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.
Subscribe
Gold Breaks Records, Surpassing $2,100 Mark with Analysts Predicting Further Rise
Gold prices reached a record high of $2,100 per ounce, driven by geopolitical tensions, expectations of U.S. interest rate cuts, and a potential weaker dollar. Analysts anticipate gold maintaining above $2,000, possibly reaching $2,200 by end of 2024. The demand for gold, seen as a safe-haven asset, is bolstered by factors like the Israel-Palestinian conflict and central banks' interest in gold. A forecasted shift in Fed policy in 2024 could further increase gold's attractiveness.
READ MOREPentagon Reports Attack on U.S. Warship and Commercial Vessels in Red Sea
A U.S. warship, USS Carney, and three commercial vessels were attacked in the Red Sea, linked to tensions from Israel's conflict with Hamas. The Houthis, an Iran-backed group in Yemen, claimed responsibility, targeting the ships with drones and missiles. The USS Carney, which had previously intercepted attacks from Yemen, responded without damage or crew injuries. The attacks raise concerns about the safety of international maritime commerce in a key global trade corridor and the potential wider impact on Middle East stability.
READ MOREInvestor Patience Wears Thin Over Mounting U.S. Deficits
The U.S. faces fiscal difficulties with a rising national debt expected to reach 115% of GDP in a decade and concerns over who will buy the massive issuance of Treasuries. Despite rising Treasury yields and a credit rating downgrade, the U.S.'s economic strength and the dollar's status as a reserve currency offer some investor confidence. However, there's caution against complacency, with the UK gilt crisis serving as a warning of potential market reactions to fiscal instability.
READ MOREECB's Nagel Cautions: 'Way Too Early' to Claim Success in Inflation Fight
ECB's Nagel stated that the battle against inflation is ongoing and challenging, with potential geopolitical tensions posing further risks. He couldn't confirm if interest rates have peaked, as ECB decisions are data-dependent. Nagel expects inflation to decrease gradually and unevenly, influenced by factors like ending energy price caps and strong wage growth in Europe.
READ MOREFed's Warning: Interest Rate Reductions Might Be Further Off Than Investors Expect
Wall Street anticipates the Federal Reserve might cut interest rates as early as May, possibly in March, but Federal Reserve officials, including Chair Jerome Powell, indicate that further rate hikes are still possible. Despite recent slowing inflation, the Fed's focus remains on maintaining rates to reach a 2% inflation target, with some officials open to raising rates further if needed. This stance contrasts with investor optimism for early rate cuts in 2024.
READ MOREWall Street's 'Fear Gauge' Drops Amid Investor Optimism on Fed's Inflation Battle End
The Vix, known as Wall Street's "fear gauge," has dropped to a four-year low of 12.4, suggesting investor complacency about the Federal Reserve managing inflation without economic downturn. This decrease in volatility coincides with a strong S&P 500 performance and a recent decline in U.S. inflation. However, analysts warn of potential future market instability, as longer-term forecasts indicate higher volatility ahead. Concerns also exist about overlooked risks in areas like commercial real estate and credit delinquencies.
READ MORE
"SILVER Is One of the Most Important Charts In Macro RIGHT NOW"
Gold and silver are setting records and building momentum. We got the latest official inflation numbers this week… and the Fed seems to live in a different reality than the rest of us.
READ MOREWhy The Rally In Gold And Silver Is Far From Over
Silver's demand remains high due to its industrial use, but the notable trend is the record pace of gold accumulation by central banks globally. Key factors driving the rise of precious metals include the U.S. national debt surpassing $34 trillion, high interest servicing costs comparable to the Defense Department's budget, and geopolitical tensions. Additionally, a weakening dollar and the Federal Reserve's expected shift from restrictive to more accommodative policies contribute to this trend.
READ MOREGold Hits an All-Time High at $2075
Gold is at a critical juncture, benefiting from December seasonals and expectations of a dovish pivot by the Federal Reserve. The dollar's weakness adds to gold's favorable position. Recently rising to $2071, up $35, gold shows potential for further gains without being overcrowded. Short-term profit-taking might follow, but if gold stays above $2050, it's poised for a significant bullish breakout.
READ MOREPowell's Comments Fuel Gold Rally as Investors Bet on Rate Peak"
Gold prices hit a seven-month high at $2,060.69 per ounce, and U.S. gold futures rose to $2,080.60, following Federal Reserve Chair Jerome Powell's comments hinting at possible U.S. monetary policy easing. These remarks led to increased expectations of an early rate cut next year. Meanwhile, silver prices also climbed, reaching a six-month high of $25.39 per ounce. Both gold and silver benefited from lower interest rates and a weaker dollar.
READ MOREHiring Of Tax Enforcers Will 'Ramp Up' Soon: IRS Warns
IRS Commissioner Danny Werfel announced plans to increase hiring of tax enforcement agents in 2024, with a focus on complex cases involving big corporations and high-income earners. This is part of a broader initiative to enhance IRS capabilities using $60 billion in additional funding. Despite assurances that audits will not increase for Americans earning less than $400,000, there are concerns about the lack of a clear definition of "high income" at the IRS, which could potentially lead to more widespread audits. Additionally, the IRS is hiring more armed agents for its criminal investigations division, though Werfel emphasized these hires are not intended to increase the number of tax audits.
READ MOREThere Only Two Solutions to a Global Debt Crisis
The Heritage Foundation reports that 40% of U.S. personal income taxes are now consumed by interest payments on federal debt. In October, $88.9 billion was paid in interest, with annual payments potentially exceeding $1 trillion. The article likens this to a person overwhelmed by credit card debt. Two solutions are suggested: hyperinflation, akin to Venezuela's model, which could drastically devalue the debt but with severe economic consequences, and a debt jubilee, an ancient practice of erasing debt, which is seen as an unlikely remedy in the modern context.
READ MOREFed Powell Calls Talk of Cutting Rates ‘Premature’, Says More Hikes Could Happen
Federal Reserve Chairman Jerome Powell indicated Friday that it's too early for aggressive interest rate cuts due to inflation concerns. He emphasized maintaining restrictive policies until inflation is reliably near the 2% target, hinting at further tightening if necessary. This statement contrasts with market expectations of the Fed easing in 2024, which has recently boosted Wall Street. Powell's remarks received a mixed response in the markets.
READ MORE
Missed Opportunities: The Surprising Risks of Timing the Market
Buy low, sell high... Sounds easy enough. But history shows that timing the market could have dire consequences for your overall returns...
READ MOREPending Home Sales Drop to a Record Low, Worse Than During the 2008 Great Financial Crisis
In October, U.S. pending home sales plunged 1.5%, reaching their lowest level since 2001, surpassing the downturn observed during the Great Financial Crisis. This significant drop, which marked an 8.5% decline from the previous year, reflects an acute crisis in the housing market. High mortgage rates, which momentarily exceeded 8%, combined with a severe shortage of available homes, have drastically suppressed housing demand. The situation is particularly dire in the West, where the decline in home sales has been most severe, indicating a market contraction worse than what was experienced during the Great Financial Crisis.
READ MOREUS Manufacturing Surveys Signal Stagflation
November's U.S. manufacturing PMI data indicates a downturn, signaling economic stagnation. The S&P Global Manufacturing PMI fell to 49.4, showing a contraction driven by reduced new orders and employment. The ISM Manufacturing PMI remained unchanged at 46.7, missing expectations and reflecting broad sectoral weakness. This slowdown, marked by a significant drop in factory employment not seen since 2009, raises concerns about reduced consumer spending and weaker wage growth. The data points to a stagnating economy with reduced manufacturing activity and potential GDP contraction, underlining the risks of stagflation.
READ MOREHow President-Elect Milei Could Make Argentina a Beacon of Freedom and Prosperity
Javier Milei's election as the world's first anarcho-capitalist president is historically significant. It's unprecedented for someone elected to run a state to aim at abolishing it, proposing minimal government involvement. His victory, especially among young and poor supporters, could signal a trend towards greater individual freedom. Milei understands the government's negative role in the economy and money. He proposes sound money policies and free-market principles, aiming for Argentina to become an investment magnet. His foreign policy should focus on neutrality, being friendly to all but allied to none. If Milei's reforms succeed, Argentina could become one of the most prosperous countries, attracting capital and educated immigrants seeking freedom.
READ MOREWarning for 2024: Euro-Zone Crisis Doom Loop Revisited by S&P
The Euro-zone faces a persistent risk of a "sovereign doom loop," where banking sector troubles could severely impact sovereign states. Despite attempts to disconnect banks from state finances, S&P Global Ratings warns of heightened risks in 2024 due to recession concerns and uncertain fiscal policies. This situation, similar to the UK's 2022 financial crisis, could lead to significant market confidence loss. Banks, heavily invested in government bonds, may further increase their holdings, deepening the interlinkage and risk. The region could face further destabilization due to potential austerity measures and tight monetary policies.
READ MOREHeres Why US Banks Are Hoarding Liquidity
The persistence of high bank reserves in the US despite the Federal Reserve's balance sheet reduction hints at underlying financial strains. Banks are hoarding cash, incurring higher costs to maintain liquidity due to substantial unrealized losses on bond portfolios. This cautious approach is fueled by recent bank failures and regulatory shifts, fostering a climate of financial insecurity. The situation raises concerns about the Federal Reserve's quantitative tightening policy and suggests potential early termination of this strategy if financial stress intensifies. The declining use of the Fed's reverse repo facility further underscores these mounting pressures in the banking sector.
READ MOREFed's Barr Suggests Banks Should Rely on Discount Window for Liquidity Solutions
Michael Barr, the Fed's Vice Chair for Supervision, highlighted the discount window as essential for financial stability and monetary policy. Speaking at an ECB event, he urged banks to use this funding source regularly, not just in crises. His comments follow recent U.S. bank failures and a report recommending Federal Home Loan Banks to guide lenders to the Fed in severe stress. Barr reassured that using the discount window is a positive action and shouldn't be seen negatively by banks or regulators.
READ MORE