation and reduced consumer spending, the Federal Reserve decided not to lower interest rates on June 12, raising concerns about a potential recession. Historically, restrictive credit policies have led to economic downturns, hurting ordinary people reliant on credit. Policymakers should heed past lessons that deflation is more dangerous than inflation and consider low rates and increased government spending to benefit the economy and citizens.
READ MOREWorld Gold Council Survey: 29% of Central Banks to Increase Gold Holdings in 2024
The World Gold Council's 2024 survey reveals that central banks plan to continue increasing their gold reserves amid a complex geopolitical and financial environment. In 2023, central banks added 1,037 tonnes of gold, following a record 1,082 tonnes in 2022. The survey, conducted from February to April 2024, shows 29% of respondents intend to boost their gold holdings in the next year to rebalance their assets and address financial market concerns.
READ MOREChina's Energy Consumption Per Person Outstrips Europe, Led by Tech and Renewables
China's per capita energy use surpassed Europe's for the first time last year, driven by technology and manufacturing demands. While China increased coal-fired generation, it also led in adding renewable energy capacity, reducing its carbon intensity. This shift highlights a global decarbonization challenge, as declining fossil fuel use in Europe may increase emissions in manufacturing-heavy regions like China and India.
READ MORETether Launches a New Gold-Backed Dollar-Tracking Token
Tether has introduced "Alloy," a new gold-backed asset, with its first token, aUSD₮, pegged to the U.S. dollar and backed by Tether Gold. This innovative product aims to provide price stability by combining the stability of the dollar with the value of gold. The system adjusts collateral values in real-time, and liquidates assets if gold's value drops too low, ensuring overall stability.
READ MOREYuan Hits Weakest Level Since November as China Loosens Currency Control
China's central bank set the yuan's reference rate at its weakest since November, signaling a loosening grip on the currency as the dollar strengthens and traders expect prolonged high US interest rates. The yuan remains under pressure due to capital outflows and mixed economic data, while Chinese banks maintain their benchmark lending rates.
READ MORESoft U.S. Data Pushes Gold to Two-Week High
Gold prices reached a two-week high on Thursday due to weak U.S. economic data boosting expectations of Fed rate cuts later this year, along with global election uncertainties. Spot gold rose 0.3% to $2,333.69 per ounce, while U.S. gold futures remained steady at $2,347.30. Market expectations of the Fed's policy shift and persistent geopolitical tensions continue to support gold. Analysts maintain a positive outlook, targeting $2,500 per ounce by the end of 2024.
READ MORECBO Raises 2024 US Budget Deficit Forecast by 27% to Nearly $2 Trillion
The Congressional Budget Office (CBO) has increased its 2024 US budget deficit forecast by 27% to nearly $2 trillion, highlighting significant federal borrowing. The deficit is now projected at $1.92 trillion, up from $1.69 trillion in 2023, due to additional spending and student-loan relief measures. The CBO also predicts faster growth and higher inflation, with the Federal Reserve expected to delay interest rate cuts until early 2025.
READ MOREGold Prices Rise as Market Eyes Potential Fed Rate Cuts
Gold prices reached a one-week high early Thursday, driven by expectations of a Fed rate cut due to signs of easing inflation and a slowing US economy. Geopolitical risks in Europe also supported gold, although a stabilizing US Dollar and rebounding bond yields kept the price below the 50-day Simple Moving Average.
READ MOREChina Commands 80% of Global Solar Silver Supply Chain
China controls 80% of the solar silver supply chain, highlighting its dominance in the solar industry. This control spans from mining and refining to the creation and installation of solar panels. A recent report by Bank of America underscores this dominance, raising concerns amid Janet Yellen's trip to China. As silver is crucial for solar panels, the supply chain is critical to understanding future demand trends, with potential silver shortages predicted within five years due to increased consumption for net-zero energy applications.
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