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Debt ceiling negotiations will resume on Tuesday which supports gold prices

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Debt ceiling negotiations will resume on Tuesday which supports gold prices

A second debt limit meeting between President Joe Biden and Senate majority leader McCarthy and other top congressional leaders will be held tomorrow, Tuesday, May 16. The divide between both sides was too wide for any progress to result from their first meeting. Staff on both sides negotiated through back channels to find common ground and potential compromises over the weekend.

The probability that tomorrow’s talks will yield any progress is remote, and the number of days remaining before June 1st is dwindling. Add to that the president's schedule this month, traveling to Japan from May 19 – 21, and Australia 22 – 24.

President Biden said, “I remain optimistic because I am a congenital optimist, and I think we’ll be able to do it.” on Sunday. However, McCarthy still is steadfast in that he wants to attach spending reductions to a debt ceiling increase. While President Biden still insists that he will not negotiate over the debt limit, calling on Congress to pass a clean increase before addressing budget reductions.

According to the Financial Post today, “In her second letter to Congress in two weeks, Treasury Secretary Janet Yellen confirmed that the agency will be unlikely to meet all U.S. government payment obligations by early June, triggering the first-ever U.S. default. The debt ceiling could become binding by June 1, she said.”

A US debt default would greatly hinder the ability of the Federal Reserve to set short-term interest rates. Reuters today reported that “A default on U.S. Treasury debt would be a leap into the unknown for the Federal Reserve's ability to conduct monetary policy to achieve its job and inflation goals. That's because U.S. government bonds are the key to how the central bank sets its short-term interest rate target. Anything that gums up the Treasuries market could scramble those mechanics.”

The debt ceiling crisis and potential default continue to be highly supportive of gold prices keeping gold above $2000 an ounce. As of 5:14 PM EDT, gold futures basis the most active June contract are currently fixed at $2020.40 after factoring in today’s fractional gains of $1.60. The U.S. dollar index is fixed at 102.27, after factoring in a decline today of 0.23%.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

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More than a quarter of Americans now view gold as the best long-term investment

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More than a quarter of Americans now view gold as the best long-term investment

Gold is holding above $2,000 an ounce, but it's not making any new significant gains. And silver is down more than 6% in the last five days.

Weaker economic data has reignited recession fears, keeping gold and silver on the sidelines because of lower demand expectations.

 

Here's a look at Kitco's top three stories of the week:

3. Palantir sells all of its gold-bar holdings worth $50 million

2. Confidence in Fed Chair falls to lowest on record as Jerome Powell attempts to balance inflation fight with banking crisis uncertainty – Gallup poll

Americans' approval of gold as best long-term investment doubles from last year, says Gallup survey

1. Gold price should be at $2,200 right now, U.S. dollar is overvalued by 20%, says BCA Research

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Gold price troubled by US dollar’s moves as Fed’s rate expectations diverge

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Gold price troubled by U.S. dollar's moves as Fed's rate expectations diverge

After hitting a high of $2,055 an ounce this week, a move higher in the U.S. dollar weighed on the gold market, forcing the metal to end the week lower. Analysts point to divergence in Federal Reserve interest rate expectations as additional noise in the trading environment.

"This week was all about the dollar, which has had a significant rally, taking away some of gold's appeal," OANDA senior market analyst Edward Moya told Kitco News.

There is also a widening gap between market expectations and what the Fed's dot plot says, TD Securities global head of commodity strategy Bart Melek said. "Even if the Fed is more dovish than it is now, there is a risk that the market might have to come closer to where the dots are. That's what gold is pricing in here," Melek told Kitco News.

A conflicting narrative is developing between the Fed signaling a pause in June and some Fed officials calling for more rate hikes.

Fed Governor Michelle Bowman said Friday that more policy tightening might be needed. "Should inflation remain high and the labor market remain tight, additional monetary policy tightening will likely be appropriate to attain a sufficiently restrictive stance of monetary policy to lower inflation over time," Bowman said. "I also expect that our policy rate will need to remain sufficiently restrictive for some time to bring inflation down and create conditions that will support a sustainably strong labor market."

Markets will have a hard time feeling confident that the Fed is done raising rates when Fed officials are saying these types of comments. "Bowman's comments caught my attention," Moya noted. "And if core inflation is still above 5% in the middle or end of summer, you should not be surprised if we get a much more hawkish Fed."

What this means for gold is that its path to record highs will be more complex than some would like to believe.

"I'm still bullish but not as aggressively. I am hesitant when people bet against the dollar, should not be surprised for the move higher to last a little longer. It could be troubling for gold. But the macro backdrop is great. We are still looking at a recession in the second half of this year or early 2024," Moya said.

Key events analysts are watching next week include more macro data, such as retail sales, the debt ceiling debate as the June 1 deadline nears, and the banking sector contagion risks.

