India Purchased Over 77 Tons of Gold in 2021, Highest Amount Recorded Since 2009 

Jan. 31, 2022

Indian Flags

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The Reserve Bank of India (RBI) has bought 118 tons of silver in 2020 and 2021. This acquisition is the largest amount of gold the central bank has obtained since 2009. The central bank’s gold reserves jumped from 676.6 tons to 753 tons. Economists believe that RBI is solidifying its portfolio by increasing its gold inventory during a time when inflation is affecting major fiat currencies worldwide.

The gold buying trend among central banks has become more prevalent in the last two quarters of 2021. This is mainly due to central banks’ worries that inflation and a possible global recession could bring economic destabilization. Analysts believe that adding significant amounts of gold to central bank reserves can help hedge against inflationary pressures and allow countries’ economies to remain solvent.

Gold Bars

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Gold jumped 0.25% to $1803.60 per ounce. Silver rose 0.16% to $22.64 per ounce. Platinum grew 0.79% to $1035.00 per ounce, while Palladium increased 1.38% to $2434.50 per ounce. Bitcoin tumbled 0.46% to $37,726.90. 

Important Inflation Indicator Hits 5.8%, Highest Rate in 39 Years

Jan. 28, 2022

Household income

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The Personal Consumption Expenditures Price Index, a key inflation gauge that tracks the measure of prices, increased by 5.8% in December 2021. This report by the Commerce Department also stated that consumer spending dropped 0.6% for the month of December, with electronics, clothes, and automobile sales declining the most. Higher prices combined with the surge in omicron cases may have discouraged holiday shoppers from purchasing goods. 

The report might encourage the Fed to take a more hawkish approach to lower inflation. Interest rates are expected to rise in March, which has sparked a major market sell-off in the month of January. As both the stock and crypto markets continue to show instability, many investors are shifting towards gold and silver as a way to stabilize their portfolios. 

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Gold dipped 0.83% to $1789.30 per ounce. Silver fell 1.98% to $22.43 per ounce. Platinum declined 2.84% to $1010.10 per ounce, while palladium jumped 2.30% to $2353.00 per ounce.

US GDP Jumps in the Fourth Quarter of 2021

Jan. 27, 2022

Supply Chain

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The US economy beat out expectations for the last quarter of 2021 due to an increase in consumer spending and inventory investment. The gross domestic product grew at a 6.9% annualized pace. Government spending and imports are deducted from GDP, which is considered dampers to the country’s economic output. Inventories, supported primarily by automotive dealers, added 4.9 percentage points to growth. 

Money Velocity

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In more news, orders for durables, items that have long periods between successive purchases, have hit a new low since 2020. The low figure is a result of a 3.9% drop in transportation orders, and orders for long-lasting goods fell by 0.9% for December. It wasn’t all bad news, however. Positive data from employment figures were also released this past week. US jobless claims totaled 260,000 for the week of Jan. 22., a decline of 30,000 from the previous week.

Gold dipped 0.79% to $1812.40 per ounce. Silver decreased 2.85% to $22.96 per ounce. Platinum declined 0.68% to $1041.10 per ounce, while palladium jumped 0.09% to $2366.00 per ounce. 

Fed to Hold Press Briefing Wednesday as Big Decision on Interest Rates Expected to be Announced

Jan. 26, 2022

Rate hike

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The Federal Reserve is expected to announce its plans to raise interest rates for the month of March, the first hike in three years. Policymakers continue to seek out strategies that can curb inflation without triggering a stock market crash – a task that has proven difficult. Investors expect the Fed to raise interest rates up to four times in 2022, ending the year at a 0.9% rate. 

Some investors and policymakers are worried that an increase in interest rates will overburden debt holders. This applies to the US as a whole, which owes $30 trillion in debt. The US government alone spent $508 billion in December, the highest amount ever spent in one month. With increasing debt a growing concern, a rate hike becomes a tricky move for the Fed to pull off.

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Gold fell 0.08% to $1844.00 per ounce. Silver rose 0.57% to $23.94 per ounce. Platinum increased 3.42% to $1072.10 per ounce, while palladium jumped 5.1% to $2402.00 per ounce.

