Germany Looks Towards Nationalizing its Section of  Nord Stream 2

June 24, 2022

Natural Gas

The German Ministry of Finance is looking into the option of nationalizing a section of the Nord Stream 2 that is located within the country. 

The government believes it could convert part of the pipeline that extends from land to the sea as a mobile liquid natural gas (LGN) terminal. This plan arose as a result of worries that Russia will shut off natural gas deliveries to Germany due to its geopolitical conflicts stemming from Russia’s invasion of Ukraine.

Several days ago, Russia diminished the amount of natural gas through the Nord Stream pipeline by 60%. This caused Germany to raise its energy emergency alarm and enact new measures to control its energy consumption and distribution within the country.

The Russian government says that the expropriation of the Nord Stream pipeline that runs through Germany is a legal matter that will be handled through the courts.

Gold spiked 0.27% to $1,834.90 per ounce. Silver grew 0.86% to $21.39 per ounce. Platinum increased 0.55% to $930.70 per ounce, while Palladium jumped 1.91% to $1,941.00 per ounce. Bitcoin fell 0.01% to $21,102.80

Germany Implements National Gas Emergency Plan

June 23, 2022

Nord Stream

Energy prices jumped in Germany after the country rose to the second-highest gas emergency level amid extreme reductions in Russian natural gas supplies. The German government said that the country is facing an extreme energy crisis.

The second alarm stage out of the three-stage emergency system will initiate the rationing of natural gas in Germany. It will also allow utility companies to raise energy prices for households and industries. 

Another action the government will take to ease the drop in energy supplies is to relaunch coal-fired plants, which will boost the country’s electricity supply.

The European energy crisis is worrying many EU members, who fear that if Russia were to completely shut off its energy supplies to Europe the continent would face an economic disaster. 

While banks try to fight higher inflation rates, the escalating energy crisis is making inflation a lot more difficult to control. Investors are flocking to gold and silver as a way to hedge their portfolios against inflationary pressures.

Gold spiked 0.26% to $1,850.10 per ounce. Silver grew 0.05% to $21.67 per ounce. Platinum decreased 0.43% to $943.30 per ounce, while Palladium jumped 0.67% to $1,935.50 per ounce. Bitcoin rose 2.38% to $20,446.00.

Switzerland Resumes Gold Purchases from Russia

June 22, 2022

gold bars

Bloomberg reported on Tuesday that Switzerland made its first gold bullion purchase from Russia since February. 

The Swiss Federal Customs Administration reported that more than 6,000 pounds of gold were delivered to Switzerland from Russia. Switzerland’s current gold purchase accounts for 2% of the country’s May bullion imports. 

Since the Russian invasion of Ukraine, metal exchanges like the London Bullion Market Association banned precious metals from Russia. The Swiss purchase of Russian gold is currently viewed as a possible softening stance against the ban.

The EU is working on putting tougher sanctions on Russia, but little is known if Switzerland will agree to an upcoming ban on Russian gold imports.

Gold grew 0.57% to $1,852.30 per ounce. Silver dropped 0.74% to $21.77 per ounce. Platinum decreased 1.28% to $946.60 per ounce, while Palladium dipped 0.66% to $1,924.50 per ounce. Bitcoin sunk 1.84% to $20,735.00.

Lithuanian Blockade Causes Panic Buying in Russian Enclave of Kaliningrad

June 21, 2022

Supply Chain

Supplies by rail transit from Russia destined for Kalinigrad have been blocked by Lithuania, causing residents of Kalinigrad to panic as fears of supply shortages loom.  

The Lithuanian government said that the decision to impose a blockade was authorized by the European Commission as part of the EU’s sanction on Russia. Certain goods like alcohol, crude oil, construction materials, glassware, advanced technology, fertilizers, coal, and metals are on the list of sanctioned items denoted by the EU.

As a result, Russia has demanded the lift of the blockade. The Russian Foreign Ministry says that Russia considers the blockade  “provocative measures” and that Moscow would respond accordingly. 

Gold rose 0.08% to $1,846.50 per ounce. Silver grew 1.55% to $22.11 per ounce. Platinum increased 2.26% to $968.90 per ounce, while Palladium jumped 2.47% to $1,950.50 per ounce. Bitcoin rebounded 4.95% to $21,610.60.

Germany Plans to Increase the Use of Coal for Energy

June 20, 2022

Germany

On Sunday, Germany’s Economy Minister Robert Habeck relayed concerns that the energy situation will be “really tight in winter” if the country does not implement measures to prevent a power shortage. The energy crisis in Germany has hit a critical point due to Russia’s reduction in gas supplies to the country. 

