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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India's Bold Move: Reducing Bullion Import Taxes to Revitalize Market
India has significantly reduced import duties on gold and silver from 15% to 6%, aiming to boost retail demand and combat smuggling in the world's second-largest bullion consumer. This move is expected to create a more level playing field for industry stakeholders and potentially increase global gold prices. However, it may also widen India's trade deficit and pressure the rupee. The decision led to an immediate drop in local gold prices, which could stimulate demand that had been suppressed by record-high prices earlier in the month.
READ MOREBiden's Exit Sparks Gold Price Fluctuations as Traders Weigh Implications
Gold prices dipped on Monday as traders processed President Joe Biden's decision to withdraw from the 2024 presidential race. Spot gold fell below $2,400 an ounce, as the uncertainty surrounding the election boosted gold's appeal as a safe-haven asset. Meanwhile, concerns about declining demand in Asia and potential liquidations also weighed on prices. Despite these fluctuations, gold has surged over 15% this year, supported by expectations of U.S. interest rate cuts and geopolitical tensions.
READ MOREElection-Year Politics Add Volatility to Already Strained Bond Markets
Global bond markets are facing increasing pressure due to a combination of rising government debt loads and unpredictable election-year politics. Recent events, such as Macron's surprise election call in France and Trump's strong performance in the US presidential debate, have triggered bond market tremors. These incidents highlight the growing concern about governments' ability to manage their expanding debt, which is expected to reach a record $56 trillion this year.
READ MOREHedge Funds Go for Gold as Political and Economic Uncertainties Loom
Hedge funds have significantly increased their bullish positions on gold, reaching a four-year high, as reported by Bloomberg. This surge in gold investments is driven by growing concerns over the upcoming U.S. presidential election and uncertainty surrounding the timing of interest rate cuts. The trend is further evidenced by gold prices hitting an all-time high of $2,483.73 per ounce on Wednesday, as investors seek safe-haven assets amid geopolitical risks and anticipate more aggressive monetary easing by the U.S. Federal Reserve.
READ MOREOil Prices Decline with Biden's Withdrawal and Fed Rate Cut Prospects
Oil prices fell on Monday following President Joe Biden's announcement that he will not seek re-election. Brent crude and U.S. West Texas Intermediate crude futures both saw declines, with market analysts suggesting that the potential for rate cuts could impact oil demand. Despite Biden's exit not being a major factor for oil markets, the broader economic implications of high interest rates and potential recession risks continue to weigh on investor sentiment.
READ MOREUnderstanding Recession Indicators: Is the US Economy at Risk?
The possibility of a recession in the United States remains a concern, despite efforts by the Federal Reserve to stabilize the economy through increased interest rates. While there are no immediate signs of serious recession risk, concerns persist about consumer spending's ability to sustain economic growth. Despite expectations of a soft landing with slow GDP growth, factors such as stubborn inflation, high interest rates, increasing debt delinquencies, and rising unemployment rates (4.1% as of June 2024) make it difficult to predict the economy's ultimate trajectory.
READ MOREZambia Sets Ambitious Target: 1 Million Tons of Copper by 2027
Zambia, Africa's second-largest copper producer, aims to increase its annual copper production by over 40% to reach 1 million tons by 2027, according to the country's Finance Ministry. This growth strategy is part of a larger plan to capitalize on the anticipated global copper supply shortage driven by increasing demand from the energy transition sector. Despite facing recent challenges that led to a 14-year low in production in 2023, Zambia plans to resolve issues at major mines, develop new projects, and expand existing facilities to achieve this goal. The country's long-term vision includes quadrupling copper output to 3 million tons by 2031.
READ MOREJamie Dimon: Premature Rate Cuts Could Trigger Inflation Rebound
Jamie Dimon, CEO of JPMorgan Chase, has advised the Federal Reserve to hold off on cutting interest rates, expressing concerns that inflation could resurge. Dimon's stance contrasts with the Fed's current trajectory, which suggests a potential rate cut in September 2024. Dimon believes that while inflation has been decreasing, the risk of it rising again remains significant, and premature rate cuts could destabilize the economy.
READ MORETeen Workforce Grows as Inflation Pressures Family Budgets
Rising inflation has pushed more teenagers into the workforce to support their families financially. Many teens work various jobs to pay for personal expenses, save for college, and help her family with groceries and pocket money for her siblings. This trend reflects a broader pattern where teens are increasingly working to alleviate the financial strain on their parents, as consumer prices have surged over 20% in the past three years.
READ MOREBiden's Exit Sparks Market Uncertainty, Gold Prices Respond
Gold prices remained steady following President Joe Biden's withdrawal from the 2024 presidential race. While gold initially gained from increased safe-haven demand, investors have mixed views on what a potential Trump victory would ultimately mean for the precious metal. Factors such as trade policies, US-China relations, and monetary policy expectations continue to influence gold prices, with the metal recently reaching record highs due to anticipation of Federal Reserve interest rate cuts
READ MORECould Trump's Policies Strengthen Dollar? Experts are Split
Despite Donald Trump's rhetoric favoring a weaker dollar, major banks predict that a second Trump presidency would likely strengthen the US currency. Analysts from Deutsche Bank, Morgan Stanley, and Barclays argue that Trump's proposed policies, particularly tariffs and trade restrictions, would have a more significant impact on boosting the dollar than any efforts to weaken it. These banks suggest that the long-term economic factors and potential global market reactions to Trump's policies would ultimately result in a stronger dollar, regardless of his stated preference for a weaker currency.
READ MOREMorgan Stanley Forecasts Gold Prices Surpassing $2,600 by Year-End
Morgan Stanley predicts that gold prices could exceed $2,600 per ounce by the fourth quarter of 2024, driven by a significant increase in central bank purchases and strong retail demand, particularly from China. The price of gold has already risen 50% from its 2022 lows and 25% since February, with continued inflows into gold ETFs suggesting robust investor interest. While the market faces volatility due to potential U.S. recession fears, the strategists believe that financial flows will support further price increases, especially as the Federal Reserve is expected to cut interest rates.
READ MOREBofA Predicts Market Gains with Focus on Bonds, Gold, and Undervalued Stocks
Bank of America strategists, led by Michael Hartnett, are advising investors to adopt a bullish stance on bonds, gold, and undervalued stocks in anticipation of a Federal Reserve interest rate cut, a potential victory for Donald Trump in the upcoming election, and a soft landing for the U.S. economy. They suggest that proposed tariffs could be deflationary, and the bond market is already pricing in rate cuts amid concerns about inflation and a weakening labor market. Recent data shows significant inflows into gold and bonds, while the S&P 500 and small-cap stocks have also seen gains this year, indicating a positive sentiment in the market.
READ MORESilver Market Teeters on Edge as Volatility Drops Prices
The silver market experienced significant volatility and a sharp decline this week, approaching a critical support level at $28.50. This area, previously a strong resistance point, may trigger a bounce. However, a break below $28 could lead to further drops. Silver's price is influenced by factors such as the US dollar, interest rates, and overall risk appetite. The market appears to be at a crucial juncture, with potential for either a rebound towards $30 or a continued decline to $26, depending on how it responds to the current support level.
READ MOREGlobal Business Grinds to Halt as CrowdStrike Update Triggers Massive IT Meltdown
A widespread IT outage, potentially the largest in history, disrupted global businesses on Friday, affecting financial services, healthcare, broadcasting, and air travel. The issue stemmed from a defect in CrowdStrike's latest update for Windows systems, which the company is actively addressing. While not a cyberattack, the outage coincided with separate issues in Microsoft's cloud services, causing significant disruptions and impacting CrowdStrike's stock price.
READ MOREGlobal IT Outage Causes Financial Chaos and Delays
A widespread technology outage caused by a malfunction in a routine software update from cybersecurity firm CrowdStrike disrupted airlines, banks, hospitals, and emergency services globally. Thousands of Microsoft users were knocked offline, stranding airport travelers, delaying hospital appointments, and interrupting live news broadcasts. Major airlines such as Delta, United, and American Airlines grounded all flights, and 911 phone lines in states like Alaska and Ohio were down. CrowdStrike confirmed it was not a cyberattack but a software glitch, and a fix has been sent to customers. Mac and Linux users were unaffected.
READ MOREGold plummets to near $2,400 as profit-booking kicks in, US Dollar advances
Gold prices have fallen to near $2,400, extending a three-day losing streak after hitting all-time highs above $2,480. This decline is attributed to profit-taking, a recovery in the US Dollar, and rising bond yields. Political uncertainty in the US, with speculation about President Biden possibly not running for re-election and an assassination attempt on Donald Trump, has boosted the US Dollar's appeal. Market expectations for the Federal Reserve to reduce interest rates in September remain strong, influenced by recent inflation data and cooling labor market conditions. The US Dollar Index has rebounded to near 104.30, further pressuring gold prices.
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Gold's Market Share: "As Irrelevant As A Pimple On An Elephant's Behind" - Rick Rule
In today’s GoldSilver update Alan Hibbard sits down with legendary commodities investor and speculator Rick Rule.
READ MOREIndia's Gold Market: ETFs and Central Bank Buying Shine Amid Jewelry Slump
India's gold market in June 2024 showed a mixed performance, with investment demand and central bank purchases offsetting weak jewelry sales. Despite a slight decline in June, gold prices remained high, with year-to-date gains of 16%. Gold ETFs continued to see strong inflows, with assets under management reaching INR344bn, a 54% year-over-year increase. The Reserve Bank of India made its largest monthly gold purchase in nearly two years. However, jewelry demand remained subdued, and there was a significant widening of discounts between domestic and international gold prices. Looking ahead, jewelry demand is expected to pick up during the festival season starting in August, while interest in bars and coins is anticipated to continue.
READ MOREChina's Gold Market: ETF Inflows Surge Despite Weak Wholesale Demand in June
China's gold market in June 2024 showed mixed signals, with wholesale demand remaining weak while ETF inflows continued to strengthen. Gold withdrawals from the Shanghai Gold Exchange increased slightly from May but were significantly lower year-over-year, indicating persistent weakness in overall demand. However, Chinese gold ETFs saw their seventh consecutive monthly inflow, reaching record-high assets under management. The People's Bank of China reported no changes in gold reserves for the second month in a row. Despite a slight decline in gold prices in June, both RMB and USD-denominated gold prices showed substantial gains for the first half of 2024. Looking ahead, while high gold prices may pressure demand, economic uncertainties and low consumer confidence could support investment in gold bars and coins.
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