Reason to Invest in Bitcoin on 2022

Reason to Invest in Bitcoin on 2022

bitcoin

The traditional finance industry must embrace cryptocurrencies to continue to function. Your decision to invest in Bitcoin depends on your risk tolerance and perspective on humanity. Russia has stated that it will look into cryptocurrencies as a way to reduce its dependency on the US Dollar. Bitcoin has the potential to completely disrupt the US Dollar and other fiat currencies. Whether not you invest in Bitcoin in 2022 is up to you. Just keep in mind that the cryptocurrency market is highly volatile and speculative.

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Bitcoin is a safe have

The ongoing coronavirus crisis has rattled the global financial system and caused great turmoil. As people face unprecedented health and economic risks, they are looking for safe-haven assets to invest in. Many people are diversifying their portfolios with Bitcoin and other cryptocurrencies to minimize risk. However, others say Bitcoin is not a safe haven asset. What are the pros and cons of investing in Bitcoin? Let's take a closer look.

It is a store of value

As the world becomes increasingly dependent on oil, whether Bitcoin is a store of value is gaining importance. Oil prices have increased and people have traded their fiat currency for it. People in Russia and Ukraine have been trading domestic fiat for cryptocurrency to hedge against rapid inflation. But is the world ready for Bitcoin? Will it survive the current economic crisis? Or will it be left behind in the long run?

It is volatile

If you are wondering why Bitcoin is so volatile, you are not alone. The price of cryptocurrencies can fluctuate dramatically, reaching a high of $70,000 only a few years after its inception. This phenomenon is often attributed to intense sell-offs that cause the price of cryptocurrencies to plummet. The destabilizing effect of such events on derivatives markets has an adverse effect on other markets as well. Bitcoin has experienced high volatility on Thursdays, and these fluctuations can be seen in the market as a whole.

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It is a risky investment

While many investors will say that bitcoin is a risky investment in 2022, this is not entirely true. In fact, it's actually a great time to buy cryptocurrency, and a huge boom could occur if the price continues to rise. Currently, there are six major cryptos with high ceilings, with the others having less institutional backing. In addition, there's also the possibility that some countries will ban bitcoin to protect their fiat currency.

It is a high multiple-tech stock

It is hard to make a convincing case for the bullish case for Bitcoin in 2022, but we are not yet out of the woods. Bitcoin is an incredibly cheap stock relative to other high-growth stocks. This bullish case is dependent on innovative tech. The selloff has already priced in the worst-case scenarios. The group itself remains at a decent value relative to other stocks. Moreover, rising interest rates and uncertain economic recovery are headwinds. Lastly, we have the threat of the disruptive Omicron Covid disruption. All of these uncertainties could create a macro growth scare, and that may not be favorable for Bitcoin.

Tim Moseley

Extreme dollar strength limits the price gains in gold today

Extreme dollar strength limits the price gains in gold today

A substantial move in the dollar nullified market participants from bidding the precious yellow metal substantially higher in trading today. As of 6:30 PM EDT gold futures basis, the most active August 2022 contract is fixed at $1849.70. The gains in gold today were largely muted by extreme dollar strength. The dollar gained 0.80%, or 81 points taking the dollar index to 102.58.

The significance of dollar strength can be best illustrated by viewing spot gold pricing through the eyes of the Kitco gold index, which separates the effect of dollar strength or weakness and market participants actively buying or selling gold. In the case of today, spot gold is currently fixed at $1846.70. This screen-print below is of the Kitco Gold Index taken at approximately 5 PM EDT. It has the current spot price of gold fixed at $1846.50, normal trading took gold pricing higher by $22.90 and dollar strength took away $13.80 of those gains resulting in today’s $9.10 price increase.

Both dollar strength and gains in gold pricing today were the byproducts of the market sentiment shifting its focus from inflation rather than raising rates today. It was this market sentiment that resulted in bidding the U.S. dollar higher and also being supportive of gold pricing. Typically, gold and the dollar move in an inverse direction rather than in tandem, as witnessed today.

According to Reuters, “Gold prices rose from a two-week low on Wednesday as investors looked toward the safe-haven metal amid worries over an increase in inflation primarily due to rising fuel prices, although a stronger dollar and higher U.S. yields kept gains in check.”

In a Reuters article penned by Seher Dareen, the author cited oil prices strengthening today after European Union leaders agreed to a partial and phased ban on Russian oil as a major force that will keep inflation at current levels. This article quoted Edward Moya, senior analyst with OANDA as saying, “Investors now are desperate for more safe havens than just treasuries and that is why you are seeing gold outperforming.” Adding that “Inflation cannot really drop if these energy costs are that elevated. So I think the risk of much more aggressive tightening globally could really fuel the gold trade,”

This is precisely why the Federal Reserve’s plan to raise interest rates considerably over the next few FOMC meetings will not impact inflationary pressures brought about by the consistently high cost of energy. Without energy costs subsiding the Federal Reserve will have a difficult task at best at having a real impact on lowering inflationary pressures.

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

 

Tim Moseley

Gold declines almost 1 flirting with the 200-day Tuesday May 31 2022 18:06

Gold declines almost 1%, flirting with the 200-day Tuesday May 31, 2022 18:06

Today's price decline results in the second consecutive month of lower prices. On a technical basis, the fact that gold tested and briefly dipped below its 200-day moving average brings up a realistic probability that the long-term market sentiment for gold is neutral to bearish.

As of 4:30 PM, ET. August gold is trading near its low today of $1837.60, and the 200-day moving average is currently fixed at $1846.90. Gold prices hit a low two weeks ago of $1792.80 before recovering and trading back above the 200-day moving average last week. Today gold opened at $1856.50 and traded to a high of $1867.90 before moving lower and breaking below the widely accepted long-term market sentiment study (200-day moving average) on an intra-day basis.

President Biden meets with Chairman Powell and U.S. Secretary of the Treasury Yellen

Today President Biden met with Jerome Powell and Janet Yellen. This is their first meeting since Chairman Powell was confirmed for a second term by the Senate earlier this month. Before the meeting, President Biden made a brief remark stating that this meeting was to "discuss my top priority, and that is addressing inflation."

The obvious agenda was to discuss the extremely high level of inflation. With inflation still at levels not seen for over 40 years.

"My meeting with the Chairman today and Secretary Yellen is to discuss my top priority, and that is addressing inflation in order to transition from historic recovery to a steady growth that works for American families. And my plan is address inflation starts with simple proposition; Respect the Fed, Respect the Fed's independence, which I have done and will continue to do."

White House National Economic Council Director Brian Deese called it, "very constructive ,,, We have run this first leg of the race at a very rapid clip that has put us in the strong position relative to our peers, but this is a marathon and we have to move and shift to stable resilient growth. We can actually take on inflation without having to sacrifice…all of those (labor market) gains."

It has been actions by the Federal Reserve's monetary policy that has resulted in higher yields in U.S. Treasuries and dollar strength. Those factors have pressured gold lower over the last two months. While higher levels of inflation typically result in bullish market sentiment for gold, higher interest rates and dollar strength have the opposite effect. Therefore, market participants have witnessed the pendulum shifting from bullish market sentiment in gold as inflation rose, and bearish market sentiment as interest rates and the dollar moved higher.

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

 

 

Tim Moseley

Police State in Slo-Mo

 

Police State in Slo-Mo

by Jeff Thomas, International Man Communique

 

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For many years, I’ve forecasted that the US will evolve into a police state; that it will begin slowly; then as more and more freedoms are removed, the creation of the police state will accelerate.

We’re now seeing that acceleration, as more and more Americans are detained, questioned, and having their property confiscated than ever before.

As an example, in 2016, some 20,000 travelers in and out of the US were stopped, often at random. Typically, their baggage was searched, their documents photocopied, access codes to their electronic devices demanded and their files copied. In most cases, no explanation was given, but they were advised that if the search was refused, they would be detained indefinitely.

The following year, in 2017, the number of people detained rose by 50%, to 30,000.

It’s important to note that the travelers were not threatened with arrest, which suggests that the authorities were working on the basis that the Patriot Act of 2001 allows all of the above activities—without cause being given, without a warrant being obtained, without access to a phone call or legal representation being allowed, and that the individuals in question may be detained, indefinitely.

This, of course, is in direct violation of the Fourth Amendment to the Constitution, which states that people have the right "to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures."

However, they are particularly vulnerable when they travel, so the travelers in question are extremely unlikely to refuse. They understand that "indefinitely" means, "until a Supreme Court ruling is passed, overturning the Patriot Act as unconstitutional." If it hasn’t happened yet and isn’t under consideration, it’s safe to say that the level of police state allowed under the Patriot Act is permanent.

Police States have been implemented countless times throughout history. They tend to be most prominent where collectivism has already been instituted.

Wherever collectivism is already firmly established, new crackdowns are generally introduced suddenly. In Germany, in 1938, under existing Nazi rule, Kristallnacht took people by complete surprise. Later, in 1961, under existing Soviet rule, the Berlin Wall went up with no previous announcement. In both cases, the collectivist tyranny was already in place and the people had already successfully been subjugated. These events were merely further losses of freedom.

But what of a country that still enjoys a few of its former freedoms and is in the process of being transformed into a full-blown collectivist state? Well, in such cases, the loss of freedoms is often done in slo-mo.

Another way of describing this is the old adage of boiling a frog. Since a frog will jump out of a pot of hot water, place him in a pot of lukewarm water and slowly turn up the heat. Before he knows it, he’s being boiled to death.
 

 

 

At present, a majority of Americans appear to now understand that they’ve experienced a significant loss of their "guaranteed" freedoms. They’re now worried and, at each new stage of oppression they tend to say, "I’m not happy about this, but I can probably live with it… and, besides, they say that they’re doing it for my own safety."
 

Likewise, when the intention is to convert a country to collectivism, make the early changes in stages. Get the people to accept that the losses of freedom are for the benefit of their safety. Then, the further along you go, the more you can accelerate the process.

However, I think that it’s safe to say that a family returning from a holiday that’s just been isolated from each other, interrogated separately, frisked, had all their belongings pored through and copies of their papers and electronic files taken, without even being told the reason, does not feel as though it’s been done for their safety.

Remember, the 30,000 above were just hoping to reach their destination with no trouble from anyone. A generation ago, they never would have tolerated such a violation of their rights. But now, they submit and accept whatever they’re told to do.

But, upon release, they most likely assumed that the authorities had been looking for something specific. They were not. In recent years, there have been very few actual prosecutions from such Gestapo-like shakedowns, in spite of the copying of documents and confiscation of minor items. The object here is not to prosecute anyone; it is to teach people to submit.

This will be important later on.

What we’re witnessing is a loss of freedom in slo-mo. Just as Germans stood by and accepted Kristallnacht; just as they stood by and watched the Berlin Wall be built that would close off their freedom of migration, the great majority of Americans ultimately will stand by and watch the last of their freedoms be removed, because they’ve already been trained to submit to whatever indignities and restrictions are placed upon them.

After World War II, Lutheran Pastor Martin Niemöller was questioned as to how he and other Germans could possibly have simply stood by and watched as freedoms were removed, resulting eventually in total domination of the German people. He said,

First they came for the Socialists, and I did not speak out because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

Pastor Niemöller was able to make the above statement in 1976, as he was one of the few survivors of the concentration camps.

But, in addition to the above insight, there’s another very significant lesson to be learned here. Historically, whenever a government is instituting the transition into a collectivist state, one of the early warnings is a limitation on travel outside the country (getting the people used to the idea that they don’t have a right to leave). The US has now reached that point. The next development will be to teach them that, by traveling outside of the country, they are automatically suspect. The implication will be money laundering, drug trafficking, or terrorist activities.

Whether it’s accomplished through the use of a physical barrier, such as a wall, or through the intimidation of random searches and interrogations, as is presently underway in the US, or whether it’s simply the appearance of armed guards in ports of exit (like the armed guard in the photo above), the objective is not to obtain copies of your emails to your friends or to go through socks in your luggage. It’s to teach you that your rights have been lost and you are expected to submit to any and all indignities and restrictions imposed on you.

Historically, the end-product is always the same. The final acceptance that you’ve waited too long to leave the increasingly oppressive country—and that you’ve been successfully locked in.

 


New Opportunities Are Emerging For Citizens of The World.

Freedom and democracy may appear to be struggling to stay alive in America, but there may be a knock-out punch ready to be released. The evolution of the blockchain-enabled metaverse is going to enable the 'Citizens of the World' to gain their own Freedom by democratizing power and creating a new world with new rules, new players, and new opportunities. For 99.99% of us, the metaverse will improve our real-world lives through the democratization of power and opportunity.

Along with the major long-term trend of society towards decentralization and smaller-scale organizations, there are new opportunities developing to help 'Preparers' in the cryptocurrency sector. Businesses are beginning to issue their own Crypto Coins that can be traded on Cryptocoin Exchanges.

Markethive.com for example will be releasing its HiveCoin (HIV) in the coming weeks. It has tremendous upside potential that is outlined in a Video by Founder Tom Prendergast, "Entrepreneur Advantage…".

Not only that, if you go to their website and register as a FREE Member, you will be given 500 HiveCoins for "FREE" along with access to several Earning Opportunities and online tools to increase your HiveCoin balance.

Be sure to check it out today – Markethive.com

Markethive

Tim Moseley

Gold prices stuck in no-mans land holding support at 1850 on quiet US holiday

Gold prices stuck in no-mans land holding support at $1,850 on quiet U.S. holiday

Gold prices have dropped from their overnight highs but continue to hold support above $1,850 an ounce; Commodity analysts note that the market generally lacks conviction in any direction as U.S. markets are closed for the Memorial Day long weekend.

Spot gold prices are trading in neutral territory Monday morning, last trading around $1,856 an ounce.

Analysts note that the precious metal is trading in the middle of its broader long-term range. Although gold prices continue to benefit from a weaker U.S. dollar, rising risk sentiment, helping to boost equity markets, is taking some shine off the yellow metal's safe-haven allure.

However, some analysts have said that the jump in the S&P 500 last week was a classic bear market. Analysts have said that rising fears of an impending recession will continue to weigh on equity markets.

"There could still be more pain to come," said Craig Erlam, Senior European Market Analyst at OANDA. "But at these levels, it's only natural that the vultures are circling. There isn't a huge amount to be excited about on inflation, interest rates and the economy but that doesn't mean there isn't value out there."

Friday, commodity analysts at Bank of America warned that oil prices, being driven by Russia's invasion of Ukraine, could push the global economy into a 1980s-style recession.

"For next year, we believe oil demand could approach pre-Covid levels but only if Russian liquids production holds near 10mn b/d and OPEC+ supplies increase. With our $120/bbl Brent target now insight, we believe that a sharp contraction in Russian oil exports could trigger a full-blown 1980s style oil crisis and push Brent well past $150/bbl," said Francisco Blanch, Global Research head of global commodities and derivatives research at Bank of America Securities.

Market analysts have said that these fears will continue to support gold prices.

"Recent data has shown that the world's largest economy is cooling rapidly, raising fears of a hard landing in the near term. This situation has led traders to price in a less aggressive tightening cycle over the forecast horizon, pulling down Treasury rates of late," said Diego Colman, Market Analyst, in a note published Saturday.

"In terms of technical analysis, gold is stuck between support at $1,840 and resistance at $1,870. A decisive move outside of these levels is required for near-term guidance, but if prices break out on the topside, buyers could become emboldened to launch an attack on $1,895," he added. "If XAU/USD resolves to the downside and breaches the $1,840 area, where the 200-day simple moving average is currently located, selling pressure could accelerate, paving the way for a drop towards $1,785."

However, not all analysts are convinced that gold prices are ready to move higher or that the U.S. dollar has peaked.

In a recent note to clients, Bart Melek, head of commodity strategy at TD Securities, said that he still prefers to sell rallies in the gold market.

"Given that [gold's] positioning is still tilted to the long end of exposure, any signs that inflation will remain stubbornly high, or data pointing to a steadfast economy due to higher wages and the spending of savings, as seen today, Fed Funds estimates could easily move back to the highs seen at the start of Mayor even higher," he said. "…Repositioning could easily force gold to trend down to $1,840/oz and then to just below $1,800/oz. It should be noted that specs have plenty of room to take on new short exposure and reduce long positions."
 

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

 

Tim Moseley

Bitcoin Is Freedom’s First Line Of Defense

Bitcoin Is Freedom’s First Line Of Defense

by Mickey Koss 

 

On Memorial Day, we remember fallen soldiers and their sacrifice made toward protecting freedom. Like Bitcoin, freedom requires proof of work.

