Welcome to this week’s newsletter. Last week's edition covered key developments, providing insightful analysis for precious metals enthusiasts. As we delve into this week's content, you'll find a comprehensive review of market movements, the BRICS's currency war, and expert predictions, ensuring you stay ahead in the ever-evolving world of precious metals. This newsletter is your gateway to staying informed and ahead of the curve in the dynamic world of gold and silver trading.
The Gold Trail: A Daily Journey Through the Week's Market
Monday - 12.25.23: Christmas Day
Tuesday - 12.26.23: The gold market saw modest gains, hovering around $2,072 per ounce as traders eased back into the post-holiday week. Factors like lower-than-expected inflation data and a weaker dollar provided tailwinds, while silver fluctuate due to profit-taking after Monday's rise, ending slightly down at $24.33 per ounce. Overall, the precious metals market displayed a cautious and mixed performance.
Wednesday - 12.27.23: Gold continued its ascent, closing around $2,081 per ounce, spurred by positive technical indicators and continued speculation of a slower pace of Fed rate hikes. The dollar remained slightly weak, further supporting gold's appeal. Silver, however, remained slightly down at $24.33 per ounce, influenced by ongoing economic uncertainties and ongoing profit-taking from the previous day's gains.
Thursday - 12.28.23: Gold prices have recently surged to record highs, driven by market expectations of impending U.S. interest rate cuts, with the London benchmark reaching an all-time high of $2,069.40 per troy ounce and futures hitting $2,091.80. In contrast, the silver market is facing volatility, with prices slightly declining and facing selling pressure, marked by fluctuations around $24.35 per troy ounce. The silver market's volatility is mainly influenced by changes in interest rates.
Friday- 12.29.23: Gold prices stabilized after hitting a three-week high, supported by a weaker U.S. dollar and lower bond yields, with the market anticipating rate cuts, leading to its biggest annual gain since 2020. Meanwhile, silver traded neutrally at around $24.20, with potential for gains amid dovish Federal Reserve policies. The technical outlook for silver stocks remains bullish as 2024 approaches, even as silver ended the year with usual volatility. Notably, in India, both gold and silver prices saw a rise in the spot market due to high demand.
BRICS' Masterstroke in the Currency War Against the US Dollar
The BRICS alliance's bold maneuver, now joined by Saudi Arabia and the UAE, signals a looming threat to the US dollar's supremacy. This coalition, actively working to diminish the greenback's global influence in a currency war, represents an unprecedented challenge. Described by a former White House economist as an "economic wrecking ball," the bloc's shift towards using their own currencies for trade in 2023 could drastically undermine the dollar's hegemony, heralding a new era of financial uncertainty and geopolitical power shifts on a global scale.
Silver Price Forecast: Breakout to $30, Potential Upside to $42 in 2024
Silver's price shows promising signs of a breakout in 2024, with analysts forecasting a significant increase. Commerzbank predicts a rise in silver prices to $30 by the end of 2024, suggesting a potential decrease in the Gold/Silver ratio to 72. InvestingHaven, while aligning with Commerzbank's view, projects an even more optimistic outcome, estimating silver to reach $34.70 in 2024 with the possibility of nearing $50 in 2025. This bullish sentiment is further supported by J.P. Morgan, which forecasts both gold and silver to outperform platinum, palladium, and base metals like copper and nickel in their 2024 outlook. The most substantial growth for silver is expected in the fourth quarter of the year. Although some analysts do not foresee silver reaching $40 in 2024, others predict a range of $35-42. These projections indicate a stable year of growth for silver, with the most significant increase expected later in the year. Despite uncertainties in forecasting, the consensus among experts points to a rebound and promising upside for silver. Additionally, InvestingHaven’s premium Silver newsletter offers in-depth analysis, including custom charts and market trend updates for silver, gold, and cryptocurrencies.
