Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. In this column, JWR also covers hedges, derivatives, and various obscura. This column emphasizes JWR’s “tangibles heavy” investing strategy and contrarian perspective. Today, a recap of last week’s market rout in precious metals. (See the Precious Metals section.)
Precious Metals:
Gold and silver both bounced back on Friday, following a rout for most of last week. On Friday afternoon, spot gold had recovered to $1,846.10 per Troy ounce (up .81%). Meanwhile, spot silver had jumed back up to $21.88 (up 3.5%.) Kitco reported: Gold price ends nine-day losing streak but still negative for the week. For the record, I don’t expect silver and gold to resume a substantial bull market until the Federal Reserve capitulates and starts lowering interest rates again. I expect that to happen before the November 2024 presidential election. – JWR
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Adam Hamilton posted this analysis, over at Gold-Eagle.com: Gold’s Violent Breakdown. Here is an excerpt:
“Gold just suffered a violent technical breakdown, plunging even deeper out of favor. Heavy gold-futures selling has cascaded following the FOMC’s latest hawkish surprise. That pummeled gold sharply lower, shattering key support zones. But big gold-futures selling quickly exhausts speculators’ capital firepower. Then they rush to buy and normalize their excessively-bearish bets, catapulting gold proportionally higher.
Only two weeks ago, gold was looking solid heading into late September’s FOMC meeting. After closing at $1,931 the day before, the yellow metal just drifted flatlined following Fed officials’ latest decision. That proved a hawkish surprise, despite no rate hike. Top Fed officials’ projections for their federal-funds rate at year-end 2024 were boosted 50 basis points, implying two rate cuts next year instead of the previous four.
That should’ve been a nothingburger for markets. Traders had expected this latest dot plot to moderate to three rate cuts forecast in 2024. And Fed officials’ FFR projections have proven notoriously inaccurate, as the Fed chair himself warns. Divining the FFR 15.4 months into the future may as well be an eternity away, as the actual coming FFR trajectory will likely vary radically depending on how the US economy fares.”
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Bond yields can’t keep gold down forever as ING sees higher prices in 2024.
Economy & Finance:
Federal Debt Increased By $2.2 Trillion In Fiscal Year 2023.
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Mortgage rate races toward 8% after hitting a high not seen since late 2000.
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Another from CNBC: Why borrowing costs for nearly everything are surging, and what it means for you.
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A Peter St. Onge video on X that I found linked over at the Whatfinger.com news aggregation site: BoA: When Fed starts cuttings things will break. 276 rate hikes are finally crushing the global economy. But history says the real storm comes when they start cutting rates. Because cuts means they broke it.
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Treasury’s Yellen says US overdependent on China for critical supply chains.
Commodities:
H.L. sent us this: Switzerland: Emergency Plans to Deal with Energy Shortages this Winter, Ban Use of Electric Cars for ‘Non-Essential’ Journeys.
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From reader D.S.V.: New EV battery factory requires so much energy a coal power plant will be expanded and its closure delayed by years.
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Biden admin issues restrictions on gas furnaces in latest war on appliances. (Thanks to reader C.B. for the link.)
Inflation Watch:
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Orange juice prices are soaring. Don’t expect relief anytime soon.
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Alexander William Salter Inflationary Growth is Fake News. (Salter is an Associate Professor of Economics in the Rawls College of Business and the Comparative Economics Research Fellow with the Free Market Institute, both at Texas Tech University.)
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The latest OECD inflation data.
Forex & Cryptos:
Reuters: US dollar’s rally supercharged by soaring real yields on Treasuries.
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Posted on October 6th, at Currency Thoughts: Dollar Marking Time Ahead of U.S. September Jobs Report.
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Jameson Lopp: Sovereignty vs Society.
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Bitcoin News: Here Is When BTC Could Revisit $20,000 One Last Time, Analyst Says.
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SBF was ‘very resistant’ to investors on FTX board: Paradigm co-founder.
Tangibles Investing:
California Probes Classic Car Owners Amid ‘Zero-Emission Zone’ Proposals.
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Hagerty: Prices in the collector-car market soften further.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail or via our Contact form.) These are often especially relevant because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News items from local news outlets that are missed by the news wire services are especially appreciated. Thanks!