Category Archives: silver-rounds

On Thursday, investors will digest one of the most important data points that will shape future Federal Reserve interest rate policy: June’s Consumer Price Index (CPI).The inflation report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.1%, a deceleration from the 3.3% rise seen in May. This would be the smallest annual rise since January as another drop in energy prices likely will have contributed to further downward pressure on headline CPI.Over the prior month, consumer prices are expected to have risen 0.1%, a slight uptick from May’s flat monthly reading.Meanwhile, on a “core” basis, which strips out the more volatile costs of food and gas, prices in June are expected to have risen 3.4% over last year and 0.2% over the prior month, unchanged from May, according to Bloomberg data.”We expect the June CPI report to be another confidence builder following the undeniably good May report,” Bank of America economists Stephen Juneau and and Michael Gapen wrote in a note last week.The economists said while the anticipated numbers are “not quite as low as May, it would be a good print for the Fed.”Thursday’s inflation data arrives at a critical moment for the central bank after slowing job market growth, coupled with recent testimony from Federal Reserve chair Jay Powell, have kept rate cut hopes alive.Powell, who is set to complete his semiannual policy update to Congress on Wednesday, has largely stuck to his data-dependent narrative — a positive sign given recent encouraging data. On Tuesday, he told the Senate Banking Committee that although there’s been evidence of inflation cooling, the Fed still needs more “good data” to be confident that inflation is moving toward the Fed’s 2% target.Core inflation has remained stubbornly elevated due to higher costs of shelter and core services like insurance and medical care. In May, non-housing services “surprisingly edged down in May, owing in large part to a slight decline in motor vehicle insurance,” Bank of America’s Juneau and Gapen noted.But the economists expect the category (and motor vehicle insurance) to have increased in June, indicative of the “bumpy” path forward when it comes to price stabilization.”Non-housing services inflation should moderate over time given cooling services wage inflation; however, a sustained period of deflation is unlikely,” they warned.FILE – Federal Reserve Board Chair Jerome Powell speaks at a news conference at the Federal Reserve in Washington, June 12, 2024. Powell testifies to the Senate Banking Committee on Tuesday, July 9, 2024. (AP Photo/Susan Walsh, File) (ASSOCIATED PRESS)Meanwhile, price increases for rent and owners’ equivalent rent, or the hypothetical rent a homeowner would pay for the same property, are expected to cool in the coming months, BofA said, “which should add to the Fed’s confidence on the inflation outlook.”The team at Goldman Sachs, led by Jan Hatzius, agreed “further disinflation” remains in the pipeline this year, citing “rebalancing in the auto, housing rental, and labor markets.”Still, “we expect offsets from continued catch-up inflation in healthcare and car insurance and from single-family rent growth continuing to outpace multifamily rent growth.”Goldman anticipates year-over-year core CPI inflation of 3.2% and core PCE inflation of 2.7% in December 2024, down from their previous projection of 3.5% and 2.8%, respectively.To cut or not to cut?Inflation has remained stubbornly above the Federal Reserve’s 2% target on an annual basis. But recent economic data has helped fuel a narrative that the central bank should cut rates sooner than later.On Friday, the Bureau of Labor Statistics showed the labor market added 206,000 nonfarm payroll jobs last month, ahead of the 190,000-plus expected by economists. However, the unemployment rate unexpectedly rose to 4.1%, up from 4% in the month prior. It was the highest reading in almost three years.Notably, the Fed’s preferred inflation gauge, the so-called core PCE price index, showed inflation eased in May. The year-over-year change in core PCE came in at 2.6% over the prior year in May, in line with estimates and the slowest annual gain in more than three years.”Should the CPI report print [fall] in line with our expectations, we would maintain our expectation for the Fed to start its cutting cycle in December.” BofA said. “That said, we do acknowledge that another 0.2% month-over-month print for core CPI would tilt the risk towards an earlier cut especially given signs of softening activity.”Investors now anticipate a range of one to two 25-basis-point cuts in 2024, down from the six cuts expected at the start of the year, according to Bloomberg data.As of Wednesday, markets were pricing in a roughly 75% chance the Federal Reserve begins to cut rates at its September meeting, according to data from the CME Group.Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.Click here for the latest stock market news and in-depth analysis, including events that move stocksRead the latest financial and business news from Yahoo Finance Continue reading →

(Kitco News) Zimbabwe’s plan to sell gold coins to tame inflation is a missed opportunity to build better gold reserves, according to the International Monetary Fund (IMF).
Over the summer, Zimbabwe’s central bank started selling gold coins to fight inflation. The idea was that gold coins would provide a store of value to the country’s plunging currency and give the population an alternative to the U.S. dollar.
The one troy-ounce 22-carat gold coins named ‘Mosi-Oa-Tunya,’ meaning “Smoke that Thunders” in reference to Victoria falls, have been very popular. After the first week of being launched, which was at the end of July, the country’s central bank sold 1,500 gold coins. 
Each gold coin has a serial number and can be bought with local currency, the U.S. dollar, and other foreign currencies. The price is set based on the international price of gold and production costs. As of this week, each gold coin was going for $1,755, according to the central bank’s website.
The owners of the coins can convert them into cash or make a trade-in whenever needed. The gold coins could also be used as legal tender to transact in or as a security for loans.
The goal is to lower the demand for U.S. dollars following the collapse of the Zimbabwe dollar. Earlier, Zimbabwe revealed plans to adopt the U.S. dollar as legal tender for the next five years to stabilize the country’s exchange rate. This is the second time in more than a decade that Zimbabwe is legalizing the greenback as legal tender.
Surging inflation and currency devaluation have made things difficult for Zimbabwe’s population. The country’s annual inflation accelerated by 285% in August. In response to the crisis, Zimbabwe’s central bank has more than doubled its policy rate from 80% to 200%, a new record.