Gold Prices Up After Rocky Trading Day for Stocks and Crypto Put Investors on Edge

Jan. 25, 2022

Stock Market

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Precious metals prices, especially gold, remain steady going into Tuesday morning. Investors believe that gold and silver will continue to perform well as the markets prepare for the Fed’s Wednesday meeting. The Fed is expected to speak about its current plans regarding interest rate hikes, downsizing the balance sheet, and ending stimulus-era bond purchases. In anticipation of the Fed’s Wednesday’s meeting, Monday trading for stocks and crypto saw a major sell-off at the early part of the day, ending in the day in the green. 

Gold bar

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Instability in Eastern Europe and the Middle East, coupled with increased inflation and supply chain bottlenecks, have investors worried about an upcoming recession. With this in mind, many investors have moved their assets into gold and silver, viewing the precious metals as a secure investment in times of instability. 

Gold rose 0.46% to $1846.30 per ounce. Silver fell 0.52% to $24.00 per ounce. Platinum dipped 0.88% to $1036.40 per ounce, while palladium jumped 1.49% to $2207.50 per ounce.

Russia’s Duma Deputy Chairman Suggests Launch of Centralized Stablecoin Backed by Gold

Jan. 24, 2022

Russian Flag

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The Chairman of the State Duma Committee on Industry and Trade, Vladimir Gutenev, recently announced that Russia could withdraw a ban on gold-backed stablecoins and allow government-controlled cryptocurrency mining. With recent threats made by the US and EU to exclude Russia from SWIFT, Russia’s government has been looking for ways to become more independent from western financial systems. Gutenev believes that a Russian digital ruble backed by gold can circumvent sanction threats and facilitate economic relations with other countries. 

Gold Bar

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Gutenev believes gold is undervalued compared to world-leading fiat currencies like the US dollar and Euro. Stablecoins backed by gold, such as Pax Gold, have become very popular amongst investors and provide the added value of being redeemable in gold. Gutenev also mentioned Russia’s commitment to building up its reserves by mining more gold, in order to diversify its sovereign fund.  

Gold fell 0.19% to $1840.20 per ounce. Silver dipped 2.72% to $23.73 per ounce. Platinum decreased 2.74% to $1023.60 per ounce, while palladium jumped 0.74% to $2153.00 per ounce. Bitcoin tanked 7.74% to $33,470.30.

Bitcoin and Ethereum Tank Overnight as Regulators Crack Down on Digital Currencies

Jan. 21, 2022

bitcoin

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Cryptocurrencies fell sharply overnight, erasing $150 billion from the digital currency market. Bitcoin dropped 7% to $38,287, while Ether fell 8% to as low as $2,809.50. Cryptocurrency mining, particularly with bitcoin, has faced strong opposition from many countries where the majority of mining is done.

Mining

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Until recently, the top three countries for bitcoin mining were China, Kazakhstan, and Russia. Unfortunately for the bitcoin miners, China completely banned crypto mining in September 2021 and Russia has announced plans to ban crypto mining soon as well. In Kazakhstan, Bitcoin miners are facing political and energy instability. The country has faced power outages which have angered citizens to the point where the government was almost overthrown. EU regulators are also in talks to ban proof-of-work crypto mining due to its high energy consumption. 

Many investors are currently worried about cryptocurrency’s volatility and have decided to invest in precious metals. Gold fell 0.04% to $1846.30 per ounce. Silver dipped 0.16% to $24.56 per ounce. Platinum grew 0.1% to $1060.80 per ounce, while palladium jumped 3.44% to $2171.00 per ounce. 

U.S. Jobless Claims Jump to 3-Month High

Jan. 20, 2022

Unemployment

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Unemployment figures signal trouble for the U.S. economy. Initial filings for jobless claims reached 286,000 for the week ending on January 15, well above the Dow Jones estimate of 225,000. The total amount of jobless claims was the highest recorded figure in three months, sparking fear among economists. With unemployment and inflation on the rise, some analysts worry stagflation may set in. 

The unemployment issue presents a challenge to the Fed’s plan to raise interest rates in March to curb inflation. This is because one important criteria for implementing this new policy is a shrinking unemployment rate. Analysts worry that if unemployment rates continue to climb, the Fed might postpone interest rate hikes. If this occurs, analysts believe that inflation will skyrocket, GDP will contract, and markets could crash sooner rather than later. 

Silver drop

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As economic fears continue to mount, gold and silver have made tremendous gains this week. Investors are looking to precious metals as a way to protect their wealth during economic uncertainty. Gold grew 0.26% to $1852.50 per ounce. Silver spiked 1.72% to $24.67 per ounce. Platinum jumped 2.53% to $1071.60 per ounce, while Palladium increased 2.16% to $2081.50 per ounce. Bitcoin fell 3.66% to $43,194.50.

