Precious metals news

Gold prices rose on Thursday, supported by a weaker dollar and lower Treasury yields, amid increasing expectations of a U.S. interest rate cut in September. Spot gold climbed 1.2% to $2,410.69 per ounce, breaking a five-session losing streak, while U.S. gold futures increased by 0.7% to $2,450.40. The market is also focused on the upcoming weekly jobless claims data. Analysts suggest that gold could reach new highs as the market adjusts to potential Fed rate cuts, with economic uncertainties and geopolitical tensions further boosting its appeal as a safe-haven asset.

With the data finally out, I was able to update the Global Conventional vs. Unconventional Oil production for 2023.  Thanks to the folks at ASPO France.  I also share some interesting trends that have taken place since 2006, when conventional oil production peaked...

The Japanese yen's recent strengthening against the US dollar has been closely linked to movements in US tech stocks and the broader market. This connection is largely due to the unwinding of the "carry trade," where investors borrowed cheaply in Japan to invest in higher-yielding assets elsewhere. As Japan raises interest rates from near-zero levels, capital is flowing back into the yen, causing significant currency fluctuations and impacting global markets. This shift is reversing a long-term trend of yen weakness and dollar strength, leading to increased volatility in both currency and stock markets.

Former Treasury Secretary Steven Mnuchin has called for the discontinuation of the 20-year Treasury bond, which he reintroduced in 2020, citing its higher yields and additional costs to taxpayers. The bond's reintroduction has resulted in approximately $2 billion in extra annual interest expenses, totaling around $40 billion over its lifespan. Despite the Biden administration's preference for maintaining the bond to ensure stability, Mnuchin argues that the bond has not met expectations and is financially burdensome. The debate over the bond highlights the complexities of managing the U.S. government's growing deficit.

Australia's gold industry is anticipating a surge in mergers and acquisitions (M&A) activity, driven by record-high gold prices and a slowdown in exploration. Larger mining companies are expected to target smaller producers and explorers as a means of expanding their reserves, given the challenges and costs associated with new exploration efforts. This trend has become a major topic of discussion at the Diggers & Dealers Mining Forum, with industry experts noting that favorable market conditions, strong commodity prices, and shareholder support are creating an ideal environment for deal-making. The sector has already witnessed its largest-ever takeover with Newmont Corp.'s acquisition of Newcrest Mining Ltd., and many believe this could be the beginning of a broader M&A wave in the Australian gold mining industry.

The Royal Mint, the UK's official coin maker, has launched a groundbreaking initiative to extract gold from electronic waste at its new facility in Llantrisant, Wales. Using an innovative, eco-friendly chemical process, the plant can process up to 4,000 tonnes of e-waste annually, potentially yielding 450kg of gold worth approximately £27 million. This venture not only addresses the growing global e-waste problem but also helps the Royal Mint diversify its operations in response to declining cash usage. The extracted gold will be used in jewelry production and eventually in commemorative coins, demonstrating a sustainable approach to precious metal sourcing while preserving jobs and reducing reliance on traditional mining methods.

Gold prices rose on Wednesday, driven by safe-haven demand and increasing expectations of a U.S. Federal Reserve interest rate cut as early as September. The precious metal gained support from geopolitical tensions and a looser monetary policy outlook, despite closing lower in the previous four sessions. Traders now see a 100% chance of a rate cut in September, with nearly 105 basis points of cuts anticipated by year-end. Gold's non-yield-bearing status makes it attractive in a low-interest-rate environment, while strong central bank buying has also contributed to its positive performance in 2024.

Japan conducted a record-breaking yen-buying intervention on April 29, selling 5.92 trillion yen ($40.83 billion) worth of dollars to combat the yen's decline. This intervention, along with an additional 3.87 trillion yen spent on May 1, aimed to stabilize the currency but ultimately failed to reverse its long-term weakening. The yen briefly strengthened by 5% but later hit a 38-year low in July, prompting further intervention. Japan's foreign reserves fell to $1.22 trillion by the end of July, reflecting the sale of U.S. Treasury holdings to fund these interventions.

In response to recent market turmoil, Bank of Japan Deputy Governor Shinichi Uchida indicated the central bank would refrain from raising interest rates during periods of financial instability. His dovish comments led to a weakening of the yen, a spike in bond futures, and a rebound in stocks. Uchida emphasized the need for monetary easing amidst volatile global markets and suggested that future rate decisions would depend on market conditions. Despite this, some economists still anticipate another rate hike by the end of the year.

Last week, US 30-year mortgage rates dropped significantly, hitting their lowest point since May 2023, which led to a surge in refinancing applications. The 30-year fixed mortgage rate fell by 27 basis points to 6.55%, while the rate on a five-year adjustable mortgage dropped by 31 basis points to 5.91%. This decline spurred a nearly 16% increase in the refinancing index, reaching a two-year high. Mortgage applications for home purchases also rose by 0.8%. Economists believe this drop in rates could signal a modest recovery in the housing market, assuming recession fears do not materialize.

The July jobs report revealed weaker-than-expected hiring and a rise in unemployment, sparking concerns about a potential recession and prompting expectations of more aggressive interest rate cuts by the Federal Reserve. However, some economists argue that the market's reaction may be overblown, citing continued consumer spending and a different composition in unemployment rise compared to typical pre-recession patterns. While the risks of an economic downturn have increased, experts caution against overreacting to a single data point and suggest that the labor market's weakness is more due to slower hiring rather than widespread layoffs.

This is basically gold building a launchpad, and this is just the beginning. No, You did not miss anything because you ain’t seen nothing yet

A wave of dip buying led to a significant rally in stocks following a massive $6.5 trillion selloff that had unsettled global markets. The S&P 500 saw its largest advance since February, with megacap stocks leading the gains. Hedge funds, as noted by Goldman Sachs, bought into the tech sector amid the volatility. The VIX, Wall Street's "fear gauge," recorded its steepest drop since 1990. This return to market stability came after a period marked by weak economic data and disappointing tech results. US Treasuries fell as demand for safe-haven assets decreased, and traders adjusted their expectations for Federal Reserve rate cuts. The S&P 500 rose 2%, driven by gains in companies like Nvidia and Walt Disney, while Treasury yields and corporate bond issuance also increased.

The U.S. national debt has reached a staggering $35 trillion in 2024, increasing by $1 trillion since January alone. This milestone pushes the debt-to-GDP ratio to 98%, with projections suggesting it could exceed 140% by 2032 under current policies. The rapid accumulation of debt, which has grown by $11.8 trillion since 2020, raises concerns about fiscal sustainability. Despite the alarming figures, neither major political party has shown significant initiative to address the issue, highlighting a lack of political will to tackle the growing debt problem.

India's gold industry has established a self-regulatory organization called the Indian Association for Gold Excellence and Standards (IAGES), with support from the World Gold Council (WGC). This initiative aims to enhance consumer confidence and trust in the industry by promoting fair, transparent, and sustainable practices. IAGES will provide accreditation based on strict audits, allowing members to display the IAGES logo. Major industry bodies will participate, and the WGC will finance and promote the initiative to retail consumers.

Google searches for "buy gold" surged nearly 64% at the start of August, driven by recession fears following the Federal Open Market Committee meeting and a disappointing U.S. jobs report. This spike in interest highlights gold's role as a safe-haven asset during economic uncertainty, with Hawaiian investors showing the highest interest. Despite the recent market volatility, gold maintains its appeal due to its historical value and industrial uses.

Gold prices stabilized on Tuesday after experiencing a sharp selloff on Monday, which saw the biggest intraday drop since early June. The recovery came as global stock markets normalized and exchange-traded funds added gold to their holdings. Despite the recent volatility, gold remains up over 15% this year, supported by expectations of Federal Reserve rate cuts and central bank buying. Analysts at Goldman Sachs maintain a bullish outlook on gold, citing its hedging value against various economic and geopolitical risks.

Oil prices dipped on Tuesday as concerns over weak demand, especially after a global market sell-off and disappointing economic data from the U.S. and China, outweighed fears of supply disruptions from escalating Middle East tensions and a drop in Libyan production. Despite an early session rally, both Brent and U.S. crude futures fell, reflecting the market's focus on demand issues over geopolitical risks.

The Bank of Japan's recent interest rate hike has sparked controversy and market turmoil. The decision, made despite poor economic data, led to a historic plunge in Japanese stocks and global market instability. Critics argue the BOJ acted prematurely, potentially jeopardizing future rate increases. The yen's rapid surge following the hike has negatively impacted exporters' earnings prospects, further destabilizing the market. This unexpected volatility has forced economists to reassess their expectations for future BOJ policy moves, with many now believing additional rate hikes are off the table for the near future.

Join Mike Maloney as he covers the major market news from ‘Black Monday’, and tells what he has been doing to prepare for this event.