But the IMF sees this as a missed opportunity on the gold reserves side. “The sale of gold coins has contributed to withdrawing Zimbabwe dollar liquidity from the market, though it represents an opportunity cost in terms of foregone reserves for the Reserve Bank of Zimbabwe,” Bloomberg quoted an IMF spokesperson as saying Thursday.
Earlier in the week, the IMF noted that Zimbabwe’s monetary policy moves were helping with currency devaluation. “The recent tightening of monetary policy and the contained budget deficits are policies in the right direction and have contributed to the narrowing of the parallel market exchange rate gap,” the IMF said Monday.
Due to the popularity of one-ounce gold coins, the country’s central bank is also working on releasing a tenth of an ounce coins.
The gold coin idea also inspired the country to try incentivizing the nation’s biggest gold miners to produce above the state-planned targets.
Large miners are being encouraged by the government to produce more gold. And those who exceed their targets can receive 80% of the payment for the additional output in foreign currency. The current payment plan is a 60-40 split between foreign and local currency payments. 
Zimbabwe’s gold output is already up 47% this year, with the government looking for gold mining to account for a third of 2023’s overall mining industry targeted $12 billion in revenue. Continue reading →

(Bloomberg) — The price of copper — used in everything from computer chips and toasters to power systems and air conditioners — has fallen by nearly a third since March. Investors are selling on fears that a global recession will stunt demand for a metal that’s synonymous with growth and expansion.Most Read from BloombergYou wouldn’t know it from looking at the market today, but some of the largest miners and metals traders are warning that in just a couple of years’ time, a massive shortfall will emerge for the world’s most critical metal — one that could itself hold back global growth, stoke inflation by raising manufacturing costs and throw global climate goals off course. The recent downturn and the under-investment that ensues only threatens to make it worse.“We’ll look back at 2022 and think, ‘Oops,’” said John LaForge, head of real asset strategy at Wells Fargo. “The market is just reflecting the immediate concerns. But if you really thought about the future, you can see the world is clearly changing. It’s going to be electrified, and it’s going to need a lot of copper.”Inventories tracked by trading exchanges are near historical lows. And the latest price volatility means that new mine output — already projected to start petering out in 2024 — could become even tighter in the near future. Just days ago, mining giant Newmont Corp. shelved plans for a $2 billion gold and copper project in Peru. Freeport-McMoRan Inc., the world’s biggest publicly traded copper supplier, has warned that prices are now “insufficient” to support new investments.Commodities experts have been warning of a potential copper crunch for months, if not years. And the latest market downturn stands to exacerbate future supply problems — by offering a false sense of security, choking off cash flow and chilling investments. It takes at least 10 years to develop a new mine and get it running, which means that the decisions producers are making today will help determine supplies for at least a decade.“Significant investment in copper does require a good price, or at least a good perceived longer-term copper price,” Rio Tinto Group Chief Executive Officer Jakob Stausholm said in an interview this week in New York.Why Is Copper Important?Copper is essential to modern life. There’s about 65 pounds (30 kilograms) in the average car, and more than 400 pounds go into a single-family home.The metal, considered the benchmark for conducting electricity, is also key to a greener world. While much of the attention has been focused on lithium — a key component in today’s batteries — the energy transition will be powered by a variety of raw materials, including nickel, cobalt and steel. When it comes to copper, millions of feet of copper wiring will be crucial to strengthening the world’s power grids, and tons upon tons will be needed to build wind and solar farms. Electric vehicles use more than twice as much copper as gasoline-powered cars, according to the Copper Alliance.How Big Will the Shortage Get?As the world goes electric, net-zero emission goals will double demand for the metal to 50 million metric tons annually by 2035, according to an industry-funded study from S&P Global. While that forecast is largely hypothetical given all that copper can’t be consumed if it isn’t available, other analyses also point to the potential for a surge. BloombergNEF estimates that demand will increase by more than 50% from 2022 to 2040.Meanwhile, mine supply growth will peak by around 2024, with a dearth of new projects in the works and as existing sources dry up. That’s setting up a scenario where the world could see a historic deficit of as much as 10 million tons in 2035, according to the S&P Global research. Goldman Sachs Group Inc. estimates that miners need to spend about $150 billion in the next decade to solve an 8 million-ton deficit, according to a report published this month. BloombergNEF predicts that by 2040 the mined-output gap could reach 14 million tons, which would have to be filled by recycling metal.To put in perspective just how massive that shortage would be, consider that in 2021 the global deficit came in at 441,000 tons, equivalent to less than 2% of demand for the refined metal, according to the International Copper Study Group. That was enough to send prices jumping about 25% that year. Current worst-case projections from S&P Global show that 2035’s shortfall will be equivalent to about 20% of consumption.As for what that means for prices?“It’s going to get extreme,” said Mike Jones, who has spent more than three decades in the metal industry and is now the CEO of Los Andes Copper, a mining exploration and development company.Where Are Prices Heading?Goldman Sachs forecasts that the benchmark London Metal Exchange price will almost double to an annual average of $15,000 a ton in 2025. On Wednesday, copper settled at $7,690 a ton on the LME.