Monthly Archives: March 2024

The Undervalued Potential of Silver:
Market Experts Foresee a Breakthrough Beyond $30

(USAGOLD – 3/14/2024) Gold prices dropped to their lowest levels of the session following weaker-than-expected retail sales data for February and a significant downward revision of January’s figures. Concurrently, the Producer Price Index (PPI), a measure of inflation, increased by 0.6% in February, surpassing expectations and marking a more substantial rise than the 0.3% increase seen in January. This data suggests that inflationary pressures remain persistent, particularly in the wholesale sector, where energy prices notably surged. Gold is trading at $2163.77, down $10.64. Silver is trading at $25.03, up 3 cents. Interest is growing in the silver market as analysts predict it could be the next to rally, following gold’s surge to record highs. Despite its higher volatility, silver traditionally outperforms gold in both bear and bull markets, but has seen hesitancy from investors during rallies. Currently, silver futures are trading at $25.25 an ounce, with the gold/silver ratio remaining above its historical average, suggesting silver is undervalued compared to gold. Experts like Carley Garner and Dennis Gartman discuss silver’s potential for growth, despite its current underperformance, attributing it to factors such as market dynamics and central bank demand for gold. The global economy’s health and an expected economic rebound in China are seen as key drivers for silver’s bull market, with predictions of prices breaking through $30 and potentially reaching $50 an ounce.

Market Reacts to CPI Surge:
Gold Retreats Amid Fed Rate Cut Speculation

(USAGOLD – 3/13/2024) Gold and silver prices are back higher on Wednesday. The marketplace has mostly digested Tuesday’s U.S. consumer price index for February it seems. Gold is trading at $2170.38, up $12.04. Silver is trading at $24.48, up 34 cents. Gold prices faced downward pressure following a U.S. inflation report that exceeded expectations, leading to doubts about an imminent Federal Reserve interest rate cut. The Consumer Price Index (CPI) rose by 0.4% in February, with an annual increase of 3.2%, surpassing the forecasted 3.1%. This data caused gold to drop over 1%, with spot gold falling to $2,153.05 per ounce. The market anticipates the next Fed meeting on March 20, with a focus on potential interest rate adjustments.

Gold Glitters Amid Global Uncertainty:
Record Highs Despite Strong U.S. Economy

(USAGOLD – 3/12/2024) Gold and silver prices are lower and hitting fresh lows in early trading on Tuesday in response to a U.S. inflation report that slightly surpassed market forecasts, leading to some investors to take some profits. Gold is trading at $2160.08, down $22.67. Silver is trading at $24.03, down 44 cents. Despite a strong U.S. stock market and economy, gold prices have soared to a record high, trading at $2,195 per ounce on Friday, with significant gains both year-to-date and over the past 12 months. This rally is surprising given that gold typically spikes during economic crises, not periods of market strength. The surge in gold’s value is partly due to weaker economic growth and stock performance in non-U.S. markets, particularly in developed economies like Germany, Japan, and the United Kingdom. Chinese investors, facing a commercial real estate crisis, have shown “phenomenal” demand for gold as a hedge against economic instability. In the U.S., investors are turning to gold to bet against potential inflation, reposition portfolios after the stock surge, and protect against geopolitical instability, including conflicts involving Israel, Hamas, Russia, Ukraine, and uncertainties surrounding the U.S. presidential election.

From Historical Peaks to Future Projections:
The Evolution of U.S. Debt-to-GDP Ratio

(USAGOLD – 3/11/2024) Gold prices continue to march higher but are below Friday’s high around $2,195 per ounce. The charts for both gold and silver remain bullish to suggest still more price upside in the near term as we await February inflation data tomorrow. Gold is trading at $2183.72, up $4.77. Silver is trading at $24.48, up 17 cents. Daniel Wilson and Brigid Meisenbacherat from the Economic Research Department at the Federal Reserve Bank of San Francisco recently discussed the long-term fiscal outlook of the United States, highlighting the concern that the federal debt as a percentage of GDP is approaching its historical peak last seen at the end of World War II. After WWII, the debt-to-GDP ratio decreased significantly due to a primary surplus, rapid economic growth, and low interest rates. However, current projections for the next three decades suggest a persistent primary deficit, with the debt-to-GDP ratio potentially reaching 172% by 2054 without major policy reforms. The primary deficit is driven by mandatory spending on programs like Social Security and Medicare, coupled with an aging population. The outlook for reducing the debt ratio appears challenging, requiring either significant policy reforms, such as tax increases or spending cuts, or a scenario where economic growth outpaces interest rates.

USAGOLD Comment: The projected fiscal challenges underscore the importance of including tangible assets like gold in one’s investment strategy to safeguard against the unpredictable impacts of high debt levels and the accompanying economic policies.

Banking Sector Facing Mounting Risks:
FDIC Report Highlights Industry Trends

(USAGOLD – 3/8/2024) Gold prices to finish the week, are hovering slightly below session peaks around $2,185 per ounce following a weak jobs report. Gold is trading at $2170.89, up $11.18. Silver is trading at $24.28, down 5 cents. The FDIC’s Quarterly Banking Profile, released yesterday, revealed an increase in its “Problem Bank List” by eight banks to a total of 52, representing 1.1% of the institutions under its oversight and totaling $66.3 billion in assets. Noteworthy statistics from this report include a rise in the share of unprofitable institutions to 10.9%, the highest level since Q4 2017. Additionally, 70% of the quarterly profit decline was attributed to specific, non-recurring large bank expenses, such as a special assessment to recoup failed bank costs. US bank profits saw a significant drop of 44% in Q4 as major firms covered failed bank costs. Meanwhile, embattled lender NYCB secured a $1 billion investment to bolster its financial position. Real Estate RXR CEO Scott Rechler predicts hundreds of banks failing or being taken over by 2026, highlighting the potential risks and challenges facing the banking sector in the years ahead.

The Stealth Gold Rally:
Unpacking the Unseen Forces Driving Prices Higher

(USAGOLD – 3/7/2024) Gold prices are hovering slightly below session peaks around $2,164 per ounce following a weekly initial jobless claims report that met forecasts for American workers. Gold is trading at $2155.36, up $7.18. Silver is trading at $24.28, up 12 cents. Ross Norman’s (CEO of Metals Daily Ltd) article discusses the recent, unexpected rally in gold prices, suggesting that understanding the buyers and their motivations could reveal the rally’s sustainability. Unlike event-driven or speculative gains, which are often short-lived, this rally could be of a higher quality, driven by strong conviction among buyers. Despite declining interest in gold in the West, with significant drops in ETFs and physical demand, China’s robust demand seems to be compensating, driving gold prices up in a “stealth rally.” Norman speculates that the rally may not be solely due to expectations of a Fed rate cut or declining US treasury yields, as traditional market indicators like the gold/silver ratio and ETF demand don’t fully support these explanations. Instead, he suggests that official sector buying, particularly by central banks diversifying away from dollar assets in response to geopolitical tensions and financial sanctions, might be a key driver, though this remains speculative. The increase in gold prices, now reaching new highs, underscores the potential significance of these under-recognized factors.

Beyond the Numbers:
How Elections, Tariffs, and Geopolitical Tensions Shape Economic Forecasts

(USAGOLD – 3/6/2024) Gold prices continue to flirt with an all time high this morning. Gold is trading at $2142.94, up $14.90. Silver is trading at $23.99, up 32 cents. Michael Every of Rabobank recently wrote a article entitled “The End/Beginning of a Golden Age” that discusses the complex interplay of economic forecasts, political events, and global trade policies, focusing on recent comments from the Fed’s Bostic about potential rate cuts and their implications on inflation. He highlights the impact of the US election cycle, especially considering a potential Trump victory and its implications on trade tariffs and global economic dynamics. Every critiques economists’ tendencies to ignore political influences on economic outcomes, emphasizing the importance of understanding political, legal, and geopolitical factors in economic modeling and forecasts. The discussion also touches on global shifts such as China’s economic targets, BRICS’ financial strategies, and geopolitical tensions affecting economies worldwide.

3/5/2024

COT: Underinvested speculators fuel gold’s latest surge (Saxo)
What’s next after gold hits record closing high?

Why Britain is still paying the price for Gordon Brown’s gold bullion blunder (Telegraph)
It has been considered one of the worst financial blunders the Government ever made…

Gold flirts with record high as investor demand surges (Commodities Journal)
Gold flirted with a record high, surging above USD2,100/oz, as investors continued to pour into the safe haven asset.
…

Gold’s Latest Milestone:
Analyzing the Implications of Yesterday’s Closing Price

(USAGOLD – 3/5/2024) Spot gold prices hit an all time high this morning but has since faded. Gold is trading at $2130.70, up $16.22. Silver is trading at $24.02, up 14 cents. Yesterday’s historical daily close of gold is significant because it represents a continuation of a notable upward trend in gold prices, closing at $2,117.36. This price point is an indication of the current market dynamics, reflecting a relatively small increase from the previous close, which can be seen in the context of gold’s recent performance. This trend is indicative of broader economic factors at play, including market sentiment, inflation expectations, and global economic uncertainties, which often drive investors towards safe-haven assets like gold. The significance of today’s close, therefore, lies not just in the number itself but in what it represents about the current state of the global economy and investor behavior towards gold as a protective investment against volatility in other markets.

U.S. National Debt Skyrockets:
$1 Trillion Increase Every 100 Days Signals Alarm

(USAGOLD – 3/4/2024) Gold prices are strong in early trading Monday, this is after recent gains that saw gold hit a two-month high Friday. The U.S. national debt is escalating rapidly, with a recent pattern of increasing by $1 trillion approximately every 100 days, pushing the current total to nearly $34.4 trillion. This quickened pace of debt accumulation has been observed since June, with the debt rising from $32 trillion in mid-June to over $34 trillion by January. The acceleration in debt growth, alongside high gold and bitcoin prices, reflects market concerns about debt debasement. Bank of America’s Michael Hartnett predicts this 100-day $1 trillion growth pattern will continue. Meanwhile, Moody’s Investors Service downgraded the U.S. government’s ratings outlook to negative, citing large fiscal deficits and weakened debt affordability, especially in the context of higher interest rates and the absence of effective fiscal measures to curb government spending or increase revenues.

3/4/2024

Hotshot Wharton professor sees $34 trillion debt triggering 2025 meltdown as mortgage rates spike above 7%: ‘It could derail the next administration’ (Fortune)
“It’s bad across the board for the country but it’s hard to avoid exposure wherever you live in the world”

3 Reasons Why The Gold Price Breakout Will Continue To Make All-Time Highs In 2024 (Investing Haven)
“Inflation expectations, the Yen, and speculators”

Is Silver a Sleeping Giant? (Barchart)
The silver-gold ratio provides few clues…

March Madness:
Financial Shocks and Shutdowns Loom Over the Economy

(USAGOLD – 3/1/2024) Gold and silver prices are higher in early trading this morning. Gold is trading at $2046.56, up $12.01. Silver is trading at $22.67, up 21 cents. March will be an interesting month. Congress approved a temporary spending bill to prevent a partial government shutdown this weekend. The measure, which extends funding for part of the government until March 8 and the rest until March 22. The Fed is going allow the Bank Term Funding Program (BTFP) to expire on March 11. Yesterday New York Community Bank stock crashed 20%+ after reporting “material weakness in internal controls.” NYCB is the same bank that acquired the collapse Signature Bank during the regional bank crisis. Adding to the liquidity crunch, Office building prices are down nearly 50% from their highs, with a Canadian pension fund just sold its 29% stake in this New York office building for $1. We are sure in for some fireworks this month