Russia Central Bank Doubles Interest Rates to Slow the Collapse of Ruble
Feb. 28, 2022
The US, UK, and EU implemented a multitude of economic sanctions against Russia for its incursion on Ukraine last week. As a result, the Russian ruble has crashed as low as 115 against the US dollar. On Monday, the Russian central bank rose interest rates from 9.5% to 20% as a measure to prevent the complete collapse of the ruble. The Bank of Russia announced Sunday that the central bank will purchase more gold as a way to hedge against the economic sanctions.
Global markets are currently volatile as Russia and Ukraine prepare for their first round of negotiations in Minsk. Oil and gas prices rallied Monday morning, influenced by concerns over the lack of supply. Other commodities also rose, as Russia provides a large portion of the world’s natural resources like aluminum and palladium.
Gold jumped 1.48% to $1925.20 per ounce. Silver grew 0.76% to $24.65 per ounce. Platinum spiked 0.87% to $1074.20 per ounce, while Palladium increased 4.59% to $2520.00 per ounce. Bitcoin rose 7.34% to $40,484.80.
Russia to Hit the West with Counter-Sanctions
Feb. 25, 2022
Moscow has announced Friday that the Kremlin is ready to impose counter-sanction on western powers, such as the US and EU, in retaliation for the sanctions applied to Russia. The head of the Russian Senate added that sanctions will not mirror the ones imposed by the US, but will hit the countries where it’s most effective. Details about the counter-sanctions are yet to be uncovered.
The Senate head said that “the West has many soft spots” and is worrying investors as to what industries would be most affected. Russia is a top global supplier of oil, natural gas, palladium, steel, and other commodities which have triggered massive fluctuations in prices since the Russian invasion began. Analysts predict that precious metals and other commodity prices will continue to rise as sanctions are implemented.
Gold dropped 0.79% to $1897.10 per ounce. Silver grew 1.10% to $24.07 per ounce. Platinum fell 0.09% to $1099.30 per ounce, while Palladium increased 1.86% to $2413.00 per ounce. Bitcoin dipped 1.77% to $39,026.70.
Russia Invades Ukraine
Feb. 24, 2022
War unfolded around 5 am in Kyiv Thursday after Russian President Vladimir Putin announced a “special operation” in Ukraine. Videos flooded social media showing multiple attacks throughout Ukraine as Russian military forces hit important defensive infrastructure points. President Putin did not mention when the offensive will end, but the Kremlin communicated to Russian media that Putin will decide when to cease the operation.
Many UN members have condemned the Russian incursion on Ukrainian soil with some nations recommending stronger sanctions against Russia. President Biden is set to speak Thursday afternoon about the ongoing war, suggesting that additional sanctions will be pursued. The Chinese Foreign Ministry has maintained a neutral position in this situation and believes that Russia is an independent power that can make its own decisions.
Gold rose 0.64% to $1926.80 per ounce. Silver grew 0.51% to $24.79 per ounce. Platinum fell 0.73% to $1098.50 per ounce, while Palladium increased 6.96% to $2655.00 per ounce. Bitcoin dipped 3.98% to $35,783.80.
Sanctioning Russia will have Financial Consequences for American Households
Feb. 23, 2022
Tuesday, President Biden announced that the administration is implementing economic sanctions against Russia. These sanctions were signed off on in retaliation for Russia’s recognition of the breakaway regions of Donetsk and Lugansk as sovereign states, as well as the Russian military deployment of troops in Donbass.
The first round of sanctions is set to tighten the financial flexibility for Russian international commerce, but analysts believe that sanctions will cause an inverted effect on US consumers. Russia is a world leader in many natural resources such as oil, natural gas, aluminum, nickel, palladium, and other precious metals. Economic sanctions against Russia will lower the supply and worsen an already critically inflationary problem for US consumers.
Gold rose 0.22% to $1912.70 per ounce. Silver grew 1.43% to $24.56 per ounce. Platinum jumped 0.56% to $1100.60 per ounce, while Palladium increased 2.14% to $2481.00 per ounce. Bitcoin spiked 1.62% to $38,550.50.