"There are still too many risks that will lead investors to need more safe haven assets. There is too much geopolitical stress, and the debt ceiling debate is at an impasse. That X-date might get pushed out by a few weeks," Moya noted.

That additional market stress is coming, and credit conditions are tightening. "This is bad news for the economy," Moya said.

The recent macro data points to stubborn inflation, with the headline annual number falling below 5% in April, but the Fed's preferred core figure still at 5.5%.

The Fed rate hike expectations might remain in limbo until the new Fed dot plot is released at the June meeting, said Melek.

"Gold can go sub $2,000. There is strong support at around $1,965. We still expect $2,100, but that won't be sustained until the later part of the year when it becomes more certain that the Fed will ease," he noted.

From a technical point of view, the rally in gold is feeling some topside exhaustion, said Forex.com senior technical strategist Michael Boutros. The next key level to watch is $1,995. "If we break below that, expect a larger correction," Boutros said.

However, as long as $1,926 an ounce holds, the trade in gold is still constructive. "Fundamentals continue to support gold or at least give a floor to this," the strategist added.

 

Next week's data

Monday: NY Empire State manufacturing index

Tuesday: U.S. retail sales, industrial production

Wednesday: U.S. housing starts, building permits

Thursday: U.S. jobless claims, Philadelphia Fed manufacturing index, existing home sales,

Friday: Fed Chair Powell speaks (conversation with Chair Jerome Powell and Ben Bernanke, former Chair of the Board of Governors of the Federal Reserve System at the Thomas Laubach Research Conference)

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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What is Markethivecom? A Comprehensive Overview

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What is Markethive.com? A Comprehensive Overview

MARKETHIVE

Are you an entrepreneur looking for a free business-building system that offers advertising, inbound marketing tools, and privacy protection? Look no further than Markethive.com. Our platform combines the power of social media, blogging platforms, and groups to help you promote your business and connect with like-minded individuals.

At Markethive, we believe in providing our users with the best possible service and support. That's why we offer top-of-the-line security features, including privacy protection and login verification. Our development team is constantly working to improve our tools and products, ensuring that our users have access to the latest and greatest features. Plus, our CEO and CTO are always available to answer any questions you may have.

One of the unique features of Markethive is our matching bonus system, which rewards users for referring others to our platform. We also offer a universal income program, allowing users to earn MHV coins simply by using our platform. Whether you're a guru, a large-scale company, or an individual entrepreneur, Markethive has something to offer. So why not choose Markethive for your business promotion needs?

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At Markethive.com, we are a free inbound marketing platform that provides entrepreneurs with the tools they need to build and grow their businesses. Our mission is to empower entrepreneurs by providing them with a secure and supportive environment that allows them to change the world.

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MARKETHIVE

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We understand that our users may have questions or concerns about our platform, which is why we offer a range of help and support options. Users can contact us via email or through our Telegram support room.

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At Markethive.com, we offer a wide range of benefits to our members. From free membership to inbound marketing tools, social media details, and universal income for entrepreneurs, our platform has everything you need to grow your business. Below are some of the benefits you can enjoy by joining our community.

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One of the most significant benefits of Markethive.com is that we offer free membership. You can join our platform without paying anything, and you will have access to all our features. This means you can start promoting your business and building your brand without worrying about the cost.

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In conclusion, Markethive.com is a platform designed to help entrepreneurs grow their businesses. We offer a range of benefits, including free membership, inbound marketing tools, social media details, universal income for entrepreneurs, blogging systems, business building systems, privacy protection, matching bonus, MHV coins, infinity airdrop, micro faucet, and autoresponder system. Join our community today and start growing your business.

MHV Consumer Coins

What are HIVE Consumer Coins?

HIVE Consumer Coins are a cryptocurrency that is part of the Markethive ecosystem. They are designed to be used as a medium of exchange within the platform and can be earned by participating in various activities on the site. HIVE Consumer Coins are built on the ERC-20 protocol and can be stored in the Markethive wallet.

How to Earn MHV Consumer Coins

There are several ways to earn HIVE Consumer Coins on Markethive. One way is to sign up for a free account, which automatically rewards you with 500 HIVE Consumer Coins. You can also earn HIVE Consumer Coins by referring others to join Markethive. For each person you refer, you will receive a matching bonus of 500 HIVE Consumer Coins.

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How to Use HIVE Consumer Coins

HIVE Consumer Coins can be used within the Markethive ecosystem to purchase advertising, access premium services, and pay for other products and services offered on the platform. You can also use HIVE Consumer Coins to tip other users for their content or services.

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Overall, HIVE Consumer Coins are a valuable part of the Markethive ecosystem, providing users with a way to earn and use cryptocurrency within a secure and decentralized platform.

MARKETHIVE

Tim Moseley

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Biden and McCarthy locked in disagreement postponing negotiations

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Biden and McCarthy locked in disagreement postponing negotiations

The Washington standoff over raising the debt ceiling has raised economic concerns on a global basis. A nonpartisan congressional report cited a "significant risk” of a historic default within the first two weeks of June. A report by the U.S. Congressional Budget Office confirmed statements by Treasury Secretary Janet Yellen warning that a government default could come as early as June 1.

The debt limit meeting between President Joe Biden and top lawmakers which was scheduled for today has been postponed. The meeting has been rescheduled for early next week. The divide between both sides remains too large for any genuine progress to result from the meeting today. Rather staff on both sides will continue to negotiate through back channels to find common ground, as well as compromises that both the Democrats and Republicans are willing to consider.

According to Republican representative Daniel Webster, "Spending levels are the key… Spending cuts are a place where we are stuck. Not with all of them, but with a list of them.” President Biden's 2024 budget request relies on tax increases to reduce deficits while proposing to increase discretionary spending by 5% next year. That creates a $200 billion differential with House Republicans who believe an 8% budget cut is necessary while increasing the defense budget.

Concern over the potential for a U.S. default is global. At a meeting of the Group of Seven (G7) David Malpass President of the World Bank said that the "looming risk of a default, which would be the first in U.S. history, was adding to problems facing the slowing global economy”.

Although gold had fractional declines this week prices have been heavily supported by fears that no agreement will be reached by June 1 when the government will no longer be able to pay all its obligations.

As of 5:00 PM EDT Gold futures basis the most active June contract is currently fixed at $2015.60 after factoring in today's decline of $4.90 or 0.24%. Gold had a fractional decline when compared to last Friday's close as well as compared to Monday's open and current pricing. The most prominent factor taking gold lower this week was dollar strength. The U.S. dollar index opened at approximately 101 and is currently trading at its highest value this week of 102.5 a net gain of 1 ½% taking the dollar index to 102.54.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Which Countries Are Set To Drive The Next Crypto Bull Run?

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Which Countries Are Set To Drive The Next Crypto Bull Run? 

Many in the cryptocurrency industry have attempted to predict when the next crypto bull run will commence. Much of it is speculation, so we can’t be sure when, but a few crypto veterans believe they know what regions will drive the next crypto market bull run. In February of this year, Gemini crypto exchange co-founder, Cameron Winklevoss, said that the next crypto bull market would come from the East.

His statement on Twitter referenced that countries in the East have been embracing crypto by introducing sensible regulations that could result in record levels of institutional investment. As per the sentiments of Coinbureau.com, this article explores five countries that could be the primary drivers behind the next bull market, when they could pass pro-crypto regulations, and 
which cryptocurrencies will benefit. 


Image source: Twitter

United Arab Emirates

The first country to watch is the United Arab Emirates (UAE). The UAE introduced its first pro-crypto regulations in 2018 when it announced its Blockchain Strategy 2021. However, it wasn't until early 2022 that the crypto industry started to migrate to Emirate cities like Dubai. That's because early 2022 is when the UAE announced that it would introduce a federal license for so-called Virtual Asset Service Providers (VASPs), including cryptocurrency exchanges. 

This federal license effectively combined all the crypto licenses the country had created by that time. In the following months, there were plenty of headlines about businesses, such as international schools accepting crypto payments and government agencies dabbling in Metaverses and NFTs. The UAE Ministry of Economy even set up a virtual headquarters in a custom metaverse. 


Source: YouTube

By the end of 2022, the UAE was home to over 1.5K crypto projects and companies. Most of these projects and companies moved to Dubai, which caused FOMO from other Emirate cities, such as Abu Dhabi. It announced multibillion-dollar crypto initiatives to get in on the rush. Earlier this year, the UAE Minister for foreign trade announced that crypto would play a significant role in UAE trade. 

Although the UAE's crypto adoption is bullish, banking access is one minor issue holding it back from its full potential. According to UAE crypto regulation analyst, Wealthy Expat, pro-crypto regulation has yet to make UAE banks more comfortable opening accounts for crypto clients. It may have to do with the fact that the Financial Action Task Force (FATF) put the UAE on its grey list last March. 

For reference, being grey-listed means it becomes harder to transact with the global banking system, as explained in this article highlighting five institutions' efforts to thwart the crypto industry. It’s not ideal for crypto projects and companies seeking to cater to International clients, and it's a big part of why the UAE has taken proactive steps to get itself off the FATF's grey list. 

Such steps include tightening regulations around privacy coins and demanding more information from crypto projects and companies. As noted by Wealthy Expat, these revamped crypto regulations should make UAE banks more comfortable servicing crypto clients. And with a bit of luck, also be enough to get the UAE off that grey list. If both outcomes occur, it will finally open the floodgates for crypto capital in the country. 