The Russian government says that Gazprom cut off 60% of its natural gas supply via the Nord Stream pipeline, citing German company Siemens Energy’s failure to deliver a piece of equipment for the pipeline. 

Siemens Energy says they could not return the part because of sanctions placed on Russia. Germany believes the gas cut decision was “political.”

To offset the loss in gas deliveries. Germany plans to increase its coal energy production in the coming months. 

Gold fell 0.08% to $1,845.60 per ounce. Silver dropped 0.25% to $21.83 per ounce. Platinum increased 0.43% to $953.40 per ounce, while Palladium jumped 2.75% to $1,919.00 per ounce. Bitcoin sunk 0.15% to $20,522.00.

US Manufacturing Output Has Fallen Unexpectedly In May

June 17, 2022

manufacturing

US production at manufacturing plants has unexpectedly fallen in May. This suggests that manufacturing is cooling as demand starts to slow down due to inflation.

Manufacturing output fell 0.1% Month-over-month (MoM) in May, well below Reuters forecast of 0.3% MoM.

Utilities and mining spiked in May, hitting 1% MoM and 1.3% MoM respectively.

Capacity utilization rose to 79%, a .1% slight increase from April.

Investors believe lower production numbers will be an ongoing trend over the next two quarters as GDP continues to shrink and inflation continues to rise.

Gold fell 0.81% to $1,846.70 per ounce. Silver dipped 1.55% to $21.81 per ounce. Platinum decreased 1.47% to $956.70 per ounce, while Palladium sunk 3.08% to $1,876.50 per ounce. Bitcoin dropped 1.53% to $20,617.90.

Dow Jones Descends Below 30,000 as Recession Fears Set In

June 16, 2022

GDP drops

For the first time since December 2020, the Dow Jones Industrial Average dipped below 30,000 points. The stock market has erased all gains from Wednesday afternoon after the Fed announced an expected 75 basis point interest rate increase.

The Fed has confirmed that inflation is a threat to the economy and stated that the central bank will work to bring down the inflation rate with a more aggressive monetary approach.

As a result of higher interest rates, the stock market has been suffering, erasing all of 2021’s gains. It now sits at about 1% above pre-Covid levels. 

The bond market is also performing poorly as of Thursday morning, as the Fed’s monetary policy directly affects Treasury bond yields.

Gold fell 0.38% to $1,837.50 per ounce. Silver dipped 0.58% to $21.84 per ounce. Platinum increased 0.53% to $965.60 per ounce, while Palladium jumped 0.67% to $1,936.00 per ounce. Bitcoin dropped 7.22% to $20,933.30.

Fed is Expected to Announce Interest Rate Hike to Slow Down Inflation

June 15, 2022

Dollar

The Federal Reserve is expected to raise interest rates on Wednesday due to higher-than-expected inflation rates for this quarter. Interest rates are expected to increase by 75 basis points.

In addition, the Fed will likely lower its expectations for the country’s GDP for 2022. The Fed will also update the language for its post-meeting statement, reflecting the current inflationary environment which requires a much more aggressive strategy to contain rising prices.

The Central Bank will also discuss its outlook on future rate increases as well as its estimates for unemployment, GDP, and inflation. 

Gold rose 0.80% to $1,830.30 per ounce. Silver jumped 2.38% to $21.79 per ounce. Platinum increased 1.85% to $975.00 per ounce, while Palladium jumped 2.41% to $1,918.50 per ounce. Bitcoin dropped 3.67% to $21,308.80.

31 Million Tons of Gold Ore Discovered in Uganda

June 14, 2022

mine

The government of Uganda released an exploration survey earlier this month showing gold ore deposits of around 31 million tons. The Ugandan government hopes to secure foreign investment for the extraction of gold ore.

Several of the gold deposits are located in Karamoja, located in the northeastern part of the country. Other gold deposits were also found in eastern, western, and central areas of Uganda.

The Ugandan Ministry of Energy and Mineral Development expects to extract an estimated amount of 320,158 tons of refined gold from the 31 million tons of gold ore.

A Chinese company called Wagagai Mining established a mine in the eastern town of Busia, Uganda. The company has plans to initiate production in 2022. 

Uganda’s parliament recently legislated a new law that would allow the country to create a state-controlled mining company. The law would mandate a 15% acquired stake for all mining companies and investors operating in the country. 

Gold fell 0.8% to $1,822.00 per ounce. Silver dipped 1.4% to $21.21 per ounce. Platinum decreased 1.2% to $949.00 per ounce, while Palladium jumped 1.5% to $1,880.00 per ounce. Bitcoin dropped 4.78% to $22,180.60.