Commodity Markets Under Pressure as Tensions in Ukraine Escalate
Feb. 22, 2022
As the Ukrainian/Russian conflict reaches a boiling point, the commodities market is set to enter a supply slump. The US and EU are discussing the implementation of sanctions on Russia which will have consequences on global markets as a whole. Currently, Russia is a heavyweight in the palladium, platinum, silver, gold, nickel, titanium, oil, natural gas, coal, diamond, wheat, and aluminum industries. Aluminum prices alone have jumped 15% to date.
The biggest commodities threat to the world economy is a drop in the oil supply. Russia is one of the world’s largest producers of oil, pumping about 9 million barrels a day. One of Russia’s largest customers is Germany, which is the world’s fourth-largest economy by GDP. On Tuesday, German Chancellor Olaf Scholz announced the halt of the Nord Stream 2 gas pipeline’s approval, leading economists to believe that energy prices will skyrocket to all-time highs.
As a result of Russia’s recognition of Donetsk and Lugansk separatist regions, precious metals rose overnight. Gold rose 0.22% to $1906.90 per ounce. Silver grew 1.24% to $24.32 per ounce. Platinum jumped 0.74% to $1099.60 per ounce, while Palladium increased 2.14% to $2426.50 per ounce. Bitcoin fell 0.32% to $38,118.40.
Russian Troops Kill Five Ukrainian Soldiers at Border; PGMs Soar
Feb. 21, 2022
Moscow reported that its military killed a “Ukrainian sabotage and reconnaissance group” trying to cross the Russian border Monday. Russian military officers issued a statement saying that “a unit of the Southern Military District, alongside a border patrol by the Russian Federal Security Service, prevented a sabotage and reconnaissance group from violating the Russian state border from the territory of Ukraine.” No Russian servicemen were injured.
As the Russian/Ukrainian conflict heats up, investors and manufacturers continue to buy large proportions of platinum and palladium. Russia is the world’s largest producer of palladium and market insiders believe added sanctions against Russia will cause a tremendous drop in the supply of the precious metal.
Gold fell 0.28% to $1901.20 per ounce. Silver dropped 0.21% to $24.01 per ounce. Platinum grew 0.75% to $1090.20 per ounce, while Palladium increased 0.57% to $2400.00 per ounce. Bitcoin rose 1.89% to $39,115.40.
US Weekly Jobless Claims Rose Unexpectedly to 248,000
Feb. 17, 2022
The number of jobless claims surpassed expectations for the week of February 12, according to the Labor Department. As of January 29, two million Americans remain unemployed. Current unemployment figures are partially due to an increase in discouraged workers forgoing employment. Labor participation notably dropped by 1.1% compared to pre-pandemic figures. With a steadily rising number of discouraged workers growing, employers are struggling to fill vacancies – further exacerbating existing production issues.
Economists worry that with an increase in unemployment in combination with rising inflation and high consumer sales, the US will face a period of stagflation. The Fed released meeting minutes on Wednesday suggesting that the bank will raise interest rates sooner than later, as inflation figures continue to threaten economic growth.
Gold rose 1.37% to $1903.30 per ounce. Silver jumped 0.81% to $23.88 per ounce. Platinum grew 1.70% to $1093.90 per ounce, while Palladium increased 3.14% to $2389.90 per ounce. Bitcoin fell 4.30% to $42,095.60
The Threat of Higher Inflation Rates Continues
Feb. 16, 2022
A week ago, January’s consumer price index data revealed that inflation rates are rising at a faster pace than expected. Automobile, clothing, gas, food, and other goods have hit record highs, with no signs of a reversal. Besides higher consumer prices, the producer price index (PPI) grew 1% over the past month – exceeding analysts’ original estimates of 0.5%. The PPI annual increase was reported at 9.7%, which may be a sign that inflation rates will continue to grow to record levels.
