Palladium Drops as Low as 5% on Fears that Omicron Variant Will Temporarily Shutdown Auto Industry
Nov. 29, 2021
The WHO and governments around the world have sounded the alarm about the potential spread of a new COVID-19 variant Omicron. Many global leaders are reacting quickly to prevent the spread of the new variant by implementing travel bans and enforcing new lockdowns. Investors fear that shutdowns can include automotive, microchip, and other manufacturers already suffering from production setbacks. Due to this fear, palladium spot dropped 8%, the lowest it’s hit since March 2020.
Precious metal analysts are suggesting that COMEX gold futures are in a longer-term bullish trend and not far from the August 2020 record high price of $2,063. Silver COMEX futures may hold a bullish longer-term technical posture if prices continue to sit above the $21 mark. If silver can break the $30.21 long-term resistance, there would be strong price potential for the metal.
Indian Government Plan on Banning Cryptocurrencies
Nov. 24, 2021
Source: Ledger Insights
The government of India has proposed a new bill for Parliament that would prohibit the trading of most private digital currencies. While several cryptocurrencies are excluded from the proposal, little is known on which tokens will be allowed to trade under the new bill. The Indian government and central bank are concerned about decentralized digital currencies but expressed that the new bill will allow the country to develop and issue its own national cryptocurrency.
Source: Notebook Check
India is among the most recent countries to ban private cryptocurrency, following the lead of Nepal, Vietnam, and China, among others. To compete in the crypto market, China is preparing to issue its own digital currency, although it’s unclear when the government will roll out the token.
Source: Mining Review
Gold and Silver Spot Slide as Dollar Strengthens, Oil Reserves to be Released to Help Stabilize Fuel Prices
Nov. 23, 2021
Precious metal prices dipped overnight in reaction to increased hopes of interest rate hikes and oil supply stabilization. Investors believe that Fed chairman Jerome Powell will raise interest rates next year, leading foreign asset managers to buy more dollars.
India, China, the U.K., the Republic of Korea, Japan, and the U.S. is coordinating efforts to release oil reserves to help stabilize prices. President Biden announced the release of 50 million barrels from its strategic reserves, at a time when the current U.S. gas price average sits at $3.29 per gallon.
Source: Business Insider
Jerome Powell to Remain Chairman of the Fed, Gold Prices React Down 1.45%
Nov. 22, 2021
President Biden nominated Jerome Powell for a second term as Chairman of the Federal Reserve. Powell has led the nation’s central bank through the pandemic, offering the lowest interest rates in six years and implementing numerous bond buyback programs. Fed chair contender Lael Brainard was also considered for the role but is now set to become the vice-chair of the board of governors.
Markets reacted positively to Powell’s continued tenure as Fed chairman, giving the U.S. Treasury notes a slight boost in rates. Subsequently, gold and silver spot reacted to the dollar’s overnight gains.
Oil Prices Fall as China Releases Reserves
Nov. 19, 2021
US President Biden and Chinese President Xi Jinping recently held virtual talks to discuss economic stabilization policies and establish stronger cooperation between the two powers. As a result, the Chinese government has agreed to release oil from its reserves to help drive down oil prices. Little information is known regarding the US government’s concessions for this agreement.
Source: Atlantic Council
With oil prices stabilizing, hopes of slowing down inflation in the short term emerge. Still, the US dollar remains weak compared to gold and silver. Investors are still concerned that inflation will still reach record levels despite the current stabilization of oil prices.
In the past 24 hours, gold grew 0.13% to $1867.70 per ounce. Silver gained 0.40% to $25.08 per ounce. Platinum dipped 0.86% to $1,054.10 per ounce, while Palladium dropped 2.41% to $2119.10 per ounce.
A Spike in Money Velocity May Spell Doom For the US Dollar
Nov. 18, 2021
The Federal Reserve has a brewing money velocity conundrum they are publicly ignoring. Money velocity (Money*Velocity=Price*Quantity) is the rate that measures the speed at which money is exchanged throughout the economy. Currently, the Fed has accelerated, through stimulus, the speed at which the supply of currency enters the market. Easier credit access is encouraging banks to loan out more money through mortgages, credit cards, and consumer loans at higher rates than in previous years. The current rate of bank lending is at 13%.
Source: Knowledge Lenders Capital
If money velocity continues to skyrocket, inflation rates will move up along with it. The Fed’s dovish approach to handling inflation rates is encouraging central banks, asset managers, and private investors around the globe to continue to flock to gold, silver, and bitcoin. Until the Fed addresses the issue of the velocity of money and implements measures to contract the money supply, higher rates of inflation are inevitable.
Source: The Star
Central Banks Add Gold to Reserves as Faith in Dollar Deteriorates
Nov. 17, 2021
Source: Financial Times
The international central bank community is buying significant amounts of gold bullion. As inflation continues to follow an upward trend at an alarming rate, central banks are investing in assets that provide more security to their financial systems. This strategy will help governments secure their creditworthiness in case of a global financial collapse.
Source: Financial Express
The Reserve Bank of India (RBI) purchased over 41 tons recently, making it the largest gold investor for the third quarter. The Central Bank of Brazil brought 9 tons of gold in Q3. Uzbekistan, Kazakhstan, the Philippines, Mongolia, and Russia also invested in significant amounts of gold as well. In total 96 tons of gold were purchased this quarter. As the US dollar continues to lose value, many central banks and governments are losing faith in the world’s reserve currency, especially since the Fed has taken a soft approach to acknowledge and mitigate the threat of inflation.
Cryptocurrency Values Plummet While Gold and Silver Remain Stable Overnight
Nov. 16, 2021
Source: Sydney News Today
Bitcoin, ethereum, and other major cryptocurrency prices fell overnight. While the reason for the drop in value remains unclear, investors speculate the Chinese government crackdown on crypto mining could be one of the leading causes. Because China is currently facing massive energy shortages, the government is concerned about crypto mining’s high energy consumption.
Gold and silver prices remain stable as inflation continues to put pressure on the US dollar and bond market. Retail sales accelerated to over 1.7%. The retail figures are concerning due to the fact that supply chain bottlenecks are getting worse, suggesting that inflation might spike more than previously expected. With added inflationary pressures, asset managers continue to ditch the dollar for gold and silver bullion.
Bitcoin’s New Major Upgrade Went Live and Gold Spot Eased Up Over the Weekend
Nov. 15, 2021
Taproot, the first Bitcoin upgrade in four years, will provide quicker transactions, greater privacy features, and will also include smart contracts. The smart contracts upgrade will allow entrepreneurs to create apps and other systems similar to the Ethereum blockchain.
Source: Bitcoin Tech Talk
Bitcoin’s digital signature, which acts as a fingerprint, received an upgrade through Taproots as well. To protect the privacy of each Bitcoin transaction, Taproot will include a multi-signature feature that will make each transaction unreadable.
Gold and Silver spot fell slightly to the dollar on Monday. Gold dropped 0.13% to $1870.20 per ounce. Silver decreased 1.2% to $25.13 per ounce. Platinum grew .56% to $1,103.60 per ounce, while Palladium gained 1.7% to $2184.50 per ounce.
Labor and Consumer Goods Shortage to Affect the Holidays
Nov. 12, 2021
Source: Financial Times
Airlines announced that air travel will face many cancellations due to staff shortages. This comes at a time when the nation is facing high unemployment. A large percentage of people are currently foregoing employment, prompting what economists call “The Great Resignation”. Business leaders across multiple industries are trying to find ways to boost recruitment efforts, including raising wages and offering greater benefits.
Retailers are also facing product shortages on popular holiday items. The supply chain bottlenecks continue to increase while retail sales show no signs of slowing down. Experts believe that if demand continues to peak this holiday season, inflation will peak along with it.
Source: Bahai Teachings
After days of enjoying a hot streak, Gold fell 0.2% to $1864.00 per ounce. Silver grew 0.9% to $25.37 per ounce. Platinum decreased .5% to $1,094.60 per ounce, while Palladium gained 0.5% to $2038.00 per ounce.
$1.2 Trillion Infrastructure Bill and Its Inflationary Impact
Nov. 11, 2021
President Biden is expected to sign a $1.2 trillion infrastructure deal that proposes to invest in the updating of roads, highways, bridges, tunnels, water pipes, and internet systems. To fund the infrastructure bill, the Federal Reserve will tap into its printing machine, adding to the already enormous $26.70 trillion debt bubble.
Opponents of the spending bill warn of increased inflationary pressures on the economy, at a time when the US is facing a 30-year inflation rate high. With the added supply of money into the economic system, it is hard to gauge just how high inflation will rise. Asset managers continue to dump dollars for precious metals and cryptocurrency as a way to hedge against the inflation crisis.
Gold and Silver spot remain strong today. Gold rose 0.7% to $1869.00 per ounce. Silver increased 1.8% to $25.19 per ounce. Platinum jumped 1.31% to $1,098.50 per ounce, while Palladium gained 2.24% to $2106.00 per ounce.
Consumer Prices Skyrocket, Hitting a 30 Year High
Nov. 10, 2021
Source: Food Navigator
The Department of Labor Consumer Price Index, which tracks price changes in all consumer items, jumped 6.2% in October. This spike is especially notable, as the U.S. economy has not seen CPI rates like this since November 1990. Additionally, October saw energy prices spike over 4.8%, while food costs saw a 1% increase.
An overflow of cash and easy credit is flooding the economic system, leading to supply and demand bottlenecks. A labor shortage is exasperating supply chain issues as well. As a result, prices are reacting to the scarcity of goods and services, leading economists to believe that inflation will get worse before it gets better.
With talks of stagflation and hyperinflation among economists and big-time investors, precious metal prices are reacting positively. Gold rose 1.71% to $1870.30 per ounce. Silver jumped 3.48% to $25.24 per ounce. Platinum increased 2.55% to $1,104.90 per ounce, while Palladium grew 1.12% to $2077.00 per ounce.
