Evergrande Pays off Bond Interest in Move to Avoid Default
Oct. 22, 2021
Source: The Guardian
China’s largest real estate developer recently submitted its interest payment that was due on September 23. Evergrande previously owed $83.5 million in interest to an offshore bond and risked a cataclysmic default. However, the dangers of Evergrande filing for bankruptcy are far from over. The company is the most indebted real estate developer in the world, owing more than $300 billion to creditors. Evergrande has currently missed four coupon payments, with additional ones coming up in November and December.
Since the start of the Evergrande debacle, international markets have taken a downward turn, due to worries that a collapse of China’s largest real estate developer would completely tank the Chinese economy. China’s real estate developers are facing multiple default risks, adding to the nation’s economic woes.
Source: Global Times
Many countries are investing highly in gold as they continue to prepare for record-high inflation and a global economic crisis. For example, the National Bank of Serbia plans to purchase large quantities of gold from a Chinese firm called the Zijin Mining Group. Serbia has vowed to increase its gold reserves from their record 35 tons to 50 tons by 2022.
Precious metals made strong gains today with gold spot rising 1.61% to $1810.40. Silver also rose, increasing 2.42% at $24.75, with platinum jumping by 2.49% to $1,075.60. Not to be left out, palladium increased by 0.22% to $2,022.50.
Russia Continues to Bet on Gold, Nation Adds More to Reserves
Oct. 21, 2021
Sources: Moscow Times
The Central Bank of Russia increased its gold holdings by 0.14%. That brings their gold reserves to 73.0 million ounces. This is an ongoing trend for Russia month over month, as the country tries to fend off inflationary concerns that are rattling the globe.
Russia has surpassed its initial goal for gold reserves which was set at $500 billion. Currently, Russia’s central bank holds more than $618 billion, making the nation the fifth-largest holder of gold reserves in the world.
Gold spot prices cooled off overnight, down .03% at $1,784.08. A weakened dollar continues to be of concern to asset managers, leading to a major shift out of the dollar into gold and other precious metals.
Rent for Single-Family Homes are Skyrocketing Across the Nation
Oct. 20, 2021
Source: Realty Biz News
The housing market remains hot due to low inventory and many people are flocking to single-family rentals. Investors have caught wind of this trend and are jumping into the housing market. These investors are buying up as much property as they can, looking for ways to increase their profit margins. Rental properties are seen as a great hedge against inflation since bonds and other investment vehicles are providing dismal returns.
Bitcoin leaps over $65,000 as many flock to the digital currency following the initial launch of ProShares Bitcoin Strategy ETF. A couple of investment firms have applied for their own Bitcoin ETF’s and many speculate that Bitcoin can be well on its way toward the $100,000 mark.
Sources: Washington Post
Gold and silver are holding steady today. Gold spot rose 0.61% to $1,781.30. Silver spot climbed by 0.97% to $24.11. Platinum decreased by 0.07% to $1,046.50. Palladium dropped by 2.18% to $2,055.49. Reasons for the drop in platinum and palladium are due to lower demand by automakers scaling back production in response to the supply chain crisis.
Precious Metals Achieve Strong Gains After Dollar Pulls Back
Oct. 19, 2021
Source: U.S. Global Investors
Tuesday, precious metal prices made strong gains with silver spot rising 2.6% to $23.76 per ounce, platinum climbed 1.5% to $1,051.47, and palladium grow 2.9% to $2,074.29. Gold continues to provide great inflationary protection with the gold price increasing by 0.9% at $1,780.90 per ounce.
The US Dollar has lost some steam against its peers, with the Euro gaining 0.3% and the British Pound 0.6%. US Bond rates eased up as well.
Source: Finance and Market
Some investors think that the US Dollar will gain strength once the Fed begins tapering stimulus programs. But others say that the rapid increase of inflation and unemployment simultaneously will create the phenomena of stagflation. With stagflation becoming a growing concern, gold and Bitcoin are viewed as safe-havens.
US Markets are Down Monday as Investors Lose Confidence in Economy
Oct. 18, 2021
Monday, the stock market started off in the red as inflation and other issues continued to grow without any signs of improvement. Workers in the US, across several industries like manufacturing and airlines, continue to strike due to issues like vaccine mandates and compensation. The strikes are impacting an already overburdened economy, with some saying it will exacerbate supply chain issues and commercial flights.
Gold spot prices also dropped over the weekend, as many short-term investors bought dollars due to it strengthening over other currencies. Long-term investors are still investing in gold and other precious metals as inflation continues to threaten the chances of a global economic recovery as pandemic restrictions ease.
The Dow Jumps 200 Points on Positive Retail Sales Report, While Gold is Down 2%
Oct. 15, 2021
Friday started off with positive news on Wall Street as retail sales rose 0.7%, compared to a decline of .02% as expected. Despite supply chain issues and increased unemployment, consumers seem to spend, probably because of the large cash surplus in circulation.
Also, stock indexes rose as reports from Goldman Sachs, JP Morgan, CitiGroup, and Morgan Stanley show positive third quarters.
Source: Bangkok Post
Gold and other precious metals prices retreated overnight as the dollar gained strength in correlation to the positive results previously mentioned. With the drop in precious metals, it’s a perfect time to take advantage of the dip.
The Dollar Continues to Lose Purchasing Power as Gold Jumps Pass $1,800 Mark
Oct. 14, 2021
Source: US Money Reserve
The US Dollar declined due to inflationary issues and the Fed’s failure to control monetary issues. The Fed has hinted to tighten monetary policy but many subject matter experts believe that any changes to either interest rates or other tapering measures might accelerate the decline of the economy.
Raising interest rates would hurt the US Bond market which would have a terrible effect on the US’s ability on getting more credit which would be ok if the US had a budget surplus.
As such, investors keep moving towards gold to cover any future losses. Buying gold provides tremendous benefits as inflation continues to grow day to day.
Consumer Prices Come in Higher Than Expected
Oct. 12, 2021
The Dow, S&P, and Nasdaq fell this morning as a result of CPI and prolonged inflation fears. Consumer prices continue to rise as energy and food prices continue to skyrocket. The Consumer Price Index (CPI) rose .4%, more than expected in September. This will bring Year Over Year gains to 5.4%, with an annualized rate of 6%. Used car prices fell 0.7%, helping to offset CPI rates.
With mounting fears of inflation wreaking havoc on our daily lives, precious metal continues to provide a safe haven to protect your assets from impending losses. Precious metals showed strong gains, with gold spot increasing by $27.60, silver $0.57, platinum $13.90, and palladium $62.20.
IMF Issues Warning to Central Banks About Curtailing Inflation
Oct. 12, 2021
Source: The Indian Express
The IMF announced, through their quarterly update, a warning to the US, UK, and other developed countries about the dire consequences of inflation that will transpire if it isn’t curtailed. Though the IMF didn’t give ideas on how to slow down the rate of inflation, they did mention that central banks need to tighten their monetary policies to control inflation.
The Federal Reserve has mentioned previously that a method for curbing inflation would be to raise interest rates. But raising interest rates can create another overlooked problem, the bond market would get wreaked. Now if bond rates drop, it will accelerate the chances of an economic collapse. So the Fed definitely has a ticking time bomb on its hands.
As central banks continue to struggle with the inflation crises, gold continues to hold firmly as investors continue to use the precious metal as a hedge against inflationary investments. Gold Spot rose by 0.4% to $1,761.41 per ounce.
Markets Down as Oil Hits 7 Year High
Oct. 11, 2021
Source: Financial Times
Markets are up today, as energy stocks continue to gain surpassing the $80 mark. West Texas Intermediate Crude (WTI) topped $82 while Brent rose 1.4% to $83.79 per barrel. While the economy tries to recover from the pandemic and energy crises, prices are estimated to continue to rise as OPEC struggles to meet oil demands.
The S&P 500 has also been affected by investors fleeing Big Tech stocks for financial and energy stocks. The USD is holding on stronger today as the Fed hints at tapering policies.
Source: Women Who Money
As investors continue to worry about slow job growth and inflation, precious metals continue to show promise when hedging against fiat currency. Gold Spot is currently holding at $1757.80. Silver and palladium are up .22% and 2.70% respectively. Platinum is currently down .09%.
Jobs Report Misses Expectations
Oct. 8, 2021
The U.S. jobs report showed that employers hired fewer workers than expected for September. This is the first jobs report since the September 5 expiration of supplemental unemployment benefits.
Nonfarm payrolls added 194,000 employees in September. According to the Department of Labor, the unemployment rate dropped down to 4.8%. Jobs expectations were set at 500,000 new jobs with an unemployment rate of 5.1%.
The US Plans Release of Emergency Oil Reserves in Hopes of Lowering Gas Prices
Oct. 7, 2021
Source: NITHIDPHOTO/ISTOCK VIA GETTY IMAGES
The White House is considering several options to curtail increasing gas prices in the country. The Biden Administration is hinting at releasing emergency oil reserves to stabilize the current oil crisis. As of Oct 6, 2021, gasoline prices have surged to their highest price in seven years, at $3.21 per gallon.
Source: Yahoo News
The Strategic Petroleum Reserve (SPR) is currently the world’s largest supply of emergency crude oil, with an authorized storage capacity of 714 million barrels. The SPR was established to reduce disruptions in the supply of oil products and establish stability in the country during times of energy instability. The US has used the SPR on three occasions before.
Inflation and surging demand for petroleum products have spiked after OPEC nations declined to ramp up production efforts.
Choppy Wednesday for Markets As Economy Struggle To Make Solid Gains
Oct. 6, 2021
Source: The Balance
The gold spot price dropped Wednesday as it continues to get some pushback from the U.S. Dollars’ small gains in value. US gold futures fell 0.8% to $1,747.50 and gold spot shed 0.7% to $1,747.61 per ounce by 0923 GMT. While silver spot silver dropped 1.7% to $22.28 an ounce, platinum fell 1.6% to $946.07, and palladium had a minor hit of 1.1% to $1,892.82.
Source: FX Street
This comes as a result of investors buying dollars as a temporary hedge over concern of the spike in oil prices. U.S. Treasuries have also increased. Since the Fed considers its tapering efforts as a solid policy, the dollar is holding on as a result.
Some investors believe tapering efforts aren’t enough to contain inflationary issues and continue to look at gold as a safe haven.
Gold, Silver, and Platinum Prices Drop as the Stock Market Rebounds
Oct. 5, 2021
U.S. stock indexes improved after a tough end to the 3rd quarter of trading, weakening the price of gold and other precious metals. Experts think the gold spot price will gain strength as the global economy struggles with supply chain bottlenecks and inflation issues.
The Eurozone producer prices are up 1.1% due to inflationary pressures. Australia’s central bank will leave interest rates unchanged, saying that they will not increase interest rates until at least 2024.
Source: Politico EU
China’s real estate woes continue, with another firm, Fantasia Group Holdings, missing debt payments this week. Fantasia, a smaller real estate developer compared to Evergrande, has many investors fearing this could be a trend in China.
Better-than-expected economic numbers aren’t influencing the gold price much, with December gold futures trading at $1,753.30 an ounce.
Russia’s Gold Reserve Expected to Run Out in 20 Years Says Nation’s Largest Mining Company
Oct. 4, 2021
Recently Polyus, Russia’s largest gold company, announced that Russia’s gold mining deposits are depleting at a fast rate and can exhaust their portfolio in 20 years. Russia’s annual gold production stands at about 330 tons and holds in reserves about 8,000 tons.
The nation’s gold resources, which include the portfolios of mining companies and extracted resources have been reduced for several years now, going from 62% to 30%.
The CEO of Polyus, Pavel Grachev, has called for national and private investment for exploration and prospecting to boost up gold deposits. Polyus hopes to recover from COVID-19 pandemic slowdowns that decreased ore-grade mining in Siberia. They expect to increase production by 2024.
Russia is the second leading gold producer in the world, second to China. With the warning of gold depletion in Russia, experts are predicting a significant increase in the gold price if Russia’s gold production drops as mentioned.
Gold Spot Prices Increase as PCE Inflation Continues on an Upward Trend
Oct. 4 2021
After a rollercoaster ride for the end of the week of September, Gold ending with a healthy increase starting in October after continued fears of the increased rate of inflation.
Source: Daily FX
The chair of the Federal Reserve, Jerome Powell blames inflation increases on supply chain inefficiencies. Investors believe inflation rates are affected not just by supply chain issues. The problem seems to point towards the Fed’s lax monetary policies for the nation’s inflationary woes.
With the gold market back above $1,750 an ounce, many investors think we will have a bullish fourth quarter as the Fed continues to hint on more printing of the dollar.
Bitcoin Shoots up as the Dollar Sinks
Oct. 1, 2021
The U.S. Dollar Index (DXY) value retreated after the U.S. jobless claim came in at 362,000 last week against 351,000 a week before. Since Bitcoin and the gold price have an inverse correlation effect with the U.S. dollar inflation rate, Bitcoin spiked up to 47,337.40 USD. The Federal Reserve is hinting at tapering its asset purchasing program which will keep interest rates low.
Another factor for the increase in Bitcoin’s value is the fear of the U.S. debt ceiling. If the debt ceiling is lifted, the Federal Reserve’s printing press will continue to flood the market with cheap dollars, further worsening the effects on inflation and economic stability.
As many worried investors continue to look into alternative stores of value to protect their wealth, Bitcoin and Gold continue to be a safe haven for many people and companies seeking to soften the economic blow of a deteriorating dollar as a hedge.