“All the signs on supply are pointing to a fairly rocky road if producers don’t start building mines,” said Piotr Kulas, a senior base metals analysts at CRU Group, a research firm.Of course, all those mega-demand forecasts are predicated on the idea that governments will keep pushing forward with the net-zero targets desperately needed to combat climate change. But the political landscape could change, and that would mean a very different scenario for metals use (and the planet).And there’s also a common adage in commodity markets that could come into play: high prices are the cure for high prices. While copper has dropped from the March record, it’s still trading about 15% above its 10-year average. If prices keep climbing, that will eventually push clean-energy industries to engineer ways to reduce metals consumption or even seek alternatives, according to Ken Hoffman, the co-head of the EV battery materials research group at McKinsey & Co.Scrap supply can help fill mine-production gaps, especially as prices rise, which will “drive more recycled metals to appear in the market,” said Sung Choi, an analyst at BloombergNEF. S&P Global points to the fact that as more copper is used in the energy transition, that will also open more “opportunities for recycling,” such as when EVs are scrapped. Recycled production will come to represent about 22% of the total refined copper market by 2035, up from about 16% in 2021, S&P Global estimates.The current global economic malaise also underscores why the chief economist for BHP Group, the world’s biggest miner, just this month said copper has a “bumpy” path ahead because of demand concerns. Citigroup Inc. sees copper falling in the coming months on a recession, particularly driven by Europe. The bank has a forecast for $6,600 in the first quarter of 2023.And the outlook for demand from China, the world’s biggest metals consumer, will also be a key driver.If China’s property sector shrinks significantly, “that’s structurally less copper demand,” said Timna Tanners, an analyst at Wolfe Research. “To me, that’s just an important offset” to the consumption forecasts based on net-zero goals, she said.But even a recession will only mean a “delay” for demand, and it won’t “significantly dent” the consumption projections going into 2040, according to a presentation from BloombergNEF dated Aug. 31. That’s because so much of future demand is being “legislated in,” through governments’ focus on green goals, which makes copper less dependent on the broader global economy than it used to be, said LaForge of Wells Fargo.Plus, there’s little wiggle room on the supply side of the equation. The physical copper market is already so tight that despite the slump in futures prices, the premiums paid for immediately delivery of the metal have been moving higher.What’s Holding Back Supplies?Just take a look at what’s happening in Chile, the legendary mining nation that’s long been the world’s largest supplier of the metal. Revenue from copper exports is falling because of production struggles.At mature mines, the quality of ore is deteriorating, meaning output either slips or more rock has to be processed to produce the same amount. And meanwhile the industry’s pipeline of committed projects is running dry. New deposits are getting trickier and pricier to both find and develop. In Peru and Chile, which together account for more than a third of global output, some mining investments have stalled, partly amid regulatory uncertainty as politicians seek a greater portion of profits to resolve economic inequalities.Soaring inflation is also driving up the cost of production. That means the average incentive price, or the value needed to make mining attractive, is now roughly 30% higher than it was 2018 at about $9,000 a ton, according to Goldman Sachs.Globally, supplies are already so tight that producers are trying to squeeze tiny nuggets out of junky waste rocks. In the US, companies are running into permitting roadblocks. While in the Congo, weak infrastructure is limiting growth potential for major deposits.Read More: Biggest US Copper Mine Stalled Over Sacred Ground DisputeAnd then there’s this great contradiction when it comes to copper: The metal is essential to a greener world, but digging it out of the earth can be a pretty dirty process. At a time when everyone from local communities to global supply chain managers are heightening their scrutiny of environmental and social issues, getting approvals for new projects is getting much harder.The cyclical nature of commodity industries also means producers are facing pressure to keep their balance sheet strong and reward investors rather than aggressively embark on growth.“The incentive to use cash flows for capital returns rather than for investment in new mines is a key factor leading to a shortage of the raw materials that the world needs to decarbonize,” analysts at Jefferies Group LLC said in a report this month.Even if producers switch gears and suddenly start pouring money into new projects, the long lead time for mines means that the supply outlook is pretty much locked in for the next decade.“The short-term situation is contributing to the stronger outlook longer term because it’s having an impact on supply development,” Richard Adkerson, CEO of Freeport-McMoRan, said in an interview. And in the meantime, “the world is becoming more electrified everywhere you look,” he said, which inevitably brings “a new era of demand.”Most Read from Bloomberg Businessweek©2022 Bloomberg L.P. Continue reading →

September 20, 2022  by SchiffGold  0   0This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.Registered = Warrant assigned and can be used for Comex delivery, Eligible = No warrant attached – owner has not made it available for delivery.Current TrendsGoldIt’s been four months of a relentless decrease in gold holdings at the Comex. This was highlighted last month and the momentum has continued into September. Since May, almost $9M ounces of gold have left Comex vaults.Figure: 1 Recent Monthly Stock ChangeOver the last 30 days, Registered has seen a fall of 1.47M ounces with Eligible losing 170k. As shown below, nearly every day shows a net loss in metal.Figure: 2 Recent Monthly Stock ChangeSilverSilver is slightly different than gold. The action has been focused primarily on Registered metal (metal available for delivery). Only one month (March) has seen an increase in Registered since December of last year. In fact, since March of last year, Registered has only seen a meaningful increase in inventory in two months.Figure: 3 Recent Monthly Stock ChangeThe bleed-out of Registered can be seen below with consistent movement out throughout the last 30 days. Nearly 11M ounces have left Registered during this time.Figure: 4 Recent Monthly Stock ChangeThe table below summarizes the movement activity over several time periods to better demonstrate the magnitude of the current move.GoldOver the last month, gold has seen Registered fall by 10.2%, or 1.4M ouncesCombined with the outflow in Eligible, total inventories dropped 5.7% or 1.6MIn the last week, the action has been Registered moving to EligibleInventory is down over the past year by 20%Eligible is down 11% and Registered down almost 30%!SilverSilver Registered is down by almost 20% in the last monthRegistered silver is down an incredible 56% in the last year and 69% over three yearsEligible is nearly flat over the month, with a fall of 1.2%Combined, inventory has dropped 4% in the last month, but the fall in Registered is clearly acceleratingAt the current pace, Registered silver could be fully depleted by January!Figure: 5 Stock Change SummaryThe next table shows the activity by bank/Holder. It details the numbers above to see the movement specific to vaults.GoldEvery vault has seen inventories fall over the last year with 5 vaults seeing supply fall by more than 30%Over the last month, 5 of 8 vaults lost gold with only meager gains seen in Delaware Depository and HSBCSilverSilver has seen massive outflows MoM with 3 vaults seeing almost 10% or more reduction. 2 other vaults saw 5%+ reductions.Over the last year, only Delaware and Malca have seen increases in silver, with 7 vaults seeing sizable reductions (+10%)Figure: 6 Stock Change DetailHistorical PerspectiveZooming out and looking at the inventory for gold and silver shows just how massive the current move has been. The decline has been swift and steep, with losses seen in both Eligible and Registered.Figure: 7 Historical Eligible and RegisteredSilver has seen a massive move down in Registered as a % of the total (black line). In September 2020, Registered made up 40% of total Comex inventories. The number has crashed to 13.8%, which is now the lowest level since at least Jan 2015.Figure: 8 Historical Eligible and RegisteredThe chart below focuses just on Registered to show the steepness of the current fall. In Feb 2021, there were 152M ounces of Registered. That number now sits at 44M, which is a net fall of 108M ounces. Considering the recent acceleration, total holdings could fall below 2016 levels within a few months.Figure: 9 Historical RegisteredComex is not the only vault seeing big moves out of silver. Below shows the LBMA holdings of silver. It should be noted that much of the holdings shown below are allocated to ETFs. Regardless, total inventories have fallen every single month since November. Holdings fell below 1B ounces in June and now sit just above 900M as of August.Figure: 10 LBMA Holdings of SilverAvailable supply for potential demandThese falls in inventory have had a major impact on the coverage of Comex against the paper contracts held. There are now 3.4 paper contracts for each ounce of Registered gold within the Comex vaults. The coverage would actually be far worse if the total open interest had not plummeted in recent weeks.Figure: 11 Open Interest/Stock RatioCoverage in silver is far weaker than gold with 15 paper contracts for each ounce of Registered silver. This is the worst coverage since June of 2018 when total open interest was almost 61% higher.Figure: 12 Open Interest/Stock RatioWrapping UpThe physical demand for gold and silver has been voracious. While the price is still being controlled by the paper market, it’s clear that something in the physical market could trigger a major shift. As supplies continue to dwindle, it’s only a matter of time before shorts will get stuck without being able to deliver. At the current pace, this is not something that will happen in a few years. It could be a few months!The price action in gold and silver does not suggest that supplies are starting to run thin, but the data is ringing the alarm bell for anyone who wants to listen. Physical is in demand and investors want it now! Prices will catch-up. Make sure you are positioned before they do.Data Source: https://www.cmegroup.com/Data Updated: Daily around 3PM EasternLast Updated: Sep 19, 2022Gold and Silver interactive charts and graphs can always be found on the Exploring Finance dashboard: https://exploringfinance.shinyapps.io/goldsilver/Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today! Continue reading →

(Bloomberg) — Economist Nouriel Roubini, who correctly predicted the 2008 financial crisis, sees a “long and ugly” recession in the US and globally occurring at the end of 2022 that could last all of 2023 and a sharp correction in the S&P 500.Most Read from Bloomberg“Even in a plain vanilla recession, the S&P 500 can fall by 30%,” said Roubini, chairman and chief executive officer of Roubini Macro Associates, in an interview Monday. In “a real hard landing,” which he expects, it could fall 40%.Roubini whose prescience on the housing bubble crash of 2007 to 2008 earned him the nickname Dr. Doom, said that those expecting a shallow US recession should be looking at the large debt ratios of corporations and governments. As rates rise and debt servicing costs increase, “many zombie institutions, zombie households, corporates, banks, shadow banks and zombie countries are going to die,” he said. “So we’ll see who’s swimming naked.”Roubini, who has warned through bull and bear markets that global debt levels will drag down stocks, said that achieving a 2% inflation rate without a hard landing is going to be “mission impossible” for the Federal Reserve. He expects a 75 basis points rate hike at the current meeting and 50 basis points in both November and December. That would lead the Fed funds rate by year’s end to be between 4% and 4.25%.However persistent inflation, especially in wages and the service sector, will mean the Fed will “probably have no choice” but to hike more, he said, with funds rates going toward 5%. On top of that, negative supply shocks coming from the pandemic, Russia-Ukraine conflict and China’s zero Covid tolerance policy will bring higher costs and lower economic growth. This will make the Fed’s current “growth recession” goal — a protracted period of meager growth and rising unemployment to stem inflation — difficult.Once the world is in recession, Roubini doesn’t expect fiscal stimulus remedies as governments with too much debt are “running out of fiscal bullets.” High inflation would also mean that “if you do fiscal stimulus, you’re overheating the aggregate demand.”As a result, Roubini sees a stagflation like in the 1970s and massive debt distress as in the global financial crisis.“It’s not going to be a short and shallow recession, it’s going to be severe, long and ugly,” he said.Roubini expects the US and global recession to last all of 2023, depending on how severe the supply shocks and financial distress will be. During the 2008 crisis, households and banks took the hardest hits. This time around, he said corporations, and shadow banks, such as hedge funds, private equity and credit funds, “are going to implode”In Roubini’s new book, “Megathreats,” he identifies 11 medium-term negative supply shocks that reduce potential growth by increasing the cost of production. Those include deglobalization and protectionism, relocating of manufacturing from China and Asia to Europe and the US, aging of population in advanced economies and emerging markets, migration restrictions, decoupling between the US and China, global climate change and recurring pandemics. “It’s only a matter of time until we’re going to get the next nasty pandemic,” he said.His advice for investors: “You have to be light on equities and have more cash.” Though cash is eroded by inflation, its nominal value stays at zero, “while equities and other assets can fall by 10%, 20%, 30%.” In fixed income, he recommends staying away from long duration bonds and adding inflation protection from short-term treasuries or inflation index bonds like TIPS.(Adds previous Roubini debt warnings in fourth paragraph)Most Read from Bloomberg Businessweek©2022 Bloomberg L.P. Continue reading →

