Gold futures surge 32 higher after the Fed signals a pause in hikes is imminent

Gold futures surge $32 higher after the Fed signals a pause in hikes is imminent

The rally in gold spot and futures returns after a small two-day correction. On Monday of this week, gold hit a new high value at $2015 per ounce. It was approximately one year ago to the day that gold futures traded above $2000 per ounce. Gold traded to a high of $2077 in March 2022. What followed was a multi-month correction that began a conclusion in September through November of last year. On November 3 a triple bottom was identified, the multi-month correction concluded, and a multi-month rally began.

As of 6 o’clock EST p.m. gold futures basis, the most active April contract has just opened up overseas in Australia. It is currently fixed at $1972.10 which is an increase of $22.50 based on the closing price in New York.

Market participants United States are now followed by overseas traders digesting what the Federal Reserve said and did after today’s FOMC meeting. As expected, they did raise their fed funds rate by ¼%. However, for the first time since they began their rate hikes they announced a pivot. That pivot is not rate cuts but rather that rate hikes will be paused with possibly one more rate hike of ¼% in May. They also confirmed that they would continue to keep this terminal rate elevated throughout 2023, a position they have maintained for quite some time.

While many investors had hoped to hear something about a rate cut the Federal Reserve made it clear that that is not something on the table right now and we can expect to see elevated interest rates throughout the remainder of the year. The pivot was that the Federal Reserve announced that they would not continue aggressive rate hikes and that a pause of rate hikes is imminent and soon.

It was this news that took gold prices higher and move the dollar lower. Currently, the dollar is down by 0.66% with the dollar index fixed at 102.195.

However, this FOMC meeting had a quite different tone than expected in that they announced a pause for the first since it began an aggressive period of rate hikes in March 2022 taking the Fed funds rate from near to its current rate which is 4 ¾% to 5.00%.

According to the CME’s FedWatch tool, there is a 38.8% probability that they will pause the rate hikes in May and a 61.2% probability that they will enact their last rate hike in this cycle of ¼% which would take their terminal rate to 5.00% to 5.1/4%.

Today’s announcement by Chairman Powell that a pause in rate hikes is imminent was solid news for the precious metals and disruptive for US equities and the dollar which traded lower.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Gold prices decline after reaching 2000 yesterday as banking fears ease

Gold prices decline after reaching $2000 yesterday as banking fears ease

Yesterday gold futures surged to the highest value of 2023, however after trading to a high of $2014 gold basis is most active April 2023 contract closed well below the intraday high. The high achieved yesterday was not only unsustainable on Monday but led to a deep price decline today. Gold futures are currently trading off by 1.98% or $39.20 taking the most active contract to $1943.60. The decline of $39 today can be attributed to market sentiment shifting regarding the banking crisis as fears diminished amongst traders, gold prices also eased ahead of Wednesday's rate hike decision by the Federal Reserve.

The Fed began its today FOMC meeting today which will conclude tomorrow. According to the CME's FedWatch tool, there is an 87.1% probability that the Federal Reserve will raise rates by 25-bps or ¼%, with a 12.9% probability that the Federal Reserve will pause and announce that they are not raising rates higher this month.

On Friday gold futures closed at $1972 in New York trading, however during the remainder of Globex trading which ends at 6:00 PM EST on Friday gold traded above $1990. This was a net gain of approximately $70 on the day. This was followed by yesterday's new record yearly high at $2014. However, the Japanese candlestick that formed yesterday contained a very small real body (the price between the open and closing price), with exaggerated upper and lower wicks (the vertical lines above and below the real body of a Japanese candlestick).

This type of Japanese candlestick is called a "doji" or a star when it gaps above the real body of the Japanese candlestick that occurs before it. If there is a gap between formed after the star it creates a Japanese candlestick pattern labeled as a "Three River Evening Star".

The "Three River Evening Star" is a Japanese candlestick pattern composed of three candles. The criteria for proper identification of this pattern occurs only when a stock or commodity is in an uptrend. This reversal pattern begins with a long green candle (a candle that closes above its opening price), followed by a star that gaps away from the green body, and the third day is a long red candlestick that must gap below the body of the star. The pattern can reveal a potential top or key reversal from bullish market sentiment to bearish market sentiment.

By

Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

Gold hits 12-mo high falls back a bit on profit taking

Gold hits 12-mo. high, falls back a bit on profit taking

Gold and silver prices are slightly up in midday U.S. trading Monday, with gold notching a 12-month high of $2,014.90 overnight, basis April Comex futures, and silver a six-week high. Some normal profit-taking pressure and chart consolidation are seen on the price pullbacks from the overnight highs. Still, safe-haven demand for the metals is present in a shaky general marketplace amid the U.S. and European banking crisis. The technical charts are also bullish for gold and silver, which continues to invite chart-based speculators to the long sides. April gold was last up $1.70 at $1,975.30 and May silver was up $0.108 at $22.565.

Global stock markets were mixed to lower overnight. U.S. stock indexes are higher near midday. Banking stocks across the globe dropped Monday. Risk aversion is again keener early this week. The Swiss banking firm UBS acquired Credit Suisse over the weekend to try to stabilize the European banking system, following the collapse of two big U.S. banks in early March. The move did little to boost trader and investor confidence. "There is a general sentiment that is trending increasingly negative," said one market analyst. Said noted investor Mark Grant on CNBC when asked about the banking crisis: "It's going to get worse. It's going to be messy."

Now focus is on the Federal Reserve's FOMC meeting that begins Tuesday and concludes Wednesday afternoon. There is still some debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points or stand pat amid the U.S. and European banking crisis. Most market watchers, however, are leaning toward a 0.25% rate increase. The 0.5% rate hike by the European Central Bank last week makes a 0.25% increase by the FOMC more likely.

  Once $2,000 breaks, gold is off to the races – Willem Middelkoop

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are lower, hit a 15-month low and are trading around $66.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.4%.

There was no major U.S. economic data released Monday.

Technically, April gold futures prices hit a 12-month high early on today. Bulls have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $2,000 and then at today's high of $2,014.90. First support is seen at today's low of $1,970.00 and then at $1,950.00. Wyckoff's Market Rating: 8.5

May silver futures bulls have the overall near-term technical advantage. Prices are in a fledgling uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today's high of $22.855 and then at $23.00. Next support is seen at today's low of $22.35 and then at $22.00. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 565 points at 394.90 cents today. Prices closed near the session high and scored a bullish outside day up. The copper bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 417.25 cents. The next downside price objective for the bears is closing prices below solid technical support at 372.00 cents. First resistance is seen at today's high of 396.10 cents and then at 400.00 cents. First support is seen at today's low of 385.50 cents and then at the March low of 382.20 cents. Wyckoff's Market Rating: 4.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

‘Original fear of missing out’: Gold price explodes and could test 2k after best week in 3 years – analysts

 

'Original fear of missing out': Gold price explodes and could test $2k after best week in 3 years – analysts

The gold market surged as prices saw their best week in three years amidst the fallout of the banking sector. Analysts are not ruling out a test of the $2,000 an ounce level next week as markets look past the Federal Reserve monetary policy meeting scheduled for Wednesday.

The precious metal rose from $1,867 an ounce to above $1,980 this week, posting a gain of more than $110 and its best performance since March 2020. April Comex gold futures were last trading at $1,988 an ounce, up $65 on the day.

The biggest event markets were gearing up for all week – the Federal Reserve monetary policy meeting – is now on the periphery. Markets are pricing in a 25-basis-point hike for Wednesday, but investors are more focused on the potential pause and rate cuts that could follow.

After wild swings in rate hike expectations this week, the gold market is in a winning position, according to analysts.

"Markets are concluding that we'll see the Fed go for another 25bps increase and then probably sit on it for a while and see what happens. The view from the gold perspective is that given disruptions in the banking system and the U.S. Treasury Department's willingness to help, we might get accommodation that allows inflation to hang around longer at a higher level. This is a good thing for gold," TD Securities global head of commodity strategy Bart Melek told Kitco News.

The consensus in the gold market is that the Fed will have to ease up before inflation is tamed, Melek added. And that is a massive shift in perspective from just a few weeks ago.

Another 25 bps hike might be interpreted as nothing more than a move by the Fed to keep its credibility, said Gainesville Coins precious metals expert Everett Millman. "They don't want to be seen as abandoning higher rates so quickly," Millman told Kitco News.

After Wednesday's decision, the Fed is unlikely to keep raising rates, Millman added. "Something will surely break if the Fed keeps its foot on the pedal," he said.

What the ECB told us

The European Central Bank raised the rate by 50 basis points this week, holding onto its hawkish stance despite the banking sector worries and market turbulence. RJO Futures senior market strategist Frank Cholly told Kitco News that this gave markets confidence that the Fed would also proceed with its existing plans.

"The market got its answer yesterday when ECB raised by 50 bps. Lagarde hammered the point that inflation has been too high for too long. I don't think 2% inflation is realistic. They know now they will break some things along the way," Cholly said.

Fed's new lending program

The Fed has been helping banks with liquidity issues this week, raising concern that the tightening from last year will be somewhat reversed. According to the latest data from the Fed, banks loaned $164.8 billion from two Federal Reserve backstop facilities this past week.

JPMorgan Chase & Co. estimated that the additional funding from the U.S. central bank's new 'Bank Term Funding Program' could add up to a maximum of $2 trillion in liquidity.

"It puts quantitive tightening on a bit of pause, with more money slashing around," Melek noted.

And the whole idea does not square with the Fed's efforts to tighten monetary policy, nor does it bode well in the fight against inflation, said Millman.

Testing $2,000 an ounce

With the fear of banking contagion risk spreading further, gold is very likely to test $2,000 an ounce next week before seeing some major profit-taking, analysts said.

"I would not be surprised if gold re-tested the highs from last year of above $2,000 an ounce. We can't see the future, but the banking situation gets more concerning by the day. The Fed is stuck between a rock and a hard place of trying to rescue vulnerable banks and fighting inflation," Millman explained. "Those two goals seem to be at cross purposes. Hard to raise rates higher without causing more stress in the banking system."

Melek pointed out that there is no reason why gold couldn't test $2,000 an ounce next week. "A good portion of this move higher is short-covering. But longs might have started getting in as well," Melek described.

The next big test for the gold market will be $1,975 an ounce, said Cholly. And if the precious metal gets a close above $1,950 an ounce, the momentum will continue.

Also, the fear of missing out is pushing prices higher, Cholly added. "This is the original fear of missing out. When gold gets cheap, people tend to stay away from it. But when prices go higher, people buy more," he said.

This is the opposite of what happens with other commodities, which see demand destruction once a certain price level is reached. "I thought gold would reach $2,000 sometime this year. Now, I am convinced it will be over $2,000 and will happen faster than I thought as people begin to chase the market," Cholly noted.

Next week's data

Tuesday: U.S. existing home sales

Wednesday: Fed decision

Thursday: U.S. jobless claims, new home sales

Friday: U.S. durable goods orders

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold Price chart

 

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Silvergate Capital Silicon Valley Bank amp Signature Bank Have All Collapsed More To Come?

Silvergate Capital, Silicon Valley Bank, & Signature Bank Have All Collapsed. More To Come?

The recent scandals of Signature Bank, SVB, and Silvergate Bank have made headlines and left the industry reeling. However, the ramifications of these financial institutions' missteps for the crypto sector are yet to be entirely clear. To understand the impact, one must first look at the fundamental principles of blockchain technology and how it has upended traditional banking models.

The failure of these Banks in the United States means that many are questioning the sustainability of the cryptocurrency sector. The companies in question have all gone bankrupt, but this isn't the first time a major company has failed in the crypto sector. For example, the collapse of Mt. Gox and its affiliates in 2014 has cast a shadow on the industry, but this is not the only failure incident in this sector.

New York state financial regulators closed Signature Bank in what is believed to be the result of the Silicon Valley bank failure, as nervous depositors pulled funds out of Signature Bank. The bank's stock began to fall. The collapse of Silicon Valley Bank is expected to put pressure on several other small and regional banks in the United States.

In less than seven days, the largest bank for tech companies and two banks most accommodating to the cryptocurrency industry collapsed. The sad incidents generated uncertainty in the stablecoin market, despite cryptocurrency values rising Sunday night as the federal government intervened to offer depositors a safety net.

Silvergate Capital announced that it would be closing down and liquidating its bank. Major startup lender, Silicon Valley Bank, failed after its customers withdrew more than $42 billion in response to the bank's disclosure that it needed to borrow $2.25 billion to strengthen its balance sheet. Banking officials seized Signature on Sunday night; it had a significant crypto emphasis but was far bigger than Silvergate.

Approximately half of all venture-backed startups in the United States had cash on hand at Silicon Valley Bank, various firms that deal in digital assets, and venture capital funds that support cryptocurrencies. For bitcoin businesses, the two leading banks were Signature and Silvergate. The federal government stepped in to guarantee every deposit SVB and Signature depositors made. This action increased confidence and caused the price of bitcoins to increase briefly.

Nic Carter of Castle Island Ventures argues that the government is once again pursuing a loose monetary policy rather than one tightening since it is willing to support both banks. Historically, this has benefited speculative asset classes like cryptocurrency. However, the instability once more highlighted the frailty of stablecoins, a part of the bitcoin ecosystem that investors can often rely on to maintain a particular price. Stablecoins are intended to be tied to the value of a physical good, such as a fiat currency like the U.S. dollar or a commodity like gold. Yet, good financial conditions may prevent them from falling below their pegged value.

 


Image Source: Coindesk

Not Entirely Stablecoin

With TerraUSD's demise in May of last year, many of crypto's issues over the previous year have roots in the stablecoin industry. Meanwhile, during the last several weeks, regulators have focused on stablecoins. After much pressure from New York regulators and the SEC on its issuer, Paxos, Binance's dollar-pegged stablecoin, BUSD, saw significant withdrawals.

USDC lost its peg over the weekend and fell as low as 87 cents after its issuer, Circle, acknowledged having the sum of $3.3 billion banked with SVB. As a result, the sector's trust suffered once more. Circle has established itself as one of the best in the ecosystem of digital assets because of its links to and support from the conventional banking industry. It has long intended to go public and secured $850 million from investors like BlackRock and Fidelity.

Another popular dollar-pegged virtual currency, DAI, partially supported by USDC, dropped as low as 90 cents. For these reasons, USDC to dollars conversions has been temporally halted on Coinbase and Binance. Tether, the biggest stablecoin in the world with a market valuation of more than $72 billion, has seen many conversions from DAI and USDC in the past few days. The issuing company had no exposure to SVB. However, there have been concerns about tether's operations and the state of its reserves.

Circle published a post stating that it would "fill any gap utilizing company resources," this enabled the stablecoin market to recover. Since then, the USDC and DAI have turned back toward the dollar.

Reasons Behind The Ruins of Crypto-Friendly Banks
 
Silvergate Capital, a holding company for a bank that had made significant bets on serving the burgeoning crypto economy since 2016, announced that it would cease operating as a bank. State authorities ordered the closure of Silicon Valley Bank (SVB), which had long performed a similar function by handling funds for businesses with venture capital funding.

In broad strokes, the same problem classic bank runs brought down both banks. Whether they are crypto exchanges or software firms, their former clients deal with significant commercial difficulties, partly due to the current financial and economic climate. As a result, deposits have decreased, and cash withdrawals have increased at a time when many of the banks' long-dated non-cash holdings have also been negatively impacted by the markets.

Hence, Silvergate and Silicon Valley Bank were forced to sell those underlying assets at significant losses when cash demands reached a certain level. In the fourth quarter of last year, Silicon Valley Bank, which had a bigger total balance sheet, and Silvergate reported losses on the sale of assets of $1 billion and $1.8 billion, respectively. Importantly, a substantial amount of the losses in both situations were attributable to the liquidations of U.S. Treasury bonds.

This serves as a valuable counterpoint to the careless mischaracterization of FTX's collapse as a "bank run" by several prominent media outlets back in November. There are a few similarities between what occurred at FTX and the liquidity difficulties that impacted Silvergate and SVB. These challenges have two upstream causes: the business cycle and the Federal Reserve's tightening interest rates. These elements are connected and fundamentally refer to disturbances brought on by COVID.

 


Image source: cryptoofficiel.com
 

The initial pressure that destroyed Silvergate and SVB resulted from Fed rate rises. It was clear that the increasing Treasury rates would discourage new investment in high-risk industries like tech and cryptocurrency. But another, mostly disregarded danger to the health of banks is the rise in interest rates. As the Wall Street Journal notes in uplifting clear language, issuing new Treasury bonds with greater yields has decreased the market value of pre-hike Treasuries with lower yields.

Most banks are legally required to keep significant quantities of Treasury securities as collateral, so they are susceptible to the same risk that affected Silicon Valley Bank and Silvergate. That's one of the reasons why bank stocks, especially those of regional or mid-sized banks, are falling.

Yet, Silvergate and Silicon Valley Bank had unique business cycle problems that might only apply to a select audience. Both catered to markets that witnessed enormous runups in the early phases of the COVID-19 pandemic, namely the crypto and venture-funded tech industries. The COVID lockdowns benefitted both industries, but cryptocurrency specifically profited from the pandemic relief funds distributed to Americans.

So, through 2020 and 2021, both banks had significant inflows. The balance sheet of Silicon Valley Bank quadrupled between December 2019 and March 2021. In 2021, Silvergate's assets also rose significantly. When interest rates on those bonds were still at or near 1%, both banks would have purchased more of them as collateral to support that deposit growth. Because of Fed rate increases, rates on new bonds are now closer to 4%, which reduces demand for older bonds. That's why Silvergate and SVB were forced to sell liquid assets at a loss when clients in booming or turning industries began withdrawing their deposits.

We're still in Covid Economy

If you focus only on one aspect of the situation, you can cherry-pick explanations to blame this disaster on whoever suits your prejudices. But the reality is that everyone is trying to escape the same COVID-caused disaster in the same leaky lifeboat, battling over who gets eaten first.
Some people may criticize the Fed for raising interest rates, especially the crypto traders, yet doing so is required to control inflation.

The inflation, in turn, was brought on by COVID-19-related actual cost increases and a materially increased money supply due to COVID relief and bailout actions. An anti-Fed criticism at this time is, at best, reductive since it will take years to fully assess the total cost and value of such initiatives.

On the other hand, it will be alluring for many in the mainstream to attribute the impending banking crisis to the cryptocurrency industry as a whole. The fact that Silvergate, ‘the crypto bank,’ failed first is the strongest argument in favor of this assertion. You could hear it described as “the first domino to fall" or other such nonsense in the coming weeks, but that isn't how things stand.

Due to its involvement in a sector-wide degenerate long bet on cryptocurrencies that was well in advance of real acceptance and a sustainable source of income, Silvergate was more vulnerable. Yet that wasn't what started its liquidity issue, and its decline won't significantly contribute to any further bank failures in the future.

Instead, all American banks are subject to many of the same structural forces, regardless of whether they are financing server farms or the physical corn and pea version. A deadly virus that has killed more than six million people is the core cause of their severe economic upheaval. If there is one thing to learn right now, adjusting financial levers won't completely eliminate that type of instability in the present chaotic world.

 

 

 

About: Prince Chinwendu. (Nigeria) Rapid and sustainable human growth is my passion, and getting a life-changing opportunity into the hands of people is my calling. Empowering entrepreneurs provides me with enormous gratification. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Tim Moseley

Gold surges to 19828 as investors rethink the banking crisis and accommodative Fed

Gold surges to $1982.8 as investors rethink the banking crisis and accommodative Fed

Gold futures surged to the highest value of 2023 taking out the former high of $1976 achieved in February. As of 4:09 PM EST, the most active April contract of gold futures is up $58.10 or 3.02% and fixed at $1981.10. Although dollar weakness contributed to today’s dramatic ascent it was only a small factor in a much larger picture. Considering that gold futures had a net gain of over 3% and the dollar softened by 0.52%, roughly 5/6 of today’s gains in gold are directly attributable to market participants bidding the precious yellow metal higher.

Next Tuesday, the Federal Reserve will hold its second Open Market Committee meeting of the year. This will be followed by an FOMC statement and press conference by Chairman Jerome Powell on the following day March 22.

However, this FOMC meeting will be quite different in that there is an additional major component that must be factored into their decision that they will announce next Wednesday, March 22. Not only will the Federal Reserve continue to be laser-focused on reducing inflation which remains sticky or persistent in many sectors, but now they need to factor in a banking crisis that was first reported last week.

On March 10, 2023, reports began to surface about the Silicon Valley Bank failing after a bank run by depositors challenging the solvency and leading to an inevitable bankruptcy announcement today. The SVB was unique in that its primary business was funding venture capitalists and start-up tech companies. To raise the capital they liquidated a major portion of their assets on their balance sheet at a loss of $1.8 billion.

Immediately the FDIC and banking regulators stepped in to guarantee that depositors' money would become available. Then yesterday 11 major US banks created a $30 billion fund held at the first Republic Bank to create a backstop to keep banks like SVB and signature Bank of New York solvent. Federal banking regulators applauded the support of this large bank group because it validates the resilience of the banking system in the United States.

This brings us to next week’s FOMC meeting. It is anticipated that the Federal Reserve will approve a ¼% rate hike with the banking crisis ultimately backstopping the opinion that the Federal Reserve would step up its rate hikes with a ½% rate hike next week. Although it has been rumored that the Fed might pause many analysts believe that the Fed needs to continue to raise rates even with the banking crisis to maintain its credibility.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

A global rush to safe-haven moves gold higher

A global rush to safe-haven moves gold higher

Gold prices surged today with gold futures trading to a high of $1942.50. Multiple assets traded sharply higher including gold, the dollar, and U.S. Treasuries. These gains were directly attributed to another crisis in the banking sector. This caused market participants to lighten their riskier assets and move that capital into safe-haven assets.

Today’s global rush into safe-haven assets began in Europe and then moved across the pond into Wall Street as news surfaced of a new bank failure this time in Europe. Shares of Credit Suisse initially dropped 31% and when the dust settled its stock shares had declined by 13.91%. This is because of a report of a potential plan to stabilize the bank from Swiss banking regulators.

According to Bloomberg News, “Swiss authorities and Credit Suisse Group AG are discussing ways to stabilize the bank, according to people familiar with the matter, after comments by its biggest shareholder and broader financial market jitters helped trigger a plunge in the stock on Wednesday.”

The article in Bloomberg stated that the first move to shore up confidence in the Credit Suisse bank is being led by Switzerland's central bank and its financial regulator announced that Credit Suisse will receive a “liquidity backstop if needed”.

Issues with Switzerland's second-largest lender, Credit Suisse have been ripe with problems over the last several years due to a “series of blowups, scandal sips, leadership changes, and legal issues.” Last year Credit Suisse lost $7.9 billion which eroded the profits from the previous year. Over the last three months credit Suisse depositors have withdrawn over $100 billion in assets as concerns over the multiple issues cited above.

Gold futures were extremely volatile today with tremendously large price swings from the high of $1942.50 to its intraday low of $1889.50 before settling higher. As of 5:30 PM EST gold futures basis the most active April contract is currently up $12.40 or 0.85% and fixed at $1923.30. The dollar gained 1.15% and the dollar index is currently fixed at 104.40.

This has led some former Federal Reserve officials to suggest that the two most important central banks put a pause on further rate hikes until concerns over banking issues are resolved. This dramatically changed the CME’s FedWatch probability that the Fed will not raise rates at this month’s FOMC meeting to 50.5%. The probability of no rate hike in March was 30.6% yesterday, and zero before that. This probability indicator also anticipates that there is a 49.5% probability that the Federal Reserve will go ahead with another ¼% rate hike this month.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

What Are Your Core Values? Ask Yourself These 7 Questions

What Are Your Core Values? Ask Yourself These 7 Questions

Whether yours need to be clarified or created from scratch, this is how to develop your defining values.

by Steve Calechman

March 6, 2023

Bearded middle aged man relaxing in men's store.

Hey buddy — quick question: What are your values?

It’s an innocent ask but the answer might make you a bit defensive. You probably think that you have values. Wait, you know you have values. You have lots of them — good ones. You just keep them to yourself, but when you say them out loud…

 

ecosystem for entrepreneurs

Well, there’s the problem.

When determining your values, one of two things usually happens. You say them but they sound incredibly vague (Wow. I believe in honesty…) because you haven’t really defined them. Or, when you explain them your rationale falls apart (I gave up playing all sports to spend time with my kids, but is that the best way to promote being active?).

So maybe it’s time for a tune-up, or to establish a core set of values. It’s a good thing to do. When it happens, life gets easier. Those stressful decisions, whether it’s moving for a job or letting someone merge, aren’t so stressful, because you’re not wondering if you did the right thing.

“It’s a way to live with fewer regrets,” says Rosemary Lloyd, a retired Unitarian Universalist minister in Lincoln, Massachusetts.

But determining your values is not an intellectual exercise. It’s about taking those general ideals — loyalty, family, generosity, etc. — making them your own, and then putting them to use. Otherwise, it’s just a premise.

“A value doesn’t mean much if it isn’t attached to a behavior,” say Carol Landau, clinical professor emerita of psychiatry and human behavior at Brown University.

To get there, it starts with figuring out what matters, since, as Lloyd points out, “there are hundreds of values in the world.” You don’t need all of them — a top three usually helps — and your list can change over time and each value can shift in importance.

Some values may come quickly, but you may have forgotten others because, well, life gets hectic. What helps in determining your values is to ask yourself questions and see where the answers lead. The following can help.

1. When Was I Happiest In My Life?

It might have been something from the past like at summer camp or the weekly poker game, or something as recent as holding your child. The moment taps into you at your best, and you can tease out the elements to recapture, whether it’s traveling a little more often or just laughing really hard.

 

ecosystem for entrepreneurs

“If you know what makes you happy, don’t we want to maximize that in our lives?” Lloyd says.

2. When Was I Most Proud?

It could have been changing jobs at 30 years old or telling the truth at 9, but the commonality is that you faced a challenge and pushed through it. This kind of adversity often reveals what’s most important.

“It’s something you’re willing to fight for,” Lloyd says.

But, she adds, it’s also good to ask the converse question, like when you were saddest or least proud. Those low points offer motivation by giving you a choice: feel like this; never again like that.

“I’ll remember it for the next time,” she says.

3. How Am I Spending My Extra Time?

We get it — extra time? Who has extra time? — and with everything you have to do, there doesn’t feel like you have any, but there are pockets. “That’s when you theoretically have freedom of choice,” Landau says.

Everyone needs distractions, but you want to examine if your YouTube break is five minutes or bleeds over into scrolling Twitter for 90, which leads into useless, online debates.

If it’s the latter, you then want to ask another question: Does it make me feel a little uncomfortable? It’s a gut check and it makes you realize that what you’re currently doing might be preventing you from spending time with your partner, reading, or anything else you profess to value.

4. Are We Where We Intended To Be?

This is a question to ask your partner because values are rarely solo endeavors. If you want to play weekend basketball, you need support to make it happen. And if it’s a family matter, you want to make sure you’re still in sync with what you’ve always talked about, Landau says.

 

But this is just an example of the need to reach out to others when trying to determine what matters. It could be a friend, relative or mentor, any person you trust and who knows you from different times in your life and can remind you of what has always made you happy.

“They’re out of the fray,” she says. “It gives you perspective.”

5. What Would Break Us Up?

Relationship-wise, that is. An affair is the quick answer but not always the complete one. Maybe it’s actually not being considered or seen as a priority. With any question, your goal is to get away from the first, and most obvious, response. Dedicating some attention gets you to the third or fourth where your answer lies, Lloyd says.

This kind of question also taps into family history, which is where most values originate from, and you might realize that being stoic and not talking about problems is actually a tradition that you no longer want to continue.

6. If I Could Start Over, How Would I Spend My Time?

You still live within the limits of your life, but this is a pretend do-over. It doesn’t mean complete upheaval, but based on what you know now, maybe you see spots where what you thought was urgent, e.g., repaying a loan immediately, can be stretched out without much downside. Whatever it is, you have a chance to course correct and refocus your energy.

“You feel better if you’re living according to your principles,” Landau says.

7. Why Am I Doing That?

It’s always good to examine your reason, from working late to buying used sports equipment. Maybe it makes sense. Maybe it needs to be tossed. But now you’re off autopilot and there’s more certainty and less mystery in your decisions.

“You’ll find out what’s driving you,” Landau says.

And it’s not an overly intense process. It can be five or 10 minutes of thought, sometimes not even that much because you’re certain that making people laugh or comfortable is always who you’ve been. It’s just the other values that are there but need a nudge to become more prevalent.

“You just go live your life, but maybe do it with a little more awareness,” Lloyd says. “It has you live a life worth living.”

Tim Moseley

Headline CPI fractionally lower as gold futures hold key 1900 level

 

 

Today’s CPI report revealed that inflation continues to be troublesome and elevated in some sectors, with a fractional decline overall from 0.5% in January to 0.4% last month. Headline inflation continues to slowly dissipate from 6.4% year-over-year in January to 6% in February. Core inflation also remains elevated coming in at 5.5% year-over-year compared to 5.6% in January. Housing which includes mortgages and rentals composed the largest category and accounted for more than 70% of last month’s increase in the CPI.

The repercussions of today’s CPI report are that the Federal Reserve is likely to raise their terminal rate by ¼% at the next FOMC meeting (March 21 – 22). According to the CME’s FedWatch tool, the probability of a 25-bps rate hike is 81.9% and the probability that the Fed will not raise rates is 18.1%. It is noteworthy that according to the FedWatch tool, the probability that the Fed will not raise rates at its next meeting was 35% yesterday versus 0% one week and one month ago.

The Federal Reserve has been caught between a rock and a hard place attempting to raise rates enough (which intrinsically results in a contracting economy) to lessen the current level of inflation but not too much to result in a recession. It seems more and more unlikely that the Federal Reserve will be able to pull off a “soft landing”. The banking crisis that was reported this weekend further exacerbates the ability of the Fed to reduce inflation and not lead the country into a recession.

Continued rate hikes by the Federal Reserve create bearish market sentiment for gold prices because gold does not yield interest. However, higher inflation has the opposite effect creating bullish market sentiment for gold. Collectively these two forces work against each other with elevated inflation pushing prices higher and rising interest rates pulling prices lower. That being said, gold futures were able to hold above the key psychological level of $1900 per ounce.

Today gold futures opened at $1919.40 which was also the high, and traded to a low of $1899.80. As of 5:15 PM EST, the most active April contract is currently fixed at $1908.30. Concurrently, the US dollar is trading fractionally higher up 0.08% with the dollar index currently fixed at 103.265.

Although there are a couple of economic reports that will come out before the next FOMC meeting, the Federal Reserve now has the most important data it will use to make its final decision regarding the level of the next rate hike.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter