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PCE inflation index jumps to 5382 YOY or 06 in January

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PCE inflation index jumps to 5.382% YOY or 0.6% in January

The preferred inflation index used by the Federal Reserve; the core Personal Consumption Expenditures (PCE) index jumped to its highest value since last summer. The core PCE increased by 0.6% in January when compared to the prior month, taking the year-over-year PCE to 5.382%. Today's PCE report was the result of surging consumer spending after a dramatic decline at the end of last year.

According to the BEA, "Personal income increased $131.1 billion (0.6 percent) in January, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $387.4 billion (2.0 percent) and personal consumption expenditures (PCE) increased $312.5 billion (1.8 percent). The PCE price index increased 0.6 percent in January. Excluding food and energy, the PCE price index also increased 0.6 percent (table 9). Real DPI increased 1.4 percent and Real PCE increased 1.1 percent; goods increased 2.2 percent and services increased 0.6 percent."

The net result was strong declines in US equities and precious metals and gains in both US treasury yields and the dollar. This raises expectations that the Federal Reserve will raise rates by ¼% for the next three consecutive FOMC meetings. This also raises the expectations by market participants that the terminal fed funds rate will move to a higher target than 5.1%.

Most importantly, this report confirms that components of inflation remain sticky or persistent. This after an extremely hawkish monetary policy by the Federal Reserve has raised rates at the last eight consecutive FOMC meetings. The Fed raised its benchmark rate from near zero in March 2022 to 4.5% – 4.75% last month. It has also raised the probability of ½ a percent rate hike at the next FOMC meeting in March. According to the CME's Fedwatch tool, there is a 27% probability of that outcome.

Today's PCE report creates more bearish downside pressure for gold and silver. As of yesterday, gold futures were already priced below the opening price on January 3, the first trading day of the year.

Today's April gold futures gave up $8.80 or 0.48% and is currently fixed at $1818. March silver lost 2.66% or $0.57 and is currently fixed at $20.74 per ounce. Today's PCE report will only strengthen the resolve of the Federal Reserve to "do whatever it takes", to reduce inflation to their target level of 2%. However, their current target might be unachievable at least according to El-Erian, a Bloomberg Opinion columnist who doubts whether the Federal Reserve can achieve that goal. In fact, 3% to 3 ½% might be the new 2%.

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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The Seven stages of overcoming the new hawkish Federal Reserve’s policy and forward guidance

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The Seven stages of overcoming the new hawkish Federal Reserve's policy and forward guidance

Although the Federal Reserve implemented its first interest rate hike approximately one year ago, market participants went through various stages of accepting the new Federal Reserve’s narrative as fact. Oddly there are similarities to the way market participants went through a process of steps before they were able to accept and incorporate the forward guidance of the Federal Reserve. There are similarities between the steps needed for the American public to accept the new hawkish monetary policy of the Fed and overcoming a major life event such as grief.

Both events cause strong and overwhelming emotions, and the process of acceptance occurs through a series of steps that are quite similar to the seven stages of grief. In this article, we will look at the similarities between processing and accepting both scenarios.

Recently we have seen market participants move from disbelief to accepting that the Federal Reserve would implement the plan they laid out in December 2022. After the December FOMC meeting, when they released a report titled" Economic projections 2023 – 2025", which included the most current dot plot.

I entered the following question to Open AI’s GPT. "Can you compare the seven steps of grief to changes in the monetary policy of the Federal Reserve", and got the following reply?

"As an AI language model, I do not hold personal opinions, but I can provide an analogy to help illustrate how the seven stages of grief could be compared to the process necessary to accept the Federal Reserve's new hawkish monetary policy.

The seven stages of grief are a model developed by psychiatrist Elisabeth Kubler-Ross to describe the process that people go through when they experience significant loss. The stages are denial, anger, bargaining, depression, acceptance, testing, and integration.

Similarly, the process of accepting the Federal Reserve's new hawkish monetary policy may involve several stages. At first, there may be a feeling of denial or disbelief that the policy is necessary. Then, there may be anger or frustration about the potential consequences of the policy, such as higher interest rates or reduced economic growth.

Afterward, people may try to bargain, seeking ways to mitigate the impact of the policy or find alternatives. As the policy takes effect, there may be feelings of depression or anxiety about the unknown future. Eventually, however, people may come to accept the policy as necessary and begin testing it to see how it affects them.

Finally, the policy may be integrated into people's understanding of the economy and their financial decisions. This process may take time and may involve setbacks and adjustments along the way. However, ultimately, the acceptance of the new policy may lead to a more stable and prosperous economy in the long term."

While it is obvious that to compare the steps to overcome grief and the steps that market participants have taken to accept the new hawkish narrative of the Federal Reserve is a stretch, I believe that great insight can be gleaned from the AI platform.

Today’s decline in gold prices took the April futures contract below the opening of the first trading day on January 3. It is quite plausible that this most recent decline is a direct result of market participants accepting that the Federal Reserve "will do whatever it takes", to reduce inflation to their target level of 2%. I believe the recent decline in gold clearly demonstrates that market participants have accepted the new narrative of the Federal Reserve.

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Federal Reserve minutes were released today But Wait There’s More

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Federal Reserve minutes were released today, "But Wait There's More"

I know it is a little cliché to use a phrase most recognized from late-night ads hawking everything from pots to knives, to discuss the FOMC minutes released today, but the minutes continue to send the same message to the American public. The Federal Reserve will continue and implement "more" rate hikes until "inflation is clearly on a path towards 2%."

The Fed's hawkish monetary policy seeks to raise its benchmark Fed funds rate to a target just above 5%, and keep that rate elevated until incoming data provide confidence that inflation is on a sustained downward path to 2%.

The minutes revealed that Federal Reserve members almost unanimously anticipate that it is appropriate to raise its Fed funds rate by 25 basis points at the next FOMC meeting scheduled to be held in March, although two officials favored a larger 50 basis point hike.

"Market participants interpreted incoming data as pointing to moderating inflation risks. Against this backdrop, market participants judged that the FOMC would likely slow the pace of rate increases further at the current meeting, and respondents to the Desk's Survey of Primary Dealers and Survey of Market Participants widely expected the Committee to implement a ¼ percentage point increase in the target range for the federal funds rate."

According to Bloomberg News, "US central bankers raised interest rates by a quarter-point, moderating their action after a half-point hike in December and four consecutive jumbo-sized 75 basis-point increases. The move lifted the benchmark policy rate into a range of 4.5% to 4.75%. Both Chair Jerome Powell and the minutes indicated that officials are prepared to raise rates further to produce a broader slowdown in the economy that tamps down inflation."

The release of the Fed minutes today created bullish momentum for the dollar and concurrently more sustained bearish momentum for gold. The dollar gained 0.36% today or 37 points fixing the dollar index at 104.485.

As of 5:10 PM EST, the most active April contract of gold futures is down $8.30 or 0.45% and fixed at $1834.20. Today's decline effectively sealed the fate of gold's strong price decline in February. Gold pricing is now below the opening price of January 3, the first trading day of the year.

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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The Power of Patience: Long-Term Investing Strategies for a Shaky Economy

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The Power of Patience: Long-Term Investing Strategies for a Shaky Economy


The current economic climate is characterized by instability, uncertainty, and volatility, making it challenging for investors to navigate the financial markets. The COVID-19 pandemic has profoundly impacted the global economy, leading to market disruptions, supply chain disruptions, and widespread business closures. In addition, political and economic tensions in many parts of the world have contributed to a volatile and uncertain financial environment.

As a result of these challenges, investors are understandably worried about their investments and financial stability. They are wondering how to protect their portfolios from the effects of a shaky economy and avoid the pitfalls of short-term thinking. In times like these, it's important to remember that long-term investing strategies are more powerful than ever before.

In this post, we will explore the benefits of long-term investing, its principles, and some challenges of investing in a shaky economy. We will also discuss different long-term investing strategies and how to balance long-term and short-term financial goals.

Key Principles of Long-Term Investing

Long-term investing is a strategy that involves holding investments for an extended period, typically over five or more years. However, simply holding investments for a long time is not enough to achieve long-term goals. Instead, investors must follow key principles to help them achieve their financial objectives.

One of the key principles of long-term investing is diversification. Diversification involves spreading investments across asset classes, industries, and geographies to reduce risk. By investing in a variety of assets, investors can avoid putting all their eggs in one basket and can help mitigate the impact of market volatility. For example, if an investor puts all their money into one stock, they risk losing all their money if that stock performs poorly. However, spreading their money across several stocks and other asset classes reduces their risk and potential losses.

Another important principle of long-term investing is asset allocation. Asset allocation involves determining the right mix of asset classes to achieve an investor's long-term goals. This involves considering the investor's risk tolerance, time horizon, and financial goals. For example, an investor with a long time horizon and high-risk tolerance may choose to allocate more of their portfolio to equities, while an investor with a shorter time horizon and lower risk tolerance may choose to allocate more of their portfolio to fixed-income investments.

Finally, risk management is another important principle of long-term investing. Risk management involves identifying potential risks and taking steps to mitigate those risks. This may involve diversifying investments, investing in lower-risk assets, and implementing strategies to protect against market downturns. By managing risk effectively, investors can reduce their exposure to potential losses and help achieve their long-term financial goals.

Benefits of Long-Term Investing

Long-term investing is a strategy that involves holding investments for an extended period, typically over five or more years. One of the key benefits of long-term investing is the power of compounding interest, which is the ability of an investment to generate earnings on its earnings over time. Compounding can be especially powerful over long periods, as small gains can grow into substantial wealth.

Another benefit of long-term investing is the "time in the market" approach. This approach involves buying and holding investments for the long term rather than trying to time the market by buying and selling based on short-term market fluctuations. This can help investors avoid making rash decisions based on emotions or market noise, leading to costly mistakes.

In addition to the power of compounding and the time in the market approach, there are several other benefits to long-term investments that are worth considering:

1. Reduced transaction costs: Long-term investing can help reduce the impact of transaction costs, such as brokerage fees and commissions. By holding investments for an extended period, investors can avoid the need to buy and sell frequently, which can lead to unnecessary costs.

2. Diversification: Long-term investing allows investors to build a diversified portfolio of assets across various asset classes, sectors, and geographies. A diversified portfolio can help reduce risk and volatility by spreading investments across different types of assets that are not highly correlated with each other.

3. Greater potential for higher returns: Long-term investments have historically produced higher returns than short-term investments. While there is always a level of risk involved in investing, the potential for higher returns over the long term can help offset that risk.

4. Peace of mind: Long-term investing can help investors avoid the stress and anxiety of predicting short-term market movements. By focusing on a long-term strategy and staying invested even during market downturns, investors can enjoy greater peace of mind knowing that they are investing long-term and not just trying to chase short-term gains.

Long-term investing has numerous benefits and can help investors weather the storm during a shaky economy. While short-term market fluctuations may be concerning, it's important to stay focused on the long term and remember that patience and discipline can ultimately pay off.

Weathering Market Volatility

Market volatility is one of the biggest challenges of investing in a shaky economy. Market volatility refers to the degree of variation of a stock's price or a market's value. When markets are volatile, prices can swing wildly, and investors can be tempted to make rash decisions.

However, it's important to remember that market volatility is normal in investing. In fact, volatility allows investors to earn higher returns over the long term. By maintaining a long-term perspective and resisting the temptation to make knee-jerk reactions to market fluctuations, investors can help avoid costly mistakes.

There are also several strategies that investors can use to minimize risk and manage emotions during times of market volatility. These include dollar-cost averaging and value investing.

Strategies for Long-Term Investing

Investors can use several different long-term investment strategies to achieve their goals. Some popular strategies include buy and hold, dollar-cost averaging, and value investing.

Buy and hold involves investing and holding investments for the long term, regardless of short-term market fluctuations. This strategy is based on the belief that over the long term, markets tend to rise and that by holding investments for a long time, investors can benefit from the power of compounding.

Dollar-cost averaging involves investing a fixed amount of money regularly, regardless of market conditions. This strategy can help investors avoid the temptation to time the market and help smooth out market volatility's impact.

Value investing involves seeking out undervalued investments and holding them long-term. This strategy is based on the belief that the market sometimes misprices investments and that investors can benefit from their eventual correction by identifying undervalued assets.

Balancing Short-Term and Long-Term Goals

While long-term investing is essential, balancing long-term and short-term financial goals is vital. Short-term goals can include saving for a down payment on a home, paying off debt, or funding a child's education. Long-term goals include retirement savings, investing in a business, or leaving a financial legacy for future generations.

Establishing an emergency fund is one way to balance short-term and long-term goals. An emergency fund is a reserve of cash or liquid assets that can be used to cover unexpected expenses, such as a job loss, medical bills, or a major home repair. By having an emergency fund, investors can avoid selling investments during market volatility or economic uncertainty.

Another way to balance short-term and long-term goals is to establish a savings plan. A savings plan can include the following:

  • Automatic contributions to an investment portfolio.
  • A regular contribution to a 401(k) or IRA.
  • A dedicated savings account for short-term goals.

By establishing a savings plan, investors can progress toward both short-term and long-term financial goals. 

 

Why Markethive Remains Your Best Bet for Long-Term Investment

In today's economic climate, investing in the right opportunities is crucial to achieving long-term financial success. With the current economic uncertainties and market volatility, finding stable and profitable investment opportunities can be challenging. However, one opportunity that has been in development since 1996 is the Markethive project, now gaining attention among entrepreneurs as the best long-term investment in this shaky economy.

Markethive is a blockchain-powered social market network that combines social media, digital marketing tools, and cryptocurrency to create a unique platform for entrepreneurs and small businesses. The platform offers a range of features, including blogging, email marketing, and social media sharing, to help businesses increase their online visibility, reach new customers, and grow their bottom line.

One of the critical reasons why Markethive is the best long-term investment is that it is built on blockchain technology. Blockchain technology provides a secure decentralized network resistant to hacking, fraud, and manipulation. This means that the Markethive platform is protected against cyber-attacks and data breaches, which is a major concern for businesses in today's digital landscape.

Another reason Markethive is a great long-term investment is its use of cryptocurrency. The platform has its cryptocurrency, Hivecoin, to power transactions on the network. Hivecoin has started gaining a significant following among cryptocurrency enthusiasts, and its value is expected to increase after it has been listed on the exchanges and as the platform grows.

Moreover, Markethive has a clear and transparent roadmap for growth and development. The company has a dedicated team of developers, marketers, and entrepreneurs who are focused on expanding the platform's features and user base. The company has also established partnerships with leading companies in the blockchain and digital marketing industries, further boosting its credibility and potential for growth.

Furthermore, Markethive is designed to benefit its users and community, not just its investors. The platform is built on decentralized and community-driven technology principles, and it rewards its users for their contributions through a unique rewards program. This program enables users to earn Hivecoins for various activities on the platform, such as blogging, sharing content, and referring new users. This means that users can benefit from the success of the platform in the long term, not just its investors.

Markethive Entrepreneur One Program (E1)

The E1 program offers subscribers various benefits to help them achieve their business goals faster and more efficiently. From advanced marketing automation tools to blockchain-based security and privacy features, the E1 program has everything you need to take your online business to the next level.

The E1 program offers entrepreneurs and small business owners access to powerful marketing tools, training, and support, as well as the opportunity to participate in the Incentivized Loan Program. Becoming an E1 member will be an excellent long-term investment in your business and future. 

Here are some of the benefits of the E1 program:

1. Advanced Marketing Automation Tools: Markethive's E1 program offers advanced marketing automation tools that can help you streamline your marketing efforts and save time, including email autoresponders, lead capture pages, and more.

2. Incentivized Loan Program (ILP): One of its key benefits is the Incentivized Loan Program (ILP), which allows members to earn equity in Markethive through their ongoing participation and contributions to the community. This provides a long-term incentive to stay engaged with the platform and build a successful business over time. It is achieved through the monthly $100 E1 subscription fees. All ILP holders will receive some percentage of the company's net revenue for 20 years with an option to roll it over or end it on the 20th year.

3. Advertising Impressions: Every month, E1 subscribers receive a certain number of advertising impressions that they can use to promote their business, products, or services on the Markethive platform. These impressions can be used to display banner ads, text ads, or sponsored content and can be targeted to specific audiences based on demographics, interests, and other criteria. The number of advertising impressions allocated to E1 subscribers varies. Because Markethive has a growing and active user base, these impressions can help drive significant traffic and exposure to your business.

4. Unlimited Advertising Co-op: The Markethive E1 program also offers access to an unlimited advertising co-op, which can help you get your business in front of more potential customers and drive more sales. The advertising co-op is a valuable feature of the Markethive E1 program that provides subscribers with an affordable and effective way to promote their businesses and products. E1 subscribers can access high-quality advertising that would otherwise be out of reach and build a community of entrepreneurs who can help each other achieve their goals.

Considering all of these benefits together, it's clear that the E1 program is an investment in your business that is well worth making. And, because Markethive is constantly evolving and improving, now is the perfect time to get on board and start taking advantage of all that the platform has to offer.

But that's not all. It's also worth noting that the E1 program is a long-term investment that can benefit you, your children, and future generations. By subscribing to the E1 program, you're laying the foundation for a successful online business that can provide you with passive income for years to come.

And for those with an E1 program subscription, it's worth considering getting more before the opportunity is gone forever. As the platform continues to grow and evolve, the value of the E1 program will only increase as the sales will close when the Wallet is released. Then you can only get it from the exchange from those willing and ready to sell. It makes sense to lock in your subscription now while you still can.

Conclusion

Long-term investing is a powerful strategy for building wealth, even in a shaky economy. By following fundamental principles of diversification, asset allocation, and risk management, investors can help protect their portfolios and achieve their long-term goals. By weathering market volatility, using different long-term investing strategies, and balancing short-term and long-term financial goals, investors can build a solid financial foundation for the future. With patience and discipline, anyone can become a successful long-term investor.

The Markethive project is the best long-term investment in this shaky economy. With its secure and decentralized blockchain technology, use of cryptocurrency, a clear roadmap for growth and development, and community-driven rewards program, Markethive offers a unique and profitable investment opportunity for subscribers and general users alike. By becoming an E1 Member, you can position yourself for long-term financial success while supporting a platform designed to help small businesses and entrepreneurs thrive in today's digital economy. So why wait? Subscribe today and start taking your online marketing efforts to the next level while building generational wealth!

 

ecosystem for entrepreneurs

 

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

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Changing expectations of the Fed’s forward guidance pressure gold lower

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Changing expectations of the Fed's forward guidance pressure gold lower

The Federal Reserve first spoke about its forward guidance at last year’s Jackson Hole Economic Symposium. Specifically, it was Chairman Powell’s keynote speech that delivered the blow to the American public about its intent to raise rates and keep those elevated rates in place until the Fed hits its 2% inflation target.

After the December FOMC meeting the Federal Reserve released its economic projections for 2023 – 2025 including the most recent dot plot. The dot plot is the Fed’s mechanism for predicting future rates by calling on 17 Fed officials to vote on future monetary policy. In the case of the December dot plot, it revealed an overwhelming consensus that the Fed would raise rates to a target of just over 5%, and keep rates elevated for the entire calendar year of 2023.

Although the Federal Reserve has maintained its policy, it was market participants' expectations that have recently shifted from disbelief to an acceptance that the Fed will not likely back off its extremely hawkish monetary policy. This includes continued rate hikes and maintaining those elevated rates throughout the year.

During February market sentiment regarding the forward guidance of the Federal Reserve shifted from uncertainty to acceptance. That resulted in gold trading under pressure for the last three consecutive weeks. On the first full trading day of the week (due to shortened trading hours yesterday on Presidents’ Day) gold is once again trading under pressure. As of 3:25 PM EST, the most active April futures contract is down $5.30 or 0.29% and fixed at $1844.80.

While it is true that inflation has been declining since the Federal Reserve began raising rates in March of last year, recent data suggests that inflation is not diminishing as quickly as the Federal Reserve had hoped. The jobs report for January coming in well over the forecast of 188,000 versus 517,000 combined with the most recent inflation reports suggests that inflation remains elevated and persistent in certain sectors.

The most recent data has cemented the idea that the Federal Reserve will maintain its hawkish monetary policy with a real possibility of two more rate hikes and most importantly maintain the new elevated rates throughout 2023.

By Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Gold prices can go lower but now is the time to build a strategic position – Incrementum’ Ronald-Peter Stferle

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Gold prices can go lower, but now is the time to build a strategic position – Incrementum' Ronald-Peter Stöferle

Now is the time for investors to look at building a strategic position in the gold market, according to one market strategist, as prices are expected to struggle in the near term due to rising bond yields on the short end of the curve.

In an interview with Kitco News, Ronald-Peter Stöferle, managing partner and fund manager at Incrementum AG and one of the authors of the annual In Gold We Trust report, said that he is expecting to see lower gold prices in the near term as markets begin to price in further aggressive monetary policy action from the Federal Reserve.

Persistently higher inflation has prompted markets to price in a 21% chance that the Federal Reserve will raise interest rates by 50 basis points next month. These shifting expectations have pushed the yield on U.S. two-year notes above 4.6%, its highest level since 2007.

At the same time, the yield on one-year notes is above 5%. Stöferle noted that when looking at inflation expectations, real bond yields are currently seeing positive returns.

"This is a tough environment for gold and I expect to see further downside risks in the next couple of weeks," he said.

The comments come after April gold futures ended last week in neutral territory at around $1,850 an ounce. Markets are closed Monday for the Presidents' Day long weekend.

However, Stöferle added that the gold market continues to show relative strength despite the selling pressure. He explained that he sees the price action and resilient strength in gold as the market calling out central bankers' hawkish rhetoric.

The rise in shorter-term bond yields has pushed the inverted yield curve to its widest level in 40 years. Stöferle said that this market trend indicates that it's only a matter of time before the U.S. falls into a recession and the Federal Reserve is forced to unwind its aggressive tightening.

Stöferle said that he expects that as soon as unemployment starts to rise, the Fed will quickly loosen interest rates.

"In the 2022 In Gold We Trust, we said that central bankers are doves in hawkish clothing and nothing we have seen has changed this view," he said. "As soon as credit markets tighten, there's no way the Fed or any central banker will stay hawkish."

While there is growing optimism in the marketplace that the U.S. can avoid a recession, Stöferle said that many investors have underestimated the time lag in monetary policy. He added that the Federal Reserve has already made its policy mistake and it's only a matter of time before something breaks.

 Commerzbank lowers mid-year gold price forecast to $1,800 due to shifting interest rate expectations

Not only has the Federal Reserve raised interest rates by 450 basis points this tightening cycle, but it has also reduced its balance sheet by $500 billion. Stöferle said that it's only a matter of time before the economy feels the effects of reduced liquidity in the marketplace.

"It's like being in a room that is losing oxygen. At first, you might not notice anything, but then it gets harder to breathe. Soon, you are rushing to the exits, hoping to get out before it's too late," he said. "Not only is the risk of a recession rising, but I think we could see a major fiscal crisis."

In this environment, Stöferle said that now is the time to take advantage of lower gold prices and build a strategic position ahead of the second half of the year. He added that one strategy investors should look at is building a position through cost averaging, where you look to buy at successively lower prices.

Despite lower prices in the near term, Stöferle said that gold prices are still on track to end the year above $2,000 an ounce.

By Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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GoldSilver – Now is the time to dollar cost average

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Gold/Silver – Now is the time to dollar cost average

It was just seventeen days ago (February 1) when Gold went on a two-day rally looking as though it was going to punch back through $2000/oz (Silver $25/oz), and if you were not already on board, you thought you missed it for good. Since then, Gold and other Precious Metals seem to have hit the "pain train" as economic data continues to support an aggressive Fed policy stance leading to a stronger U.S. Dollar and rising Treasury Yields. While the Fed may want to keep its hawkish narrative alive, the reality is that the wheels are already starting to fall off the economy, and no matter what cards they hold up their sleeves, they will ultimately have to pivot dovish to save face.

Even though the Fed aims to stay "apolitical" and is laser-focused on getting back down to a 2% inflation target, the probability of reaching that goal in this new global environment is nil. The heightened geopolitical tensions and unpredictable weather patterns leave basic commodity prices at elevated levels that are here to stay. Those rising input costs will ultimately lift the prices of all goods and services, and those costs will drive the consumer to take on more debt. The rising borrowing costs will spear the economy into a recession where political leaders will pressure the Fed into reversing policy action. That is why I believe getting on board assets like Gold and Silver on this decline makes sense to "dollar cost average" to try and take advantage of the recent declines.

Daily Silver Chart

Since their October 2022 lows, Gold and Silver saw substantial gains, which peaked in January. The short-term traders and investors involved in those markets then began liquidating those holdings and going back to chasing "profitless tech and cryptocurrencies." Now that those asset classes have once again peaked, a rotation back into hard assets will become underway in anticipation of a "Fed pivot." I anticipate this occurrence happening in the second quarter. To further help you develop a trading plan, I went back through 20 years of my trading strategies to create a Free New "5-Step Technical Analysis Guide to Gold that can easily apply to Silver." The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Silver.

Daily Gold Cha

Strategy

By systematically purchasing regular intervals of the 10-ounce Gold contract or 1000-ounce Silver contract, you can layer in over time and preposition for the next rally. One example with a $25,000 account size would be to focus on the December 2023 10-ounce Gold contract and use a dollar-cost average approach by purchasing 10 ounces of Gold at 1850/oz, 10 oz at 1800, and 10 oz at 1750 with a year-end target of $2100/oz. If filled on all three contracts, your average price will be $1800/oz; therefore, every dollar move Gold makes on the three contracts will be $30 since you control 30 ounces. If the $2100/oz price objective is achieved by year-end, this will result in a gain of approximately $9,000 (30 oz times $300 rise). Traders should also consider proper risk management while using a dollar-cost averaging approach, such as a hard stop on three contracts at $1700. If that were to occur under this scenario, it would likely result in a loss of $3,000. If you have never traded futures or commodities or would like to learn more about taking delivery of Silver, I just completed a new educational guide that answers all your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book.

By Phillip Streible

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Central banks are replacing dollars with gold

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Central banks are replacing dollars with gold
 

The economy started the year on a strong note, and the gold market is taking a hit. The Federal Reserve might need to raise rates more than expected since inflation is not coming down fast enough.

Here's a look at Kitco's top 3 stories of the week:

3. Macro data: Gold price drops below $1,850 as U.S. retail sales surprise on the upside in January

2. Frank Giustra warns that the dollar will be dethroned in 'bifurcated' global monetary system

1. Billionaire John Paulson: central banks are replacing dollars with gold, you are better off investing in precious metal than USD

By Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Cryptocurrency: A Beginner’s Guide

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Cryptocurrency: A Beginner's Guide

crypto

Introduction

Cryptocurrencies are a form of digital currency, which means they're stored on the internet and can be used to purchase or sell goods and services. Like normal currencies, cryptocurrencies can be exchanged for other forms of money, products and services. There are many different types of cryptocurrency available today with Bitcoin being the most popular one.

What is cryptocurrency?

Cryptocurrency is a digital currency that can be used to buy and sell goods and services. It is not backed by any government or central bank, but instead uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds.

Cryptocurrency transactions are recorded on a public ledger called a blockchain, which can be accessed by anyone at any time. Because cryptocurrencies are decentralized, meaning they're not controlled by one central bank (like dollars), no single entity has direct control over how much money there is in circulation or its price–but this also means there's less oversight about who's buying what with your coins!

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How do you get involved in cryptocurrency?

You can get involved in cryptocurrency by:

  • Getting a cryptocurrency wallet. This is basically like an online bank account, where you can store and transfer your digital currency. There are many different types of wallets available for different purposes; some are more secure than others. You'll also need to decide whether you want to use an exchange or download a wallet on your computer or phone (or both). If you have no idea what any of this means and just want to get started using Bitcoin as quickly as possible, we recommend Coinbase because it has both mobile apps and web interfaces that make buying/selling easy even if all the technical details confuse you–but there are plenty of other options out there too!

  • Buying cryptocurrency from an exchange such as Binance or Kraken (which we discuss below). This involves transferring money into the site's payment system so that they can process your order (a process known as "funding"). Some exchanges allow credit card payments while others require bank transfers; some only deal with Bitcoin while others handle multiple currencies including Ethereum or Litecoin; some require ID verification before allowing users access while others don't require any personal information at all! Go figure…

If none of these options sound appealing then maybe try mining instead? Mining refers specifically  to using computer hardware like GPUs (graphics processing units) which solve complex mathematical problems–called hashes–in order to release new blocks onto blockchain networks where people transact with each other without needing intermediaries such as banks involved at every step along their journey through life's journey together."

What is blockchain technology?

Blockchain technology is a decentralized digital ledger that records transactions. It's the technology behind cryptocurrencies like bitcoin, which made headlines in 2017 when it hit $20,000 per coin and then lost more than half its value in 2018.

It's not just a buzzword: blockchain has been around since 2008 and has been used by companies like IBM and Microsoft as well as governments such as Dubai to track everything from loans to real estate contracts. The most important thing about blockchain is that it provides an immutable record of all transactions ever made on the network where it resides–that means no one can change or remove these records without everyone else knowing about it!

Cryptocurrency exchanges and wallet

Cryptocurrency wallets are digital storage spaces for your cryptocurrency. They can be an app, or a website; they can also be physical devices that you can carry around with you.

The main function of a cryptocurrency wallet is to store and hold your private keys, which are used to sign transactions.

The cryptocurrency market is growing fast and it's very important to learn all you can.

The cryptocurrency market is growing fast, and it's important to learn all you can about cryptocurrencies. Cryptocurrencies are a new technology that is not regulated by the government. They have a lot of potential.

How do you buy and sell cryptocurrency?

  • You can buy and sell cryptocurrency on an exchange, such as Coinbase or Binance.

  • You can buy and sell cryptocurrency on a peer-to-peer exchange like LocalBitcoins, which acts as an intermediary between buyers and sellers.

  • You can buy and sell cryptocurrency with your wallet provider (e.g., if you have a Bitcoin wallet). These services may charge fees for their services or make money off of interest earned from holding funds in their accounts.

  • Cryptocurrency exchanges have become popular options for acquiring digital assets because they allow users to purchase coins with fiat currencies like USD or EUR, rather than having to go through all the steps involved with purchasing them directly from miners or ICOs (initial coin offerings). They also provide users with more security than peer-to-peer trading platforms do; however, these centralized exchanges still carry risks due to their centralized nature: if one is hacked then all customer funds could potentially be stolen at once!

What do you need to start trading in cryptocurrency?

To start trading in cryptocurrency, you need:

  • A computer or smartphone

  • An internet connection

  • A cryptocurrency wallet (to store your coins)

  • An account with a cryptocurrency exchange (to buy/sell coins)

Why are cryptocurrencies so popular?

Cryptocurrency is a digital currency that is designed to work as a medium of exchange. It uses cryptography to secure transactions, verify them and prevent double spending. Cryptocurrency can be used to buy goods and services, or traded for other currencies (both fiat and cryptocurrency).

Cryptocurrency is not controlled by any central authority or bank: instead it depends on an internet-based peer-to-peer network. Transactions are verified by network nodes through the use of blockchain technology, which records them publicly in a data structure known as a ledger. Each node (a computer connected to the network) gets a copy of this ledger, which means that there's no centralized version of this ledger anywhere – it exists entirely on computers all over the world at once!

ecosystem for entrepreneurs

What is blockchain technology and how does it work?

Blockchain technology is a decentralized ledger that records transactions across a network of computers. Each computer has a copy of the blockchain, which means no one person or company owns it. Instead, many different people around the world keep track of all transactions made on blockchain networks and verify them through complex mathematical algorithms.

Each block in a blockchain contains data about who made the transaction (for example: "Alice sent 5 bitcoins to Bob"), as well as other information that's necessary for verifying whether or not Alice had enough bitcoins available at that time to send them to Bob. When someone wants to make sure their own transaction went through properly and wasn't tampered with by others along its journey from sender to recipient, they'll have their computer check with other computers running similar verification software until they get an answer confirming everything looks good – essentially forming consensus among peers who agree upon what constitutes true ownership over digital assets like currencies or contracts between two parties

Knowing the basics of crypto may help you understand why it's become so popular.

Cryptocurrency is more popular than ever. In fact, the cryptocurrency market has grown by over 1000% since 2017 and continues to rise. The popularity of cryptocurrencies is largely due to their ability to be used as an alternative currency, which means you can buy goods and services with them without having to convert your money into another form of payment (like cash). This makes it easier for people from all over the world who don't have access to traditional financial institutions or banks because they live in countries where these types of institutions don't exist (or are too expensive).

You might be wondering why all this matters? Well if you're interested in investing in cryptocurrency then understanding its history will help give context as well as give insight into what makes it so unique compared other forms investment vehicles like stocks or bonds; this way when something happens with regard…

Conclusion

In conclusion, cryptocurrency is an exciting new world that can be difficult to navigate. In this guide, we've tried to simplify things and give you a basic understanding of what it means to trade in crypto. We hope that by learning about the different types of exchanges, wallets and how they work together with blockchain technology you will be able to make better informed decisions when buying or selling cryptocurrency!

Tim Moseley

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Gold market cautious as investors spooked by risk of Fed hiking 50 bps in March

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Gold market cautious as investors spooked by risk of Fed hiking 50 bps in March

Gold is down for the fourth week in a row as markets are worried about how aggressive the Federal Reserve will have to be to bring inflation down to 2%.

Markets were hit with stronger-than-expected economic data and stubborn inflation numbers this week.

In response, gold struggled, with April Comex gold futures down 1.3% on the week and last at $1,851 an ounce.

"Inflation will be more sticky than many anticipated. And we got confirmation that economic data is firm," TD Securities global head of commodity strategy Bart Melek told Kitco News. "The next Fed move could be 50 basis points. And the central bank might not be able to stop there. And that means higher rates for longer."

The problem for gold is that the U.S. dollar has been climbing. "The hypothesis that the U.S. dollar will weaken in a big hurry is being questioned," Melek said.

For those playing the long game, OANDA senior market analyst Edward Moya told Kitco News that there are two drivers to keep an eye on.

The first is the new expectations for additional Fed tightening. "The Fed is clearly going to remain aggressive in tightening. The 50 bps startled a lot of traders," Moya said. "Even though half a point rate increase might not play out, the Fed will be hiking in March, May, and probably in June."

The CME FedWatch Tool currently sees an 18% chance of a 50 bps hike in March.

The second thing to watch is recession risks, which will start climbing as the Fed continues to raise rates. "It seems we are recession bound. This is an economy that will need a recession to bring down inflation. And markets will start to believe that," Moya noted.

And all the recession talk is good for gold, he added.

 

Gold price levels to watch

Analysts remain largely neutral on gold in the short-term as they see the $1,800 an ounce level as likely holding. "I don't think $1,800 will break. That is a huge support level," Moya said.

Next week, analysts will look at FOMC minutes from the February meeting, PMI data, the Fed's preferred inflation measure – core PCE, and more Fed speakers.

Longer-term, Melek is optimistic that the precious metal could still hit $2,000 an ounce towards the end of the year or in early 2024.

"The market will react to the actual pivot happening. The question is whether it will be later in 2023 or early 2024," Melek said. "As the economy slows, the Fed will decide that slower economic activity will do more harm than bringing inflation down to 2%."

 

Data next week

Tuesday: U.S. existing home sales, manufacturing PMI

Wednesday: FOMC February meeting minutes, FOMC member Williams speaks

Thursday: U.S. GDP Q4, U.S. jobless claims

Friday: U.S. PCE price index, U.S. new home sales

By Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter