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 NEWS$2000 Monthly Close? What Happens To GOLD When the Fed Stops Hiking Interest Rates?
Where does Gold go from here? Join Mike Maloney and Alan Hibbard as they explore the 5 times in the last 50 years that gold's price has behaved just like it is today... and see where it usually goes next.
NILLION: The Future of Securing Assets (EVEN GOLD) & Data Online?
Welcome to a glimpse into the future of internet security. In this exclusive interview, Mike Maloney dives deep into NILLION, a revolutionary technology with Alex Page.
READ MOREGold Heads for Second Straight Monthly Rise
Gold prices are on track for their second consecutive monthly gain, driven by expectations of a Federal Reserve rate cut. Despite a minor drop, spot gold remains robust at around $2,035.53 per ounce, reflecting a 2.7% increase this month. U.S. gold futures also experienced a slight decline. The weakening dollar and lower Treasury yields contribute to gold's appeal. Market predictions indicate a possible rate cut by March, with gold prices expected to hit new highs in early 2024 due to the Fed's policy shift and a slowing economy. Silver also continues to rise, aligning with the positive trend in precious metals.
READ MOREInflationary Expectations Do Not Cause Inflation
Inflation is often linked to rising prices due to factors like oil price hikes, influencing inflationary expectations. However, without an increase in the money supply, a general rise in prices cannot occur. Economists like Ben Bernanke focus on managing these expectations to control inflation. Milton Friedman argued that predictable inflation is less harmful than unexpected inflation. Nonetheless, the core issue is that inflation is fundamentally about the increase in the money supply, not just price rises, and its impact on the economy goes beyond just changing price levels.
READ MOREU.S. Treasury’s Financial Crisis Warning Bell Didn’t Ring on Repo Crisis of 2019 or 2023 Bank Runs
The Office of Financial Research's Financial Stress Index, designed to foresee financial crises, has notably failed in its role. It didn't predict the financial upheaval of the COVID-19 pandemic or the major U.S. bank failures that followed. This raises serious concerns about the reliability of the tools used by federal banking regulators and their grasp of the true state of the financial system. Despite its ineffectiveness, this index continues to be promoted, suggesting a possible disconnect between the perceived and actual financial stability in the U.S.
READ MOREInterest Payments on the Exploding Federal Debt vs. Tax Receipts
US government debt is rapidly approaching $34 trillion, with rising interest rates pushing the Treasury's borrowing costs higher. Inflation and Federal Reserve rate hikes have led to interest rates on new Treasury securities reaching between 4.3% and 5.5%. The average interest rate on all government debt increased from 1.57% in February 2022 to 3.05% in October. Consequently, the government's interest payments have doubled since 2018, reaching $245 billion in Q3 2022. This escalation in debt servicing costs is placing a significant financial burden on the government, despite high tax revenues.
READ MOREIn Q3, “Unrealized Losses” on Securities Held by Banks Jump by 22% To $684 Billion
"Unrealized losses" at FDIC-insured commercial banks on securities, primarily Treasury securities and MBS, jumped by $126 billion to $684 billion at the end of Q3. This increase is linked to rising interest rates, which caused a significant drop in the market prices of these bonds. While these losses are considered temporary since banks will be paid face value at maturity, they can pose risks if they become permanent.
READ MOREIs Your Currency Safe? Within A Year, Millions May Lose Their Savings Due To AI Threat
Cybercrime is on the rise in Europe, with Germany reporting record levels in 2021. Cybercriminals are increasingly using AI for sophisticated hacks and scams, including AI-written code for mass data theft and voice mimicry to bypass security systems. These criminals often recruit openly online and operate globally, making it challenging for law enforcement to track and prosecute them. For instance, German police discontinued an investigation into an €800,000 theft, citing difficulties in catching perpetrators based abroad. This highlights a broader issue of inadequate resources and international cooperation in tackling cybercrime.
READ MOREUS Pending Home Sales Index Slumps To Record Low -6.6% YoY, Mortgage Rates Ease, Purchase Apps Stall
The U.S. housing market is under strain, with pending home sales dropping 1.5% in October and down 6.6% year-over-year, marking a continuous negative trend for 23 months. This decline has driven the Pending Home Sales Index to a new record low. High mortgage rates and limited inventory are major challenges, affecting the market despite recent decreases in mortgage rates. This situation is impacting Americans' primary source of wealth and raising concerns about the ongoing financial pressure.
READ MORESurge in Continuing Jobless Claims Hits Highest Level in Two Years
Last week's significant drop in non-seasonally adjusted initial unemployment claims reversed the previous surge, with a minor increase in seasonally adjusted claims. Continuing claims, however, have risen above 1.9 million for the first time since November 2021. This rise in claims, attributed to seasonal distortions, is expected to further increase, according to Goldman Sachs. They predict an additional rise of around 125,000 claims by March, indicating ongoing challenges in the labor market.
READ MOREFed’s Favorite Inflation Indicator - Core PCE Deflator - Fell to +3.5% Yoy in October From +3.7%
The Federal Reserve's preferred inflation gauge, the Core PCE Deflator, dropped to 3.5% year-over-year in October, its lowest since April 2021, from 3.7% in September. The headline PCE also decreased to 3.00% YoY, under the expected 3.1%. Both income and spending growth have slowed, with income growth at its slowest since December 2022 (4.5% YoY) and spending growth at its slowest since February 2021 (5.3% YoY). The savings rate saw a minor increase from a revised 3.7% to 3.8% in October. This data raises questions about whether consumers are beginning to cut back or simply reaching their credit limits.
READ MOREJust to Afford the Basics, Americans Need an Extra $11,400 Today
ChatGPT A recent analysis using government data reveals that the typical American household now needs an extra $11,434 annually to maintain the same standard of living as in January 2021, before inflation hit 40-year highs. This financial burden persists despite a receding inflation rate and a strong economy indicated by low unemployment. The analysis, conducted by Republican members of the U.S. Senate Joint Economic Committee, highlights the ongoing struggle of many families amid economic growth. Rising living costs and inflation are key reasons behind Americans' economic pessimism.
READ MOREUS Grocercies UP 25% Since 2020 But Slowing Growth As M2 Money Growth Dies
Under President Biden, inflation remains high, with significant increases in food, used cars, and rent prices since 2020. Food prices rose by 25%, used cars by 35%, and rents by approximately 20%. A survey revealed that the average weekly cost of food for a four-person household increased from $238.32 in 2020 to $315.22 in 2023, a 32% jump. Food CPI peaked in August 2022 at 11.33% and has been decreasing as M2 Money growth slows down. Despite these trends, President Biden attributes high prices to factors other than his administration's policies.
READ MOREThe Discrepancy Between GDP and GDI Is Ongoing and Massive. That Should Bear Glaring Attention!
The BEA revised third-quarter GDP growth from 4.9% to 5.2%, but the Gross Domestic Income (GDI) stands at only 1.5%, highlighting a significant discrepancy. This difference raises questions about the economy's strength, as GDI often receives less attention. Despite higher GDP figures, the lower GDI suggests potential economic weakness, possibly nearing recession. This contrasts with the more optimistic public perception of the economy based on GDP growth alone.
READ MOREThe Treasury Market Continues to Scream a Recession Ahead
The percentage of yield curve inversions in the Treasury market, an indicator often used to predict economic recessions, has recently risen to nearly 90%, signaling a potential recession ahead. This increase comes after a brief period of decline. It's important to remember that just because a recession hasn't yet occurred doesn't mean the probability of it happening has diminished. The Treasury market's current state suggests that the risk of a recession remains high.
READ MOREFamily Offices Move Cash Out of Stocks and Into Private Markets Such as Commodities
Family offices, which manage investments for families typically with assets of $100 million or more, are increasingly investing in private markets rather than public stocks, even amidst market rallies. This shift highlights a significant change in their investment strategies. The focus is not just on private markets; these offices are also expanding their interests into alternative assets like real estate and commodities.
READ MOREAnother Treasury Auction Met With Poor Demand
Tuesday's auction of $39 billion in 7-year Treasury notes received weak demand, marking a notably poor reception compared to expectations set earlier in the day. Primary dealers absorbed a significant portion of the notes, indicating lackluster interest from a broader range of investors. This follows a pattern of varied responses to recent Treasury sales, including Monday's somewhat tepid $54 billion offering of 2-year notes and a more successful $55 billion sale of 5-year maturities. The overall market reaction saw most Treasury yields, particularly the 2-year rate, remaining generally lower after the auction results were announced.
READ MOREAfter Defying Bearish Signal, Gold Rallies Toward ‘Golden Cross’
Gold futures have recently surged to their highest levels since August 2020, marking a significant turnaround from a previous bearish trend. This shift is highlighted by the emergence of a bullish indicator known as a "golden cross." This technical pattern occurs when a short-term moving average, such as the 50-day moving average, rises above a longer-term moving average, like the 200-day moving average. This crossover is often interpreted by investors as a sign of increasing momentum and potential for further price gains in the gold market.
READ MORESoon, Americans May Regret Trusting the Fed and Holding Cash
Amid market uncertainty, investors are holding record amounts of cash, reflecting skepticism about the economy's health despite official positive statistics. The stock market's optimism is driven more by expectations of Federal Reserve rate cuts rather than true economic strength. With concerns about the long-term value of cash due to inflation and credit risks, there is increasing interest in gold as a stable and potentially more profitable alternative. Investors are looking for a catalyst to shift from conventional assets to precious metals like gold, seeing it as a safer option in uncertain economic times.
READ MOREMixing the Economic Elements for Crude Oil to Surge to $150 and Dow 20,000: Rickards
The escalating tensions in Ukraine and Gaza could potentially trigger a sharp increase in oil prices, potentially reaching $150 per barrel. This surge could induce a significant economic downturn, echoing the effects of past oil crises. Additionally, these geopolitical conflicts might precipitate a drastic drop in the Dow Jones index, similar to previous economic slumps caused by similar events. For instance, a severe downturn could lead to a decline in the Dow Jones index comparable to a 45% fall experienced during the 1974 recession, equating to a drop of over 15,000 points from current levels.
READ MOREAmericans Are Saving Less and Drawing Down Their Existing Savings
Americans are increasingly tapping into their savings to maintain their lifestyles amid rising living costs. Recent Morning Consult polling reveals a significant decrease in adults who can cover six months of expenses with their savings compared to last year. Additionally, about 21% are unsure how long their savings will last, up from 15.5% in July 2022. This trend reflects a desire to preserve consumption patterns, even at the cost of dwindling savings, and contributes to ongoing economic uncertainty and pessimistic sentiment.
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