Wall Street is balanced and cautious on gold next week Main Street remains optimistic about price gain

Wall Street is balanced and cautious on gold next week, Main Street remains optimistic about price gain 

Precious metals traders rode a roller coaster of optimism and greed higher this week, as markets cemented expectations for a rate cut from the Federal Reserve at their September meeting. But gold prices may have pushed too high too quickly, with the ensuing pullback dragging the yellow metal right back to where it started.

Spot gold opened the week trading at $2,411.65 before moving down to test support near $2,400 per ounce shortly after 3:00 am early Monday morning. This level of support held, and it started the precious metal’s upward climb. After hitting an intraday high of $2,436 per ounce shortly after 11:00 am EDT on Monday, spot gold saw a retracement down to the $2,420 area following comments from Fed Chair Jerome Powell, which were dovish on balance.

Prices then began trending higher during the Asian session, and by Tuesday morning gold was trading above $2,440 per ounce. Prices saw a dip to the low $2,430s following the release of a slightly better-than-expected U.S. retail sales report for June, but they rebounded sharply thereafter, and by Tuesday evening spot gold had set a new all-time high above $2,482 per ounce.

Traders then turned their attention to the next Fed speaker on the docket, Christopher Waller, whose comments shortly after 9:30 am that “the time to lower the policy rate is drawing closer” appeared to confirm the market’s optimism for a fall rate cut. This drove spot gold to a fresh all-time high above $2,483 per ounce, but the yellow metal couldn't break decisively through resistance, and the sharp retracement that followed drove the price to an intraday low of $2,452 per ounce.

Asian and European traders once again boosted gold into the low $2470s, but after a higher-than-expected weekly jobless claims report on Thursday morning followed by a failure to break back above $2,470, spot gold began its long march lower, falling from $2,468.48 just before 11:00 am EDT on Thursday to Friday morning’s weekly low of $2,393.88 just before the North American market open.

Gold prices have continued to test the critical $2,400 per ounce level throughout Friday's trading session, but at the time of writing, spot gold had yet to see a decisive break below.

The latest Kitco News Weekly Gold Survey shows industry experts returning to a balanced stance, while retail sentiment remained optimistic about the coming week.

Unchanged,” said Adrian Day, President of Adrian Day Asset Management. “Gold will likely need to consolidate before moving back up. Additional hints of the Federal Reserve starting its rate cutting cycle, however, could see gold up any time.”

Darin Newsom, Senior Market Analyst at Barchart.com, sees gold continuing to trend lower in the near term.

I’m sticking with the idea gold remains in an intermediate-term downtrend on weekly charts,” Newsom said. “Looking at the more heavily traded December issue, a close below last Friday’s settlement of $2,469 would bring to an end the string of 3 consecutive higher weekly closes, fitting with a normal technical pattern. With weekly stochastics still neutral, meaning there is time and space for Dec futures to move lower, I’m looking for Dec24 to test its previous series of lows near $2,350.”

Neutral,” said Adam Button, head of currency strategy at Forexlive.com. “The market impressively shook off the news that China has halted buying (at least temporarily) but the heavy profit-taking late in the week will be tough to reverse. Eyes are on US politics.”

May have seen a double-top in gold,” said Mark Leibovit, publisher of the VR Metals/Resource Letter. “I have been cautious and occasionally hedging with inverse gold and silver ETFs. Risk is a near-term move down to 1900-2000, despite my longer term of 2700.”

As always, taking it a day at a time,” Leibovit added. “Currently own NO precious metal positions, which were sold a few days ago.”

Analysts at CPM Group are recommending that investors stand aside next week, cautioning that the $92.7 price decline over the last two days “could potentially be repeated in the coming days or weeks, not only on the downside, but also on the upside.”

Should prices settle below $2,400 today, Friday 19 July, liquidation selling on Monday could be heavy,” they said. “Or, with more bad political news the price could spike higher once again.”

CPM sees the price action for the next two weeks skewed to the downside, but the outlook is skewed to the upside after that. “In such a volatile environment, prices could move sharply either way, potentially testing $2,300 and possibly reaching $2,500 once more,” they said. “Any downside risk is likely to be short-lived, with investors using price softness as a reason to buy gold to hedge against the numerous risks.”

Bob Haberkorn, Senior Commodities Broker at RJO Futures, said that while Friday’s price weakness looked dramatic, it wouldn’t impact gold’s appeal in the medium term.

The pullback we're seeing this morning is pretty significant,” he said. “But I think, news-wise, nothing's really changed. Bond futures are down, but the rates are pretty significant, they’ve come up a little bit here, and the dollar’s a little stronger.”

I think what you're seeing here is just a liquidation of some of the weaker longs from the week, and it's overdone itself,” Haberkorn said. “I mean we tested $2,400, the low on the August [contract] was $2,395. I think overall it's just a shakeout of some of the weaker longs and concern about weakening demand out of China.”

Haberkorn doesn’t expect the yellow metal to stay down for long. “I think this move lower is going to be short-lived, and you'll see it as a buying opportunity,” he said. “There's no comment by the Fed that I saw on rates, or not doing a rate cut, that would justify this kind of move.”

The geopolitical situation hasn't changed this week,” he added. “If anything, it's gotten even riskier on the geopolitical front, and with the U. S. election. And then there was news last night of some attacks inside of Israel along with the continuation of what's going on in Europe and the Ukraine.”

On the recent turmoil surrounding the U.S. election, Haberkorn said he doesn’t think a Biden withdrawal would materially impact precious metals.

I don't think if he drops out, it would necessarily be a shock to anybody, or to the market, where it would impact gold prices or silver prices,” he said. “If there were, the shock would be the unknown. Do they go with Harris, or do they go into an open convention floor in Chicago in two weeks? There's unknowns there, but I think a lot of this is baked into the cake.”

Haberkorn sees the Fed and interest rate expectations as the main driver for gold right now. “I think If Biden drops out, it'll be a big deal, but I don't think it will be for gold. It's not going to be a game-changer in any direction.”

This week, 16 Wall Street analysts participated in the Kitco News Gold Survey, and the results showed a return to a balanced and uncertain outlook for the precious metal. Six experts, representing 38%, expect to see gold prices rise next week, while the same number predict a price decline. The remaining four analysts see gold trending sideways during the week ahead.

Meanwhile, 168 votes were cast in Kitco’s online poll, with Main Street investors remaining bullish but tempering their expectations compared to last week. 103 retail traders, or 61%, looked for gold prices to rise next week. Another 36, or 21%, expected the yellow metal to trade lower, while 29 respondents, representing the remaining 17%, saw prices trading within a range next week.

Investors will be paying attention to key inflation data next week with the release of June’s core Personal Consumption Expenditures Index on Friday morning. The Federal Reserve’s preferred inflation gauge could deliver the final confirmation that inflation is trending definitively downward, with the CME’s FedWatch Tool already indicating a more than 90% chance of a rate cut by the end of the summer.