Oil Prices Continue to Rise, Adding to Inflation Woes

Jan. 19, 2022

Turkey

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Political troubles in Russia and the UAE, coupled with a pipeline outage in Turkey, have led to a fourth day of high oil prices. On Tuesday, Turkey’s pipeline operator shut down the flow of oil at its Kirkuk-Ceyhan pipeline because of an explosion. The blast caused a huge fire near the town of Pazarcik, and firefighters and emergency personnel were deployed quickly to douse the blaze. Although oil flow has now resumed through the pipeline, the incident still affected crude prices.  U.S. West Texas Intermediate futures notably rose 1.2% to $86.44.

Pipeline

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Investors grow increasingly concerned about oil shortages and their effect on rising prices. Asset managers continue to dump dollars for precious metals as a way to hedge against inflation. The price of silver spiked tremendously by about fifty cents an ounce on Tuesday. With its low cost of entry, silver continues to attract new investors looking for a way to diversify their portfolios during this period of high inflation.

Gold grew 1.14% to $1844.40 per ounce. Silver spiked 2% to $24.12 per ounce. Platinum jumped 4.08% to $1039.20 per ounce, while Palladium increased 6.34% to $2057.00 per ounce. Bitcoin fell 0.29% to $42,491.10.

Houthi Rebel Attack on Oil Tankers in UAE Pushes Oil to Seven-Year High

Jan. 18, 2022

Oil tanker

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On Monday, Yemen’s Houthi rebels coordinated a deadly attack on oil facilities in the United Arab Emirates, pushing oil prices to a seven-year high. As a result of this attack, U.S. West Texas Intermediate futures rose 3% to $85.56, while Brent jumped 1.6% to $87.89. The UAE government vows revenge for the attacks, leading investors to worry about higher oil prices and increased upward pressures on inflation rates.

Abu Dhabi

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Another added economic stress comes from China, who has suspended operations in the manufacturing and shipping sectors to contain omicron cases. To hedge against all the inflationary pressures that negatively impact the economy, investors continue to turn to precious metals.

Gold fell 0.25% to $1822.00 per ounce. Silver spiked 2.09% to $23.61 per ounce. Platinum jumped 1.13% to $1001.70 per ounce, while Palladium increased 1.93% to $1941.00 per ounce. Bitcoin fell 1.61% to $41,541.10.

Consumer Sentiment Falls to Second Lowest Reading in 10 Years

Jan. 17, 2022

Shopping mall

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The University of Michigan Consumer Sentiment Index (MCSI) fell 2.5% to 68.8 in January from its previous level of 70.6 in December. This is the second-lowest reading in a decade, with the lowest recorded in November 2021. The top issue concerning consumers was inflation, followed by unemployment. Unsurprisingly, a large percentage of respondents claim that they are doing worse financially than a year ago.

This pessimistic outlook by consumers is reflected in recent retail sales data, which shows that sales fell 1.9% from November to December 2021. Since consumers tend to spend less when they are worried about the economy, analysts posit this trend may be a warning sign for the near future.

Gold Bars

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Gold grew 0.12% to $1827.40 per ounce. Silver spiked 0.17% to $23.13 per ounce. Platinum jumped 0.62% to $991.50 per ounce, while Palladium increased 0.27% to $1920.00 per ounce. Bitcoin fell 1.06% to $42,644.10.

Ireland’s Central Bank Adds More Gold to its Reserves

Jan. 14, 2022

Ireland

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As inflation rates rise worldwide, central banks continue to purchase gold at record amounts. Ireland purchased two tons of gold for $88 million in November alone. The Central Bank of Ireland has notably boosted its gold reserves to over 60% in two years, which is a substantial amount considering that Ireland has not purchased gold since 2009. The Governor of the Bank of Ireland expressed his concerns about rising inflation and is currently looking for strategies to mitigate it.

Gold Price

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Gold grew 0.07% to $1830.20 per ounce. Silver sank 0.3% to $23.10 per ounce. Platinum jumped 0.82% to $994.60 per ounce, while Palladium increased 1.09% to $1941.00 per ounce. Bitcoin tumbled 0.41% to $42,757.50.