Even though consumer prices continue to rise while salaries remain stagnant, consumer spending jumped 3.8% in January. Furniture, auto, and online sales contributed to the highest segments in consumer purchases. Usually, higher consumer spending is viewed as a positive attribute to a robust economy. However, speculators point out that consumer debt is increasing to record rates as consumers contend with rising prices. High credit card debt is signaling to Wall Street that consumers are struggling to maintain their current lifestyle. To add to the problem, increased demand for a variety of goods and services will continue to push prices to new levels as well.
With the fear of higher inflation rates to come, investor demand for gold as a safe haven asset continues to rise. Gold rose 0.40% to $1868.90 per ounce. Silver jumped 0.47% to $23.60 per ounce. Platinum grew 2.44% to $1066.20 per ounce, while Palladium decreased 6.33% to $2321.50 per ounce. Bitcoin fell 4.41% to $43,627.10.
Safe Havens Fall After Russian Troops Pull Back From Ukrainian Border
Feb. 15, 2022
Russia has begun preparations for a troop withdrawal from the Ukrainian border Tuesday after the Russian military completed a joint exercise in neighboring Belarus. The Russian Ministry of Defense made said announcements to de-escalate fears of a potential Russian invasion. This came after the White House and Ukraine’s president informed the media that an “imminent invasion” was to occur on February 16.
As a result of the demobilization of the Russian military on the Ukrainian border, oil prices dropped Tuesday morning – falling from a 7-year high to $94 a barrel. Petroleum prices are also expected to fall as diplomatic talks continue between Russia and NATO partners.
Precious metal prices dipped as optimism has grown toward a de-escalation between Russia and Ukraine. Gold fell 1.05% to $1860.90 per ounce. Silver dropped 2.69% to $23.33 per ounce. Platinum slipped 1.56% to $1025.70 per ounce, while Palladium decreased 6.33% to $2257.00 per ounce. Bitcoin soared 4.41% to $44,424.40.
Palladium Prices Spike over Worries of Russian-Ukrainian Conflict Escalation
Feb. 14, 2022
Palladium prices skyrocketed overnight after the White House’s statement revealing Russia’s impending invasion of Ukraine. Palladium investors worry that an escalation between Russia and Ukraine will limit the supply of the precious metal. If the US places sanctions on Russian businesses, palladium investors will face rising prices, putting a burden on automotive manufacturing.
Russia is the largest producer of palladium mining around 90 metric tons a year. Auto manufacturers use the precious metal for catalytic converters, and as auto production picks up, demand for palladium has increased. Analysts forecast that the Consumer Price Index will continue to grow due to the strain on the automotive industry.
Gold grew 0.51% to $1842.20 per ounce. Silver spiked 1.02% to $23.91 per ounce. Platinum jumped 1.08% to $1053.00 per ounce, while Palladium increased 0.40% to $2362.00 per ounce. Bitcoin soared 1.18% to $42,569.70.
Debt Amongst American Households Hit All-Time High
Consumer debt increased at its fastest rate in five years. As inflation rates grow, consumers are left using credit cards and other money lending alternatives to maintain their lifestyles. The Fed’s consumer debt statistics calculates student loans, credit cards, and auto loans, but excludes mortgages. The total debt reached totals of $4.43 trillion and if you include mortgages, that figure jumps to $15 trillion.
With rising prices and stagnant wages, Americans are looking at alternative ways to make ends meet. Economists are worried that the interest rate hikes will cripple consumers who are already burdened by debt and higher prices. The average credit card rate for those people with excellent credit sits at around 16% while rates for those with less than stellar credit carry rates of 20-30%. Once the Fed implements their proposed interest rate for March, those credit card interest rates will spike, leading to less purchasing power for American households.
Gold grew 0.51% to $1842.20 per ounce. Silver spiked 0.28% to $23.35 per ounce. Platinum fell 1.36% to $1030.40 per ounce, while Palladium decreased 2.28% to $2242.50 per ounce. Bitcoin soared 0.31% to $43,662.60.
Inflation Hits Highest Rate in 40 Years
Feb. 10, 2022
The Consumer Price Index (CPI) surged by 7.5% in January marking the highest recorded rate in the US since 1982. Core prices, which exclude energy and food, rose 6%, a more significant increase than expected by economists. Also, food and housing prices are accelerating the rate of inflation to unprecedented levels, leading investors to purchase gold and silver as a hedge. All the while, employees’ real earnings after accounting for inflation grew only 0.1% for the month of January.