The Burst of the Startup Bubble: A Shift in Venture Capital Dynamics in 2023
In 2023, the once-thriving startup landscape, fueled by the Federal Reserve's cheap money policy and low interest rates, witnessed a dramatic downturn. High-profile companies like WeWork and Bird declared bankruptcy, while others like Hopin and Clubhouse faded away. This shift was triggered by the Fed's increased benchmark rates and persistent inflation, which halted the flow of easy money and led to a more cautious investment approach. The tech sector, previously bolstered by this easy funding, saw a significant decline in investor enthusiasm, reflecting a broader trend of reassessment in the startup world. Venture capitalists, like Jeff Richards of GGV Capital, now predict a future focus on genuinely profitable and well-managed companies, moving away from the overvalued 'unicorn' startups of previous years. This change signifies a new era in the startup ecosystem, emphasizing sustainable growth and profitability over rapid expansion and hype.
Gold Prices To Skyrocket in 2024 — 5 Reasons It’s Such a Safe Investment During Economic Turmoil
Gold is anticipated to become an increasingly valuable asset in 2024, buoyed by high inflation rates and economic uncertainty. Experts predict significant growth in gold prices, with some estimates reaching as high as $2,300 per ounce. The attractiveness of gold as an investment is rooted in its role as an inflation hedge, where it maintains or increases its value against declining fiat currencies. Historically, gold has proven to be a reliable store of value, consistently appreciating over the last century and offering a contrast to the devaluation of currencies like the U.S. dollar. In terms of portfolio diversification, gold stands out due to its minimal correlation with stocks, thereby reducing overall investment risk. Its global acceptance and ease of conversion into other assets make it a universally recognized store of value. Additionally, the limited and dwindling supply of gold, with concerns about reaching peak gold production, suggests that its scarcity will further drive up its value in the face of growing demand.
2024's Deficit: A Looming Crisis Exacerbated by Government Spending and Debt
In 2024, the U.S. is on track for a record deficit since the Covid pandemic, primarily due to increased government spending and rising public debt. Despite modest GDP growth, the public debt has surged to $1.3 trillion. The fiscal year 2024 has already seen a $380 billion deficit in its first two months, indicating a potential annual deficit exceeding $2 trillion. This deficit, the third-largest ever, reflects a trend of escalating federal spending and debt accumulation, notably since Covid. The government's ability to borrow at low interest rates ended in 2022, leading to a significant increase in the cost of servicing the national debt. With interest payments on the debt skyrocketing, surpassing military spending and Medicare, the government faces tough spending choices. The rising interest and debt may force budget cuts in other areas to ensure bondholders are paid. This situation highlights the burden of interest payments on taxpayers and raises questions about the sustainability of government debt.
Gold Price Predicted to Stay Above $2000 Throughout 2024
Throughout 2024, gold is forecasted to maintain a price above $2000, driven by a combination of geopolitical and economic factors. Despite recent market volatility, the metal's value has reached new heights, notably surpassing $2150 in mid-December, before experiencing a price correction. Economists anticipate that planned interest rate cuts in the coming year will support the continued high valuation of gold. The year has seen a surge in various investment sectors, with the digital asset sector growing significantly and the anticipated approval of a Spot Bitcoin ETF. The U.S. economic situation also plays a crucial role in bolstering gold's value, which currently trades at $2060. Market Analyst Rania Gule emphasizes gold's status as a haven asset, predicting a steady performance above the $2000 mark, underpinned by persistent economic, political, and geopolitical risks. The upcoming interest rate cuts are expected to further bolster gold's position as a safe and valuable investment option.
Gold Prices Strengthen on Anticipation of Federal Reserve Rate Cuts
Gold prices are experiencing a firming trend, influenced significantly by the anticipation of rate cuts by the Federal Reserve. This upward movement in gold prices has been observed since the Ukraine War, with a further surge following the start of the Hamas-Israel war. Contributing factors include the weakening of the U.S. dollar and expectations of upcoming rate cuts from the Federal Reserve. As of late December 2023, spot gold rose by 0.3% to $2,058.17 an ounce, reaching a high of $2,070.39 in the previous session. U.S. gold futures remained steady at around $2,069.4. The market's activity was subdued due to the holiday season, but the trend suggests a continued positive outlook for gold. Analysts, like Carlo Alberto De Casa from Kinesis Money, attribute this bullish trend to expectations of dovish central bank policies and declining interest rates in the coming years. The likelihood of gold prices staying above $2,000 in 2024 is high, bolstered by ongoing geopolitical tensions. Lower U.S. interest rates enhance the appeal of gold, traditionally seen as a safe-haven investment during economic and geopolitical instability. Recent data indicating a slowdown in U.S. inflation has reinforced expectations of a Federal Reserve interest rate cut by March, with a 90% probability as per the CME FedWatch tool. The fall in the U.S. dollar index and lower yields on U.S. 10-year bonds further support the increased attractiveness of gold for investors using other currencies.
Kiyosaki's Accurate 2023 Commodities Predictions: Bitcoin, Gold, and Silver
In 2023, Robert Kiyosaki, renowned for his book "Rich Dad Poor Dad," accurately predicted the rise of Bitcoin, gold, and silver. He purchased Bitcoin at $6,000, urging others to invest when it was $27,000, just before it climbed to $44,000. He also favored gold, predicting its recovery even if it fell to $1,000 per ounce; gold indeed reached a historic high of over $2,100. For silver, Kiyosaki highlighted its scarcity and potential as a long-term investment, with its price rising from $22.71 to $24.53 and projections of reaching up to $48 per troy ounce by mid-2024 or 2025. Kiyosaki's insights were based on his market knowledge and experience, though he advises investors to do their own research and understand risks.
Next Week’s Key Events
Monday, Jan 1:
- New Year's holiday, markets closed
Tuesday, Jan 2:
- 9:45 am: S&P final U.S. Manufacturing PMI (Dec.)
Wednesday, Jan 3:
- 10:00 am: JOLTS (Nov.)
- 10:00 am: ISM Manufacturing (Dec.)
Thursday, Jan 4:
- 8:15 am: ADP Employment (Dec.)
- 8:30 am: Initial Jobless Claims (Dec. 30)
- 9:45 am: S&P final U.S. services PMI (Dec.)
Friday, Jan 5:
- 8:30 am: Employment Situation Summary (Dec.)
- 10:00 am: ISM Services (Dec.)
IMPACT ON GOLD AND SILVER MARKETS:
S&P final U.S. Manufacturing PMI (Dec.):
Reflects manufacturing sector health. Strong PMI data may decrease gold and silver demand as economic strength reduces need for safe-haven assets. Weak data can increase their demand due to economic uncertainty.
Job Openings report. High job openings can imply economic strength, potentially weakening gold and silver demand. Lower openings could signal economic woes, enhancing their appeal as safe havens.
Measures manufacturing sector vitality. Positive ISM data can strengthen the economy, reducing demand for gold and silver. Negative data can lead to increased demand for these metals due to economic concerns.
Shows private sector employment trends. Strong employment growth could decrease demand for gold and silver, indicating a robust economy. Weak employment data may increase their demand, reflecting economic troubles.
Initial Jobless Claims (Dec. 30):
Indicates unemployment trends. Decreasing claims can signal economic health, reducing gold and silver demand. Rising claims can heighten economic uncertainty, increasing demand for these metals.
S&P final U.S. services PMI (Dec.):
Assesses the services sector's health. Strong services data can lower demand for gold and silver, indicating economic strength. Weak services data can increase their demand due to economic concerns.
Employment Situation Summary (Dec.):
Provides comprehensive employment data. Positive employment figures may lead to a stronger dollar, reducing gold and silver appeal. Negative figures can enhance their demand as protective investments.
Measures the services industry's condition. Robust ISM Services data could decrease gold and silver demand, indicating a healthy economy. Poor data can lead to increased demand for these metals, reflecting economic instability.