However, there is one hindrance to crypto investing in the UAE, as there continues to be uncertainty about which cryptos are allowed according to Islamic law. For context, gambling is forbidden in Islam; it's safe to say that much crypto investing is no different from gambling. That's why it makes sense that the UAE is especially keen on the Metaverse and NFTs. The digital property aspect of these two crypto niches makes them more palatable from an Islamic perspective. 

As such, Metaverse and NFT cryptos could see the most significant inflows from the UAE's ongoing crypto adoption. While it's unclear when the UAE will finalize its revamped crypto regulations or get off the FATF's grey list, both will likely happen by the end of the year. This ultimately depends on how much the UAE complies with requests from the US government, which controls the FATF. 


Image source: Al-Monitor

Saudi Arabia

The second country to watch is Saudi Arabia. In contrast to the UAE, the Saudi government banned banks from processing crypto-related transactions in 2018. The government also declared that crypto trading was illegal, but there are reportedly no punishments for those who trade. The absence of penalties is probably why a significant percentage of Saudi citizens hold and trade crypto. 

According to a survey by KuCoin in May last year, around 14% of Saudi adults had held or traded crypto over the previous six months. Another 17% were interested in crypto. Now, the apparent popularity of crypto in Saudi has given rise to so-called Halal-approved crypto products, which began making the crypto headlines late last year. 

Around this time, the Saudi Central Bank announced that it had hired a crypto expert to assist in crypto policy. Also, Binance is already doing business with the country, proving that Saudi is seriously considering pro-crypto regulations. Further evidence can be found in the unexpected announcement in February that the Saudi government had partnered with the crypto project, The Sandbox, for metaverse development. This further underscores the appeal of the Metaverse and NFT niches to countries with Islamic considerations. 

Although it's still too soon to say if Saudi Arabia will adopt crypto to the extent of the UAE, geopolitics is pushing the oil kingdom in that direction. As some may have heard, Saudi Arabia's relationship with the United States is getting weaker while its relationship with China is getting stronger. 

Saudi Arabia is reportedly considering pricing some of its oil sales to China in Yuan. This is a big deal because Saudi Arabia is supposed to price all its oil in US dollars. Pricing even just a portion of its oil in Yuan would weaken the US dollar, upsetting the United States. Here's where things get very interesting. 

The Saudi Riyal is pegged to the US dollar at a rate of 3.7 SAR to 1 USD, which has been the case since 1986. If Saudi Arabia was to do something to upset the US, such as sell its oil in foreign currencies, the US could retaliate by restricting Saudi Arabia's access to USD. The Saudi government is hyper-aware of this, and possibly why the Saudi Central Bank is considering the development of a Central Bank Digital Currency (CBDC). A digital Saudi Riyal could allow Saudi Arabia to eliminate its currency’s dependence on the US dollar. 

That approach may be problematic as other countries may feel uncomfortable accepting a Saudi CBDC as payment. One solution could be to develop a new kind of Reserve currency, such as the one being considered by the BRICS countries, or they could simply adopt cryptocurrency instead. 

The crypto approach may seem far-fetched until you consider that Iran, another Islamic country, allowed businesses to use crypto for trade last year. Moreover, China recently brokered a peace deal between Saudi Arabia and Iran, so Iran may use crypto for trade with Saudi Arabia which could make Saudi more comfortable doing the same. 

If Saudi Arabia does start using crypto for trade, the Gulf countries would likely follow suit because the currencies of most Gulf countries are also pegged to the US dollar. Chances are,  they're itching to escape US influence as much as Saudi is, and possibly why the UAE is rushing to roll out a CBDC too. 


Image source: Cryptopolitan

Hong Kong

The third country is Hong Kong which is essentially part of China, highlighting the importance of Hong Kong's crypto adoption because it bodes China doing the same. For reference, China banned crypto in 2018 and eradicated what was left of the industry in 2021. Hong Kong was initially seen as a safe haven for Chinese crypto companies and projects, but this changed after the heavy-handed takeover of the authorities following mass protests in 2019 and 2020. 

In late 2020, Hong Kong banned retail crypto trading and cracked down on the crypto industry. In early 2022, Hong Kong started targeting stablecoins. Officials later confirmed this was because stablecoins could undermine a Hong Kong CBDC. The Hong Kong dollar is also pegged to the US dollar, suggesting that Hong Kong could likewise be trying to escape US influence with a CBDC. 

In mid-2022, Hong Kong officials noted that some NFTs require additional regulations. This suggests that the country may not be as open to Metaverse and NFT niches as the UAE and Saudi Arabia, and this may be due to China's strict control of social media and the desire to maintain it. In late 2022, Hong Kong officials noted they wanted CBDCs used in DeFi. Officials later explained that they wanted to create a CBDC-backed stablecoin. 

Then, Hong Kong officials out of nowhere announced they were considering legalizing retail crypto trading and investing. By the end of 2022, Hong Kong had committed to attracting over 1,000 crypto companies and projects to its jurisdiction over the next three years—a complete 180° in attitude. 

Earlier this year, Hong Kong officials specified that they wanted to restrict retail crypto investment to the largest and most liquid cryptocurrencies. This suggests that cryptos like BTC and ETH could be the biggest beneficiaries when retail crypto trading and investing become legal on June 1st, 2023. 


Image source: Twitter

Not surprisingly, it was reported that the Chinese government had signed off on Hong Kong's crypto plans. Also, Chinese banks are reportedly trying to provide banking services to crypto companies and projects in Hong Kong despite crypto being illegal on the mainland. Hong Kong banks have also begun offering crypto-to-fiat conversions to their clients. 

Meanwhile, in China, the courts confirm that holding crypto is entirely legal despite all the restrictions. In combination, this suggests that the crypto inflows from Hong Kong will be truly massive. However, there are just two caveats: First, Hong Kong officials appear to oppose everything except crypto investing. Non-CBDC stable coins will be off-limits, and DeFi will be restricted too. One Hong Kong official noted last year that financial privacy would not be permitted either.  

Still, the inflows into large-cap cryptocurrencies could be enough to kick-start a new crypto bull market. Consider that Cameron's comments about the crypto bull market coming from the East were a reference to Hong Kong. Other crypto heavyweights, like Arthur Hays, have said the same. If all this becomes evident, it will likely result in pro-crypto competition in East Asia, much like the pro-crypto competition in the Middle East. It could result in Hong Kong removing many of its stablecoin, NFT, Metaverse, and DeFi-related restrictions to remain competitive. 


Image source: CNN

Singapore

The fourth country to watch is Singapore, which seems to have a love-hate relationship with cryptocurrency. The government denied hundreds of crypto licenses, banned crypto-related advertising, and shut down crypto ATMs early last year. On the flip side, however, KPMG found that crypto investments in the country had increased by more than 13x in 2021. 

Singaporean banks started expanding their services to retail investors in early 2022, and multiple large crypto companies, including Circle and Coinbase, secured crypto licenses. Moreover, Singaporean companies have been exploring crypto payments, and the Singaporean government has been exploring tokenizing assets on Smart contract cryptocurrencies.

Yet, between these bullish headlines, there's been no shortage of bearish crackdowns on the crypto industry. Most of the crackdowns came after the crypto hedge fund Three Arrows Capital (3AC) collapsed, based in Singapore. Given that 3AC’s failure was caused by the implosion of Terra’s UST stablecoin, stablecoins were among the crypto niches Singaporean regulators targeted. 

Singaporean regulators also floated the idea of restricting the participation of retail investors in crypto but opted to introduce revamped crypto regulations for everyone instead. In late 2022, they discussed requiring retail investors to take an exam before investing. More recently, Singaporean regulators have been working on streamlining the screening process for crypto projects and companies seeking to secure bank accounts in the country. Note that banking access is the most prominent crypto industry issue, so this initiative could be very bullish. 

There are just two problems crypto could encounter in Singapore. First, the country experienced direct financial damage when FTX went bankrupt due to the government-owned investment firm Temasek losing around $275M when the exchange went down. This experience has made Singapore skeptical of cryptocurrency exchanges in general, and this has apparently been causing issues for Binance and others. 

That said, there seems to be more to Singapore's supposedly selective scrutiny of cryptocurrency exchanges and companies. Singapore has been reportedly working closely with the Federal Reserve on a CBDC. It suggests that the country is more geopolitically aligned with the United States and, unlike the other countries, is not trying to escape American influence using a CBDC.

It may explain why Singaporean authorities scrutinized Binance but not FTX, and the country continues to flip-flop between accepting and rejecting crypto. For those who don't know, Binance has been facing much scrutiny from US regulators as of late, as has the rest of the crypto industry, which means that Singapore's impact on the crypto market could go either way. 

It could be very positive if the country decides to compete with its neighbors on crypto regulations, but it could be very negative if it chooses to follow in the footsteps of the US. In all probability, Singapore will walk a very fine line. In any case, it's clear that the demand for crypto from elite investors in Singapore is very high. Once the country has finalized its crypto regulations, the inflows could be comparable to those from Hong Kong. The difference is that no crypto niches will be off-limits; Singapore will invest in everything. 


Image source: BeinCrypto

France

Last on the list of countries to watch is France. Some say France is a wild card, but it’s becoming the most crypto-friendly country in Europe, outside of Switzerland, and possibly the most crypto-friendly country in the West. It appears to be because of President Emmanuel Macron. Since Macron was re-elected in April last year, there has been an avalanche of pro-crypto news coming out of France.

For starters, Binance secured a digital asset registration in the country in May 2022. This move was significant because Binance has faced much scrutiny elsewhere in Europe. Last September, one of France's largest banks began offering crypto custody services to institutional investors and subsequently secured the same digital asset registration as Binance to provide even more crypto services. It came about when US banks started facing scrutiny for doing the same. 

Earlier this year, Binance partnered with a French company to test crypto payments in the country. French Regulators also announced that they would revamp and introduce better crypto regulations. This is noteworthy because the EU is working on its own crypto regulations, and France is front-running. As a cherry on top, USDC stablecoin issuer Circle recently chose France to host its European headquarters. Considering that Circle understands crypto regulations everywhere and has the money to set up anywhere, choosing France confirms that the country is highly pro-crypto. 

Notably, one of the only anti-crypto headlines from France was about DeFi from earlier this month. The Bank of France wants DeFi protocols to be certified and incorporated so they can be regulated. The silver lining is the bank wants different regulations for DeFi from TradFi, which is the opposite of what regulators in the United States and its other allies have been calling for. They've been saying that Decentralized Finance should be regulated the same as Traditional Finance. Therefore, France's deviation on crypto policy and other international issues could be evidence of substantial geopolitical changes. 

This article about online censorship laws being introduced worldwide highlights that the EU has introduced a set of laws that target US tech companies. It relates to the possibility, if not likely, that the EU's initial pro-crypto regulations were a similar kind of retaliation. 

The abridged version is that the US is trying to attract Europe's most prominent industries with significant incentives, particularly the renewable energy industry. These industries are struggling with high energy costs and inflation due to the war in Ukraine, which most know by now, is a proxy war between the US and Russia. Macron is the only European leader willing to protest the precarious position the EU has been put in because of the US's foreign policy. 

Case in point, he recently doubled down on his comments that the EU should not get involved in a conflict between the US and China over Taiwan. France’s pro-crypto stance seems to be an extension of this sentiment, and the countries and the continents attempt to retain economic growth in the face of terrible economic fundamentals. 

The question is, how long can France maintain this divergent stance? Well, nobody knows the answer but Macron. Something else to consider; France may not be the best place for a crypto Hub: Besides the high taxes and strict employment laws, France will constantly face pressure from other countries in the EU if it goes down this pro-crypto path, which could even result in punishments. Still, if France continues against the grain, it could inspire other countries to do the same, not just in Europe. 

French is one of the world's most widely spoken languages. More importantly, it's spoken in many African and Middle Eastern countries actively trying to escape the US dollar. It would be easy for these countries to follow in France's footsteps, which could lead to other unforeseen network effects in both regions. Eventually, every country will realize that crypto adoption is inevitable. The sooner they adopt it, the higher they will be in the new pecking order—Game Theory at its finest. 

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

Tim Moseley

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Gold silver hit by heightened recession worries

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Gold, silver hit by heightened recession worries

Gold prices are lower and silver prices sharply lower in midday U.S. dealings Thursday. Some fresh banking jitters and weaker U.S. economic data today have rekindled concerns about an economic recession being on the horizon. Gold and silver market bulls are somewhat frustrated their metals are not performing better due to safe-haven demand amid the keener marketplace uncertainty. However, at least on this day it appears metals traders are more focused on the bearish weaker consumer and commercial demand implications a U.S. and/or global recession would have on metals markets. June gold was last down $17.10 at $2,020.10 and July silver was down $1.283 at $24.37.

Today’s producer price index report for April came in at up 0.2%, versus expectations for up 0.3% from March, and compares to a drop of 0.5% in the March report, month-on-month. Gold prices initially were given a modest boost after the tamer PPI print.

However, the weekly U.S. jobless claims report showed claims jumped higher than expected in the latest week, at up 264,000 versus the forecast rise of 245,000. That report, combined with PacWest bank shares dropping sharply after reports that deposits dropped 9.5% last week, unsettled the marketplace and reignited recession fears. The U.S. dollar index and U.S. Treasuries saw better demand today, on safe-haven bids. Still, it’s my bias that gold and silver will see better safe-haven demand if the banking turmoil heats up in the near term.

Global stock markets were mostly firmer overnight. U.S. stock indexes are mixed at midday. Traders and investors are still monitoring the U.S. debt-limit-extension rhetoric coming from lawmakers. President Biden meets with congressional leaders again Friday, after little progress was made in a meeting earlier this week. U.S. Treasury Secretary Yellen said it’s doubtful the Biden administration could avoid a government default without Congress agreeing on a plan to deal with the debt matter.

The Bank of England met Thursday on its monetary policy, with the BOE raising its main interest rate by 0.25%, as expected.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $71.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.3%–down following the PPI and jobless claims data.

Technically, June gold futures bulls still have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at today’s high of $2,047.60 and then at this week’s high of $2,056.00. First support is seen at $2,007.00 and then at $2,000.00. Wyckoff's Market Rating: 7.5.

July silver futures prices hit a five-week low today and bulls have faded. A price uptrend on the daily chart has been negated. The silver bulls do still have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April and May high of $26.435. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $24.735 and then at $25.00. Next support is seen at $24.00 and then at $23.75. Wyckoff's Market Rating: 6.5.

July N.Y. copper closed down 1,490 points at 369.20 cents today. Prices closed near the session low and hit a 5.5-month low today. The copper bears have the overall near-term technical advantage and gained more power today. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 375.00 cents and then at 380.00 cents. First support is seen at 365.00 cents and then at 360.00 cents. Wyckoff's Market Rating: 3.0.

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Jim Wyckoff

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Tim Moseley

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Gold silver sell off on profit taking US PPI now in focus

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Gold, silver sell off on profit taking; US PPI now in focus

Gold and silver prices are lower at midday Wednesday and have erased the modest gains seen in the immediate aftermath of a U.S. inflation report that was close to market expectations. Profit taking from the speculative futures traders is featured in both markets. June gold was last down $11.00 at $2,031.90 and July silver was down $0.343 at $25.555.

The U.S. data point of the week saw the April consumer price index come in at up 0.4% from March and up 4.9%, year-on-year. The CPI was expected to come in at up 0.4% from March and up 5.0%, year-on-year. CPI in March was up 5.0%, year-on-year. The April core CPI (excluding food and energy) was up 0.4% from March and up 5.5%, year-on-year, versus the forecast of up 5.5% and compares to up 5.6% in the March report. In the immediate aftermath of the CPI report the marketplace breathed a sigh of relief the inflation numbers did not come in hotter than expected. However, after digesting the data, overall, traders and investors reckoned the CPI data is a wash and probably does not alter the Federal Reserve's trajectory of its monetary policy. The marketplace is now focused on Thursday morning's U.S. producer price index report.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are mixed at midday.

President Biden on Tuesday afternoon met with House Speaker Kevin McCarthy and other congressional leaders to discuss raising or suspending the U.S. debt ceiling. No agreement was reached but the lawmakers and the president will meet again Friday. U.S. Treasury Secretary Janet Yellen recently said the U.S. government could run out of money by June 1 if the debt ceiling is not raised. As the month of May winds down and if no U.S. debt extension is agreed upon, general marketplace anxiety will ratchet up.

In other news, China is expanding its gold reserves and may be abandoning the U.S. dollar. Nigel Green of deVere Group says such may be occurring after news that China's gold reserves increased by 8.09 tons in April. Total gold stockpiles in China reached 2,076 tons after that nation added 120 tons in the five months through March. "Historically, China has been a major buyer of U.S. Treasuries, but this has seen a marked cooling off as Beijing swaps them out in favor of gold."

  Gold is well supported at $2,000 but don't look for record highs before Q2 2024 – Commerzbank

Green said this strategic move will limit China's dependence on the U.S. dollar, as trade and political relations with the U.S. deteriorate. "Buying gold rather than dollars may also signal moves by China that it is eventually seeking to replace the U.S. dollar as the world's reserve currency. Building stocks of the precious metal and allowing the Chinese yuan to be traded freely would weaken the U.S. dollar's dominance as the global reserve currency."

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are weaker and trading around $73.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.462% and dipped a bit after the CPI report.

Technically, June gold futures bulls still have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the record high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at today's high of $2,056.00 and then at $2,063.40. First support is seen at this week's low of $2,022.00 and then at $2,007.00. Wyckoff's Market Rating: 7.5

July silver futures prices were scoring a bearish "outside day" down. The silver bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $26.00 and then at the April high of $26.435. Next support is seen at today's low of $25.455 and then at $25.25. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed down 710 points at 383.05 cents today. Prices closed near the session low. The copper bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 408.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 372.45 cents. First resistance is seen at 390.00 cents and then at this week's high of 395.95 cents. First support is seen at the April low of 381.65 cents and then at 380.00 cents. Wyckoff's Market Rating: 4.0.

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Jim Wyckoff

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Time to Buy Gold and Silver

Tim Moseley

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Gold silver traders tread water ahead of US debt talks CPI

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Gold, silver traders tread water ahead of U.S. debt talks, CPI

Comex gold and silver futures prices are not straying too far from unchanged levels at midday Tuesday. Precious metals traders are very tentative ahead of important government and economic developments in the U.S. that will soon come into play for the marketplace. June gold was last up $0.80 at $2,034.00 and July silver was down $0.059 at $25.775.

President Biden later today meets with House Speaker Kevin McCarthy and other congressional leaders to discuss raising or suspending the U.S. debt ceiling. U.S. Treasury Secretary Janet Yellen told lawmakers last week the U.S. could default on its debt as early as June 1 if Congress does not raise or suspend the debt limit before that time. No progress at today’s meeting would likely cause at least a bit of marketplace anxiety.

The U.S. data point of the week is Wednesday morning’s April consumer price index report, which is expected to come in at up 5.0%, year-on-year, which would be the same as reported in the March CPI. The April core CPI is forecast up 5.5% versus up 5.6% in the March report. A Federal Reserve banking lender survey released Monday showed bankers have curtailed loans to customers, which is likely to help tame inflation.

  Gold's recent push near all-time highs was just a test run as Citigroup's Morse sees prices hitting $2,400

Global stock markets were mixed overnight. U.S. stock indexes are weaker at midday. Trading has turned choppy and sideways in the stock indexes.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are lower and trading around $72.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.52%.

Technically, June gold futures bulls have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at $2,050.00 and then at $2,063.40. First support is seen at this week’s low of $2,022.00 and then at last Friday’s low of $2,007.00. Wyckoff's Market Rating: 8.0

July silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $26.00 and then at the April high of $26.435. Next support is seen at today’s low of $25.57 and then at $25.25. Wyckoff's Market Rating: 8.0.

July N.Y. copper closed down 345 points at 389.50 cents today. Prices closed nearer the session low. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 408.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 372.45 cents. First resistance is seen at this week’s high of 395.95 cents and then at last week’s high of 400.50 cents. First support is seen at this week’s low of 387.65 cents and then at the April low of 381.65 cents. Wyckoff's Market Rating: 4.0.

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Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Gold price settles above 2020 as Yellen warns of ‘constitutional crisis’ if debt cap not raised

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With the chance of a U.S. default in a matter of weeks, U.S. Treasury Secretary Janet Yellen warned that if the debt ceiling is not lifted, it could trigger a "constitutional crisis."

"It's Congress's job to do this. If they fail to do it, we will have an economic and financial catastrophe that will be of our own making," Yellen told ABC on Sunday. "And we should not get to the point where we need to consider whether the president can go on issuing debt. This would be a constitutional crisis."

The debt cap negotiations should not be done "with a gun to the head of the American people," Yellen added.

The latest message comes ahead of U.S. President Joe Biden's Tuesday meeting with Republican House Speaker Kevin McCarthy, Republican Senate Minority Leader Mitch McConnell and top congressional Democrats to discuss the debt issue.

"The meeting between President Biden and Republican leaders on Tuesday to discuss the U.S. debt ceiling will be closely watched. We think that political talks will go on for some time before an agreement to raise the debt ceiling is finally reached, which could weigh on risk appetite," Capital Economics commodity economists said.

Negotiations are currently at an impasse after the Republican-led House of Representatives passed a bill in April that would raise the debt ceiling conditional on extensive spending cuts, which Biden is against.

The federal government reached the cap on borrowing back in January. Since then, the Treasury has employed "extraordinary measures" to pay the bills.

Last week, Yellen told Congress that the U.S. could run out of money by June 1. "After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time," Yellen wrote in a letter to House Speaker Kevin McCarthy.

Uncertainty over the debt ceiling has been one of gold's drivers during the past month. "Gold and silver prices rose, which can only be explained by safe-haven demand in a week when another U.S. bank failed and concerns mounted about the approach of the U.S. debt ceiling," economists at Capital Economics said. "We suspect that the gold price will remain elevated while concerns about the banking sector and debt ceiling persist."

On Monday, gold hit a daily high of $2,037.10 an ounce, with June Comex gold futures last trading at $2,028.00, up 0.16% on the day.

"Gold looks like it wants to make another run towards record territory. Too many recessionary risks are on the table for gold to see a significant pullback," OANDA senior market analyst Edward Moya said.

Analysts expect negotiations over the debt ceiling to get right down to the wire but ultimately avoid a default. In the meantime, volatility remains the name of the game, said ABN AMRO senior U.S. economist Bill Diviney.

"Financial markets are likely to become increasingly sensitive to developments over the coming weeks as the U.S. Treasury runs down its cash buffers," Diviney said Monday. "Similar to the 2011 debt ceiling impasse, the government is divided along partisan lines, with Democrats controlling the presidency and the Senate, and Republicans controlling the House."

To learn more about how gold behaved during the 2011 debt ceiling crisis, click here.

A default scenario, something that most analysts are ruling out, will have profound negative implications for the U.S. economy.

"A technical default – one that involves the government missing coupon payments and therefore triggering credit default swaps – is highly unlikely. Should the Treasury run out of cash, we expect it to prioritise bond coupon payments over other financial commitments, even if that means swingeing cuts to spending and a partial government shutdown," Diviney said. "However, the longer this were to go on for, the negative impact on financial markets and on the economy would become increasingly non-linear."

One major negative effect would be bond yields falling, with demand for safe havens offsetting higher risk premium effects, Diviney added. "This happened during the 2011 debt ceiling impasse when S&P downgraded the U.S. sovereign from AAA to AA+," he said.

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Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter