Existing Home Sales Drop to Pre-Pandemic Levels

May 20, 2022

Real Estate

The housing market is starting to take a turn as sales of homes dropped 2.4% in April. This figure is the lowest rate recorded since the beginning of the Covid pandemic.

A low supply of available homes has kept sale prices high even with increasing interest rates. The median existing-home price reached $391,200 in April, the highest price point ever recorded in the US. That is a 14.8% jump compared to the same time last year.

Lawrence Yun, chief economist for the National Association of Realtors recently said that “We are moving back to pre-pandemic sales activity, but I expect further declines.”

Gold dipped 0.04% to $1,845.80 per ounce. Silver sunk 0.46% to $21.99 per ounce. Platinum decreased 0.31% to $978.70 per ounce, while Palladium fell 0.62% to $2,056.00 per ounce. Bitcoin dropped 0.01% to $30,273.70.

Jobless Claims Jump to Highest Rate Since January

May 19, 2022

Unemployment

The labor market is starting to show signs of weakness after weeks of falling stock prices initiated layoffs in large companies. 

Displaced American workers initiating first-time unemployment benefits rose to 218k last week. This marks the highest recorded figure since January when the Omicron variant forced many out of work. Kentucky, California, and Pennsylvania have the highest spike in jobless claims in the US.

The Philadelphia Federal Reserve’s Business Outlook survey displayed a massive dive from 17.6 to 2.6. That is the weakest outlook since June 2020 and less than the expected forecast of 15.0.

Investors believe that a tightening of financial conditions, coupled with a shrinking labor market and high inflation, will lead to a recession. Many investors have begun to diversify their portfolios with precious metals as a way to protect against a slumping economy.

Gold grew 1.54% to $1,852.50 per ounce. Silver rose 2.62% to $22.16 per ounce. Platinum increased 2.78% to $980.30 per ounce, while Palladium fell 1.91% to $2,037.00 per ounce. Bitcoin dropped 3.49% to $29,696.80.

Peru’s Silver Production Drops 9.8% in March

May 18, 2022

Mining Tunnel

The Ministry of Energy and Mines of Peru (MINEM) reported that Peru’s silver production fell by 9.8% to 241,446 kg in March. 

The first quarter’s low production numbers were due to equipment maintenance that led to the shutdown of Compañía Minera Ares S.A.C., Minera Chinalco Peru S.A., and Compañía de Minas Buenaventura S.A.A.. 

Political and social issues in Peru, the world’s third-largest silver producer, are also creating issues for the silver mining industry. Foreign investment in silver mining companies is dropping, leaving producers with less financing for mining operations.

As demand for silver starts to increase in countries like China, where COVID-19 lockdowns are expected to conclude soon, investors believe that any significant production disruptions will cause the price of silver to rise. 

Gold dropped 0.6% to $1,818.30  per ounce. Silver fell 1.2% to $21.70 per ounce. Platinum went down 1.1% per ounce, while Palladium jumped .27%. Lastly, Bitcoin fell to below $30,000.

Northeast Diesel Shortage Spooks Trucking Companies

May 17, 2022

refineries

Fuel prices across the US have skyrocketed in 2022, pushing inflation rates to highs similar to the 1970s. On the East Coast, diesel inventories are at record lows for the season, worrying many trucking companies.

The Department of Energy reports that the East Coast usually holds about 62 million barrels of diesel for the month of May. But for May 2022, the diesel supply is less than 52 million barrels.

The low supply of diesel fuel has caused prices to spike, reaching $5.90 per gallon on the East Coast. That figure is 63% higher than it was in the first quarter of 2022.

Billionaire John Catsimatidis (who owns hundreds of gas stations and an oil refinery on the East Coast), believes that diesel fuel might be rationed this summer. Economists believe this will lead to even higher consumer prices for the second and third quarters this year. 

Gold grew 0.01% to $1,831.70 per ounce. Silver rose 0.42% to $21.91 per ounce. Platinum increased 1.70% to $981.40 per ounce, while Palladium jumped 2.10% to $2,130.00 per ounce. Bitcoin fell 2.15% to $30,482.20.

20 European Companies Open Gazprombank Accounts for Energy Needs

May 16, 2022

Putin

Russia recently imposed counter-sanctions on NATO allies that would require them to pay for Russian energy exports with rubles. To settle payments, Russian gas importers in Europe must open an account with Gazprombank JSC to add euros and convert the currency into rubles.  

At least 20 companies in Europe have set up accounts, with another 14 companies currently working on opening accounts.

Russia’s new strategy of collecting gas payments in rubles has helped the currency reach up to five-year highs against the euro. The ruble is currently trading at around 65 per euro and 63 per US dollar.

Gold fell 0.23% to $1,817.30 per ounce. Silver jumped 0.85% to $21.57 per ounce. Platinum decreased 0.74% to $956.20 per ounce, while Palladium rose 0.32% to $1,021.50 per ounce. Bitcoin sunk 5.82% to $29,468.20.

Gold Continues to Dip, Wiping Out 2022 Gains 

May 13, 2022

Gold

The price of gold fell on Friday, dropping to a fourth weekly decline. 

Investors point to the growing dollar index as a reason for the drop in gold’s price. Others indicate that paper gold is selling at high rates to cover losses in the stock market. 

Prices returned to Russian preinvasion figures in mid-March. After the invasion, the gold price rallied to near-record levels.

Gold dipped 0.20% to $1,824.90 per ounce. 

Silver rose 1.28% to $21.17 per ounce. Platinum increased 0.11% to $957.60 per ounce, while Palladium rose 1.53% to $1,993.50 per ounce. Bitcoin fell 6.30% to $30,765.30.

Wholesale Prices Jumped in April

May 12, 2022

Consumer Prices

Wholesale level producer price index (PPI) rose 11% year-over-year (YoY) for the month of April, according to Thursday’s Bureau of Labor Statistics report. The report also stated that prices increased by 0.5% in one month alone. 

Core PPI, which excludes energy, trade services, and food, grew 0.6% month-over-month in April and 6.9% YoY. 

Both inflation statistics fell within the Dow Jones estimates for April.

In a separate report released Thursday, jobless claims jumped to 203,000 for the week ending on May 7. That figure grew by 1,000 compared to the previous period. 

Gold dipped 0.67% to $1,850.60 per ounce. Silver fell 2.20% to $21.37 per ounce. Platinum decreased 4.43% to $970.00 per ounce, while Palladium dropped 5.58% to $1,988.00 per ounce. Bitcoin sunk 2.55% to $28,251.50.

Inflation’s on the Rise, Coming in at 8.3%

May 11, 2022

Balance sheet

The Bureau of Labor released its consumer price index (CPI) report Wednesday morning. It stated that CPI rose to 8.3% year-over-year (Y/Y) for April. That figure surpasses the Dow Jones estimated rate of 8.1%. The inflation rate is now close to its highest level in 40 years.

Core CPI, which excludes energy and food prices, jumped to 6.2% Y/Y. This figure also came in hotter than expected, erasing hope that inflation had peaked.

Some of the highest increases in prices happened within the indexes for shelter, food, new cars, and airline fares. 

Food at home indexes increased to 10.8% Y/Y, while poultry, fish, meat, and eggs rose 14.3% Y/Y.

Shelter inflation jumped 5.44%, the highest calculated percentage since 1991. Rent prices rose 4.82%.

Airfare prices jumped a staggering 18.6% Y/Y, the highest increase since 1963.

Investors are turning bearish towards stock, cryptocurrencies, bonds, and other financial vehicles due to fears of an upcoming recession. Many investors are also turning to precious metals for stability.

Gold rose 0.74% to $1,858.29 per ounce. Silver jumped 3.04% to $22.15 per ounce. Platinum increased 3.00% to $1028.26 per ounce, while Palladium sunk 0.66% to $2,145.63 per ounce. Bitcoin dropped 1.92% to $30,741.94.

Gold Demand Rises for Industrial Use

May 10, 2022

gold bars

The demand for gold for industrial purposes has risen for the first quarter of 2022. Industrial demand for gold reached 82 tons, which is a 1% increase year-over-year. 

Despite supply chain disruptions and manufacturing shutdowns due to COVID-19 security measures in the electronics industry, industrial gold demand grew stronger over the past year.

The electronics industry bought 67 tons of gold in Q1, while other sectors demanded 12 tons of the precious metal.

The tech industry’s demand for gold increased by 9% year-over-year to 330 tons in 2021.

Gold’s role in the health care industry is also emerging; the metal proves an important component for diagnostic tools and for treating disease. 

A notable example: A group of Chinese scientists partially restored sight in blind mice. The scientists replaced their degenerated photoreceptors with nano-wire made of titanium and gold.

As the world economy faces uncertainty, a lack of growth in GDP, and high inflation rates, gold will continue to provide both industrial and financial industries with indisputable value.

Gold dropped 0.21 to $1,866.10 per ounce. Silver rose 0.23% to $22.06 per ounce. Platinum increased 3.89% to $1006.80 per ounce, while Palladium sunk 1.01% to $2,142.50 per ounce. Bitcoin grew 5.14% to $31,623.50.

Bitcoin Drops Over 4%, Nearing $32,000

May 9, 2022

Bitcoin Price

The price of bitcoin is falling at a fast rate, currently down 4.5% at $33,137.01 as of Monday morning. Bitcoin’s value has been tracking the Nasdaq which has also taken a huge hit this year, down 22.22% year-to-date. 

Some of the most popular cryptocurrencies are also losing ground. Ether dropped 5% to $2,412.74, while XRP sunk 5.6% to $.54.

Investors believe that bitcoin will continue to follow the equity market’s lead, minimizing short-term investing. A lot of capital is moving away from risker assets, to more stable investments like I bonds (interest-bearing savings bonds that combine the inflation rate and a fixed interest rate) and precious metals.

Gold dipped 1.22% to $1,865.90 per ounce. Silver fell 2.06% to $22.11 per ounce. Platinum decreased 1.15% to $962.90 per ounce, while Palladium rose 5.99% to $2,156.00 per ounce.

Payroll Growth Surpasses Dow Jones Estimate

May 6, 2022

unemployment

Jobs were added more than expected for the month of April. Nonfarm payroll rose by 428,000, slightly above the Dow Jones estimate of 400,000. 

The US unemployment rate is currently flat at 3.6% for April., which is a bit higher than the 3.5% expected rate.

The “real” unemployment rate, which is an alternative figure that calculates employment figures for part-time jobs and discouraged workers, rose to 7%. 

Discouraged workers continue to affect labor force participation rates, down 0.2 points to 62.2%. This brings the gap between available workers and job postings to 5.6 million.

Gold grew 0.20% to $1,890.30 per ounce. Silver fell 0.47% to $22.60 per ounce. Platinum decreased 2.14% to $980.10 per ounce, while Palladium sunk 5.99% to $2,120.50 per ounce. Bitcoin dropped 2.08% to $35,781.10.

Interest Rates Jump 50 Basis Points as the Fed Tries to Control High Inflation

May 5, 2022

Devaluation

The Federal Reserve increased the key interest rate by 50 basis points (bps) on Wednesday as a result of inflationary pressures. This is the first 50 bps hike in 22 years, bringing the federal fund’s target rate range to 0.75%-1.00%.

The central bank is dealing with many economic factors that are hindering GDP, such as lower worker productivity, record-high trade deficits, the war in Ukraine, and inflation; but the Fed will likely focus most of its attention on the latter. 

Rising commodity prices are also putting higher inflationary pressures on consumers. Many Americans are currently facing record-high debt balances just to make ends meet.

In addition to inflationary concerns, the US economy is facing a growing supply chain bottleneck threat that is much more severe than the previous one seen at the end of 2021.

Besides announcing the interest rate hike, the Fed also stated that they will reinvest the principal payments from securities kept in their System Open Market account on June 1. For the first three months, a cap of $30 billion per month will be set for Treasury securities. After three months, it will increase to $60 billion a month.

Precious metals gained soon after the Fed announced the rate hike. Many gold and silver investors believe that the Fed is still dovish on its inflation control policy.

Gold grew 0.65% to $1,901.20 per ounce. Silver fell 0.24% to $23.12 per ounce. Platinum decreased 0.81% to $998.90 per ounce, while Palladium sunk 1.28% to $2,290.50 per ounce. Bitcoin dropped 1.39% to $39,119.60.

Central Banks Go All in on Gold for Q1 2022

May 4, 2022

Gold Bullion

Net holding for gold reserves, held by central banks, increased by 83.8 tons for Q1 of 2022. The current holdings are 29% lower compared to 2021’s Q1 but more than double for 2021’s Q4. 

The largest gold investor for 2022’s Q1 was Egypt, who purchased 44 tons of the precious metal. Most of Egypt’s gold purchases are supplied by the country’s domestic mines.

The second-largest gold buyer for the first quarter of 2022 was Turkey, investing 37 tons of gold in its reserves.

Kazakhstan and Uzbekistan, on the other hand, sold the majority of gold compared to other gold-producing nations. Kazakhstan sold 34 tons of gold from their reserves, while Uzbekistan sold 25 tons of the precious metal. 

The World Gold Council (WGC) recently suggested that several gold-producing nations took advantage of the higher gold prices, to sell parts of their reserves at a profit. 

The WGC believes that central banks will continue to purchase more gold as they continue to battle high inflation rates.

Gold fell 0.23% to $1,870.70 per ounce. Silver dropped 1.31% to $22.47 per ounce. Platinum increased 0.73% to $989.00 per ounce, while Palladium sank 0.82% to $2,310.50 per ounce. Bitcoin rose 2.78% to $38,769.30.

Fed’s Inflation Fight Could Lead the Economy to Stagflation

May 3, 2022

BLS

The Federal Reserve is going to hike interest rates in May as a way to curb high inflation rates. The Fed has planned to conduct several interest rate increases for 2022. The central bank will possibly establish a rate of between 2% and 3.5%.

In 2020 and 2021, the Fed distributed a significant sum of cash to individuals and institutions to stimulate the economy at the height of the COVID-19 pandemic lockdowns. This action increased savings amongst individuals and businesses.

Then, it triggered a subsequent demand for goods and services due to the influx of a cash surplus. The high rate of demand increased prices, leading to massive supply chain bottlenecks which exacerbated rising prices. Now, the inflation rate sits at 8.5% year-over-year and the Fed is faced with trying to lower the stated rate.

The Fed’s fight to lower inflation does come with some economic repercussions though; Higher inflation and interest rates combined with the tightening of the money supply have led to lower GDP and stagflation in the past.

Stagflation occurs when high inflation is combined with a stagnant demand for goods and services, coupled with higher unemployment numbers. During this period, companies tend to cut their workforce and reduce salaries as production drops.

Investors are worried that with higher interest rates, the US will soon enter stagflation, crashing the stock market and pushing the country closer to a recession.

Gold grew 0.62% to $1,883.40 per ounce. Silver rose 0.91% to $23.05 per ounce. Platinum increased 3.53% to $988.60 per ounce, while Palladium rose 2.47% to $2,327.50 per ounce. Bitcoin fell 0.59% to $38,283.50.

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