Markets will get the first look at the second-quarter Gross Domestic Product with the release of Advance Q1 GDP on Thursday, along with durable goods orders and weekly jobless claims. Traders will also watch for key housing data with Tuesday’s existing home sales and Wednesday’s new home sales.

And the Bank of Canada will issue its monetary policy decision on Wednesday, with economists saying that weaker inflation data gives the central bank room to cut its interest rate.

Marc Chandler, Managing Director at Bannockburn Global Forex, believes the dollar and bond yields will strengthen, tamping down gold’s potential gains. “Gold is correcting lower after setting a record high near $2484,” he said. “I look for USD and US rates to push higher. This will likely see gold come off. A break of $2388 gives potential toward $2350-$2365. Momentum indicators look positioned to turn down.”

Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, was attempting to gauge the drivers of market sentiment amid Friday’s downturn.

I think we're mostly seeing fairly significant trading correction in gold,” he said. “It ran up pretty hard over a couple of weeks, from $2,300 to $2,480. That's $180. So it's given back not quite half of that, which is not unusual, and a 50 percent correction after a short-term move is no big deal.”

Cieszynski said it looks like gold is stabilizing around the $2,400 level. “If it does, then that gets encouraging again,” he said. “I still think the medium-term outlook for gold remains positive. There's just so much uncertainty and there's so much volatility out there.”

He also pointed to the moderate bounce in treasury yields and the U.S. dollar. “I think that might have just been enough to spark a bit of a correction,” Cieszynski said. “Plus, of course, it's a Friday in the summertime ahead of a weekend. Over the last several weekends, there was last week with Trump, there was two weeks ago, the French election, there was a European election. You could have people just taking a step back before weekends, especially here in the summertime.”

Cieszynski said Friday’s pullback to support at $2,400 just means that gold prices will have a clear path higher ahead of them to start next week. “It looks like gold has moved up into a higher range, and based on trading so far, it looks like around $2,400 to $2,480,” he said. “And of course, you've got that big $2,500 round number just sitting out there.”

Alex Kuptsikevich, senior market analyst at FxPro, sees significant downside risk to gold prices.

Pullbacks after making new highs have been a typical pattern for gold in recent months, with similar retreats in May, April, March, and December,” he said in a note shared with Kitco News. “The highs were followed by a pullback, which subsided within about two weeks, leading to a stabilisation of the price and a return to the upside.”

However, bull markets do not last forever, and traders should look for signs that this bullish trend is reversing,” he warned. “Next week could determine the momentum for months to come. Drops of more than 3% next week could repeat the pattern of 2020 and 2022 with protracted corrections of more than six months.”

Most worrisome would be a repeat of the 2011 pattern, when the high of $1921 was followed by a 20% sell-off over four weeks,” Kuptsikevich concluded. “This peak was not rewritten until nine years later, and from the global peak to the global bottom, the value of a troy ounce almost halved, declining for more than four years.”

Down,” said Michael Moor, Founder of Moor Analytics. “The trade above 23276 (-2 tics per/hour) warned of decent strength—we have attained $160.8. The trade above 23437 (-1 tic per/hour) projected this upward $15 minimum, $45 (+) maximum—we have attained $144.7. These are ON HOLD. I warned trade below 24648-12 will warn of pressure, likely decent—we have come off $48.6. Decent trade below 24102 (+2.5 tics per/hour starting at 6:00am) will project this downward $58.00 (+); but if we break below here decently and back above decently, look for decent short covering.”

And Kitco Senior Analyst Jim Wyckoff said he expects a period of near-term consolidation from the yellow metal. “Choppy and sideways amid routine chart consolidation after the record high set this week,” he said.

Spot gold last traded at $2,399.85 per ounce at the time of writing for a loss of 1.86% on the day and 0.54% on the week.

Kitco Media

Ernest Hoffman

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Hits Fresh All-Time High on Interest Rate Cut Hopes

Gold Price News: Gold Hits Fresh All-Time High on Interest Rate Cut Hopes

Gold News

Market Analysis

Gold prices pushed up to a new all-time high on Tuesday, as the markets reacted to US Fed comments suggesting a stronger chance of interest rate cuts in September.

Prices rallied as high as $2,466 an ounce on Tuesday, compared with $2,422 an ounce in late trades on Monday. The latest gains mean gold has topped its previous all-time highs of just over $2,450 an ounce seen on May 20.

KAU/USD 1-hourly Kinesis Exchange

The trigger for the renewed strength for gold was a speech by US Fed chair Jerome Powell on Monday. Powell noted that inflation had come in below expectations in June, suggesting that price increases are coming down towards the central bank’s target. He also said that inflation wouldn’t necessarily need to hit the 2% mark before the Fed starts to cut rates – a bullish factor for gold as lower rates cut the opportunity cost of holding non-yield-bearing assets.

The latest data from interest rate traders shows that the markets have now fully priced in a first US interest rate cut in September, with more than 90% expecting a 25-basis point cut, with a minority expecting a 50-point cut. A second cut is also widely anticipated in November.

Yields on US 10-year treasury notes also fell to a four-month low on Tuesday, providing a supportive element for gold prices.

Looking ahead, Wednesday will see US industrial production figures released for June, for the latest pulse check on the US economy.

Attention will then turn to Europe on Thursday with the ECB set to make an interest rate decision. Few expect anything other than a continuation of the current rate of 4.25% after the bank began its rate-cutting cycle in June, although the markets will be watching out for clues on the future path for monetary policy in a press conference, followed by a speech later by ECB President Christine Lagarde.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

Frank Watson

Time to Buy Gold and Silver

Tim Moseley

These defense pacts could trigger WW3 and drag the US into conflict it’s not being covered by mainstream

These defense pacts could trigger WW3 and drag the U.S. into conflict – it's not being covered by mainstream

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

These defense pacts could trigger WW3 and drag the U.S. into conflict – it's not being covered by mainstream media teaser image

(Kitco News) – As geopolitics has become a key focus for markets, Hal Kempfer, CEO of Global Risk Intelligence & Planning (GRIP) and retired marine intelligence officer, pointed to a conflict zone that could activate several defense pacts, drag the U.S. into conflict, and trigger World War 3.

"We're not in World War 3; we're definitely in a world of wars," Kempfer told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "Whether those things merge into one larger conflict, that's the big concern."

Kempfer zeroed in on the South China Sea, describing the area as at extreme risk of escalation and calling it the "center of gravity" due to the multiple mutual defense pacts that it could kick in. "It would effectively be World War 3 if the war breaks out in the Pacific," he said.

Kempfer pointed to recent clashes between Chinese and Philippine forces, saying that there's a risk that it could drag the U.S. into a war with China because this could trigger the U.S.-Philippine Mutual Defense Treaty and then spark a major global conflict with various countries. The treaty was signed in 1951 and requires both nations to support each other if attacked by another party.

"I don't ignore what's going on in Europe with the war in Ukraine and certainly what's happening in the Middle East and with Iran. But if you want to look at where there is a huge potential impact, not just in terms of the carnage, but also the impact on markets, you have to look at the South China Sea," he said.

For Kempfer's breakdown of the recent confrontation between China and the Philippines and the potential triggers for conflict, watch the video above.

Kempfer advised looking at the world through a geostrategic lens. "The great fear is that the U.S. gets pulled into a kinetic confrontation with China due to the Philippines, [for example], and then China responds in some ways and triggers our agreement with Japan or something like that," he said. "And next thing you know, you got all the countries in there basically pulled into a big war across the board. That is possible."

For more on potential defense pacts that could be triggered in the area, watch the video above.

Market impact: how crucial is the South China Sea route?

According to Kempfer, the South China Sea is massively important as a shipping area, with more than 20% of all global trade passing through there.

"It's a phenomenal impact," he told Kitco News. "If you look at container shipping, that is a preponderance of stuff that's impacted by what's happening in the South China Sea."

Furthermore, the South China Sea is located right next to the Sea of Japan, which means that a potential conflict with China could impact a larger waterway.

"It's not just material that comes from China or from Taiwan that could be disrupted. It's also the total impact that would have on places like Japan. Hence, Japan has broken out of decades of taking a more passive stance and moved to a much more active and aggressive stance. They are signing a mutual defense agreement with the Philippines, which is rather interesting when you look at the history of Japan and the Philippines and certainly the history of World War 2."

In terms of products, Kempfer added that the impact would also be massively disruptive.

"When people think of China, they think of the manufactured goods 'made in China.' And certainly, that is significant. So literally, store shelves will start going empty," he said. "But it's also much bigger than that. If you look at semiconductors, Taiwan, in certain categories, controls up to 80 percent of the semiconductor industry or market. That would be shut down completely. Certainly, any semiconductors coming from China would be shut down. It would have a phenomenal disruption of the supply chain around the world. It's difficult to think of anything these days that has any electronic components that aren't reliant upon semiconductors."

Rare earths are another area of impact. Watch the video above for Kempfer's outlook on this and China's dominance in this area.

For Kempfer's breakdown of other top geopolitical threats at risk of a flare-up, watch the video above.

U.S. election is 'a time of vulnerability'

Kempfer added that with the U.S. distracted by its own election on November 5th and all the uncertainty surrounding it, foreign actors could use this as an opportune time to stir things up on the geopolitical level.

"With this election coming up … it is a time of vulnerability. It's a time of transition. If somebody's going to try and do something – a foreign actor like China – that's the opportune time to do it," he said. "The election distracts the entire United States and the rest of the world. So it is a time of vulnerability or a window of vulnerability in terms of our ability to react."

The latest round of uncertainty came with the attempted assassination of former President Donald Trump that took place over the weekend. In a shocking incident on Saturday, a gunman opened fire on Trump during a rally in Butler, Pennsylvania. A bullet pierced the upper part of Trump's right ear. During the incident, firefighter Corey Comperatore was shot and killed and two other people were critically injured.

Trump said he was saved from death because he turned from the crowd to look at a screen showing off a chart he was referring to. "I rarely look away from the crowd. Had I not done that in that moment, well, we would not be talking today, would we?" Trump told the reporters.

Authorities have identified the shooter as Thomas Matthew Crooks, 20, from Bethel Park.

Gold price hits new record highs, Bitcoin surges

 

Safe-haven assets advanced early this week as markets digested the failed assassination attempt. Gold hit new record highs on Tuesday, boosted by safe-haven demand and expectations of the Federal Reserve opting to cut rates more than previously expected.

Spot gold was trading at a new record high of $2,470.20 an ounce at the time of writing. Bitcoin also climbed, hitting a daily high of $65,046.18.

Kempfer examined investment strategies amid global tension. Watch the video above for his advice on preparing for a greater level of uncertainty and his outlook on gold and Bitcoin.

Swan Bitcoin IRA – Start Saving Now 👉 https://Swan.com/retire

Kitco Media

Anna Golubova

Tim Moseley

World Economic Forum 2024 Global Economic Outlook: What Are The Chief Economists Predicting For Our Future?

World Economic Forum 2024 Global Economic Outlook: What Are The Chief Economists Predicting For Our Future?

2024 has been a year of elections as many countries worldwide have been gearing up for the polls. Nevertheless, as the campaigns and debates gain momentum, it's essential to remember that the popular vote has never chosen the individuals who wield the most significant impact on our daily lives. The World Economic Forum (WEF) is a prime example of this phenomenon. The WEF's ‘experts’ have been diligently crafting their newest economic prediction, which will inevitably have far-reaching implications that will affect everyone, regardless of our individual opinions.

This article analyzes the latest report from the WEF's chief economists, who express cautious optimism regarding the global economy's future. Despite their hopeful outlook, they anticipate various challenges ahead. However, a critical flaw in their analysis is the failure to recognize that the policies they promote often have adverse consequences for the general population. Ultimately, the WEF and its partners have overlooked a crucial aspect of the larger issue: their own role as a contributing factor to the problem.


Source: World Economic Forum

The Economists’ View, Full Of Surprises Or Not

This article summarizes the "Chief Economists Outlook: May 2024" paper authored by numerous leading economists worldwide. This publication, updated quarterly, presents the collective views of these experts. The document commences with a brief overview, indicating that most economists anticipate a more robust global economy than the previous edition. 

For perspective, in January, about 56% of economists thought the global economy would be weak. However, the latest data shows that only 17% share this belief. Not surprisingly, almost 100% of economists believe that geopolitics and politics will cause volatility. The elites appear to be particularly apprehensive about the possibility of a second Trump presidency.

It’s also not surprising that economists' prevailing view is that the US economy will maintain its strength while the EU's economy will weaken further. Surprisingly, they forecast that certain central banks, such as the European Central Bank, will cut interest rates, whereas others, like the Federal Reserve, will hold rates steady. 

It’s also surprising that economists predict a global economic recovery in the next few years. It’s surprising because there’s a strong correlation between GDP and energy production, and many countries are not pursuing the best energy policies. The WEF is partially responsible for this situation. 

According to the WEF's economic experts, these subpar energy policies are expected to boost economic growth miraculously. Ironically, their research reveals the actual sentiment on the ground, where numerous countries are skeptical about these policies' ability to stimulate economic growth. It's no surprise: they're unlikely to deliver.

Politics And Geopolitics

The paper's initial section reveals a prevailing consensus among WEF economists as “a mood of cautious optimism.” While many experts anticipate a thriving economy, the outlook is predicated on the assumption that political and geopolitical factors will not pose a significant threat to economic growth. The Middle East and Eastern Europe are currently the most pressing concerns regarding global hotspots. As we've witnessed, any intensification of the conflict between Israel and Hamas, along with its proxies, could have an even greater impact on oil prices.

The widespread use of oil in various industries would trigger a broad-based price surge, prompting central banks to maintain or increase interest rates to manage supply-side inflation effectively. The practical effect would make existing debts more costly and borrowing more challenging, ultimately leading to a slowdown in economic activity. It's worth noting that the economy already relies heavily on debt.

In Eastern Europe, the increasing tension is not primarily driven by economic factors as it is unlikely to cause additional disturbances to supply chains and similar aspects. Instead, the primary concern is that the situation could destabilize the region by casting doubt on the legitimacy of its institutions, both in the eyes of Europeans and other international actors. This is particularly relevant in light of the EU's consideration of releasing $300 billion in assets it seized from Russia to Ukraine.

It's worth noting that this move could have significant implications for the global financial system, potentially leading other countries to reassess their investments in Europe and European assets. To mitigate this risk, the EU has only released the profits generated by the seized assets rather than the assets themselves. However, the US is reportedly urging the EU to utilize the underlying assets to support Ukraine, and the EU is understandably cautious, given the potential for negative consequences.

In a related development, the US has been urging the EU to impose stricter measures on China. Taiwan is another potential hotspot that could trigger market instability. Notably, Taiwan is responsible for manufacturing most of the world's microchips, and any disruptions to its production or trade could have catastrophic consequences. It's intriguing that China has been escalating its hostilities towards Taiwan, suggesting it may not depend on Taiwan's unique microchip production capabilities.

Geopolitical experts speculate that China may have gained the capability to produce advanced chips independently, raising concerns about potential implications for Taiwan. Such action doesn't necessarily have to take the form of a full-scale invasion; a trade blockade would be sufficient to cause economic disruption. The fact that the US and EU are hastening to establish their own chip-making facilities suggests that such disruptions could be unavoidable.

On the political stage, a surge in nationalist parties has been unfolding globally, a trend that has been anticipated for some time. During difficult times, individuals often point fingers at the wealthy and immigrants. This sentiment seems true across various nations and challenges the globalist-focused economy because nationalist parties prioritize the interests of their citizens, for better or for worse. As highlighted in this article, globalism is failing, which will be painful in the short term. It will initially cause inflation to increase while asset prices remain high; wages will eventually follow. 

The economists surveyed by the WEF anticipate that inflation will persist, and they attribute this to housing and energy rather than nationalism. Specifically, housing prices have increased due to globalist policies restricting construction and accelerating immigration, while globalist policies concerning energy have led to increased expenses across the board. According to the WEF's experts, prices may surge by 30% if tensions in the Middle East intensify.

They also note that a significant portion of global trade, 20-40%, occurs between geopolitically unaligned countries, which poses a challenge for European and Asian economies. Hopefully, the WEF’s economists' forecast regarding the Middle East isn't an accurate prophecy.


Source: World Economic Forum

Unpredictability, Complexity, ESG

In the document's second section, economists from the WEF expand on the “challenging Global landscape.”  They highlight how international conflicts, domestic strains, technology, and high interest rates have led to an unpredictable environment for everyone. For those unaware, investors generally dislike uncertainty more than any other factor. Investors don't mind a world war so long as it's certain because they can price it in and plan. 

So far, the impact of this unpredictability has been relatively subdued, likely due to investors' assumption that the money printer will be turned back on. However, from the WEF and its economists' standpoint, the problem is not unpredictability; it’s complexity. The above factors contribute to this complexity, posing challenges for the WEF central planners' decision-making. In reality, they shouldn't be making these decisions in the first place.

WEF economists are concerned about the growing divergence between the data reported by governments and the actual experiences of individuals. In their own words, they quote, “The emergence of divergence between modestly encouraging economic data and stubbornly gloomy public sentiment.”  This disparity has been described as a "challenge" by the WEF's economists, who have refrained from advocating censorship to address the issue in the name of misinformation, disinformation, etc. If this challenge continues, though, don't be surprised to see such censorship

Adding fuel to the fire, the WEF's economic experts appear oblivious to the underlying reasons behind this growing disparity. They attribute it to simply being a matter of inequality and uncertainty, which barely begins to address the issue. It's becoming increasingly clear to many that the system is unfairly skewed in favor of the WEF itself. A prime example of this bias is a section in the report outlining the factors that will supposedly influence business decisions, as the WEF's economists dictated. This section of the paper outlines the factors affecting business decisions as perceived by the WEF's economists, which provides a telling example.

To clarify, businesses were not directly questioned; instead, a panel of academic experts was consulted to provide insights into businesses' perspectives. The responses were unsurprisingly disconnected from reality. For instance, WEF economists believe that typical businesses consider geopolitics in their day-to-day decision-making. In fact, most companies focus more on inflation and labor issues rather than geopolitics. 

Interestingly, the study's authors rank labor as one of the least significant factors for businesses, which contradicts many businesses' actual priorities. This disconnect may explain why ordinary individuals are pushing back on the policies of those in power.

It's intriguing that the WEF's economists discovered that corporations are increasingly issuing as many bonds as possible. They believe these companies are apprehensive about what lies ahead, which suggests that they are concerned about the future and are borrowing heavily to prepare for future challenges.

In a more optimistic light, the WEF's research revealed that a majority—75%—of top business leaders harbor doubts about ESG principles, while nearly a quarter have rejected them altogether. This finding is noteworthy, especially considering that ESG has gained widespread traction in recent years, largely thanks to the efforts of influential asset managers such as BlackRock.

The WEF's economists then pivoted to another pressing issue: fiscal and monetary policy. Fiscal policy encompasses government spending and taxation, while monetary policy involves central banks and interest rates. As previously mentioned, the WEF's economists predict that interest rates will decrease in the EU while remaining relatively stable in the US and other regions.

Previously, central banks worldwide had aligned their monetary policies to mirror the actions of the Fed. This was done to avoid potential repercussions such as Japan's significant yen depreciation when central banks implemented divergent interest rate strategies. The European Central Bank faces a similar risk with the euro, as it may not be sustainable for the ECB to maintain elevated interest rates for an extended period. Oddly enough, economists at the WEF anticipate a trend towards more constrained fiscal policies, as governments apart from the US seem restricted in their ability to increase spending. 

The projection for Europe is particularly surprising, considering the EU's strong commitment to funding ESG-related initiatives. What's most peculiar is that the paper's authors are puzzled by the expectation that the EU will reduce its spending. The discrepancy between monetary and fiscal policies in the Eurozone is believed to be a contributing factor. If not managed carefully, this could lead to the euro's collapse. That's why the ECB hastened the rollout of a digital euro to oversee the European economy.


Source: World Economic Forum

WEF Predictions, Policies  

In the third section of the report, the WEF economists offer their projections for the future of the global economy. These predictions focus on the long term, specifically the next five years, which makes sense as it aligns with the WEF's goals it’s trying to achieve by 2030. Notably, the WEF's economists observe that global growth has slowed since the turn of the century.

They are significantly concerned about the possibility of a further deterioration in this global slowdown. This anxiety stems from the fact that almost 25% of the economists at the WEF think that the world will not be able to reach its pre-pandemic annual growth rate of 4%. This pessimistic outlook could be driven by varying perspectives on how much technologies such as AI can enhance productivity, with half of them expressing doubt about its significant impact.

The realization is striking, as the WEF has been optimistic about technologies such as AI due to their implicit promise to replace the populace and preserve the world's marvels exclusively for the privileged few. They still believe AI will drive growth, but not to the extent they initially anticipated.

A notable observation is the disparate way the WEF's economists perceive the impact of advancements like AI on developed and developing nations. Their perspective suggests that developed countries will reap the most significant benefits. In contrast, developing countries will only experience limited and incremental improvements as if this disparity was intentionally designed into the system.


Source: IPSOS

In 2022, an alarming headline emerged stating that, based on a survey conducted by the WEF, individuals in developing nations have a strong affinity for the metaverse. This assertion appears counterintuitive, suggesting a concerning implication that the WEF may be aiming to keep these countries in their place. This sentiment is also reflected in the WEF economists' paper.

Consider the following quote: 

“There was a lack of consensus on the role of other industries, including mining, supply chain and transport services, manufacturing, fossil fuel energy and materials, retail and wholesale of consumer goods, and financial professional and real estate services in global growth.” 

Consider that mining, manufacturing, and fossil fuel industries are the foundation for many developing nations. Notably, WEF economists hold differing views regarding these industries, even though they are essential for the advancement of developed countries. After all, artificial intelligence relies on hardware.

The paper's concluding section focuses on the crucial aspects of policy priorities that will foster economic growth in the next five years. The WEF economists emphasize the significance of these policies, which are likely to be adopted by most countries, given the significant influence the WEF wields over government decision-making processes.

It's a bitter irony that the WEF's economists claim that the global economy could have grown by an additional 50% if capital had been allocated more efficiently in recent years. What's striking is that they seem oblivious to the fact that their own policies have created an environment that encourages this misallocation of resources. This oversight raises severe concerns about the kind of misguided policies we can expect from the WEF and its political cronies. The nature of these policies will likely vary depending on whether they are aimed at developing or developed economies.

Developed countries will prioritize education, infrastructure, improved financial access, and institutional development. While this may seem positive in theory, in reality, education can lead to indoctrination, infrastructure can result in dystopian technologies such as digital IDs, access to finance can mean giving control of your money to a single entity like Black Rock, and more institutions can translate to more unaccountable and unelected organizations influencing domestic affairs.

The economic policies advocated by the WEF economists are similar for developing countries, with a minor variation: innovation. While innovation is a crucial factor in developed countries, it supposedly has less impact in developing countries. At first glance, this might seem like an anomaly, but it actually reveals a more profound truth.

The economists at the WEF emphasize that implementing trade protectionism would have adverse effects regardless of a country's economic situation. In other words, don't you dare put the well-being of your population above our profits. Observing the outcomes for countries that choose this approach will be intriguing.

Economists' Trustworthiness: A Call for Critical Thinking

It is necessary to acknowledge that economists may not always tell the truth when delivering information to different audiences. Therefore, it is wise to approach the content of this paper with caution, as economists are known to provide misleading information to the general public. Nevertheless, the statements made by the WEF economists hold some truth. The global landscape is facing growing instability due to geopolitical and political challenges. However, the underlying concern goes beyond this surface-level analysis, pointing to the inherent instability of centralization.

Visualize the process of stacking coins one on top of the other. Initially, the stack is steady, but with each additional coin, the stability decreases. Adding supports can temporarily enhance stability, but the more coins you stack, the greater the instability, leading to an inevitable collapse. This illustrates that instability is a fundamental characteristic of centralization. It's easy to overlook that centralized systems, such as those developed by organizations like the World Economic Forum, have been in development for decades.

As their rigid structures have grown increasingly fragile, those in power have tightened their grip, but the populace has reached their breaking point. The positive development is that a growing number of people recognize that the challenges they encounter are a direct result of the systems established by influential organizations like the WEF rather than being caused by scapegoats like immigrants, the wealthy, or politicians themselves. The downside is that the WEF is aware of this growing awareness and is unlikely to take it lying down.

Censorship has been on the rise, and although there are still some areas where individuals can express themselves freely and gather peacefully, these spaces are being threatened from multiple directions. Legal action, regulations, market manipulation, and infiltration by WEF-affiliated entities applying the usual totalitarian tactics contribute to this trend. The irony is that as these tactics become more brazen, they risk fueling a growing distrust of institutions, potentially leading to a breakdown in social order and widespread chaos.

Let's not be naive; the World Economic Forum would seize this opportunity, and some believe it's actively working to bring it about. The WEF has explicitly advocated for a global reset since the pandemic outbreak. Although its efforts have been unsuccessful so far, it's unlikely to give up. The only way to achieve a reset is to dismantle the current system, and we may be inadvertently playing into the hands of those planning a deliberate collapse.

Speculation aside, the answer to the current problem is establishing a new framework composed of decentralized organizations crafted for and by the average person. This is the vision that the cryptocurrency sector strives to realize, and it's why the World Economic Forum has been attempting to insert itself into the process. Thankfully, those committed to creating decentralized platforms and institutions are not the type that would ever collaborate with the WEF, no matter the reward. Countless individuals are dedicating their time and effort to this endeavor, and if you wish to effect genuine change, consider joining them.

 

 

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

 

 

 

 

Tim Moseley

Cryptos stocks and gold see gains as markets respond positively to increased odds of Trump presidency

Cryptos, stocks, and gold see gains as markets respond positively to increased odds of Trump presidency

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Financial markets saw a positive start to the week as the attempted assassination of former President and current Republican Presidential nominee Donald Trump dominated headlines, overshadowing the return of earnings season, which included reports that Goldman Sachs recorded a profit surge of 150% amid investment banking strength.

The likelihood of Donald Trump regaining the presidency reached a record high on Saturday, according to data from Polymarket, following an incident at a Pennsylvania rally,” said analysts at Secure Digital Markets. “Traders on the platform now assign a 70% probability to his success in the upcoming November election.”

While the incident involving Trump, the Republican presidential candidate, has the potential to heighten political tensions in the U.S., investors speculated it could boost Trump's and the Republican Party's standing in the polls ahead of the November election,” they said. “Additionally, investors are focusing on the upcoming second-quarter earnings reports, which could serve as a new catalyst for a market that has reached record highs this year.”

Monday’s earnings reports provided an additional boost to stocks as the report from Goldman Sachs improved sentiment, with investors taking the growth in profits as a sign that Wall Street is recovering from a two-year drought.

BlackRock, the world's largest asset manager, reported that their assets under management climbed to a record of $10.6 trillion in the second quarter, which also boosted sentiment. Notably, BlackRock is currently the largest public holder of BTC through its iShares Bitcoin Trust ETF (IBIT), which now holds over 300,000 BTC.

At the closing bell, the S&P, Dow, and Nasdaq all finished in the green, up 0.28%, 0.53%, and 0.40%, respectively.

The cryptocurrency market experienced a significant rally on Monday, with BTC surging by up to 5% to exceed $63,000,” analysts at Secure Digital Markets said. “This rise comes amidst growing optimism for the digital asset sector under a potential Trump presidency. Since hitting a low on July 5th, BTC has increased by over 17% in just 10 days, returning to positive territory.”

BTC/USD Chart by TradingView

Although Trump has yet to outline specific plans for cryptocurrency regulation, he is now perceived as a supporter of the sector despite his previous skepticism,” the analysts said. “Trump is scheduled to speak at a major annual Bitcoin conference later this month.”

According to Sam Callahan, senior analyst at Swan Bitcoin, the market currently sees Trump as a more positive influence on prices than Biden.

More broadly, asset prices seem to be viewing a Trump victory as a favorable outcome due to his policy promises around tax cuts and less regulation,” he said. “When you couple this with the Republican Party's recent pro-Bitcoin policy stance, it's easy to understand why Bitcoin is reacting positively to the increased likelihood of a second Trump presidency.”

One potential catalyst that I will be keeping a close eye on is Trump's upcoming speech at the Bitcoin Conference,” Callahan said. “If Trump speaks about Bitcoin's potential as a treasury reserve asset, this could be a milestone moment for Bitcoin adoption in the U.S.”

Trump has consistently been seen as the pro-crypto candidate,” said Pat Doyle, Blockchain Researcher at Amberdata. “The market's response to the recent failed assassination attempt underscores strong investor confidence in Trump's prospects for winning the upcoming election. Polymarket currently places Trump's odds of victory at 71%, indicating significant market support for his candidacy. This positive sentiment is reflected in Bitcoin's price movement.”

Additionally, a Trump victory would likely result in the replacement of key figures such as SEC Chair Gary Gensler, along with other regulators who have taken a stringent stance against cryptocurrencies,” Doyle noted. “This potential shift in regulatory approach could foster a more favorable environment for the crypto market.”

Another factor at play is the growing chorus of Democrats calling for Biden to step down, which Doyle said would have a significant impact on the crypto market.

Looking ahead, the primary election-related catalyst that could significantly impact the market is the potential resignation of President Biden,” he said. “Such a development could be perceived positively by crypto investors, anticipating a shift in regulatory dynamics. Other scheduled events, including national conventions and presidential debates, will likely have a more subdued impact on the market.”

While the recent events surrounding Trump have been cited as the reason for the positive move in crypto on Monday, renowned trader Peter Brandt noted that the Bitcoin price action has demonstrated its “often-repeated Hump…Slump…Bump…Dump…Pump chart construction” – meaning the July 5 pullback to $53,500 was really just a bear trap, and Bitcoin has been recovering since then.

At the time of writing, Bitcoin trades at $63,785, an increase of 5.7% on the 24-hour chart.

Sea of green in the altcoin market

It was a breakout day for the altcoin market as all but 5 tokens in the top 200 recorded gains.

Daily cryptocurrency market performance. Source: Coin360

SATS (1000SATS) was the biggest gainer with an increase of 25.4%, followed by an increase of 24.8% for Worldcoin (WLD), and a climb of 22.2% for Mog Coin (MOG). XDC Network led the losers, falling 4.4%, while Zcash (XEC) lost 2.4%, and Stellar (XLM) declined by 2%.

The overall cryptocurrency market cap now stands at $2.33 trillion, and Bitcoin’s dominance rate is 53.7%.

Kitco Media

Jordan Finneseth

Time to Buy Gold and Silver

Tim Moseley

Trump Safe After Apparent Shooting Incident At Pennsylvania Rally

Trump Safe After Apparent Shooting Incident At Pennsylvania Rally

Former President Donald Trump is confirmed safe after an apparent shooting at his campaign rally in Butler, Pennsylvania.

Trump was addressing the crowd when the sound of gunshots interrupted the event.

Secret Service agents quickly secured Trump, who had blood near his right ear.

Trump was escorted off the stage and is being checked at a local medical facility.

The U.S. Secret Service has declared the incident an "active Secret Service investigation.

Trump Safe After Apparent Shooting Incident At Pennsylvania Rally teaser image

Former President Donald Trump is "fine" following an apparent shooting at his campaign rally in Butler, Pennsylvania, on Saturday, his campaign confirmed.

"President Trump thanks law enforcement and first responders for their quick action during this heinous act," campaign spokesman Steven Cheung said in a statement. "He is fine and is being checked out at a local medical facility. More details will follow."

According to the AP, a shooter and an attendee were killed.

Trump, the presumptive Republican nominee for the upcoming election, was addressing the crowd about border crossing numbers when the sound of gunshots disrupted the rally. Trump reached for his right ear, where blood appeared to be visible, before dropping behind the lectern. Secret Service agents quickly swarmed him as attendees screamed, and Trump was escorted off the stage.

The U.S. Secret Service stated that the incident is now an "active Secret Service investigation" and confirmed that "the former president is safe."

Footage from the event showed Trump, with blood near his right ear, fist-pumping at the crowd before leaving the stage. The rally, attended by several thousand people, was immediately declared a crime scene by local law enforcement, who began vacating the fairgrounds shortly after.

According to the White House, President Joe Biden, who was in Delaware at the time, has been briefed on the incident.

"I’m grateful to hear that he’s safe and doing well," said President Biden on a post on X. "I’m praying for him and his family and for all those who were at the rally, as we await further information. Jill and I are grateful to the Secret Service for getting him to safety. There’s no place for this kind of violence in America. We must unite as one nation to condemn it."

Former President Barak Obama wished Trump a quick recovery.

"There is absolutely no place for political violence in our democracy. Although we don’t yet know exactly what happened, we should all be relieved that former President Trump wasn’t seriously hurt, and use this moment to recommit ourselves to civility and respect in our politics. Michelle and I are wishing him a quick recovery," said Obama in a statement on X.

Details about the shooter and the motive remain unclear as the investigation continues.

Kitco Media

Neils Christensen

Tim Moseley

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website Without Spending a Dime

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website

Ah, the quest for website traffic—the digital equivalent of summoning a crowd to your virtual doorstep! 🚀 Let’s dive into some strategies that won’t cost you a dime but can make your visitor count skyrocket. Whether you’re a seasoned webmaster or just dipping your toes into the vast ocean of the internet, these tactics can help you attract more eyeballs to your site

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website Without Spending a Dime!

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website

THE “UPSIDE DOWN” GUEST POST:

Guest posting is indeed similar to crashing a cool party, where you have the opportunity to make a memorable impression. However, the challenge lies in the fact that many attendees often overlook the author bio section, missing out on the chance to connect with the guest writer on a more personal level. It's a situation that can feel disheartening for writers who invest time and effort into creating valuable content. One way to shift the attention back to the author is to strategically integrate helpful resource sections throughout the post.

These sections not only provide additional value to the readers but also offer a platform to link back to relevant content, including the author's own work. By doing so, guest writers can effectively guide a portion of the event's traffic towards their own platform, ultimately expanding their reach and influence. It's like adding an extra layer of excitement to the party, creating a buzz that resonates beyond the initial gathering. With this approach, the guest post becomes a mutually beneficial exchange, enriching the experience for both the host and the visitor.

OVERHAUL & UPGRADE OLD BLOG POSTS:

Dust off those ancient blog posts. Find one that’s outdated (like a flip phone in a smartphone world). Update it, add fresh screenshots, sprinkle in new strategies, and eliminate the old fluff. Then, hit the “publish” button. Boom! Traffic boost. 🚀 You can also consider revisiting the content to incorporate relevant external links, embed engaging multimedia, and optimize it for search engines. Moreover, crafting a compelling new introduction and conclusion can further enhance the post’s appeal. A comprehensive update like this not only revitalizes the post but also reinforces your authority in the subject matter, enticing both new and returning visitors.

USE “CLICK TO TWEET” LINKS:

Want your content to spread like wildfire on social media? Create tweet-worthy snippets within your articles to captivate your audience with compelling sound bites. Head over to ClickToTweet.com, craft a tweet that encapsulates the essence of your message, and get a special link that encourages sharing. When readers click, they’ll effortlessly share your brilliance with their followers, helping your content reach a wider audience. It's as easy as pie! 🐦

AFFILIATE PROGRAMS:

Start an affiliate program and take advantage of the power of word-of-mouth marketing. By incentivizing others to promote your products or services, you can tap into a vast network of potential customers. As a result, your reach expands exponentially, and you benefit from increased brand visibility. Additionally, the affiliate promoters gain the opportunity to earn commissions for their efforts, creating a mutually beneficial arrangement. This collaborative approach fosters a sense of partnership and community, ultimately contributing to the success of all parties involved. 🤝

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website Without Spending a Dime!

Discover the Ultimate Guide to Skyrocketing Traffic to Your Website

BUILD AN OPT-IN LIST:

Collecting email addresses from interested folks is a crucial part of building a strong community around your content. Once you have their contact information, you can nurture them with valuable and relevant content, keeping them engaged and interested in what you have to offer. As you continue to provide them with useful information, you can establish a strong and trusting relationship with your audience. Then, when you have something exciting to share, such as a new blog post, event, or product launch, you can easily reach out to them and keep them informed. This direct line of communication allows you to keep your audience in the loop and make sure they don't miss out on anything important. Leveraging email marketing effectively can be a powerful tool in growing and maintaining your online presence. 📧

LEVERAGE SOCIAL MEDIA:

Be a social butterfly and watch your content soar across platforms like Facebook, Twitter, and LinkedIn. By sharing your content across multiple platforms, you can reach a wider audience and increase engagement. Social media is a powerful tool for expanding your reach and connecting with people who share your interests. Embrace the opportunity to spread the love and make meaningful connections with your audience. So, don't hesitate to let your content take flight and reach new heights! 🦋

ANSWER QUESTIONS ON QUORA AND REDDIT:

People love answers, and there are countless platforms where you can share your expertise and provide valuable insights. Becoming a helpful guru on Quora and relevant subreddits can establish you as a go-to source for information in your niche. By dropping knowledge bombs and subtly integrating links to your site, you can drive traffic while offering genuine value to users seeking answers and guidance.

Engaging with the community, sharing experiences, and offering detailed explanations can further solidify your position as a knowledgeable and trusted resource. Embracing these platforms allows you to not only showcase your expertise but also connect with a wide audience that actively seeks the valuable information you have to offer. It's a great way to establish authority, build relationships, and drive traffic to your website. 💡

CREATE A BRANDABLE VIRAL EBOOK:

Everyone loves free stuff, especially when it's valuable and relevant to their interests. By creating an engaging eBook that is directly related to your niche, you can capture the attention of your audience and provide them with valuable knowledge and insights. Make sure to make the eBook shareable across various platforms, allowing it to easily reach a wider audience.

Once your eBook starts circulating, it has the potential to spread like gossip at a family reunion, reaching new readers and potential customers who are eager to learn from your expertise and share the valuable content with others. Embracing the power of a well-crafted eBook can significantly enhance your brand's visibility and establish you as an authority in your field. 📚

SUBMIT YOUR WEBSITE TO DIRECTORIES:

Old-school but effective. Find relevant directories and submit your site. Think of it as the Yellow Pages of the internet. Directories can help improve your website's visibility and boost its search engine rankings. By submitting your site to these directories, you can increase the chances of potential customers finding your business. Furthermore, being listed in directories can also enhance your website's credibility and authority within your industry. Embracing this traditional method can still bring modern benefits to your online presence. 🗂️

PARTICIPATE IN FORUMS:

Joining forums related to your niche can be an excellent way to expand your network and establish your expertise. By actively participating in discussions, sharing valuable insights, and engaging with other members, you can build relationships within your industry.

This type of engagement not only helps you gain visibility and credibility, but also provides opportunities to subtly promote your website or blog by including relevant links in your forum posts. Just like attending a digital cocktail party, forum participation allows you to socialize, network, and make connections in a virtual setting, creating a positive and lasting impression within your niche community. Cheers to expanding your online presence! 🥂

RECYCLE CONTENT FORMATS:

Turn your blog posts into YouTube videos, TikTok snippets, or SlideShare presentations and reach a wider audience across various platforms. By repurposing your content into different formats, you can cater to diverse preferences and consumption habits, enhancing the accessibility and appeal of your valuable insights.

Whether it's engaging visual storytelling on YouTube, bite-sized and impactful content on TikTok, or professional presentations on SlideShare, the possibilities are endless. Embrace the versatility of your content and extend its reach, ensuring that your awesome content resonates with audiences far and wide. 🔄

  1.  

Remember, Rome wasn’t built in a day, and neither is a bustling website. Consistency is key. So, go forth, my digital trailblazer! May your traffic explode like confetti at a surprise party! 🎊

https://rtateblogspot.com/2024/03/09/unleash-your-potential-maximizing-your-success-with-markethive/

Tim Moseley

Gold price could return to all-time highs in the coming days’

Gold price could return to all-time highs ‘in the coming days’

old price could return to all-time highs ‘in the coming days’ teaser image

(Kitco News) – Hotter-than-expected producer prices weren’t able to cool down the gold market. Prices look to end their second week above $2,400 an ounce, with analysts looking for a potential move to a fresh all-time high.

Gold prices ended the week in neutral territory compared to last week; however, they remain down nearly 1% from their all-time highs.

August gold futures last traded at $2,421 an ounce, unchanged on the day and only 90 cents down from last week.

While Friday’s Producer Price Index did take some momentum away from gold, the precious metal was able to hold critical support at $2,400 an ounce. For some analysts, this is a strong indication that gold’s consolidation phase is coming to an end.

Gold is seeing fresh bullish momentum following relatively dovish comments from Federal Reserve Chair Jerome Powell, coupled with weaker-than-expected inflation in the Consumer Price Index. Core CPI, which excludes volatile food and energy prices, rose 3.0% in the last 12 months. Annual inflation rose at its slowest pace since April 2021.

Meanwhile, in his two days of testimony on Capitol Hill, Powell warned Congress that risks to the economy are balanced. “Elevated inflation is not the only risk we face,” Powell said in his prepared remarks.

Robert Minter, Director of ETF Strategy at abrdn, said that these two factors have given gold the invitation it has been waiting for to rally.

Minter added that with a slowing labor market, the Fed needs to act now before it is caught even farther behind the eight ball.

There is a strong case for a September rate cut,” he said. “If you look at how high consumer debt is, it's not going to take much labor market stress to cause real problems in the economy. I don’t think we are going to see a recession, but that all depends on the Fed. They are a little late, but not fatally late, to do something.”

According to the CME FedWatch Tool, markets see more than a 90% chance of a rate cut in September.

Naeem Aslam, Chief Investment Strategist at Zaye Capital Markets, said that at this point, a September rate cut is a done deal. Although next week will see the release of some important economic reports, some market analysts don’t expect any of the data to materially change market expectations, which should continue to support gold’s new momentum.

Carsten Fritsch, Commodity Analyst at Commerzbank, is also looking for gold to hit an all-time high next week.

An interest rate cut in September is now almost fully priced in, and another one by the end of the year. The price of gold could therefore return to its all-time high from May in the coming days,” he said in a note Friday.

Although all eyes are currently on the Federal Reserve, economists will shift their focus next week to the European Central Bank, which will announce its interest rate decision Thursday. Markets are expecting the ECB to keep rates unchanged after cutting in June.

However, the question remains if the central bank will keep the door open for another rate cut in September.

While a dovish stance will weaken the euro against the U.S. dollar, creating a potential headwind for gold, analysts note a bigger trend in the marketplace. Falling global interest rates are bullish for gold as opportunity costs drop.

This week, the World Gold Council noted that investment demand picked up in Europe last month, coinciding with the rate cut

In North America, the biggest report on the docket is the June retail sales data. Economists note that any further weakness in consumption will add to Fed rate cut expectations.

 

Weekly Economic Data to Watch

Monday: Empire State Manufacturing Survey, Powell speaks at the Economic Club of Washington DC

Tuesday: U.S. retail sales

Wednesday: U.S. housing starts and building permits

Thursday: ECB monetary policy decision, weekly jobless claims, Philly Fed survey

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Gold Surges Past 2400 as June CPI Reveals Declining Inflation

Gold Surges Past $2400 as June CPI Reveals Declining Inflation

The Bureau of Labor Statistics' latest Consumer Price Index (CPI) report, released today, shows a significant decline in inflationary pressures for June. This marks the first decrease in prices since early 2020.

According to the report, “The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent on a seasonally adjusted basis, after being unchanged in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3.0 percent before seasonal adjustment.”

June's CPI dropped by 0.1%, following May's unchanged reading. This decline brought the annual headline inflation rate to 3%, its lowest in a year and considerably below May's 3.3% year-over-year figure. The results surpassed economists' expectations, as FactSet consensus estimates had predicted a 0.1% monthly increase and a 3.1% annual inflation gain.

This report provides the Federal Reserve with the additional evidence of waning inflation that Chairman Powell emphasized as a necessary component needed to begin cutting interest rates during his recent congressional testimonies. The data suggests that the Fed is getting closer to reaching its goal of bringing inflation to its 2% target.

Skyler Weinand, chief investment officer at Regan Capital, suggests that this favorable CPI report could pave the way for the Federal Reserve to implement interest rate cuts as early as September, with a potential second cut in December, provided inflation continues to trend downward.

Many analysts, including the author, believe that another positive inflation report in August could prompt the Fed to ease its restrictive monetary policy with at least two, possibly three, rate cuts this year. This aligns more closely with the Fed officials' projections from the March FOMC meeting, which anticipated three rate cuts in 2023. The most recent "dot plot," however, had scaled back expectations to one or two cuts.

The impact of the CPI report on market sentiment regarding rate cuts was immediate and significant. The CME's FedWatch tool now forecasts a 92.7% probability of a rate cut at the September FOMC meeting, with an 84.6% chance of a 0.25% cut and an 8.1% likelihood of a 0.50% reduction. Only a 7.3% probability remains for maintaining the current benchmark rate.

The gold market responded positively to this news. Spot gold (Forex) is currently trading at $2,413.92, representing a substantial daily gain of $42.79 or 1.8%. Gold futures for August delivery also saw significant increases, reaching $2,421.90 as of 5:20 PM ET, up $42.20 or 1.77%. The August contract touched an intraday high of $2,430.40.

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

Gold Futures Rise as Powell Remains Cautious on Rate Cut Timing

Gold Futures Rise as Powell Remains Cautious on Rate Cut Timing

Federal Reserve Chairman Jerome Powell's recent testimony provided little insight into the timing of potential interest rate cuts, leading to a modest gain in gold futures. Powell's remarks, spanning two days of testimony, emphasized the Fed's data-dependent approach and the need for more evidence of sustained inflation reduction before initiating rate cuts.

Powell expressed optimism about the U.S. economy achieving a "soft landing," where inflation targets are met without significantly increasing unemployment. This scenario, once deemed improbable when inflation peaked at a 40-year high in 2022, now appears more feasible. However, Powell remained cautious, stating he was not yet prepared to confirm inflation's sustainable downward trajectory to the Fed's 2% target.

The Chairman's testimony highlighted the Fed's commitment to making decisions based on incoming economic data. While acknowledging inflation's decline from recent highs, Powell emphasized the need for further progress before considering rate cuts. He refrained from providing specifics on the timing or number of potential rate reductions this year.

Investors have now shifted their focus to upcoming inflation reports. The June Consumer Price Index (CPI) report, due Thursday, is expected to show inflation continuing to decline to an annualized rate of 3.1%, down from May's 3.3%. Friday's Producer Price Index (PPI) report is anticipated to reveal a slight increase of 0.2% for June, up from May's 0.1% rise.

Powell's cautious stance and expectations of cooling inflation have contributed to a weakening dollar index. The CME's FedWatch tool indicates a 95.3% probability that the Fed will maintain current interest rates at this month's FOMC meeting. However, there's a 73.3% chance of a rate cut at the September meeting, with a 70% likelihood of a quarter-point reduction and a 3.3% possibility of a half-point cut.

The dollar index dipped 0.11% to 104.994, while gold futures for August delivery rose by $11.80 or 0.50%, reaching $2,379.70. This uptick in gold prices reflects investors' response to Powell's testimony and the anticipated inflation data.

As the market digests Powell's remarks and awaits crucial economic reports, the precious metals sector remains sensitive to shifts in monetary policy expectations and inflation trends. The coming days will be critical in shaping market sentiment and potentially influencing the Fed's future decisions on interest rates.

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter