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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TOP NEWSThirty-Six Minutes of Chaos: Analyzing the Flash Crash
The "Flash Crash" wiped out nearly $1 trillion in market value in minutes, leading to significant regulatory reforms.
$20,000 Gold: Is A Treasury Revaluation Possible?
Could gold be the key to solving America’s debt crisis?
READ MORESilver Demand Soars as Solar Power Industry Expands Globally
The global surge in solar power adoption is significantly increasing the demand for silver, which is essential for making photovoltaic (PV) panels due to its superior electrical conductivity and thermal efficiency. With silver prices reaching their highest in a decade, mining companies are ramping up production to meet this demand. Last year, global investment in solar PV manufacturing skyrocketed to approximately $80 billion, representing 40% of the world’s clean technology manufacturing investments, according to the International Energy Agency. Notably, China has more than doubled its investment in solar PV manufacturing from 2022 to 2023. This investment has contributed to a 50% increase in global renewable capacity last year, with solar PV accounting for three-quarters of this growth, marking the fastest expansion in 30 years.
READ MOREForbes: What To Expect From April’s CPI Report
The April 2024 Consumer Price Index (CPI) report, scheduled for release on May 15 at 8:30 a.m. ET, is anticipated to reflect a continuation of this year’s relatively higher inflation trends, with headline inflation expected at 0.4% and core inflation at 0.3%. These figures, according to models from the Cleveland Federal Reserve and forecasts from Kalshi, suggest inflation will remain above the Federal Open Market Committee’s (FOMC) annual target of 2%. Given these conditions, and with another CPI release set for the day of the FOMC’s June meeting, it is unlikely the FOMC will consider interest rate cuts before July, potentially extending further depending on economic indicators such as job market conditions. This scenario supports the expectation that the Federal Reserve might delay any easing of monetary policy if inflation remains stubbornly high.
READ MOREHow a Second Trump Presidency Could Influence U.S. Inflation Rates
As the 2024 election approaches, economists are speculating on the potential impact of a Donald Trump victory on U.S. inflation. Predictions suggest that a second Trump term could lead to higher tariffs and increased deficits, among other policies, potentially driving inflation upwards. While economic forecasting is not precise, these predictions are based on previous policies and anticipated future actions that could shape economic conditions.
READ MOREBeyond the Numbers: The Varied Impact of Inflation
Inflation, while a key economic indicator, does not impact all demographics uniformly due to the aggregate nature of its measurement. Monthly inflation rates are calculated based on a general basket of goods which may not reflect the true spending habits of various groups, such as low-income or rural families. By examining disaggregated product groups and leveraging high-frequency online price data, researchers can uncover how inflation differentially affects diverse populations, revealing that the experience of inflation varies significantly among different groups.
READ MOREPotential 2025 Recession Could Plunge Stock Market by 30%, Experts Warn
BCA strategist Roukaya Ibrahim predicts that a recession by early 2025, influenced by continued unemployment and economic difficulties in China, could lead to a 30% decline in the stock market. This view is echoed by Wall Street veteran Gary Shilling, who shared similar concerns with Business Insider. Ibrahim identifies two key factors that signal an impending recession by the end of this year or early next, potentially triggering a significant market correction.
READ MOREWGC: Gold Market Commentary: Higher-for-longer: Inflation not growth
In April, gold prices rose by 4%, closing at $2,307 per ounce, despite a pullback from intra-month highs due to reduced buyer interest and profit-taking, evidenced by lower Chinese premiums, decreased Indian imports, and stable COMEX positions. Conversely, North American gold ETF flows saw a modest increase, aligning with continued strong demand in Asian ETFs.
READ MOREPandemic Savings Depleted: Economic Uncertainty Looms as American Debt Rises
During the pandemic, Americans saved an impressive $2.1 trillion, fueling sustained consumer spending and economic resilience amidst rising interest rates and persistent inflation. However, recent reports from San Francisco Federal Reserve economists Hamza Abdelrahman and Luiz Edgard Oliveira indicate that these pandemic-era savings are now depleted, with many Americans having more debt than savings as of March 2024. This shift from savings to debt raises concerns about the future of consumer spending, which is a key driver of the U.S. economy. With the depletion of excess savings and an increase in consumer debt and delinquencies, there are growing worries about potential economic downturns.
READ MOREZeroHedge: Time to Bet Against Banks
In the wake of the Silicon Valley Bank collapse, the Federal Reserve introduced the Bank Term Funding Program (BTFP) to stabilize the financial sector, but this program has recently expired. Simultaneously, the anticipation of a Federal Reserve rate cut has been delayed indefinitely due to ongoing high inflation. This delay means that banks continue to face tough competition from higher-yielding money market funds for depositors. This dual pressure of the expired assistance program and the deferral of rate cuts poses significant challenges for banks, suggesting that now might be an opportune time to bet against them.
READ MORELingering Effects from Past Economic Shocks Continue to Drive Inflation in 2024
Three years after the initial economic disruptions of 2021 and 2022, the lingering effects of those events are still significantly influencing inflation rates in 2024. The primary driver of the current inflation, particularly in the shelter sector where rents and homeowners' equivalent rent have increased by 6.1% annually, stems from these past disruptions. According to Goldman Sachs economist Ronnie Walker, this persistent high inflation is more about "lagged catch-up" rather than a new wave of increases, suggesting that once these residual effects dissipate, inflation is expected to stabilize without further severe economic consequences. This pattern is also evident in other sectors, such as motor vehicle insurance, which has seen a 22.2% rise over the last year.
READ MOREChina Boosts Gold Reserves in Response to Soaring US Dollar
As the US dollar strengthens, driven by ongoing Federal Reserve interest rate hikes, China and other emerging economies are increasingly turning to gold as a hedge against economic instability and the rising cost of imports. In April, China's central bank added 60,000 troy ounces to its reserves, continuing an 18-month trend of significant gold acquisitions. This surge in gold buying reflects both a response to economic uncertainties and an effort to mitigate the impact of the dollar's strength, which has surged 10% since early 2022, complicating trade dynamics for countries like China.
READ MOREUS Stockpile Growth and Cooling Demand Drive Oil Prices Down
Oil prices dropped to their lowest levels since mid-March, exacerbated by a bearish US stockpile report indicating increased inventory levels. Brent crude approached $82 a barrel, and West Texas Intermediate hovered around $77. Industry estimates suggest a significant rise in crude stockpiles at Cushing, along with increased gasoline and distillate inventories nationwide. This uptick in stockpiles is just one component of a broader market softening, evidenced by negative trends in weekly derivatives and timespreads, suggesting an oversupply not seen since March. The ongoing price decline, which has been consistent over the past month, reflects reduced geopolitical risks and a shifting focus towards the weakening market demand.
READ MOREGlobal Currency Shifts: Dollar Rises, Yen Struggles, and Europe Reacts
On Wednesday, the dollar regained some strength, buoyed by diminished expectations for Federal Reserve rate cuts, while the yen continued its decline, prompting Japanese officials to intensify warnings about potential interventions to support the currency. As the yen hit a 34-year low, dropping to around 160 yen against the dollar, Japan reportedly spent about $60 billion last week in efforts to stabilize it. Meanwhile, in Europe, the Swedish crown weakened following a rate cut by its central bank, which also anticipates two additional reductions this year, and the British pound remained low as markets awaited the Bank of England’s upcoming meeting.
READ MOREHidden Debt: How 'Buy Now, Pay Later' Is Clouding America's Economic Outlook
Wells Fargo senior economist Tim Quinlan is raising alarms over “phantom debt,” a growing concern stemming from the popularity of "Buy Now, Pay Later" (BNPL) platforms like Affirm Holdings, Klarna, and Block Inc.’s Afterpay. These platforms, which let consumers split purchases into installments, do not report these transactions to credit agencies. This lack of transparency is troubling for market analysts and economists as it obscures a complete picture of American financial health—a critical element for predictions and planning by central banks, regional lenders, and businesses. This hidden debt layer emerges alongside increasing delinquencies in auto loans and credit cards, suggesting potential cracks in consumer financial stability amidst persistent inflation.
READ MOREGold Resilient as Safe-Haven Demand Counterbalances Rising Dollar
Gold prices remained stable Wednesday, balancing between geopolitical tensions that boosted its safe-haven appeal and a strengthening U.S. dollar that typically diminishes gold's attractiveness to investors holding other currencies. Despite fluctuating conditions, spot gold was flat at $2,315.98 per ounce by midday GMT, while U.S. gold futures saw a minimal decrease of 0.01% to $2,324.00. The dollar's recovery, influenced by speculation about potential Federal Reserve rate cuts, contrasts with the ongoing uncertainty regarding inflation and the Fed's future monetary policy. With traders estimating a 65% likelihood of a rate cut by September, gold's status and pricing reflect a complex interplay of market forces and economic indicators.
READ MOREAs Dollar Rises, China's Central Bank Continues Gold Buying Spree
Due to the strong U.S. dollar, exacerbated by the Federal Reserve's interest rate hikes since March 2022, China's central bank, among others, is increasingly investing in gold as a hedge against economic uncertainty. With the Dollar Index up 10% since early 2022, the cost of imports for emerging nations like China has surged, further driving their shift towards gold. This trend has led to a record spike in gold prices, as evidenced by China's central bank adding 60,000 troy ounces to its reserves in April alone, marking the 18th consecutive month of significant gold acquisitions.
READ MOREChina Gold Reserves Grow for 18th Straight Month
China's central bank added to its gold reserves for the 18th consecutive month in April, though the rate of acquisition has slowed due to soaring gold prices. The People’s Bank of China, a major player in the bullion market, purchased 60,000 troy ounces in April, a significant decrease from the 160,000 ounces bought in March and 390,000 in February. This slowdown occurs as gold prices hit record highs, impacting demand even as first-quarter purchases by central banks globally were the strongest on record, driven in part by these institutions, as noted by the World Gold Council and supported by insights from Goldman Sachs on continued potential in emerging markets.
READ MOREDollar Strengthens Against Yen Despite Japan's Intervention Threats
On Tuesday, the U.S. dollar saw a slight decline overall but gained strength against the Japanese yen amidst ongoing expectations of significant interest rate differentials. Despite recent warnings from Japanese officials about potential interventions to support the yen, the U.S. dollar's resilience highlights the anticipation of continued disparity in monetary policies. Japan's top currency diplomat, Masato Kanda, indicated the possibility of taking action against disorderly, speculative foreign exchange movements, following two suspected interventions last week that totaled nearly $60 billion.
READ MOREOil Prices Climb as Netanyahu Rejects Hamas Cease-Fire Deal
Crude oil futures climbed on Tuesday after Israeli Prime Minister Benjamin Netanyahu dismissed a Hamas-approved cease-fire proposal as "sabotage," committing instead to continue military operations in Rafah, Gaza. Netanyahu critiqued the proposal for falling short of Israel's essential demands. This rejection comes amid ongoing conflict, with Israeli forces taking control of the Rafah border crossing, an action that drew criticism from Egypt, which has been mediating the cease-fire talks. Defense Minister Yoav Gallant asserted that operations in Rafah would persist until their objectives regarding Hamas are met.
READ MOREGoldman Sachs Warns of Copper 'Stockout' as Prices Hit New Highs
Copper prices briefly soared above $10,000 a ton amid investor optimism about potential Federal Reserve rate cuts and a warning from Goldman Sachs about escalating supply shortages. The surge was part of a broader rally in risk assets, sparked by weaker-than-expected U.S. job figures, which fueled speculation of imminent Fed rate reductions. Despite a slight retreat in European trading, the outlook for copper remains bullish, driven by persistent supply-demand imbalances. Goldman Sachs has responded by lifting its year-end copper price forecast from $10,000 to $12,000 a ton.
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