U.S. Producer Prices Hit All-Time High for 2021

Jan. 13, 2022

PPI

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The US Labor Department announced Thursday that U.S. producer prices rose a record 9.7% in 2021. Producer prices (excluding energy and food prices) hit 8.3%, while wholesale prices reached 0.2% both breaking record highs. Analysts worry that January’s producer price index will increase due to an uptick in omicron cases, which will likely force a manufacturing slow down. 

Gold

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Gold fell 0.49% to $1823.80 per ounce. Silver sank 0.45% to $23.15 per ounce. Platinum dipped 1.23% to $982.30 per ounce, while Palladium decreased 0.76% to $1929.50 per ounce. Bitcoin tumbled 0.71% to $43,155.90.

Inflation Climbs To Highest Point in 40 Years

Jan. 12, 2022

CPI

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The Labor Department released its December report on Wednesday. The report showed that the consumer price index (CPI), which measures housing, fuel, goods, and service costs, rose to 7%. That is the fastest rate calculated since June 1982. Core prices, which exclude energy and food, came in at 5.5% – displaying the steepest 12-month increase in 31 years.

Devaluation

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Economists and investors continue to worry about the state of the economy. With rising inflation threatening economic growth, the Fed is feeling intense pressure to curb inflationary pressures by increasing interest rates. This is a tricky feat because analysts believe an increase in interest rates (and imposing other monetary measures) will negatively affect the stock market.

Gold jumped 0.05% to $1831.00 per ounce. Silver grew 0.86% to $23.12 per ounce. Platinum rose 1.24% to $1000.50 per ounce, while Palladium increased 0.91% to $1973.50 per ounce. Bitcoin edged up 0.71% to $43,751.10.

Precious Metals Rebound Ahead of Thursday’s Inflation Data Release 

Jan. 11, 2022

Precious Metals

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Gold and silver gained against the dollar overnight, as investors continue to seek out precious metals to combat higher inflation rates. While the dollar struggles as the dominant store of wealth, central banks are dumping dollars for gold  -which they view as more secure in the long term. 

Dollar

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Investors are awaiting December’s inflation report to be released Thursday, as many expect the inflation rate to be at or above 7%. If this ends up being the case, market insiders believe the Fed will take more aggressive steps in monetary policy to control the inflation rate. 

Gold jumped 0.12% to $1810.60 per ounce. Silver grew 0.02% to $22.58 per ounce. Platinum rose 0.21% to $956.80 per ounce, while Palladium decreased 0.59% to $1934.50 per ounce. Bitcoin dipped 0.71% to $41,526.10.

Bloomberg Projects that Consumer Price Index has Reached 7% for the Month of December

Jan. 10, 2022

Inflation rate

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Economists are preparing for December’s Consumer Price Index (CPI) report, due Thursday. Bloomberg predicts that CPI will have reached 7%, leading speculators to believe that the Fed might have to take stronger measures to curb inflation rates. Financial analysts believe that a tighter money supply is needed to control inflation, but doing so will negatively affect the stock market. December US retail sales numbers are expected to show poor results due to Omicron and supply chain issues.

Market Source: Pixabay

Gold sank 0.15% to $1801.00 per ounce. Silver fell 0.20% to $22.44 per ounce. Platinum dropped 3.75% to $939.00 per ounce, while Palladium decreased 1.01% to $1948.50 per ounce. Bitcoin dove 2.57% to $40,799.70.

Gold Gains as December Non-Farm Payroll Misses Expectations

Jan. 7, 2022
BLS
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For the second consecutive month, the Bureau of Labor Statistics (BLS) US payroll data presented disappointing figures. US employers added just 199,000 jobs, far lower than the estimated 422,000. Also, the labor force participation rate remained at 61.9% which is lower than pre-pandemic levels. However, the unemployment rate dropped to 3.9%, better than the expected 4.1% rate. The unemployment rate currently falls within the criteria the Fed was looking for as an indicator to raise interest rates in March.

Job report

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Wage inflation remains strong, as employers increase pay to attract more employees. Employers in various sectors continue to struggle to fill vacancies as many workers resign, in what is being referred to as “the Great Resignation.” Economists worry that the lack in the country’s productivity will hinder GDP growth and exacerbate supply chain bottlenecks. 