Bitcoin Plunges by 14%, Wiping Out $200 Billion from the Market

June 13, 2022

Bitcoin Drops

The crypto market is currently in freefall, with bitcoin falling below $24,000 and Etherium dipping just under $1,300. Institutional investors are dumping bitcoin due to a major market sell-off of riskier asset classes.

Companies like Celsius and Binance have frozen crypto withdrawals, creating a greater panic among crypto investors.

Factors like inflation, the contraction of the economy, and the overvaluation of stocks are creating a bearish crypto market, with companies like Gemini stating that a “crypto winter” is about to set in. 

In total, 9% was wiped off the cryptocurrency market in 24 hours, raising investors’ concerns worldwide.

Gold rose 2.39% to $1,836.20 per ounce. Silver dipped 3.86% to $21.33 per ounce. Platinum decreased 3.60% to $957.90 per ounce, while Palladium fell 5.99% to $1,889.00 per ounce. Bitcoin dropped 12.49% to $23,237.10.

Inflation Rate Jumped 8.6%, Running Hotter Than Expected

June 10, 2022

Stagflation Crisis

The Bureau of Labor Statistics reported Friday that the consumer price index (CPI) increased in May by 8.6%. That’s the highest spike recorded since 1981. Core inflation, which excludes energy and food prices, jumped 6% month-to-month (MoM). 

Energy and food prices significantly influenced CPI, with fuel oil hitting 106.7% year-over-year (YoY) for May.

The price of shelter increased at the fastest 12-month rate in three decades. 

High inflation rates are tapping out American household budgets, with real wages shrinking 0.6% in April and 3% on a yearly basis. Consumers use credit cards at a record rate because of depleted savings and higher prices.

Many investors believe that inflation will continue to get worse over the next year and suggest hedging your portfolio with precious metals will help soften the blow against rising prices.

Gold rose 0.99% to $1,838.40 per ounce. Silver dipped 1.27% to $21.70 per ounce. Platinum decreased 1.03% to $983.90 per ounce, while Palladium fell 1.45% to $1,960.50 per ounce. Bitcoin dropped 2.49% to $29,331.70.

Jobless Claims Spike to 229,000, Hitting 5-Month High

June 9, 2022

Unemployment

According to the Labor Department, weekly jobless claims reached a total of 229,000 for the week ending on June 4th. That is more than the 210,000 Dow Jones estimate. The figure is the highest level recorded since January.

Missouri, Illinois, and California had the largest increases in jobless claims. Oklahoma, New Jersey, and New York had the steepest decline in claims.

The jobless claims spike hints at weak economic factors within GDP and the possibility of a recession setting in within the next quarter. Economists believe that the labor market has peaked. Also, more layoffs are on the way as the economy continues to contract.

Gold rose 0.43% to $1,853.00 per ounce. Silver dipped 1.07% to $22.03 per ounce. Platinum decreased 2.58% to $998.20 per ounce, while Palladium fell 0.85% to $1,985.50 per ounce. Bitcoin dropped 0.15% to $30,131.20.

Credit Card Usage Increases to Record-Breaking Numbers in April

June 8, 2022

us national debt

The April consumer credit report released by the Federal Reserve revealed that American credit card usage surged to the biggest spike on record. Credit card debt, or revolving credit, hit a sizable $17.8 billion in April, totaling $1.1 trillion overall.

April’s consumer credit usage jumped to $38.1 billion, surpassing the expected $35 billion estimate.

Economists suggest that consumers’ savings are completely depleted, and many are using credit cards to make ends meet as inflation keeps rising. 

Many economists believe that the US is already in recession. They worry that once credit cards are tapped out, consumer spending will drop and slow GDP to even lower numbers.

Gold rose 0.19% to $1,859.50 per ounce. Silver dipped 0.50% to $22.35 per ounce. Platinum decreased 0.40% to $1,023.90 per ounce, while Palladium fell 1.20% to $2,026.00 per ounce. Bitcoin dropped 2.20% to $30,466.10.

Lawsuits Against London Metal Exchanges Filed Over Nickel Trading Debacle

June 7, 2022

Rates

Two U.S. trading firms have submitted lawsuits against the London Metal Exchanges (LME) for canceled nickel trades that occurred on March 8. 

Jane Street Global Trading and hedge fund Elliott Associates submitted lawsuits for $15.3 million and $456 million, respectively.

Elliot Associates claims that the LME exceeded its trading powers by canceling trades. Jane Street contends that the LME’s actions to halt trading undermined the integrity of the market. This caused losses for the firm.

The LME suspended nickel’s trading activity due to massive volatility. Prices skyrocketed to $100,000 a ton within hours – over double the previous price. 

The nickel squeeze happened right after Russia’s invasion of Ukraine, which stoked fears of a supply drop in nickel. Russia is one of the world’s largest producers of nickel. Nickel is used in batteries, wires, turbines, and other essential items.

Gold rose 0.62% to $1859.50 per ounce. Silver grew 0.45% to $22.35 per ounce. Platinum decreased 0.99% to $1023.90 per ounce, while Palladium jumped 1.69% to $2,026.00 per ounce. Bitcoin dropped 5.75% to $29,548.10.

Crude Oil Prices Jump to Three-Month High

June 6, 2022

Oil

Oil prices rose to $120 a barrel overnight. This is after Saudi Arabia implemented higher crude prices for July. This was done as a way to curb demand, which has recently increased as China’s economy emerges from its COVID-19 lockdowns. 

The higher-than-expected price jump followed an announcement from OPEC+ (Organization of the Petroleum Exporting Countries), which stated a planned increase in monthly oil output to ease prices. The output for July and August is now currently set at 648,000 barrels per day.

Economists expect summer fuel prices to continue to spike, causing concerns about higher inflation rates straining Americans’ household budgets.

Gold fell 0.26% to $1854.60 per ounce. Silver rose 0.82% to $22.34 per ounce. Platinum increased 1.28% to $1045.00 per ounce, while Palladium jumped 0.83% to $2,052.00 per ounce. Bitcoin spiked 5.56% to $31,562.50.

Turkey’s Inflation Rate Spikes to Highest Point in 24 Years

June 3, 2022

Turkey inflation

Inflation in Turkey reached a 24-year high in May as energy and food prices jump. Consumer prices spiked by 73.5% year-over-year (YoY) for May. 

The data showed that inflation surpassed 2002’s 73.2% inflation rate. Economists believe that Turkey is on its way to breaking the 1998 inflation rate record of 76.6%. 

Compared to 2021, food and transportation prices rose 92% and 108% respectively. 

The Turkish government and central bank’s response has severely devalued the national currency (the lira), exacerbating the country’s economic woes. The lira fell 44% against the US dollar as a result.

Gold dipped 0.53% to $1868.70 per ounce. Silver dropped 0.83% to $22.29 per ounce. Platinum increased 0.29% to $1042.90 per ounce, while Palladium soared 2.16% to $2,057.00 per ounce. Bitcoin fell 2.76% to $29,589.00.

Deceleration in U.S. Job Growth Slows to 128,000 in May

June 2, 2022

BLS

Private payrolls increased by only 128,000 in May. Its the slowest gain in the pandemic-era recovery period according to ADP. The data released Thursday came in well below the 299,000 estimated by the Dow Jones.

Hiring momentum has generally decreased due to fears of an economic slowdown, which economists believe will trigger a recession. 

Small businesses have faced the brunt of the economy’s woes in May. Over 78,000 employees being laid off in businesses with fewer than 20 employees. For businesses with 50 employees or less, May payrolls were reduced by 91,000. 

Layoffs are growing within the tech industry as well. Carvana and Peloton are currently laying off 2,500 and 2,800 employees, respectively. In addition, companies like Meta and Twitter have set up a hiring freeze as a means to cut costs.

Gold grew 1.02% to $1873.70 per ounce. Silver jumped 1.65% to $22.39 per ounce. Platinum increased 1.20% to $1029.40 per ounce, while Palladium soared 1.13% to $2,074.00 per ounce. Bitcoin rose 0.81% to $30,031.30.

Credit Card Debt Skyrockets In the UK

June 1, 2022

Credit Card

In a new report from the Bank of England, credit card usage jumped to the highest rate in 20 years. 

Credit card usage was 11.6% higher year-over-year (YoY) in April. Overall consumer credit increased by 5.7% YoY, which is the fastest rate increase calculated since 2020. 

Economists believe that rising prices are outpacing salaries, pushing consumers to use credit to make ends meet. The UK’s inflation rate rose to 9% in April, the highest rate in 4 decades.

Energy prices are also hindering the budgets of consumers in the UK. Electricity prices jumped 54%, while gas prices skyrocketed by 95%. 

Meanwhile, the housing market is showing signs of cooling, with mortgage applications and approvals dropping significantly.

Investors believe the UK will continue to experience higher inflationary pressures as the threat of Russian gas shortages loom. As a result, investors are relying more heavily on precious metals as a way to hedge against inflation. 

Gold rose 0.33% to $1,850.10 per ounce. Silver grew 1.19% to $21.97 per ounce. Platinum increased 3.21% to $1013.30 per ounce, while Palladium fell 0.10% to $2,035.50 per ounce. Bitcoin dropped 0.17% to $31,730.20.

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