Higher prices have continued an upward trajectory as demand for goods and services remain stronger than expected. Experts believe that consumers are taking on more debt to offset stagnant wages and the higher cost of living. Revolving debt rose by 2.4% year-on-year in December, while non-revolving debt jumped 6% year-on-year. Total consumer debt increased $18.9 billion to a total of $4.43 trillion dollars. To combat higher debt and growing inflation concerns, investors turn towards precious metals like gold and silver to diversify and strengthen their portfolios.
Gold rose 0.07% to $1835.50 per ounce. Silver spiked 0.77% to $23.63 per ounce. Platinum rose 0.29% to $1053.70 per ounce, while Palladium increased 1.89% to $2355.50 per ounce. Bitcoin soared 1.75% to $45,197.40.
Atlanta Fed President Says he Anticipates Three or Four Interest Rate Hikes This Year
Feb. 9, 2022
Atlanta Federal Reserve President Raphael Bostic spoke Wednesday in an interview suggesting that the central bank might implement three to four interest rate increases for 2022. However, Bostic said that the number of rate increases, as well as the amount for each increase, will depend on how the economy responds to each adjustment. Analysts suspect the Fed will raise rates five times in 2022, prompting economists to worry that the increase will have a negative effect on the stock market. Based on current market trends and Bostic’s remarks, some experts believe that a recession might occur sooner rather than later.
With a possible recession looming in the distance, investors believe the inflation rate will be difficult to control. Because of rising inflation, investors and central banks have shifted their portfolios from holding dollars and converting them to gold. Silver and gold are viewed as hedges against inflation and are noticeably in high demand.
Gold jumped 0.14% to $1835.50 per ounce. Silver fell 0.11% to $23.27 per ounce. Platinum rose 0.29% to $1050.90 per ounce, while Palladium increased 1.56% to $2310.50 per ounce. Bitcoin soared 0.23% to $44,195.60.
Palladium Demand Skyrockets as Russia-Ukraine Conflict Persists
Feb. 8, 2022
Palladium spot increased by 25% leading up to the first week of February amid mounting fears of a Russian-Ukrainian war. This greatly affects the mining process in Siberia, where about 30% of the earth’s supply of palladium is mined by the Russian company Norilsk Nickel. US and EU politicians are threatening sanctions toward Russian companies as a way to curb this escalation of conflict in the region.
Palladium is a highly used commodity and manufacturers are stockpiling the precious metal as a precaution against future supply shortages. If a palladium shortage occurs, the automotive industry would face tremendous losses and would push automotive prices to all-time highs. Increased automotive prices will raise the inflation rate, which is already at a 30 year high.
Gold jumped 0.22% to $1832.20 per ounce. Silver increased 0.59% to $23.25 per ounce. Platinum rose 1.08% to $1048.40 per ounce, while Palladium decreased 0.23% to $2298.00 per ounce. Bitcoin fell 1.43% to $43,245.50.
Gold and Silver Price Remain Strong as Higher Inflation Rates Persist
Feb. 7, 2022
Precious metals continue to perform well as inflationary pressures threaten US economic growth. Financial analysts expect higher inflation rates for the months of January and February, leading to a stronger gold and silver price. Demand for silver and gold has also remained steady as investors look for assets that hedge well against inflation.
The US dollar’s devaluation has allowed precious metals to gain significant traction for 2022. Countries are selling their dollars in for gold as a way to protect themselves from weaker purchasing power. Analysts believe that gold and silver will hit higher price thresholds as global inflation rates continue to rise.
Gold spot jumped 0.39% to $1823.10 per ounce. The silver price increased 1.71% to $23.03 per ounce. Platinum fell 0.79% to $1033.00 per ounce, while Palladium decreased 2.2% to $2273.50 per ounce. Bitcoin rose 2.76% to $43,586.20.
US Job Growth Surpasses Expectations
Feb. 4, 2022
Friday, the Labor Department released their monthly payroll report stating that US job growth increased by 467,000, beating Refinitiv’s estimates for the month of January. The positive jobs report came as a surprise to many analysts who believed figures would come up short due to record-breaking COVID-19 cases forcing millions of employees to stay home. Unfortunately, the unemployment rate still increased even after a significant job growth occurred, hitting 4% for the month of January.
Economists are still unsure if the job market will continue to grow since 10.9 million jobs still sit unfilled. A record amount employees have resigned from their jobs and refuse to reenter the workforce. This trend dubbed “The Great Resignation” has put employers in a difficult situation, resorting to offering higher wages and more perks to fill in vacancies.
Gold jumped 0.12% to $1841.80 per ounce, while the silver price increased 0.69% to $22.72 per ounce. Platinum fell 1.26% to $1039.00 per ounce, while Palladium decreased 0.62% to $2349.50 per ounce. Bitcoin rose 2.93% to $39,321.90.
Gold Mining Increased In 2021, But Still Below Pre-Pandemic Levels
Feb. 3, 2022
As economies opened up after the initial COVID-19 pandemic shutdown, gold mining production resumed to stronger levels for 2021. Despite this increase in production, output still remains lower than pre-pandemic levels. Given the slowed manufacturing rate, the global gold supply has seen an overall decline over the past few years. However, annual mine production reached 3,560.7 tons for 2021, a 2% increase year-over-year compared to the 2020s 3,474.7 ton supply.
For 2021s fourth quarter, gold production tanked due to omicron-related mining shutdowns in China, Burkina Faso, and Australia. With this in mind, analysts predict that gold production will remain stagnant. Many gold-mining executives believe companies have located most of the world’s gold and we are hitting “peak gold”. Therefore, a diminishing gold supply would push the price of gold to new highs.
Gold dipped 0.89% to $1797.00 per ounce. Silver pricefell 2.19% to $22.27 per ounce. Platinum dropped 0.87% to $1042.20 per ounce, while Palladium decreased 0.67% to $2391.50 per ounce. Bitcoin tumbled 1.08% to $36,530.00.
US National Debt Surpasses the $30 Trillion Mark
Feb. 2, 2022
This week, for the first time in history, America’s national debt crossed the $30 trillion dollar mark. The federal government has added over $7 trillion dollars in debt since January 2020. The national debt is now equivalent to $90,000 per US citizen. This means if each household paid $1,000 per month, it would take 19 years to pay debt off completely.
The total amount of debt is concerning many economists as more government debt equates to less economic growth. At the current rate of government spending, the US will reach the $40 trillion mark in less than 3 years. With interest rates set to rise, the US will also carry a heavier burden due to higher interest payments on its debt obligations. Global investors continue to dump the US dollar as a reserve currency and opting for gold instead.
Gold jumped 0.28% to $1811.80 per ounce. Silver price fell 0.13% to $22.71 per ounce. Platinum grew 0.98% to $1053.00 per ounce, while Palladium increased 0.87% to $2405.00 per ounce. Bitcoin tumbled 2.93% to $37,611.60.
Gold Demand Grows in China, Passing Pre-Pandemic Levels
Feb. 1, 2022
The Chinese gold market is showing signs of recovery after a drop in demand occurred during the COVID-19 pandemic. Purchases of the precious metal rose 36.53% year-over-year for 2021 in China, increasing 11.78% as compared to 2019 figures. China’s gold consumption notably reached 1,120.9 tons by 2021, making the country the number one top consumer of gold.
Gold investment among Chinese investors was spread throughout different sectors. Gold jewelry sales increased by 44.99% to 711.29 tons, while gold bullion was up 26.87% to 312.86 tons. The Chinese people also invested heavily in gold ETFs. As the global GDP continues to shrink, worried investors look at gold as a safe and sound investment.
Gold jumped 0.31% to $1809.40 per ounce. Silver price rose 1.29% to $22.87 per ounce. Platinum grew 1.38% to $1049.60 per ounce, while Palladium increased 1.09% to $2398.50 per ounce. Bitcoin tumbled 0.17% to $38,426.60.