Gold rose 0.01% to $1798.00 per ounce. Silver fell 0.03% to $22.26 per ounce. Platinum dropped 1.04% to $972.40 per ounce, while Palladium increased 1.54% to $1937.50 per ounce. Bitcoin dove 2.74% to $41,904.80

Gold and Silver Induces Sell-Off as Market Reacts to the Fed’s Proposed Reduction of Balance Sheet

Jan. 6, 2022

gold bars

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The minutes from the Fed’s last meeting were currently released, signaling to Wall Street that the central bank will begin to reduce its balance sheet. This came as a surprise to many investors, inducing an instant sell-off of stocks, precious metals, and cryptocurrency in a matter of minutes. Some members of the Federal Reserve Committee believe that focusing more on asset reduction to the balance sheet will help steepen the curve of inflation. 

Balance sheet

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With the proposed asset sell-off, interest rate hikes, and tapering of bonds, the Fed’s new monetary policy demonstrates that the central bank is deeply concerned about controlling inflation. Precious metal speculators believe that the Fed’s new approach will help slow down the increase of inflation but will not keep it within healthy levels. While some speculators have traded gold for dollars, central banks around the world continue to dump dollars for gold as a means to protect against an economic global collapse. 

Gold dipped 1.17% to $1795.90 per ounce. Silver fell 3.14% to $22.20 per ounce. Platinum dropped 3.16% to $969.60 per ounce, while Palladium decreased 1.22% to $1881.50 per ounce. Bitcoin dove 0.71% to $43,084.30.

Job Growth Exceeds Expectations- But is that Number Affected by the 4.5 Million People that Quit Their Jobs in November?

Jan. 5, 2022

Jobs

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Private companies added new hires at a higher rate than expected, according to a report by payroll processing firm ADP. The total number of private sector growth hit 807,000 for the month of December, which was broad-based among all sectors. The ADP report only shows data for the first two weeks of December, before the omicron variant impacted the economy. Analysts worry that the omicron variant might affect the progress of job growth for the month of December.

Shutdown

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Another significant issue causing analysts to worry is the record number of people who quit their jobs in November. About 4.5 million people left their jobs in what is now being called “The Great Resignation”. The majority of workers that quit were employed in the restaurant and health care sectors, two areas already suffering heavily due to the pandemic. Economists are worried that both these sectors will struggle even more now that omicron has put an increased amount of employees out of work.

Gold increased 0.49% to $1830.90 per ounce. Silver grew 0.28% to $23.24 per ounce. Platinum jumped 2.47% to $1,011.70 per ounce, while Palladium rose 1.05% to $1941.00 per ounce. Bitcoin leaped 1.81% to $46,644.80.

China Doubles Down on its Digital Yuan, Launches New App to Expand Usage

Jan. 4, 2022

digital currency

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The People’s Bank of China recently launched e-CNY, the digital form of the country’s official currency, the yuan. The central bank created a lottery in select cities which allocated users a small amount of currency. This trial was conducted to help facilitate the adoption of the country’s new digital currency. Recently, the central bank expanded the use of the digital yuan to more people by launching a new wallet app. The app will allow more people access to the digital yuan in certain cities throughout China.

Shanghai

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The digital yuan isn’t a digital currency like bitcoin, which is a decentralized digital currency that operates on the blockchain. Instead, it functions exactly like the paper currency of the yuan but in digital form. China will analyze the digital yuan’s usage in the Beijing Winter Olympics.

Gold increased 0.37% to $1815.80 per ounce. Silver grew 0.44% to $23.08 per ounce. Platinum jumped 2.2% to $994.30 per ounce, while Palladium rose 3.8% to $1924.00 per ounce. Bitcoin leaped 1.43% to $4,019.80.

Dollar Gains Strength for the New Year While Gold Takes Significant Hit

Jan. 3, 2022

Dollar

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The US dollar index recently climbed overnight 0.12% to 95.79, holding strong against the Euro and Yen. The US Dollar typically starts the new year off in the green. It’s risen 19 times during the first week of the year in the past 25 years. With the spike in omicron variant cases, investors will continue to analyze its effects on the economy. Currently, many investors continue to view inflation as a major risk and prefer to hold gold instead of fiat currency.

Some investors have sold significant amounts of gold for long-term bonds as yields start to rise. The 10-year Treasury note yield grew 7.6 points to 1.574%. The 30-year Treasury bond yields increased 6.5 points at 1.954%. Some market speculators believe that yields will continue to grow in the bond market.

Gold bars

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Gold dropped 1.5% to $1808.50 per ounce. Silver dipped 2.4% to $22.87 per ounce. Platinum fell 2.39% to $957.40 per ounce, while Palladium rose 0.6% to $1926.50 per ounce. Bitcoin fell 1.3% to $46,809.70.

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