Mickey Koss is a West Point graduate with a degree in Economics. He  4 years in the Infantry before transitioning to the Finance Corps.

In my first article, I compared Bitcoin to the U.S. Constitution and spoke to the characteristics of the asset that made it such a great fit for service members. On this Memorial Day, I would like to take a moment to explain what the day is all about. More than just another federal holiday marking great sales on refrigerators and mattresses, it is a day meant to remember those who have fallen while in service to the country. Certainly a solemn tone, but I think a day best served with a cold beer and some friends. The service members I knew would have appreciated that.

The U.S. military is the last line of defense for freedom, defending the Constitution against all enemies, both foreign and domestic; Bitcoin can serve as a first line of defense for freedom — a nonviolent tool which can disincentivize violence and control. It is not only a hedge against currency devaluation, but a hedge against tyranny as well.

Freedom As Responsibility And A Moral Imperative

Owning bitcoin allows you to be your own bank, and much like maintaining freedom, it’s a hefty responsibility. Ironically, on this hallowed day, the banks we rely on to hold our money for us are typically closed for the day, extending those weird and inconvenient weekend hours, keeping us from what we own. Bitcoin never sleeps. It trades 24/7/365 on a network that is more reliable than the Federal Reserve's own wire system.

While it may be far too easy to leave your coins on an exchange, if you simply buy bitcoin but never take custody, you are leaving yourself open to a multitude of attacks. One of the most insidious, in my eyes, is the potential for a self-custody ban or some sort of regulatory capture of the exchanges, effectively turning bitcoin into another meme stock that must be held by a third-party custodian. In the process, the peer-to-peer decentralized nature of the network gets degraded for millions of potential users across the country, if not the whole world.

The Freedom Convoy trucker protest in Canada was a starting illustration of something along these lines. Protestors' bank accounts were frozen and wallets were flagged, making living everyday life nearly impossible. Furthermore, ancillary individuals who donated as little as $50 saw their accounts frozen as well. Some were doxxed and even lost their jobs.

You see, when you have your money in banks and investment accounts, it’s not really yours. It belongs to the banks — the custodians — and it’s granted access to you at the behest of them and the government. To these custodians, granting you access to your money is an inconvenient privilege that can be rescinded at a moment's notice. It’s a testament to how powerful western nations have become and a cautionary tale for what could happen if you ever see yourself in the outgroup in the event of a heated disagreement.

While the First and Fourth Amendments of the Constitution guarantee freedom of speech and protect against unwarranted searches and seizures, these things are still a possibility and are largely the purpose of the legal and court system. Even if you are well within your rights, it could cost you months if not years of court cases and millions of dollars in lawyer fees to see justice brought to bear.

Anarcho-capitalists to Communists alike, whatever your views, whatever your political proclivities, Bitcoin has your back. It is a completely voluntary system of censorship-resistant, peer-to-peer, electronic money. It is a digital bearer instrument if you use it correctly. It is simply a tool; a tool that does not discriminate and does not care who you are or what you believe. Bitcoin is a tool that just is; a tool that just does. It exists everywhere and nowhere, simultaneously. All you need to do is learn.

While the Second Amendment types will tell you that it exists to protect all the other rights through the implicit threat of violence, Bitcoin is fundamentally different. It actually disincentivizes violence because it cannot be coerced out of the population at scale. Large-scale search-and-seizure becomes prohibitively expensive. It is perhaps the largest peaceful protest in the history of mankind, and it is your best way to preserve freedom. Loss of freedoms typically require violence to reinstate; opt in to peace through buying and holding bitcoin.

Freedom Requires Proof of Work

One does not simply buy bitcoin and HODL through the roller coaster ride. About a month after my wife and I decided to start saving our money in bitcoin, we experienced a pretty nasty crash. The most interesting part of the crash was not the fear and uncertainty that I was experiencing, but rather the excited indifference of my wife, suggesting that we should buy some more.

When I first pitched the idea to her, she had her reservations to say the least. She pushed back, asked great questions and made me dig. I researched more, we dug together and after doing the work, we were able to make the decision together. This was a necessity to build the conviction and trust to hold though the storms and build the base of freedom. I could not have done it without her skepticism. I would not have been able to hold on without her support.

If you can’t orange-pill your wife, you probably don’t understand bitcoin enough to hold on through the storm. You will inevitably sell during the times of peak opportunity whether out of your own fear, or theirs, locking in losses and sealing your fate. You have to do the work first and build conviction if you want it to last, if you want to become your own bank. Better yet, if you are married, it’s probably best for you to do it together.

Reviving The Dream: Bitcoin And The American Spirit

It’s no secret that, to many, the American dream feels harder and harder to attain. Millennials especially are feeling the squeeze as they delay milestones like marriage, having children or buying their first home. I see it every day with friends and coworkers.

Buying bitcoin can and will help you move closer to your goals. It just takes some work and requires work — proof-of-work — to hold on long enough to make a difference. So where to start? Do your homework. I like to recommend Bitcoin-only companies now to help stave off marketing and trickery. River Financial and Swan Bitcoin are two of the best. I also like BlockfFi’s credit card along with Lolli and Fold to get bitcoin back on money I was going to spend anyways. An example would be buying Amazon gift cards through Fold with my BlockFi card, stacking cash back at a 3% total bitcoin-back rate on all our Amazon purchases.

Another challenge I have for you is to build a habit of historical and financial literacy. Once you build your baseline, you can graduate to holding your own keys. BTC Sessions taught me everything I know about that and has helped me help others do the same. Only after holding your own keys and understanding the past will you truly be able to HODL through the storms and become a sovereign and free individual, making it that much harder for your freedoms to be eroded over time.

Every purchase you make is a vote for the future that you want. Through buying and holding bitcoin, holding your keys and taking back your self-sovereignty, you move the country back toward a sound money standard that can do much to fix our divisive problems. Furthermore, you are making it harder for tyranny and government overreach to take hold. You are sowing the seeds for a better tomorrow. You are revitalizing the American dream.

Tim Moseley

If gold is not the best inflation hedge then what is? Nancy Davis

If gold is not the best inflation hedge, then what is? Nancy Davis

Gold and oil are not ideal investments for those seeking inflation hedging, according to Nancy Davis, Founder and Managing Partner of Quadratic Capital Management. Davis spoke with David Lin, Anchor and Producer at Kitco News.

 

Stock and Bond Market

Davis commented on the recent stock market selloffs. She attributed the fall in prices to companies facing higher costs.

“This is a little bit of a wakeup call,” she said. “…Investing is risky and, you know, especially when you’re buying corporate securities, whether it’s their stocks or their bonds, if that corporation has higher costs, maybe in the form of labor costs, more supply side disruptions in the form of, you know, all the things that are happening around the world from a geopolitical and COVID perspective, coupled with consumer confidence in this country is at lows from 2008.”

Davis also said that markets have “priced in” the Federal Reserve’s projected interest rate hikes. Fed Chairman Jerome Powell recently raised interest rates.

“Now I think it’s really important for investors to realize that the rate hikes from the Fed have already been priced in,” she remarked. “The Fed has only hiked 75 basis points so far, but the interest rate markets have moved with the Fed’s forward guidance. So… we have about six months left in the year in 2022, and the rates market has priced in 175 basis points. So, if the Fed does not hike 175 basis points, they’re actually going to be easing rates.”
 

Inflation and CPI

Davis said that the Fed has not lost credibility with investors.

“I know the Fed has gotten a lot of critics saying they’re not credible and all those things,” she mentioned. “I am not one of those. I think the Fed is doing the best job they can with the tools they have available… I think using the balance sheet more as a tool to fight inflation is prudent… [It] seems like they’re going to be using that in addition to hiking policy rates.”

Davis also said that the Consumer Price Index is not the only way to calculate inflation.

“The big problem I see with CPI alone is that a third of the index, approximately 33 percent, is what they call ‘shelter,’ and it’s actually owner-occupied rent,” she said. “… Year over year, rent increases are up about 1.5 percent, whereas home ownership prices are up closer to 20 [percent].”

 

Do Gold and Commodities Hedge Against Inflation?

Davis’s company, Quadratic Capital, has a fixed-income IVOL ETF that protects against inflation. According to Davis, “85 percent of the portfolio” is composed of Treasury Inflation-Protected Securities (TIPS).

“But then we try to fix the problems that exists with TIPS alone… [We] actually try to profit when long-dated yields move higher, which would likely happen in a stagflationary or inflationary environment… And the other really attractive thing in my opinion for investors is we own options. And whenever you own options… you’re long volatility on the underlying asset class… So we actually own fixed-income volatility, which is a nice potential diversifier.”

She added that real assets, such as energy and gold, are not the best inflation hedges.

“I personally think, you know, energy and gold and all these real assets may not be the best inflation asset because… they don’t pay any coupons so there’s no monthly distribution at all,” said Davis. “They do have carry costs… Gold is not an inflation hedge, in my opinion, it’s a currency trade. It has no yield, it has no carry.”

For more information on inflation hedging, watch the video above.

By Kitco News

For Kitco News

Time to buy Gold and Silver on the dips

 

 

Tim Moseley

Will gold price benefit from classic bear market rally in equities?

Will gold price benefit from classic bear market rally in equities?

There is a new battle in the gold market as the precious metal continues to benefit from a weaker U.S. dollar and falling bond yields; however, shifting risk sentiment, as equity markets end their seven-week losing streak with a 6% rally, presents a new headwind for the precious metal.

The gold market managed to hold steady around the critical psychological level of $1,850 this week as the U.S. dollar dropped from its highs earlier in the month. The U.S. dollar index ended the week below 102 points and is down 3% from its 20-year peak.

Meanwhile, bond yields have fallen to 2.74%, down more than 13% from their recent highs above 3%.

Nicky Shiels, head of metals strategy at MKS PAMP Group, said that the weak U.S. dollar and falling bond yields could help gold push solidly above $1,850 in the shortened trading week. However, she added that risk sentiment among equity investors will be a wild card.

"The missing piece is equities are entering a vicious short-covering rally now and there's limited panic about either a recession, stock crash, or Fed hikes," she said.

According to some market analysts, risk sentiment in the marketplace has improved inflation fears have receded. Investors breathed a little easier Friday after the U.S. Department of Commerce said that annual inflation rose 4.9% last month, down from 5.2% in March and from February's peak of 5.3%. Inflation fell in line with market expectations.

The data also reported healthy consumption; however, economists note that U.S. consumers continue to dip into their COVID-19 savings, which could be unsustainable.

Some economists have said that the inflation data gives the Federal Reserve some room to raise interest rates less aggressively in the fall and into year-end. Wednesday, the Federal Reserve signaled that it is looking to raise interest rates by 50-basis points at the next two meetings, in line with market expectations.

However, for many analysts, the current risk sentiment is not sustainable as inflation pressures are far from over, ultimately supporting gold.

Billionaire Bill Ackman says Fed needs to raise rates now to beat inflation, protect the economy

"Energy prices continue to rise and will drive inflation pressures higher," said Sean Lusk, Co-Director of Commercial Hedging with Walsh Trading. "Inflation will add to growing recession fears, making gold an attractive safe-haven asset."

Phillip Streible, Chief Market Strategist at Blue Line Futures, said he sees the jump in equity markets as a classic bear market rally. He added that he also considers gold a critical safe-haven asset.

"Technically, gold holding $1,850 an ounce looks good," he said. "Not only did gold see a solid bounce off last week's low, but its measure of volatility has fallen. Gold does well when it sees low volatility. Investors are attracted to that stability when there is uncertainty everywhere."

Not all analysts are optimistic that gold prices will be able to hold the line at $1,850 an ounce.

While inflation may have peaked, Bark Melek, head of commodity strategy at TD Securities, said it will remain quite sticky through 2022.

"It is probably more wishful thinking that inflation will fall significantly and that the Federal Reserve will stop aggressively raising interest rates," he said. "The Fed will continue to raise interest rates and that will be negative for gold."

Melek added that he still likes selling rallies in the gold market.

Some analysts have noted that a plateau in inflation within the Federal Reserve's aggressive tightening cycle will push real yields higher, making gold less attractive as a non-yielding asset.

 

" Looking at gold, in particular, the US TIPS yield is now comfortably in positive territory, which will dampen investment demand for gold given that it offers no yield," said commodity economists at Capital Economics.
 

U.S. data to provide little direction for markets

Although U.S. markets are closed Monday for Memorial Day, it will be a busy week for economic data.

Friday, economists and analysts will be anxious to see the latest non-farm payrolls report to see how the labor market fairs in the current economic environment.

While major data reports will be released next week, market analysts have said that they will have little impact on interest rate expectations.

Economists have said that the central bank looks set to move by 50-basis points at the following two monetary policy meetings, no matter what the data says.

Next Week's Data

Tuesday: U.S. Consumer Confidence

Wednesday: Bank of Canada monetary policy decision; ISM Manufacturing PMI

Thursday: ADP Non-Farm Employment Change

Friday: U.S. Non-Farm Payrolls; ISM Service Sector PMI
 

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold prices still holding 1850 as PCE core inflation rises 49 in line with expectations

Gold prices still holding $1,850 as PCE core inflation rises 4.9%, in line with expectations

The gold market continues to hold around the critical psychological level of $1,850 but according to some analysts, could struggle in the near-term as inflation pressures could have peaked.

On a monthly basis, the core Personal Consumption Expenditures Index, the Federal Reserve’s preferred inflation measure, increased 0.3% last month, the U.S. Department of Commerce said on Friday. The inflation data was in line with expectations.

On an annual basis, core PCE rose to 4.9% down from the 5.2% rise seen in March. This is the second month annual inflation measures have dropped after hitting 5.3% in February. The drop in annual inflation was also in line with expectations.

The gold market is taking the latest inflation data in stride. June gold futures last traded at $1,850.40 an ounce, up 0.19% on the day.

Some analysts have noted that gold could struggle to attract new bullish capital as the Federal Reserve continues to aggressively raise interest rates while inflation pressure fall. This would drive real interest rate higher, which would be negative for gold, a nonyielding asset.

Looking at headline inflation, the report said that the PCE Index rose 0.2% last month, down compared to March’s rise of 0.9%. For the year headline inflation rose 6.3%, down from the previous increase of 6.6%.

Along with easing inflation pressures, the report also showed consumers continuing to hold up well, despite the economic uncertainty.

The report said that personal spending rose 0.9% last month, up from March’s 1.1% increase. The data beat expectations as consensus forecasts called for a 0.7% rise.

However, the data also shows that consumers are tapping into their savings as income increased 0.4%, down from March’s increase of 0.5. Economists were expecting to see a 0.5% increase.

According to economists, the savings rate fell to 4.4%, the lowest level since 2008.

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

 

 

Tim Moseley

THE PRICE OF BITCOIN

 

     What happens to bitcoin, what is the price, and why did it fall so badly, the answers are multiple but also questions are many.

Bitcoin is the world’s first decentralized cryptocurrency, a type of digital asset that uses public-public key cryptography to record, sign and send transactions over the Bitcoin blockchain all done without the oversight of a central authority. It’s the original and most valuable cryptocurrency by far, despite its huge — and normal swings in recent months, ranging in value from less than $30,000 to more than $60,000. Bitcoin has also seen a lot of new investors, with more than half of all having bought in the past year.

It is also certain that the price now at this moment when I am writing this is $28,320.50, a change of -4.30% over the past 24 hours. The recent price action in Bitcoin left the token’s market capitalization at $539,510,082,593.91 USD. So far this year, Bitcoin has a change of -37.87%. 

The leading crypto Bitcoin is struggling to fully recover after weeks of losses. Bitcoin price crashed below $26,000 in early May amid a broader market sell-off of risky assets but has risen slightly a little many are saying all is because of the struggles and crash of TerraUSD (UST), one of the largest stablecoins, which play a big role in Bitcoin’s recent crash. Stablecoins are intended to bring stability to the crypto markets and have a similar value to hold as close to the U.S. dollar as possible, but the UST dropped below 12 cents in early May and many investors on the market panicked and sold off their coins. The Terra blockchain has officially halted and UST has remained de-pegged from the U.S. dollar since May.

To return to the question posed where will the price of bitcoin go I think no one knows, we can speculate about this, but still, it is good to believe in what bitcoin means for us crypto investors and what benefits it brings to the whole planet in implementing cryptocurrency, how the money transfer is faster and safer and how they eliminate the bank fees and other problems of the Bank system.

So believe in Bitcoin and don't sell wait .

 I believed the bitcoin will come back stronger than ever,in the end, I  want to end with a quote " People give value to things "

 

 

Tim Moseley

The Artist that came out of the Winter