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 Over the last three months credit Suisse depositors have withdrawn over $100 billion in assets as concerns over the multiple issues cited above.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…

 

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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.

 

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“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

ESG: A Woke Ideology Wreaking Havoc As Anti-ESG Rhetoric Heightens

ESG: A Woke Ideology Wreaking Havoc As Anti-ESG Rhetoric Heightens

With all the craziness happening in the world right now, you probably won’t be surprised to know that laws are being proposed that would limit food production due to ESG mandates. The EU's controversial ESG regulations came into force in January 2023, and their advocates have described them as the most ambitious yet.

These laws would severely restrict companies' ability to choose suppliers and buyers without first studying their ESG credentials, made possible through the EU’s ‘Corporate Sustainability Reporting Directive.’ The provisions in the regulations don't just apply to companies in the EU. They apply to non-EU companies, which work with EU companies, and possibly even to consumers as well. 

While most EU lawmakers think these regulations will help increase the quality of life, the exact opposite is likely to occur. Not only will they crush competitiveness, but they could throw the EU into another energy and cost of living crisis that will have a knock-on effect globally. This article discusses the EU’s ESG directive, which provisions are the most disturbing, and reveals why the elites are so obsessed with ESG. 


Image source: Early metrics

ESG Explained

To recap from previous articles, ESG stands for Environmental, Social, and Governance, defining an investment trend driven by financial elites since the pandemic's start. In short, ESG expresses that environmental, social, and governance issues are more important than production output or profits. 

Logically, this imperative is incompatible with basic economics. Purposely pursuing more expensive energy sources, hiring people based on their personal identity rather than their abilities, and letting governmental and non-governmental organizations make business decisions is a recipe for disaster. 

ESG’s incompatibility with basic economics is why it's more accurate to refer to ESG as an ideology rather than an investment methodology. Any company that complied with ESG criteria would quickly find itself out of business. This is why the ESG ideology was mostly ignored during the first 15 years of its existence. 

The term ESG was coined in a 2005 report by the United Nations, the World Bank, and the Swiss government. However, the ESG criteria needed to be more consistent and clear, contributing to their lack of adoption among businesses. But in mid-January 2020, it all changed when BlackRock CEO, Larry Fink, wrote an open letter to all the shareholders of the companies the asset manager is invested in, ordering them to comply with ESG.

 
The Standardization Of ESG Criteria

In late January 2020, the world's elite gathered in Davos, Switzerland, for the World Economic Forum (WEF) annual conference. There, the big four accounting firms standardized ESG criteria. The ESG criteria have since become synonymous with the UN's Sustainable Development Goals (SDGs). For reference, the SDGs are a set of 17 goals that are supposed to be met by all 193 UN countries by 2030.


Image source: Weforum.org

The convergence between ESG and the SDGs comes from the strategic partnership the WEF signed with the UN in mid-2019. The announcement states that the WEF will help "accelerate the development of the SDGs.” In other words, they will provide private-sector funding and compliance. Besides developing the digital ID, SDGs mandate the development of smart cities, central bank digital currencies (CBDCs), and carbon credit scores to track and reduce an individual’s consumption. 

All these technologies are being developed by companies closely affiliated with the WEF, but as mentioned above, ESG is not compatible with basic economics. This begs the question of why the private sector is on board. Well, the short answer is ‘artificial profits.’ 

Companies that comply with ESG get lots of investment from asset managers and better loan terms from mega banks. Companies, which refuse to comply with the ESG, see investments pulled and risk losing access to financial services altogether. Meanwhile, on the public sector side, they risk excessive regulations and bad press from governmental and non-governmental institutions working with these asset managers and mega banks.

This terrifying situation comes from the unnatural accumulation of wealth caused by a financial system where limitless amounts of money can be created. The short story is that asset managers and mega banks borrow lots of money at low-interest rates and then use it to buy assets, influence, and further push their ideologies. Understand, the ESG ideology would not exist in a sound money system; it would not be possible.

The ESG Push

Now although the ESG push has come primarily from private sector entities affiliated with the WEF, there are a few public sector exceptions. The biggest one is the European Union (EU), whose ESG initiatives are rooted in the Next Generation EU pandemic recovery plan.

Not surprisingly, the implicit and explicit purpose of Next Generation EU is to help all European countries meet the UN's SDGs by 2030. The recovery plan is expected to cost over €1.8 trillion. In other words, it provides public sector funding and compliance, complementary to the WEF’s initiatives. 


Image source: commission.europa.eu

One-third of all this printed money will fund the EU's green deal, which was announced at the pandemic's start. Now, to give you an idea of just how ideological the green deal is, one of the three goals noted on its website is to ensure that “economic growth is decoupled from resource use.” This impossible goal is why it's appropriate that the EU’s ESG regulation is part of the green deal. 

The Corporate Sustainability Reporting Directive

The ESG regulation in question is called the Corporate Sustainability Reporting Directive (CSRD). It was first introduced in April 2021, was passed in November 2022, and went into force this January.

However, there are two caveats here. The first is that the CSRD is technically a directive, not a regulation. Whereas an EU regulation requires all EU countries to comply with the EU law as it's written, an EU directive allows EU countries to adjust the EU law and can take their time rolling it out. 


Image source: Kvalito.ch 

This ties into the second caveat: going into force and being enforced are two different things. While the CSRD went into force this January, it won't be enforced until 2025. To clarify, ESG reporting standards will be published in June. In 2024, EU companies will start collecting data using these standards. In 2025, this data will be reported. 


Image Source: DFGE.de

A spokesperson for the agency tasked with setting these standards specified that over 1,000 ESG data points must be reported.  In a December 2021 interview, one of the architects of the CSRD revealed that the directive's purpose is to “bring sustainability reporting to the same level as financial reporting.” He also indicated that all the reported data would have to be digitized and that this won't be easy or cheap. 

Failure to comply with the EU ESG disclosures will result in sanctions that should be “effective, proportionate, and dissuasive.” The CSRD will require governments to publicly shame the companies that didn't comply, order them to stop violating ESG criteria, and fine them. The CSRD is expected to apply to around 50,000 companies operating in the EU, but because of the absurdly low bar for what counts as a large company, the actual figure will probably be much higher. 

An EU company is considered a large company if it meets two of the following three criteria; it has a revenue of more than €40 million per year, has more than €20 million in assets, or has more than 250 employees. Publicly listed EU companies will also be required to comply with the CSRD regardless of their size. 

Moreover, the CSRD will also apply to non-EU companies which meet the following criteria; it returns more than €150 million each year for two consecutive years and has a subsidiary in the EU or a branch that takes in more than €40 million each year.  

Another big reason the CSRD will apply to more than 50,000 companies is because of highly concerning provisions in the CSRD, which, as mentioned above, could apply to small and medium-sized businesses inside and outside of the EU and possibly even to consumers.


Image source: WSJ/Deloitte

The Double Materiality Provision

The most problematic provision is called Double Materiality. As stated by KPMG, the third largest accounting firm and one of the big four auditors, "double materiality requires companies to identify both their impacts on people and environment – Impact Materiality, as well as the sustainability matters that financially impact the undertaking – Financial Materiality.” 

Double materiality sounds like yet another bureaucratic buzzword. However, these two insignificant words open the door to forcing small and medium-sized companies and possibly even consumers to comply with the CSRD’s ESG reporting requirements. 

This is simply because double materiality requires companies directly affected by the CSRD to collect ESG-related data from individuals and institutions which lie upstream and downstream from their actual business operations. 

In other words, in addition to the company’s own data, it would have to collect and report extensive ESG-related data from all suppliers they buy raw materials from – Upstream part of the provision. Then the company would need to chase up its largest consumers who have purchased its product and ask them to provide their ESG data for its reporting purposes. This is the downstream part of the provision. 

In a real-world scenario, the company may have trouble collecting the data due to non-compliance, or the supplier may fall short in their ESG ratings. In this case, they would have to switch to ESG-aligned suppliers to meet the CSRD criteria to avoid a low ESG score and being fined. In such circumstances, the company could quickly end up in bankruptcy. 

However, BlackRock comes to the rescue with investment, and the bank gives the company a loan. It stays afloat and finally gets all its most significant suppliers and consumers to provide detailed ESG data. There's just one problem: they all scored poorly on ESG, they need to use more renewable energy, their workforces need to be more diverse, and they are not members of the WEF. (Remember, ESG stands for environmental, social, and governance.)

BlackRock and the bank see the company’s annual ESG report and inform them that they won't be able to provide any more financial support unless they force its suppliers and consumers to improve their ESG scores. The company tries to jump a few more hurdles, but after trying so hard to comply, the company ultimately goes bankrupt.


Image source: contextsustainability.com 

 

The Harsh Reality

The reality is the CSRD has the potential to impact individuals and institutions worldwide. Large companies in the EU will bear the brunt of the burden. The time and money they will take to report ESG criteria will be a massive expense. 

Any small or medium-sized businesses, which lie upstream or downstream from these large companies, will likewise be required to report, and their expenses will be even greater in percentage terms. Never mind the costs and the surveillance that will come with digitizing all this sensitive ESG data. 

In the 2022 conference held by the WEF in Davos, the ESG panelists agreed that small and medium-sized businesses would eventually have to comply with ESG to get investments and loans from financial institutions. One of the panelists gave an example of compliance with the ‘social’ criteria of ESG, stating that small and medium-sized businesses must pay their employees a “fair wage.” 

Some argue this is code for paying their employees as much as a big enterprise can, which small and medium-sized companies often cannot do. With the CSRD applying pressure from the public sector and ESG investing applying pressure from the private sector, it's more than likely that many small and medium-sized businesses affected will go bankrupt. 

As far as the elites are concerned big business taking over everything was always inevitable. The only things that will protect small and medium-sized businesses from going under will be investments from asset managers, loans from megabanks, and grants from governmental authorities. 

This will give them the power to pick winners and losers based on their compliance with the ESG ideology, not on output. Assuming this ESG ideology continues to grow, we could see a scenario where businesses are occasionally prevented from providing goods and services to consumers on ESG grounds. 

Excuses could include climate change, social inequality, and the inability to track what's been purchased. Again, basic economics says this would not be sustainable, but printed and borrowed money would make it so. 

The EU could achieve its goal of having an economic output with zero input. It would just be rising numbers on a screen, with inflation kept in check by capital controls on digital currencies. Quality of life would quickly diminish as no actual inputs means no tangible outputs. There would be frequent and chronic shortages of critical goods and services, which the elites will blame on the same crises that ESG claims to solve. If it's allowed to be discussed at all, ‘real’ inflation will be off the charts. 


Image source: cryptonews.com

The Elite’s ESG Obsession

So why are the elites so obsessed with ESG? The answer is ‘inflation.’ The byproduct of ESG policies creates inflation. The fact is, the wealthiest individuals and institutions have trillions of dollars of debt that they can't ever hope to pay back. And as mentioned above, most of this debt was used to buy assets and influence, all to push dystopian ideologies which go against the natural laws of economics. 

In theory, most of the issues ESG seeks to fix could be more easily fixed with a sound monetary system. Saving is incentivized, wealth accumulation is arduous, and harmful ideologies are more difficult to finance. In practice, the elites default on their debts and lose all their assets and influence.

That's why there's only one solution in their eyes: to centralize control so intensely that it becomes impossible for them to default. This requires controlling where you go, what you say, and how you spend. If you look at the bigger picture, you'll realize that this is the true purpose of the SDGs and ESG.
 


Image source: US Debt Clock 

 

The Silver Lining

The silver lining is that the elites will likely fail in implementing ESG policies. Evidence of this was in mid-2022 when energy prices soared, and we saw a rise in anti-ESG rhetoric because people knew ESG was the ultimate cause.

Although ESG saw a comeback after energy prices fell, this won’t last long. That's because the energy market fundamentals still need to be addressed. There needs to be more supply relative to demand, and energy companies are reluctant to expand in the face of ESG opposition

When energy-driven inflation comes back, and it will, ESG will become Public Enemy #1 again, and rightfully so. When energy prices spike, you'll see governments declare oil, natural gas, and nuclear energy as green and spend $500 billion to burn so-called ‘dirty’ coal to keep the lights on as Europe and the UK have already done, and that's just what will happen in the developed world.

In the developing world, entire countries will go under; revolutions will arise, along with mass migrations, and all those angry people will know that ESG is ultimately to blame. This will lead to global instability, which will thwart the UN and the WEF’s plans. 

Recently, Vanguard, the world’s second-largest asset manager, resigned from the Net Zero Asset Managers initiative, stating they were “not in the game of politics.”  Moreover, Vanguard doesn’t believe it should dictate company strategy, saying it would be arrogant to presume that the firm knows the right strategy for the thousands of companies that Vanguard invests with. 

Vanguard’s decision to withdraw, citing a need for independence, has perpetuated the anger of climate extremists since the Pennsylvania-based asset manager refused to rule out new investments in fossil fuels in May 2022. 

Now, the elites are hyper-aware of this, so they're trying to move quickly to take control of everything before the purchasing power of their fiat currencies goes entirely to zero. They will fail because people will opt out of the current system when they see it closing in on them. 

They’ll opt out by participating and supporting parallel ecosystems and adopting alternative technologies like cryptocurrency, which have been in development for years in preparation for this exact transition. As fiat currencies implode, the current system will collapse, and an alternative system will emerge. 

 

 

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

Gold prices soar as investors fearing more bank meltdowns move into safe havens

Gold prices soar as investors fearing more bank meltdowns move into safe havens

Gold has gained almost $100 in the last two days of trading. Gold futures basis most active April contract opened at $1835 on Friday and closed at $1867. Today gold opened at $1877 and as of 5:30 PM EST is currently fixed at $1917.30 after factoring in today’s gain of $50.10 or 2.66%.

Gold’s dramatic rise is largely the byproduct of a potential banking crisis with two banks showing “systemic risk” according to bank regulators. California’s Silicon Valley Bank and Signature Bank of New York required immediate action over the weekend to protect depositors’ capital. The banking meltdown resulted in the two-year Treasury yields having the largest three-day decline since black Monday in 1987.

The Federal Deposit Insurance Corporation Improvement Act of 1991 granted the Treasury Secretary after consulting the president to take steps to protect uninsured depositors in the presence of systemic risk. Originally this legislation was a component of the banking act of 1933 which created the FDIC.

Gold’s dramatic gain over the last two days was a combination of investors and large money managers flocking to gold as a haven asset, dollar weakness, and the belief that the Federal Reserve could pivot its aggressive interest rate hikes.

According to Burton Schlichter, Vice President of global clearing and execution at StoneX Financial said, “After the news on Friday about the uncertainty of customer funds at SVB Bank we noticed some traders covering short positions and some reversing their positions heading into the weekend.” StoneX currently serves more than 32,000 commercial, institutional, and payments clients, and more than 330,000 active retail accounts across 180 countries.

Market participants are under the assumption that the Federal Reserve may pivot by not implementing the anticipated ¼% rate hike at the March FOMC meeting. Some investors are under the assumption that the Federal Reserve might pivot and cut rates. This seems to be based on unrealistic optimism and conjecture rather than facts.

Tomorrow the government will release the latest inflation numbers vis-à-vis the CPI (Consumer Price Index) which combined with last week’s jobs report will be used by the Federal Reserve to make it’s final decision that will be announced on March 22 when the FOMC meeting concludes

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Thursday’s Charts for Gold Silver and Platinum and Palladium March 9

Thursday's Charts for Gold, Silver and Platinum and Palladium, March 9

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Understanding the charts:

Due to popular demand, we have added Palladium to the list of Analytical Charts that Metals Analyst Jim Wyckoff features.

Sharpening Your Trading Skills: Using Bollinger Bands

Sharpening Your Trading Skills: The MACD Indicator

Sharpening Your Trading Skills: Moving Averages

Sharpening Your Trading Skills: The Relative Strength Index (RSI)

"Wyckoff's Market Rating" System Explained

By Jim Wyckoff

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Gold rallies on financial stability risks as investors rush to safety analysts are watching inflation report Fed reaction

Gold rallies on financial stability risks as investors rush to safety, analysts are watching inflation report, Fed reaction

The gold market posted an unexpected weekly gain on potential contagion risks from the Silicon Valley Bank (SVB) meltdown.

The precious metal is once again the safe-have trade, with investors rushing in after Friday's SVB collapse. California banking regulators moved quickly to close SVB Financial Group in what is the largest bank failure since the financial crisis.

SVB was one of the leading technology financiers, and its failure showcases potential unintended consequences of the aggressive hiking cycle pursued by the Federal Reserve in its fight against inflation, according to analysts. The fear is that the startup-focused lender's troubles could ripple through the rest of the global markets.

"Gold is seeing safe-haven flows on these financial instability concerns," OANDA senior market analyst Edward Moya told Kitco News. "Startups and debt refinancing are some of the biggest financial risks that traders are analyzing."

It is a dramatic turnaround for gold. Earlier this week, the precious metal was steadily falling on the outlook that the Federal Reserve will hike rates by 50 basis points at its March meeting.

Gold is now rallying and it is reacting to several drivers — the SVB and financial stability risk, the higher unemployment rate from February, and a reversal of the 50-basis-point hike expectations.

"The NFP report had a strong headline beat, but the rest of the report supported the idea that the labor market is ready to cool. Wage pressures came in much softer than forecasts, and the unemployment rate rose from 3.4% to 3.6%," Moya said. "Gold is surging as Fed rate hike bets get scaled down and as SVB contagion risks trigger some safe-haven buying. The bond market is now starting to price in rate cuts by the end of the year, and that is triggering a major collapse with yields."

The U.S. dollar index fell, and the two-year yield posted its biggest two-day decline since 2008, which is very supportive of higher gold prices.

"Gold is becoming everyone's favorite trade again, and that could continue as liquidity risk concerns won't be quickly answered for that corner on Wall Street," Moya added.

One thing to keep in mind is how sustainable this move in gold is, Gainesville Coins precious metals expert Everett Millman told Kitco News.

"This is broadly a short-term reaction. You do see safe-haven demand come in fits and starts. There is fear over the stability of banking systems, and the dollar is sharply lower today. That is driving gold higher in the short term," Millman said.

Only next week can tell whether gold can hold at these levels, especially in light of Tuesday's inflation report. "I don't think gold bottomed yet, and [prices] might have further to fall during the first half of this year. I wouldn't be surprised to see gold stuck in a range between $1,800 and $1,900," Millman said.

Trading has been very volatile, and with the inflation report coming up, the key thing to pay attention to is how markets react to the data versus the data itself, noted Millman.

"The CPI print itself is not as important as the reaction to it. There has often been a bit of disagreement about whether certain data or comments from the Fed are dovish or hawkish. The Fed will also be watching how markets react and digest the CPI," Millman said.

Market consensus calls are projecting for inflation to slow to 6% from 6.4% in February.

Gold price levels to watch

This flight to safety pushed gold to levels where traders are getting more bullish, RJO Futures senior market strategist Frank Cholly told Kitco News. At the time of writing, April Comex gold futures were trading at $1,869.70 an ounce, up 1.91% on the day.

"I am watching $1,875-$1,880. We might have a bit of trouble getting there. It is the 50-day moving average. The 200-day moving average held for gold, and the $1,800 was good value," Cholly noted.

With the economy probably hitting a rougher patch sooner, Moya remains bullish on gold but anticipates the precious metal will first settle around its current levels.

"I am considering $1,865 right now. The macro backdrop has changed. Immediate resistance is at $1,880. And then everyone will have their eyes on the $1,900 an ounce," Moya said. "If we get a cooler inflation report next week and continued financial instability concerns are still being talked about, we could have a good old fashioned gold rally, with $50-$70 daily moves to the upside."

Next week's data

Tuesday: U.S. CPI

Wednesday: U.S. retail sales, U.S. PPI, NY Empire State manufacturing index

Thursday: ECB rate decision, U.S. jobless claims, building permits and housing starts, Philadelphia Fed manufacturing index

Friday: U.S. industrial production, Michigan consumer sentiment

By Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Short covering position evening in gold ahead of US jobs data

Short covering, position evening in gold ahead of U.S. jobs data

Gold prices are higher in midday U.S. trading Wednesday, with silver near steady. Short covering and some position squaring are featured in the precious metals futures markets just ahead of an important U.S. economic data point Friday morning. April gold was last up $13.20 at $1,831.70 and May silver was up $0.024 at $20.175.

The general marketplace was quieter Thursday, ahead of the February U.S. employment situation report from the Labor Department on Friday morning. The key non-farm payrolls component of the report is expected to show a rise of 225,000 jobs, following a mammoth rise of 517,000 in the January report. Look for higher volatility in many markets is the non-farm jobs print misses expectations.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are narrowly mixed at midday.Silver mines will likely be bought by automakers like Tesla, silver to $125 per ounce – Keith Neumeyer

The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are slightly up and trading around $76.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.964%.

Technically, April gold futures bulls and bears are back on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close above solid resistance at the March high of $1,864.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,839.40 and then at $1,850.00. First support is seen at $1,820.00 and then at the February low of $1,810.80. Wyckoff's Market Rating: 5.0

May silver futures prices hit a four-month low Wednesday. The silver bears have the firm overall near-term technical advantage. Prices are in a steep five-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.505 and then at $21.00. Next support is seen at this week’s low of $19.955 and then at $19.50. Wyckoff's Market Rating: 3.0.

May N.Y. copper closed down 15 points at 402.60 cents today. Prices closed near mid-range. The copper bulls have the slight overall near-term technical advantage but trading has been choppy and sideways recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 423.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 380.00 cents. First resistance is seen at this week’s high of 409.50 cents and then at 415.00 cents. First support is seen at 400.00 cents and then at this week’s low of 396.10 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Ethereum dropped by 7 as the crisis at the crypto-focused lender continued Bitcoin and other major cryptocurrencies also fell

Ethereum dropped by 7% as the crisis at the crypto-focused lender continued. Bitcoin and other major cryptocurrencies also fell.

bitcoin

The decline in the prices of major cryptocurrencies, including Bitcoin and Ether, may be attributed to various factors, including the crisis faced by a crypto-focused lender.

When a lender or exchange faces a crisis, it can lead to a loss of trust among investors and traders, who may then start selling off their cryptocurrency holdings, leading to a decline in prices. Additionally, regulatory concerns, market volatility, and the overall economic climate can also impact cryptocurrency prices.

Bitcoin, being the largest and most well-known cryptocurrency, tends to set the tone for the broader cryptocurrency market. As such, any negative news or developments related to Bitcoin can have a spillover effect on other cryptocurrencies, including Ether.

It is worth noting that cryptocurrencies can be highly volatile and subject to rapid fluctuations in price. As such, investors should exercise caution and conduct thorough research before investing in cryptocurrencies.

 

The recent decline in cryptocurrency prices may also be related to concerns about the regulatory environment. Regulators around the world are grappling with how to regulate cryptocurrencies, which are still largely unregulated in many countries. In some jurisdictions, regulators have taken a more proactive approach, imposing restrictions on cryptocurrency exchanges and trading activities. This uncertainty about the regulatory environment can lead to increased volatility in the cryptocurrency markets, as investors may become more hesitant to invest in cryptocurrencies.

Another factor that can impact cryptocurrency prices is market sentiment. Cryptocurrencies have been subject to hype and speculation, and as such, their prices can be heavily influenced by the prevailing market sentiment. When there is a lot of hype and positive sentiment surrounding cryptocurrencies, prices can skyrocket, while negative sentiment can lead to price declines. This is particularly true in the case of altcoins, which are often subject to hype cycles based on new developments or partnerships.

Finally, it is worth noting that cryptocurrencies are still a relatively new asset class, and there is a significant amount of uncertainty surrounding their long-term prospects. While some investors see cryptocurrencies as a promising investment opportunity, others are more cautious, citing concerns about their long-term viability, security, and regulatory risks. As such, it is important for investors to conduct thorough research and carefully consider the risks before investing in cryptocurrencies.

markethive

Tim Moseley

Powell addresses House stressing data dependency before making decisions

Powell addresses House stressing data dependency before making decisions

Today Chairman Jerome Powell finished his semiannual congressional testimony. The chairman warned that the Fed could be more aggressive because "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated."

In yesterday's testimony, he opened the door for a 50-BPS rate hike at the upcoming March FOMC meeting (March 21 – 22).

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."

According to the CME's FedWatch, the probability of a more aggressive rate hike of 50-BPS has increased since yesterday from 70.5% to 79.4% today, diminishing the probability of a 25-BPS hike from 29.5% to 20.6%.

However, Powell stressed the fact that the Federal Reserve will not make any final decision about the size of a potential interest rate hike until data from Friday's jobs report and next Tuesday's CPI report have been released.

"We have not made any decision about the March meeting. We're not going to do that until we see the additional data." Adding that, "We will be guided by the incoming data and the evolving outlook."

Today ADP released its US private payroll report revealing that an additional 242,000 private sector jobs were added last month. Currently, it is forecasted that Labor Department's jobs report on Friday will show an additional 203,000 to 225,000 jobs added to the payroll last month. Additionally, economists expect the unemployment rate to rise from 3.4% in January to 3.5% in February.

Early forecasts from next week's Bureau of Labor Statistics consumer price index for February are expected to show a modest decrease in inflation down 0.1% month over month. If correct this would take the monthly gain in February to 0.4% a decrease from January which revealed headline inflation increased by 0.5%.

The extreme volatility resulting in a sharp decline in gold and increase of value in the dollar index yesterday has abated. This is as market participants along with the Federal Reserve wait for the release of these next two critical reports from the government.

As of 5:00 PM EST, gold futures basis most active April contract is down $2.00 Or 0.11% and fixed at $1818. The dollar is up 0.08% and the dollar index is fixed at 105.68.

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter