The New iPhone: Cheaper in Gold, Pricier in Dollars

Have you heard the latest about the iPhone 16? The cost of purchasing one is decreasing – if you’re paying in gold, that is.

The experts at leading gold research firm, Incrementum, have released some compelling statistics on how the cost of an iPhone has changed over the years when priced in gold:

The latest iPhone 16 Pro can now be purchased for just 0.60 ounces of gold. That’s 23% less than the cost of its predecessor, the iPhone 15 Pro, which cost roughly 0.78 ounces.

Of course, Apple doesn't accept gold as payment. When paying in US dollars, the price of iPhones has increased significantly. Since 2007, iPhones have become 150% more expensive in dollars. 

This disparity underscores the impact of currency devaluation and the preservation of purchasing power offered by gold. It's a fascinating perspective on the true nature of inflation and the cost of goods in our economy.  

Rates Cut, Gold and Silver Soars

The Federal Reserve's 50 basis point interest rate cut has ignited a rally in precious metals. 

Gold soared past $2,670 per ounce on Thursday, up nearly 30% year-to-date. Meanwhile, silver is testing price levels above $32/oz that we haven't seen since 2012.  

Gold vs Silver Year to Date

After the market has responded positively, many analysts predict more rate cuts are coming. Goldman Sachs expects three more quarter-point cuts this year, starting in June, while Bank of America forecasts four. The next potential rate decision is set for May 1, 2024, at the Fed's upcoming FOMC meeting. 

The market is already strong for precious metals, but these potential additional cuts could further boost the positive environment. If predictions hold true, we may see gold and silver prices climb even higher. 

Emerging Markets Grapples with Inflation Rate

Inflation may have moderated in the United States, but other countries aren't so lucky. Here are five of the countries around the world currently grappling with the highest rates of inflation: 

1. Zimbabwe: The country is facing severe economic challenges with a projected inflation rate of 190.2% for 2024. This hyperinflation continues to erode the purchasing power of citizens and destabilize the economy. 
2. Argentina: With a projected inflation rate of 69.5% for 2024, Argentina is experiencing one of the highest inflation rates globally. The country's economic woes have led to a significant devaluation of the peso and widespread economic hardship. 
3. Turkey: In August 2024, Turkey's inflation rate stood at 61.78%, down from 71.6% in June. The Turkish central bank has aggressively raised interest rates from 8.5% to 40% in an effort to combat inflation. While price increases are beginning to slow, analysts suggest that achieving substantial reduction will require sustained tight monetary policy. 
4. Pakistan: The country is projected to have an inflation rate of 17.5% in 2024. Pakistan's economy has been struggling with high inflation, currency depreciation, and a balance of payments crisis. 
5. Nigeria: With a projected inflation rate of 15.4% for 2024, Nigeria rounds out the top five. The country has been battling high inflation due to various factors, including currency devaluation and food price increases. 

These high inflation rates highlight the ongoing economic challenges faced by emerging markets and developing economies. Each country is implementing various measures to combat inflation, from monetary policy tightening to structural reforms, with varying degrees of success. 

In Other News...

Commercial Property Market Poised for 2025 Rebound

The commercial real estate sector is signaling a turnaround following a tough stretch. Declining interest rates and improved valuation clarity are luring buyers back, while lenders and owners are increasingly open to selling troubled assets. Despite transaction volumes remaining below historical norms, there's rising confidence that forced sales and emerging investment prospects will bring heightened activity in 2025.  

Lebanon-Israel Conflict Escalates with Deadliest Strikes in Decades 

Israeli airstrikes across Lebanon claimed at least 492 lives and injured over 1,600, as reported by Lebanese officials. The Israeli military targeted around 1,600 Hezbollah positions. Tens of thousands of Lebanese civilians evacuated southern areas, fleeing towards Beirut and the north. This unprecedented escalation marks the conflict's deadliest day in decades, fueling fears of a potential regional war.

China's Central Bank Rolls Out Aggressive Growth-Boosting Package

China's central bank has launched its most substantial economic boost since Covid-19, targeting the nation's faltering economy. The package cuts bank reserve requirements, lowers key rates, and relaxes mortgage terms. While markets and the yuan responded positively, experts suggest further fiscal measures may be needed to reach the 5% growth goal for 2024.

That’s it for this week's GoldSilver Nuggets. We'll be back next week with more news and updates.

Best,

Brandon S.  
Editor
GoldSilver