September 15, 2022  by SchiffGold  0   0The CPI data for August came in hotter than expected, sparking the biggest market crash since the 2020 COVID lockdowns. The price of gold also dropped on the news in anticipation of the Federal Reserve taking interest rates higher. Peter Schiff talked about the inflation news on his podcast and said investors need to get gold now before the entry point rises a lot higher. Because at some point the markets are going to figure the Fed can’t bend this inflation curve.After the CPI data came out, stocks plunged. The Dow Jones fell by over 1,276 points. It was the seventh-biggest drop (based on points) in history. Other stock market indices charted similar declines. The NASDAQ fell 5.16%.As Peter noted, gold also fell, but not nearly as much as stocks. The yellow metal was off about 1.3%. But gold did manage to close above $1,700, although it traded below that level interday.The dollar index charted a huge swing, moving from 107.68 prior to the CPI data and then rallying to close at 109.9. Peter said it was one of the biggest moves in the dollar he’s seen.The markets were preparing for a softer CPI. Everybody was under the impression that inflation had peaked and that it was coming down, and that when we got validation that inflation was coming down by the August CPI, that would take a lot of pressure off the Fed — that it wouldn’t have to raise rates as much because the inflation problem was solved. That’s one of the reasons the dollar sold off. It’s one of the reasons gold and silver rallied. In fact, it’s one of the reasons the stock market had been rallying, because the Fed was going to be taken out of the game. Maybe not completely sidelined, but at least it was going to tone down its rhetoric and maybe not raise rates as much as people thought. But now that we got this hotter than expected number, people think the Fed is going to raise rates more than they thought.”Peter said the markets still don’t understand that even if the Fed hikes by 100 basis points at the September meeting, it will not bend the inflation curve.I don’t know why everybody continues to be surprised when the inflation numbers come out worse than expected. They assume that what the Fed is doing is going to work. It’s not going to work. The people who think it is don’t understand the nature of the problem.”[embedded content]The numbers indicate that Fed can’t win this inflation fight. Part of the solution is positive real interest rates. If you look at all of the Fed tightening cycles since 1973, the central bank has never stopped tightening before the Fed funds rate was higher than the CPI.As long as we have interest rates below the inflation rate, even if they’re higher, they’re still negative, and negative interest rates put upward pressure on inflation. You can’t fight inflation with negative interest rates. It’s like saying, ‘I’m going to fight this fire by pouring gasoline on it. It’s just that I’m only going to pour a little bit of gasoline, not as much gasoline as I was pouring on before.’”Clearly, the fire will keep getting bigger.But the markets don’t seem to get this. Otherwise, they wouldn’t be selling gold into rising inflation.After all, gold is an inflation hedge. And if investors expect more inflation, they’re going to hedge with gold. And if you expect inflation to continue, gold is going to discount that future inflation into the present, and it’s going to be reflected in the current price of gold.”The question is when will those expectations change?How many more months can the CPI come out hotter than expected and investors still believe that inflation is going to go away? How many more rate hikes do we need that are ineffective at reducing inflation before investors figure out that it’s not going to work? And of course, how many rate hikes will the Fed be able to get away with without crashing the stock market? Without crashing the real estate market? Without causing a financial crisis?”And if the Fed keeps pushing that envelope until it rips, will the Fed continue to hike rates? Or will the Fed pivot when it anticipates or acknowledges the next crisis?As long as it pivots at all, that means inflation is going to run out of control. And if it is, the dollar needs to go way down and gold needs to go way up.”Peter said he doesn’t personally think the Fed will get away with very many more rate hikes.He pointed out that gold didn’t fall all that much given the plunge in stocks. In fact, gold didn’t even close on the lows.Maybe that’s some indication that investors are beginning to question that narrative. They haven’t completely figured it out yet, but some of the selling may in fact have been exhausted.”Peter said at some point there will be divergence and gold will start rising when inflation is worse than expected. The dollar will fall. And the long end of the bond market will start getting beat up.If you’re waiting for a sign, some indication that everything is about to blow up, that’s what you should look for. You should look for a reaction in the bond market and the currency market and the precious metals market that is opposite of the reaction that we’ve been having.”Peter said you shouldn’t wait for that signal to position yourself.I think it’s possible that by the time we get that signal, it could be a much worse entry position than the one we have right now. Because the markets can start anticipating that signal before we actually get it. I know it’s going to happen eventually. But when it does happen, that’s when you’ll know the end has finally begun. But before it does, take advantage of other investors’ misunderstanding of what’s going on by increasing your exposure to both gold and silver, and gold and silver mining stocks.”Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today! Continue reading →

(Kitco News) The London Metal Exchange (LME), the world’s oldest and largest market for industrial metals, announced that it would remain open on September 19, the day of Queen Elizabeth’s funeral.
“Reflecting the international nature of the LME’s market and taking into account the potential impact of the short notice from an operational risk perspective, the Bank Holiday will constitute a Business Day for the purposes of the LME and LME Clear Rules, and the markets themselves will remain open,” the LME said in a press release Tuesday.
Whether to close or remain open was a difficult decision for the LME because the Queen’s funeral falls on an important calendar date – when monthly valuations for September are established. This is why it is choosing to keep operations running.
“A full market closure of trading, with only a few days’ notice, would create undue operational risk. This is particularly the case because September 19 represents the key trading day to establish September monthly valuations,” the 145-year-old exchange said. “The LME has carefully considered how best to balance the interests of the market, our operational considerations and our desire to pay our respects.”
However, despite the market staying open, there will be some changes. For example, the first open-outcry session will be canceled since it coincides with the timing of the funeral service.
Also, LME offices will be closed on September 19 out of respect for the Queen. And the exchange will be donating all trading fees from September 19 to the Queen’s charities.
The decision contradicts the nation’s declared public holiday. Over the weekend, Buckingham Palace announced the date for the funeral, with the UK observing a national holiday on that date.
Most UK commodity markets, including gold and soft commodities, will be closed for the funeral, including the London Bullion Market Association (LBMA).
“The London market will be closed and there will be no metal settlements in the UK on that day … ICE Benchmark Administration has confirmed that on Monday, September 19, 2022, there will be no AM or PM auctions for LBMA Gold and LBMA Silver prices,” the LBMA said. “The London Metal Exchange has also confirmed that on Monday, September 19, 2022, there will be no AM or PM auctions for LBMA Platinum and LBMA Palladium prices.”
One exception will be Brent crude oil, with ICE Futures Europe stating that the contract would operate as usual. Continue reading →

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(Kitco News) – A kitchen renovation in a historic home in an English village led to the discovery of a trove of antique gold coins that could be worth up to $290,000.
According to the auction house Spink & Son, which will be auctioning off the coins next month, the 260 gold coins were found when residents unearthed an earthenware cup when they renovated their kitchen in July 2019. The cup, about the size of a soda can, was found buried beneath the original wooden floorboard.
The treasure trove of coins is named the Ellerby hoard, for the village where the house is located. Spink & Son said that this was the biggest hoard of 18th-century coins found in Britain.
“It is a wonderful and truly unexpected discovery from so unassuming a find location,” said Gregory Edmund, an auctioneer with Spink & Son, in a press release. “Why they never recovered the coins when they were really easy to find just beneath original 18th-century floorboards is an even bigger mystery, but it is one hell of a piggy bank.”
Edmund described the coins, some of them handmade, as “workhorses” that were heavily used as currency during the 1700s.
Historians have traced the coins to their original owners, Joseph and Sarah Fernley-Maisters, who were married in 1694. According to the press release, the Maisters were an influential mercantile family between the 16th century and 18th century. The family traded iron ore, timber and coal from the Baltic before the line died out after Sarah Maisters’ death.
“Joseph and Sarah clearly distrusted the newly-formed Bank of England, the ‘banknote’ and even the gold coinage of their day because they (chose) to hold onto so many coins dating to the English Civil War and beforehand. Perhaps these wily owners preferred gold and were happy to accept century-old and even Brazilian coins before paper,” said Edmund. “The number of coins and method of burial presents an extraordinary opportunity to appreciate the complicated English economy in the first decades of the Bank of England and significant distrust of its new-fangled invention, the ‘banknote.'”

Each of the coins will go up for auction on Oct. 7; however, a rare Portuguese coin, a contemporary 1721 4000-Reis, struck during the reign of Jõaõ V of Portugal and known as a moidore, will be going to the British Museum.
“The contextualised discovery of [the moidore] coin is exceedingly rare for England, with only the Merton College Chapel trove of 1903 presenting a comparable profile,” said Edmund. Continue reading →

alexslOverview: The US dollar remains offered ahead of today’s CPI report. Most European currencies are outperforming the dollar bloc, and the greenback is holding inside yesterday’s range against the yen. Most emerging market currencies are firmer, as well. China’s markets re-opened from the long-holiday weekend and the yuan is a touch softer. After the strong close to US equities yesterday, and some mild follow-through buying today in the futures, equities in the Asia Pacific and Europe are also extending their recent gains. Hong Kong was a notable exception in Asia and reports that regulators asked state-owned entities to report their exposure to Fosun, one of the largest non-state conglomerates, weighed on the Hang Seng. Europe’s STOXX 600 is rising for the fourth consecutive session and is at its best level in about three weeks. The 10-year US Treasury yield is a few basis points lower near 3.32%, while European benchmark yields are narrowly mixed. Gold is a little firmer at the upper end of yesterday’s range. December WTI is also in the upper end of yesterday’s range, a little below $88, ahead the OPEC+ report. US natgas is firmer for the fourth consecutive session, while the European benchmark is off 2.3%, its third decline in a row. It is now at its lowest level since late July. Iron ore recovered from yesterday’s 0.9% pullback and rose 1.4% today. It is at its best level this month. December copper is firm and is also at its best level here in September. If today’s gains are sustained, it would be the fifth advance in the past six sessions. December wheat has come back bid after yesterday’s 1.25% pullback. The USDA boosted its estimate of the wheat harvest, while reporting tighter supplies of soybeans. November beans rallied nearly 5.4% yesterday and are up a bit more today. They are at the highest level since late June. Asia Pacific The threats by Japanese officials have spurred more talk of intervention. There has been an evolution in official thinking about intervention. The Plaza Agreement (1985) and the Louvre Accord (1987) marked the high point of G7 foreign exchange coordination and intervention. However, consider that the Great Financial Crisis and the Covid pandemic passed without intervention in the major currencies. Officials recognized that the key problem was not foreign exchange rates per se but access to the dollar. Hence the swaps lines offered by the Federal Reserve during the GFC, some of which were converted into permanent standby arrangement, and again during the pandemic. Under this framework, there is no compelling need for unilateral intervention. Japan is the only G7 central bank that is still pursuing quantitative easing and is the only G7 country that is projected to record a larger fiscal deficit than in 2021. Europe is unlikely to be any more sympathetic to Japan’s plight than the US. The weakness for the yen has not affected the conduct of Japanese monetary policy. Japan’s inflation is among the lowest for high-income countries, and the Japanese economy will likely outperform Europe’s for the next several quarters. The yen reached is at its weakest level since 1998, while sterling fell to its lowest level since 1985. The euro traded at its lowest level since 2000. According to the OECD’s purchasing power parity model, the euro is undervalued by about 41.5% and the yen is undervalued by a little less than 42%, an insignificant difference. Japan’s verbal intervention coincided with the dollar’s pullback more generally. Today is the fourth consecutive session that the greenback is recording lower highs. The pre-weekend low was JPY141.50, but yesterday and today, support has been found slightly above JPY142, where options for $670 mln expire today. In addition to the lower dollar, today’s range, about 0.8 yen, is the smallest since last Monday when the US and Canada were on holiday. The greenback is also in a narrow range against the Australian dollar. It is consolidating in a narrow range below $0.6910. A move above $0.6920 could spur another half-cent gain. Initial support is seen around $0.6860. The Chinese yuan is a little softer today as the mainland market re-opens from the long holiday weekend. The US dollar initially eased to about CNY6.9165, slightly below the pre-weekend low, but rebounded above CNY6.9300. As it has done for nearly three weeks, the PBOC set the dollar’s reference rate above where the median in Bloomberg’s survey projected (CNY6.8928 vs. CNY6.9125). Europe Before the weekend, the (swaps) market was nearly 100% convinced the ECB would hike 75 bp at next month’s meeting. The confidence has waned a bit and now is around 60%. This is despite the hawkish comments over the weekend by Bundesbank President Nagel. Other ECB officials have confirmed intentions to lift rates at the coming meetings, but not necessarily in such large steps. The neutral is seen around 1.5%-2.0%. The swaps market sees the deposit rate within that range before year end. After last week’s high, the deposit rate is at 0.75%. Separately, the ZEW survey was weaker than expected. The current situation measure fell to -60.5 from -47.6. It is the worst reading since March 2021. The expectations component was even worse, dropping to -61.9 from -55.3. This level of pessimism was not seen even during the initial stages of the pandemic, when expectations bottomed at -49.5. Even during the sovereign debt crisis (2011), it did not fall this low. One has to go back to October 2008 to see such a low reading. That said, the euro barely wobbled on the news. The International Labor Organization says that UK unemployment unexpectedly fell to 3.6% in the three months through July from 3.8%. However, the government’s data shows this was driven by a 194k decline in the workforce – seemingly reflecting sickness and return to school. The claimant count rose by 6.3k, bringing the number of unemployed to 1.22 mln (compared to 1.28 mln job openings, which fell by 34k over the three-month period). Employment rose by 40k in the three months through July, which is about a third of the median forecast in Bloomberg’s survey. Average weekly earnings rose 5.5% in three month through July compared to a year ago. It was the first increase since March when it peaked at 7%. The swaps market still favors a 75 bp hike next week with almost 69% confidence, which is where it was at the end of last week. Lastly, note that the dockworkers at Felixstowe rejected the pay deal and are preparing to strike. Separately, the dockworkers in Liverpool are also preparing to strike. In the US, the White House is said to be involved in trying to settle the railroad dispute that could lead to a strike at the end of the week. The EC is expected to propose a mandatory program to cut power use. This is going to prove as controversial as it was when first aired earlier this year. The push back then resulted in voluntary cuts, and between May and August, gas demand in northwest Europe fell by 18% year-over-year. Some countries have introduced light rationing already in the form of temperature and light use in public buildings. The EC’s proposal, leaked to the press, has two goals in terms of conservation. First, a cut in overall consumption. Second, a mandatory goal of lowering demand during peak hours or when electricity generation from renewables is expected to be low. The EC also will propose a minimum “exceptional and temporary” tax on “extra” (in excess of pre-tax profits reported for the past three years) made by oil, gas, coal, and refinery industries. The EC wants to cap the extra revenue for other energy companies though limiting the price of electricity generated from renewables and nuclear. The challenge is to find a solution that is agreeable throughout the EU, which, like other issues, has proved quite difficult. The issues are thorny , and earlier this year, tensions between Germany and the periphery were evident. In any event, it seems unreasonable to expect a quick solution. Instead, following von der Leyen’s annual State of the Union address to the European parliament on Wednesday, look for the heads of state summit (informal meeting on October 6-7 and a summit October 20-21) to try to hammer out an agreement. Still, the idea that Europe is on the verge of an energy union seems to be more a case of wishful thinking. Sure, like the EU’s joint bond issuance, it could prove to be the scaffolding, but more likely is one-off emergency measures. The euro is trading with a firmer bias but holding below yesterday’s high (almost $1.02). It seems to be sandwiched between two sets of expiring options today. One set is struck at $1.01 for about 725 mln euros. The other is for nearly 1.05 bln euros at $1.0175. After yesterday’s advance, some, if not all, of the upper strike has likely been neutralized. The session highs were recorded in the European morning a little above $1.0165, and again, North American dealers will start their session with the intraday momentum indicators stretched. The session low, slightly below $1.0120, was set in early Asia. Yesterday, sterling stalled near its 20-day moving average (~$1.1715), but today has edged through $1.1730. This is just shy of the (38.2%) retracement of the losses since the August 10 high near $1.2275. The next retracement (50%) is closer to $1.1840. Support is seen in the $1.1660-80 area. Our broad view anticipated the dollar to weaken through the US inflation report and then find better bids ahead of next week’s FOMC meeting. America Today’s US CPI report and the University of Michigan’s preliminary September consumer confidence and inflation expectations are seen as the last two important data points before the FOMC meeting next week. Barring a surprise, another tame monthly CPI print is expected. The month-over-month reading in July was zero, and the median forecast in Bloomberg’s survey is for a 0.1% decline in August. The August core rate is expected to match July’s 0.3% increase. The year-over-year headline rate may ease to 8%, while the core may tick up back above 6% for the first time since April. Given the Fed’s assessment that the labor market remains strong and prices elevated, few really think that today’s CPI report will spur a change in the official stance. Moreover, in a bit of “what came first, the chicken or the egg”, the market is giving the Fed a free option to hike 75 bp. Given the Fed’s belated start and misunderstanding of the persistence of inflation, it may not want to under-deliver on market expectations. That said, look at the evolution of inflation expectations. First, we note that NY Fed’s August survey was out yesterday. It showed the one-year inflation expectation easing to 5.7% from 6.2%, and the three-year expectation at 2.8% from 3.2%. Second are the market-based measures. The two-year breakeven (the difference between the two-year inflation protected security and the conventional note) has fallen from almost 5% in late March (peak was almost two weeks after the Fed’s first hike) to less than 2.2% last week. The 10-year breakeven peaked in late April, a little over 3%, and fell to 2.30% in July and has bounced around a bit this summer, reaching nearly 2.65% in late August, and now is around 2.42%, roughly the lowest it has traded since late July. Rightly or wrongly, the breakeven measure of inflation expectations seems heavily influenced by the price of oil. The generic WTI futures contract peaked in early March slightly above $130. It had a secondary peak in mid-June around $123.70. Last week, it fell to nearly $81, the lowest level since mid-January, before the Russian invasion of Ukraine, when many, including Ukrainians, did not believe the invasion was going to materialize. There is an old rule of thumb about three gaps exhausting a move. Some interpretations of Japanese candlesticks also have a rule like that. It is relevant because the S&P 500 and NASDAQ gapped higher both Friday and yesterday, and the gaps are unfilled. The Canadian dollar, among the most sensitive of the major currencies to US equity fluctuations, has rallied sharply over the past of four sessions, which have been the best for US stocks here in Q3. The US dollar has fallen from a little above CAD1.3200 to below CAD1.3000. So far today, the greenback is trading in a tight range (~CAD1.2970-CAD1.2995). It is hovering a little above yesterday’s low near CAD1.2965, which is roughly a (50%) retracement of the US dollar gains since the August 11 low (~CAD1.2730). A convincing break targets the next retracement (61.8%) a little above CAD1.2900. The US dollar fell to its lowest level since mid-June against the Mexican peso yesterday (~MXN19.7535) but closed back above the MXN19.80 floor. The greenback is under pressure today, and there is little chart support ahead of MXN19.60. The JP Morgan Emerging Market Currency Index is extending yesterday’s gains. If sustained, it would be the fourth gain in five sessions, and it is trading near its best level since mid-August. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors. Continue reading →

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(Kitco News) – A new trend could be emerging in the physical bullion marketplace as coin sales from the U.S. Mint were weaker than its counterpart in Australia.
In its monthly sales report, the Perth Mint said that it sold 84,976 ounces of minted gold products in August, an increase of 7% from July. At the same time, sales are up 57% compared to August 2021.
Meanwhile, data from the U.S. Mint shows that it sold 51,500 ounces in various denominations of American Eagle Gold bullion coins. Sales are down 20% from July and 62% from last year.
Meanwhile, the U.S. mint sold 850,000 one-ounce America Eagle silver bullion, unchanged from July. However, sales are down 78% from the more than 3 million coins sold last year.
In Australia, the Perth Mint said it sold 1.656 million ounces in silver minted products last month, down 33% from July but up 13% from August 2021.
Some market analysts have said that the Perth Mint’s strong sales could be due to more aggressive marketing, especially in Europe.
Everett Millman, precious metals expert at Gainesville Coins, said the Perth Mint could also be benefiting from growing Asian demand as lockdowns in China have started to ease.
“From a logistics perspective, it is probably easy and cheaper to ship gold and silver coins from Australia to India and Asia,” he said.
Millman said another factor that could be disrupting U.S. mint sales is that premiums for those coins are higher than other bullion like Kangaroos from the Perth Mint or Austria’s Vienna Philharmonic gold coins.
“Consumers are becoming a little more cost-conscious, and they are turning to other coins with lower premiums,” he said.
Premiums for U.S. Mint products, especially America Eagle Silver coins, have even attracted the ire of Congress. Last month, Rep. Alex Mooney (R-WV) sent a letter to U.S. Treasury Secretary Janet Yellen, calling her and U.S. Mint Director Ventris Gibson out for production issues for America Eagle Silver coins.
Mooney noted that the U.S. Mint has only made 11.6 million ounces of the silver bullion coin available to the public through July 2022 – barely half of what has been supplied through the first seven months of prior years when demand has been similarly strong.
“This shortage in U.S. Mint production has apparently led to extremely high market-based premiums on Silver Eagles (as high as 70% over the silver melt value) – even as comparable items produced by other sovereign mints and private mints were not beset by such shortages or historically high premiums,” Mooney wrote in the letter.

“The high costs resulting from the U.S. Mint production shortage directly harm U.S. citizens wishing to avail themselves of a U.S. legal tender means of protecting their financial security from the effects of inflation.”
Millman also noted that market factors are prompting investors to avoid gold and silver bullion. He added that gold prices have struggled as the Federal Reserve aggressively tightens its monetary policy. Rising interest rates have pushed the U.S. dollar to its highest level in 20 years and bond yields above 3%, two significant headwinds for precious metals.
However, Millman said he doesn’t expect the current environment to be sustainable. He said that although the Fed continues to hold its hawkish stance regarding interest rates, that position could quickly change as economic conditions deteriorate.
Millman noted that markets continue to see the Federal Reserve pivoting on interest rates, even if expectations have been pushed back until the second half of 2023.
Analysts have noted that gold and silver bullion should pick up as recession fears continue to grow.
“If you are looking for a safe-haven asset, there are not a lot of choices out there. Every other currency has been battered by the U.S. dollar, so gold remains an attractive monetary metal,” said Millman.
Phillip Streible, chief market strategist at Blue Line Futures, said that he expects bullion demand to pick up as investors start to realize the value in the marketplace.
He noted that the gold/silver ratio is trading near its highest level in roughly two years, holding around 95 points.
“You have never gone wrong buying silver when the ratio is above 95 points,” he said. “That trend goes all the way back to the 1980s.” Continue reading →