Daily Gold Market Report

U.S. Debt Hits Record $34 Trillion as Congress Faces Crucial Funding Deadlines
3 Months After We Hit $33 Trillion…

(USAGOLD – 1/3/2024) Gold and silver prices are sharply lower in early trading. Traders are starting to look ahead to Friday’s U.S. employment situation report for December. Gold is trading at $2034.82, down $24.14. Silver is trading at $23.00, down 66 cents. The U.S. public debt has surpassed $34 trillion, marking a concerning milestone as Congress prepares for imminent funding debates. The rise in debt is attributed to increasing federal deficits, driven by lower tax revenues and higher expenditures. As Congress reconvenes, it faces deadlines to resolve spending for the fiscal year, with Republican calls for reduced discretionary spending and discussions over emergency aid for Ukraine and Israel. The potential failure to pass spending bills risks a government shutdown, and the upcoming elections further complicate negotiations. Maya MacGuineas of the Committee for a Responsible Federal Budget highlighted the gravity of the situation, urging for decisive actions to mitigate the escalating debt through measures like tax increases, spending cuts, or the formation of a fiscal commission.

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Daily Gold Market Report

From Wholesale to Gold Bars
Walmart Joins Costco in Precious Metals Market

(USAGOLD – 1/2/2024) Gold and silver prices are slightly higher in early trading Tuesday. Risk appetite in the marketplace is less robust on this first trading day of 2024. Gold is trading at $2067.20, up $4.22. Silver is trading at $23.92, up 12 cents. Walmart has joined Costco in offering a variety of gold products online, signaling a significant shift in the retail sector towards precious metals. This move comes as gold prices have surged to a new highs, fueled by aggressive speculations on Federal Reserve rate cuts. Walmart’s foray into this market follows Costco’s report of over $100 million in gold sales in a quarter, highlighting a strong consumer demand for gold bars. Critics suggest this trend represents a broader financial change, with major retailers capitalizing on the increasing interest in gold as an investment.

USAGOLD Comment: Walmart is not selling bullion direct to consumer. Vetting and navigating 3rd party sellers on Walmart’s marketplace is crucial to ensure you are purchasing from reputable sources, thus protecting against potential fraud and ensuring product quality and reliability.
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Daily Gold Market Report

USAGOLD will be soft closed until January 2nd. Have a great holiday!

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Daily Gold Market Report

Shanghai Pioneers $14M e-CNY Gold Trade
A New Era for Precious Metals

(USAGOLD – 12/22/2023) Gold prices are almost up a percent this morning as an underlying measure of consumer prices rose in November by less than forecast, reinforcing the Federal Reserve’s pivot toward an outlook for lower interest rates next year. Gold is trading at $2061.01, up $15.06. Silver is trading at $24.43, up 1 cents. The completion of the first-ever $14M cross-border settlement for precious metals using China’s digital yuan (e-CNY) in Shanghai marks a significant milestone. Facilitated by the Shanghai Financial Exchange International Board and the Bank of China’s Shanghai branch, this transaction showcases the growing potential of central bank digital currencies (CBDCs) in enhancing the efficiency and security of international gold trades. While the digital yuan is spearheading pilot tests and expanding partnerships globally, this development also signals a shift towards a more digitized, streamlined approach in the precious metals market. As traditional gold transactions evolve with these technological advancements, it’s crucial to recognize and adapt to the potential impact and opportunities CBDCs present for future cross-border gold purchases and the broader trade environment.

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Daily Gold Market Report

Taxing Unrealized Gains
How the Moore v. U.S. Case Could Shape Future U.S. Tax Policies

(USAGOLD – 12/21/2023) Gold prices are remaining range bound as we wait for a monthly report from the Bureau of Economic Analysis due Friday morning. Six-month annualized rate expected to fall to 2% in November PCE report. Gold is trading at $2038.41, up $7.02 cents. Silver is trading at $24.25, up 11 cents. Recently reported by the Epoch Times, the case of Moore v. U.S. before the Supreme Court holds particular significance, given its potential implications for wealth preservation and taxation strategies. This case scrutinizes the 2017 Tax Cuts and Jobs Act (TCJA) and its transition from a worldwide to a territorial tax system, specifically regarding the taxation of unremitted foreign corporation profits. For gold enthusiasts, who often seek assets that retain value outside traditional currency systems and resist undue taxation, the core issue here is whether the increase in value of assets (like gold) should be considered taxable income before any actual realization event, such as a sale.

The Moores’ challenge to the TCJA, arguing that the appreciation of their foreign corporation shares isn’t “income” in the traditional sense, echoes a fundamental belief in the gold community: that unrealized gains shouldn’t be subjected to taxation, as it contradicts historical and practical definitions of income.
The Supreme Court’s deliberations and eventual decision could set a precedent affecting not just stockholders but also gold investors. The possibility that the Court might sanction the taxation of unrealized gains is concerning. Such a move could compel investors to liquidate assets prematurely to meet tax obligations, potentially destabilizing carefully constructed wealth preservation strategies that favor tangible assets like gold. However, any decision favoring the government’s position might be narrowly tailored, offering some reassurance that a broad-based wealth tax on unrealized gains remains unlikely. This case underscores the ongoing need to stay vigilant in protecting assets against shifting tax landscapes.
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Oklahoma’s Bold Move
Introducing Gold and Silver Depository for Everyday Transactions

(USAGOLD – 12/20/2023) Gold prices are remaining range bound for the time being. Gold is trading at $2035.67, down $4.68 cents. Silver is trading at $24.37, up 32 cents. It seems now that several states within a week are preparing to challenge the Federal Reserve’s monopoly on money and reintroduce gold and silver as viable, everyday currencies. A bill filed in the Oklahoma Senate (Senate Bill 1351) would establish a gold and silver bullion depository in the state. This initiative, modeled after a similar law in Texas, is designed to provide a secure storage for precious metals and to facilitate their use in financial transactions. The bill proposes a system where individuals can deposit gold and silver and use them electronically, similar to cash, through a debit card linked to their bullion account.

“The depository shall make available a debit card, issued upon a request by the depository account holder, in which the depository account holder may make transactions which are debited from the balance of the holder’s account. The balance available to the depository account holder through use of the debit card shall be equal to eighty percent (80%) of the current spot price of the deposits of the depository account holder.”

The bill will be introduced in the Oklahoma legislature in February for further consideration.

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LME to Integrate ShFE Prices in New Contracts
New Era in Global Metals Market Dynamics

(USAGOLD – 12/19/2023) Gold prices remained muted on Tuesday, with a minor increase in the dollar offsetting support from declining Treasury yields. Investors are anticipating U.S. economic data expected later this week, which could provide more clarity on the Federal Reserve’s approach to interest rates. Gold is trading at $2021.69, up $2.07 cents. Silver is trading at $23.86, flat on the day. The London Metal Exchange (LME) is set to introduce new metals contracts that will use pricing from the Shanghai Futures Exchange (ShFE), Reuters reports. This is a move that marks a significant shift in global metals markets and highlights China’s increasing influence. This initiative, termed cross-listing, involves LME metal contracts being settled against ShFE prices. This development follows a strategic change in Chinese exchanges, driven by government pressure to innovate and extend their global influence, particularly in controlling commodity prices. While the specific metals involved are not specified, copper and aluminium are likely candidates due to their high trading volume on both exchanges. The process will allow easier access to Chinese market prices for LME members but raises concerns about dependency on Chinese regulatory practices and the risks of potential future policy changes by ShFE. The success of these new contracts will depend on their ability to attract sufficient trading volume and liquidity, noting that many recent LME contract launches have struggled to achieve traction.

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Gold’s Bright Future
How Fed’s Shift to Rate Cuts and QE Underlines Its Value

(USAGOLD – 12/18/2023) Gold prices are staring the week flat as the market reacts to the Fed’s decision last week and as we wait for GDP data on Thursday. Gold is trading at $2021.69, up $2.07 cents. Silver is trading at $23.86, flat on the day. The Federal Reserve’s shift towards potential rate cuts in 2024 and a return to Quantitative Easing (QE) indicates a continuation of expansive monetary policy. This change is driven by the Treasury’s significant borrowing, putting upward pressure on interest rates. The Fed’s reliance on the reverse repo market to regulate liquidity has proven inadequate, necessitating a shift back to QE. This scenario mirrors the financial troubles of the 1970s, where similar policies led to severe inflation, only controlled by drastic measures under Fed chair Paul Volker. The Fed’s actions, influenced by political pressures, are likely to repeat these past mistakes, emphasizing the need for gold as a hedge against inflation and currency devaluation​.

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Florida Considers Bills to Recognize Gold and Silver as Legal Tender
Floridians To Use Gold Or Silver In Both Physical And Electronic Form As Money

(USAGOLD – 12/15/2023) Gold prices are flat this morning after a highly volatile week. Gold is trading at $2035.53, down 83 cents. Silver is trading at $24.02, down 16 cents. The Florida House and Senate have proposed bills (House Bill 697 and Senate Bill 750) aimed at treating gold and silver as legal tender, potentially challenging the Federal Reserve’s monopoly on money. These bills define “specie legal tender” as specie coins issued by the Federal Government or other specie designated by the Chief Financial Officer. This legal tender could be used to pay private debts, taxes, and fees. The bills also propose the elimination of state and local taxes on gold and silver sales, thereby treating them more like money than commodities. Additionally, the legislation includes establishing a state-run bullion depository, allowing Floridians to use gold and silver for electronic transactions and daily purchases, similar to using cash. These bills will be formally introduced when the Florida legislature convenes on January 9 and must pass through committee stages to progress​. Passage into law would make Florida the 12th state to have passed legislation to recognize gold and silver as legal tender, with varying degrees of implementation and provisions regarding taxation and usage.

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Gold Gains Momentum Following Fed’s Rate Hold
Markets Anticipate Rate Cuts and Lower Inflation

(USAGOLD – 12/14/2023) Gold prices are continuing upwards this morning even as the European Central Bank continues to hold interest rate steady. Gold is trading at $2038.71, up $10.97. Silver is trading at $24.13, up 32 cents. Gold prices increased by over 1% yesterday following the U.S. Federal Reserve’s announcement of a potential end to its interest rate hikes and the possibility of rate cuts in the coming year. Spot gold rose to around $2,027 per ounce. The Federal Reserve maintained current interest rates, with projections suggesting a decrease by the end of 2024. The Fed’s recognition of diminishing inflationary pressures and expectations of interest rate cuts led to a drop in yields and the dollar, boosting gold and silver prices. The dollar index fell 0.6%, making gold more affordable for international buyers. Market expectations now lean towards a 60% chance of U.S. rate cuts by March 2024. This scenario enhances the attractiveness of gold. Federal Reserve Chair Jerome Powell noted that inflation has eased without a significant increase in unemployment, though the full impact of monetary tightening may not be fully realized yet. Recent data showed stable U.S. producer prices in November, signaling a continued decrease in factory-gate inflation. Gold’s future movements could be influenced by upcoming policy meetings of the European Central Bank and the Bank of England. Meanwhile, prices of silver, platinum, and palladium also experienced increases.

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Growing Blockchain Tokenization of Assets
A Potential Risk to Financial Stability

(USAGOLD – 12/13/2023) Gold prices are flat as the marketplace is quiet just ahead of the end of the FOMC meeting. Gold is trading at $1982.86, up $3.32. Silver is trading at $22.64, down 13 cents. The Bank of England (BOE) has recently raised concerns about the growing trend of asset tokenization on blockchains. The BOE’s Financial Stability report highlights that while banks are increasingly positive about using crypto technologies for tokenizing money and real-world assets, this rise in asset tokenization could lead to greater systemic risks in the financial environment. “Tokenization, the process of issuing a digital representation of an asset, is a growing part of the crypto ecosystem and is forecast to become a $10 trillion market by 2030, according to asset management company 21.co,” reported by CoinDesk. These risks include increased interconnectedness between crypto and traditional financial markets and direct exposure of systemic institutions. Although the current risks are limited, the BOE emphasizes the need for continuous monitoring and global cooperation in regulation to manage potential cross-border spillovers and market fragmentation.

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Pandemic’s Psychological Impact
Disconnect Between US Economy and Public Sentiment

(USAGOLD – 12/12/2023) Gold prices are flat with the consumer price index report for November coming in at up 3.1%, with the core rate (minus food and energy) coming in at up 4.0%. Gold is trading at $1981.58, down 37 cents. Silver is trading at $22.85, up 3 cents. Reuters published an article citing a Chicago Federal Reserve study that found a disconnect between the U.S. economy’s performance and public sentiment since the onset of the COVID-19 pandemic in spring 2020. Researchers noticed a decline in optimism for economic outcomes, a change from the historical correlation between economic conditions and consumer and small business sentiment. Possible reasons include higher price levels and altered unemployment expectations. The pandemic’s psychological impact and its influence on economic behavior, has cut deep. In its Stress in America 2023 report last month, the APA said the country was “recovering from collective trauma” that may be rooted in the pandemic but has sources far beyond it, including economic ones.

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China’s Economic Downgrade
A Deep Dive into Soaring Debts and Global Impacts

(USAGOLD – 12/11/2023) Gold and silver prices have slightly decreased in early trading on Monday in the U.S. Recently, the short-term chart positions for both metals have worsened, particularly for silver. Gold is trading at $1992.68, down $11.99 cents. Silver is trading at $22.88, down 12 cents. Attributed to the country’s soaring government debt and sluggish economy, Moody’s lowered its outlook for China’s sovereign bond rating from stable to negative. Government debt is a growing global concern, statistics from the IMF are showing alarming levels of debt in various economies: the Euro Zone at 85% of GDP, Britain at 98%, the US at 150%, and Japan at 263%.

China’s government debt, though lower than others at just over half of its GDP, is worrying due to its overall debt level, which is nearly 300% of GDP when household and corporate debts are included. Phil Rosen of Business Insider reports, “Data released last week showed China’s manufacturing and services activities contracted in November, and the readings reinforced the government’s case to prop up the economy with further fiscal stimulus.” The situation in China could have significant global implications, including the potential for a flood of cheap manufacturing products and a contagion effect on global financial markets. China has been a losing bet for investors for nearly two decades, with the Shanghai composite index below its 2007 level, despite China’s aggressive commercial policies.
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World Gold Council: Gold Outlook 2024
The Global Economy Faces Three Likely Scenarios In 2024

(USAGOLD – 12/08/2023) The gold market is experiencing significant downward pressure due to the U.S. economy’s unexpected surge in job creation, which is concurrently reducing the unemployment rate. Gold is trading at $2,010.15, down $18.32 cents. Silver is trading at $23.35, down 45 cents. The “Gold Outlook 2024” report by the World Gold Council presents three potential scenarios for the global economy in 2024: a soft landing with moderate economic slowdown and stable to slightly decreasing gold prices; a recession, where gold may rise in value as a safe-haven asset; and a less likely no landing scenario, with continued economic growth and persistent inflation, where gold’s behavior could vary based on inflation rates and investor sentiment. Each scenario reflects different impacts on gold prices, influenced by economic conditions and market responses.economic conditions and investor behavior.

While the markets lean towards the Federal Reserve achieving a soft landing, this outcome is challenging to attain. In the past five decades, the Fed has only successfully managed a soft landing twice in nine tightening cycles, with the remaining seven leading to a recession. This trend is expected, as prolonged higher interest rates typically exert pressure on financial markets and the broader economy.

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Global Gold-Backed ETFs
A Mixed Picture in November with North American Gains and European Losses

(USAGOLD – 12/07/2023) Gold prices are slightly up this morning, eyeing resistance at $2,050 per ounce, coinciding with signs of stabilization in the U.S. labor market, as the quantity of American workers seeking first-time unemployment benefits shows little change from the previous week. Gold is trading at $2,035.21, up $9.66 cents. Silver is trading at $23.91, up 1 cents. In November, gold-backed ETFs saw decreased outflows compared to October, according to the World Gold Council. Global ETFs had net outflows of $920 million and a physical holding reduction to 3,236 tonnes. Despite this, AUMs increased by 2% to $212.2 billion, aided by gold prices exceeding $2,000 per ounce. North American ETFs reversed a five-month trend of redemptions with net inflows of $659 million, while European funds continued to see withdrawals for the sixth consecutive month, attributed to high opportunity costs and strong local currencies. Asian funds experienced modest inflows.

Overall, global ETFs faced outflows of 235 tonnes in the first 11 months of 2023, with total holdings down 17% from their October 2020 peak. AUMs dropped by $13.7 billion during this period, largely due to significant outflows in Europe, marking one of the worst year-to-date performances in the region’s history.
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Anticipating U.S. Rate Cuts in 2024
Market Expectations Versus Economic Realities

(USAGOLD – 12/06/2023) The gold market is experiencing a resurgence in purchasing activity due to a notable slowdown in the U.S. labor market last month, as reported by recent figures from the private-sector payroll company ADP. Gold is trading at $2,031.75, up $12.39 cents. Silver is trading at $24.22, up 6 cents. US businesses advertised 8.7 million job vacancies in October, down from 9.6 million in September, according to the labour department’s Job Openings and Labor Turnover Survey released on Tuesday. Business Insider also reported that layoffs also have remained an unfortunate reality of 2023, continuing pace with the cuts made at dozens of companies toward the end of last year. While markets are pricing in a high likelihood of rate cuts by May 2024, the actual evidence to support this, such as a slowdown in employment and core inflation, is not yet apparent as these a lagging indicators. Employment reports, including the monthly report from the Bureau of Labor Statistics, indicate healthy employment gains, suggesting that the Fed may not be inclined to signal cuts yet. The resolution of strikes by the Screen Actors Guild and United Auto Workers positively impacted non-farm job gains, and there is an expectation of a rebound in the service sector in November, although this rebound is projected to stay below the long-term average. The overall sentiment is that while there are expectations of rate cuts in 2024, more significant evidence of an economic slowdown is needed for these to materialize.

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Gold Prices Ride a Rollercoaster
Surge and Dip on Fed Rate Speculations

(USAGOLD – 12/05/2023) Gold prices are trading lower this morning after much volatility yesterday. Gold is trading at $2,028.54, down 88 cents. Silver is trading at $24.43, down 8 cents. Gold prices experienced significant fluctuations yesterday, initially surging to ~$2140/oz then retracting back to $2020/oz, in response to evolving market expectations regarding U.S. Federal Reserve interest rate policies. After Federal Reserve Chair Jerome Powell’s comments suggested potential rate cuts, gold briefly hit a record high before declining due to reassessed expectations and a strengthening dollar. Despite this volatility, gold has been on an upward trend, gaining about 12% since early October and up ~11% YTD. This rise is attributed to both a demand for safe-haven assets following the Hamas attack on Israel and anticipation of looser U.S. monetary policy. Central bank purchases have also bolstered gold prices, offsetting reductions in exchange-traded fund holdings. Investors are now closely watching U.S. jobs data this week for further insights into the Fed’s monetary policy decisions.

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Historic M2 Decline and Its Impact on Gold Prices
A New Era for Investors?

(USAGOLD – 12/04/2023)Gold prices are trading lower this morning after spot gold spiked to a new record high of $2,146.7 overnight. Gold is trading at $2,053.74, down $18.58. Silver is trading at $25.11, down 25 cents. Sean Williams, of The Motley Fool, recently pointed out the recent decline in the M2 money supply, the first significant contraction since the Great Depression, and its implications for the stock market and potential impact on gold prices. M2, which includes cash, coins, checking deposits, savings accounts, money market accounts, and CDs below $100,000, has fallen by 4.51% since its peak in July 2022. This decline is noteworthy as it’s the first notable drop in M2 in nearly 90 years.

Historically, significant changes in money supply, especially reductions, have been associated with economic downturns. The contraction in M2, coupled with high inflation, could lead to reduced discretionary spending and potentially slower economic growth or a recession. Such economic conditions often lead to poor stock market performance but can increase the appeal of gold as a safe-haven asset. This historical context, when combined with the current economic indicators, could lend further support to already strong gold prices in US dollars moving forward.
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Breaking the Barrier
Gold’s Historic Monthly Rise Above $2000 and Its Economic Implications

(USAGOLD – 12/01/2023) Gold prices are trading flat amid some chart consolidation heading into the weekend. Gold is trading at $2,035.63, down 78 cents. Silver is trading at $25.17, down10 cents. The November monthly close of gold above $2000 per ounce is significant for several reasons. Firstly, it marks a notable psychological and financial threshold, often attracting increased attention from investors and the media. Such a high price can indicate strong investor interest in gold as a safe-haven asset. Secondly, crossing this price point might influence the strategies of both individual and institutional investors, potentially leading to increased demand and speculative trading. Finally, this milestone often leads to broader market analysis and speculation about the future of the global economy, as gold prices are frequently seen as a barometer for financial stability and investor sentiment.

Meanwhile, silver is also making moves. Tavi Costa of Crescat Capital posted, “The monthly close in gold prices at all-time highs makes silver one of the most important charts in macro right now. The metal just broke out from a decade-long resistance after 3 years of major consolidation. It sure looks like precious metals have turned, and the bottom for miners and silver are probably in.”
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Reshaping Global Trade
UAE Joins BRICS in the Quest for De-Dollarization in Oil Markets

(USAGOLD – 11/30/2023) Gold prices have corrected following yesterday’s 6-month high. Gold is trading at $2,034.06, down $10.18. Silver is trading at $25.13, up 11 cents. The UAE’s shift from the US dollar to local currencies for oil trades reflects a strategic alignment with the BRICS alliance, marking a significant move away from dollar dominance in global oil markets. “Reports indicate that the UAE is eyeing potential oil and gas deals with up to 15 countries, including heavyweights like China, Russia, and Egypt, all of whom are members of the BRICS alliance and advocates of de-dollarization,” Jai Hamid reports. This decision, part of a broader trend towards de-dollarization, could reshape international trade dynamics, indicating the UAE’s role as a pivotal player in a diversifying global economy.

“The drive for de-dollarization within BRICS has led to certain complications, particularly in the realm of oil trade. The group’s endeavor to promote local currency usage in bilateral trade has revealed the limitations and inefficiencies of relying on national currencies for international transactions,” Hamid also reports. A BRICS currency could streamline international transactions, reduce reliance on dominant global currencies like the U.S. Dollar, and enhance economic integration within the bloc. This move could facilitate smoother transactions, promote mutual growth, and offer greater economic independence and sovereignty to the BRICS nations.
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