Bitcoin and Ethereum Hit High Marks, As Investors Bail U.S. Dollar
Nov. 9, 2021
Source: Business Insider
Despite the Fed suggesting tapering efforts, many Americans are still preparing for higher inflation rates and an economic downturn. Cryptocurrencies like Bitcoin and Ethereum have hit all-time highs, giving active and passive investors another opportunity to protect assets against inflation. Bitcoin surpassed its previous record price of $66,974.77 to $68,521 a token. Ether, Ethereum’s token, touched $4,814 before settling down to $4,771.
Gold has continued to move upward, hitting a two-month peak before cooling down a bit this morning. A lack of confidence over the Fed’s management of our current economic and monetary troubles will continue to push precious metals to new highs.
Source: Financial Times
Dollar Remains Flat While Gold Surges to Two Month High
Nov. 8, 2021
Source: Nikkei Asia
The U.S. dollar has barely budged, days after the Fed discussed stimulus tapering measures. Investors warn that if interest rates remain low, inflation will continue to move upward and reach levels we haven’t seen in decades. The Fed persists that inflation is “transitory” and should subside soon.
Source: Money Control
Over the weekend, the House of Representatives pushed a $1.2T infrastructure bill. The precious metals market reacted, with gold setting a two-month high. The infrastructure bill is a cause of concern among those who look at inflation as a threat to our economy since the Fed will have to print an enormous amount of dollars to cover new expenditures.
Source: British Herald
Positive Jobs Report Better Than Expected, Meanwhile Gold Remains Steady
Nov. 5, 2021
Source: Karen Bleier/AFP/Getty Images
Employers added over 531,000 jobs in October, following the expiration of stimulus unemployment benefits and the reduction of COVID-19 cases.. The Labor Department stated that the unemployment rate fell 0.2 to 4.6%.
The jobs report gave a needed boost to Wall Street this morning, although some investors are still wary about the outlook of the economy. The Fed continues to brush off worries of inflation, still suggesting that the current rate is “transitory”. But if inflation was transitory, then why not raise interest rates? That’s the question economists are asking as we move through Q3.
Source: Business Standard
Precious Metals Rebound as Fed Maintains Statement That Inflation is “Transitory”
Nov. 4, 2021
As the Federal Reserve reduces its pandemic-era bond purchases, interest rates will remain at the current rate. The Fed plans to shrink its mortgage-backed securities by $5B and monthly Treasury purchases by $10B. Fed Chair Jerome Powell still believes inflation is “transitory” and prices will come down as supply chain bottlenecks subside.
Source: Chief Executive
As a result, gold and silver prices jumped overnight in response to the Fed’s indifference to curtailing long-term inflation. Asset managers continue to look at gold as the right vehicle for hedging against inflation, as well as a viable option when interest rates remain flat.
Source: Money Week
Gold and Silver Fall Day Before Diwali
Nov. 3, 2021
Source: The Medium
The price of gold fell again today ahead of Diwali. The Hindu holiday, also observed by Jains, Sikhs, and some Buddhists, celebrates the victory of good over evil and is widely referred to as the “Festival of Lights”. Gold is highly regarded and sought after for Diwali celebrations, as the gifting of gold is believed to bring prosperity and wealth to families.
Diwali devotees and investors alike will look closely at the gold price today, as the Federal Reserve discusses inflation and monetary policy Wednesday. Wall Street expects the Fed to cut down on bond buybacks but is unsure of interest rate hikes.
Gold and Silver Prices Drop as Investors Look Toward Fed For Stimulus Tapering Announcement
Nov. 2, 2021
Source: Business Insider
The price of precious metals subsided last night as the Fed prepares to announce future hints regarding stimulus policy adjustments and interest rate hikes. Economists and investors alike are concerned about inflationary pressures that are leading to stagflation and a sinking economy.
Source: Bangkok Post
In the event the Fed does hint into increasing interest rates, the value of government bonds and the USD would also increase, but only temporarily. This will cause precious metals to drop a bit, as asset managers divert funds into dollars before jumping back to gold and silver. Many investors are more cautious and continue to bet against the dollar by investing in gold and silver despite the Fed’s monetary decisions.
Gold price fell 0.16% to $1,792.90 per ounce. Silver also shrunk, decreasing 1.72% to $23.64 per ounce. Platinum dropped 1.56% to $1,050.70 per ounce, while Palladium slipped 1.38% to $2,024.00 per ounce.
Fed holds meeting this week to discuss inflation
Nov. 1, 2021
Source: Financial Times
The Federal Reserve will hold a meeting this week to discuss monetary policy regarding inflation and how they might taper stimulus measures. Investors, dubious about inflation’s temporary nature, seem to be in agreement with the Fed. The question remains, however: What actions will the Federal Reserve take to manage impending inflation?
Source: Financial Times
Investors have jumped on oil shares to offset inflation pressures on other assets. The price of oil continues to surge as inflation pushes prices to new highs of $85 per barrel.
Gold price holds strong, making gains over the weekend, with the precious metal rising 0.32% to $1,789.30 per ounce. Silver also increased, jumping 0.42% to $24.04 per ounce. Platinum climbed to 3.13% to $1,053.00 per ounce, while Palladium rose 3.95% to $2,058.50 per ounce.