A Daily Journey Through the Week's Market
Monday - 9.16.24: Gold and silver prices gained moderately on Monday, with gold climbing to $2,603 per ounce and silver reaching $25.30. The rally was supported by a weaker U.S. dollar and declining bond yields, fueling safe-haven demand. Concerns over inflation and a possible Federal Reserve pause on interest rate hikes also contributed to the rise in precious metals.
Tuesday - 9.17.24: Gold and silver held steady, with gold hovering around $2,600 per ounce. Investors were cautious ahead of the upcoming Federal Reserve meeting, with the central bank expected to provide guidance on interest rate policy. Meanwhile, silver fluctuated around $25, influenced by industrial demand and concerns about slowing global growth.
Wednesday - 9.18.24: Precious metals saw some volatility as gold briefly dipped below $2,590 per ounce but quickly rebounded. Investors focused on the Federal Reserve’s 50 basis-point rate cut, leading to a weakening dollar and higher gold prices. Silver traded near $25.40 as traders factored in ongoing uncertainties in global industrial output.
Thursday - 9.19.24: Gold continued its upward trend, reaching $2,610 per ounce, supported by a dovish Federal Reserve statement. Silver followed suit, rising to $25.50 per ounce. Lower bond yields and renewed inflation concerns drove further demand for safe-haven assets like gold and silver as the dollar weakened.
Friday - 9.20.24: Gold and silver prices are soaring due to a recent aggressive interest rate cut by the Federal Reserve and heightened geopolitical tensions in the Middle East. With safe-haven demand and technical buying supporting the precious metals markets, gold has reached a new record high and silver has hit a two-month peak.
Fed Cuts Rates by Half a Point, Gold Prices Soar
The Federal Reserve has made a significant move by cutting interest rates by a half-point. This decision is expected to boost gold prices as investors seek a safe haven during times of economic uncertainty.
Key Points:
- Rate cut: The Fed's aggressive rate cut signals a shift in monetary policy.
- Gold price surge: Gold prices have surged in response to the rate cut, with some analysts predicting further gains.
- Economic outlook: The economy may experience a slowdown as a result of the rate cut, but unemployment is expected to remain relatively stable.
- Future rate cuts: The Fed may cut rates further in the future if economic conditions deteriorate.
What Experts are Saying: "The Fed's decision to cut rates by a half-point is a clear signal that they are concerned about the economy," said a financial analyst.
Looking Forward: The Federal Reserve's aggressive rate cut has sent gold prices soaring. This move marks a significant shift in monetary policy and is expected to boost demand for the precious metal as investors seek a safe haven during times of economic uncertainty. While the economy may experience a slowdown, the overall outlook for gold remains positive.
The Fed's Big Rate Cuts Push Gold Above $2,600
What's happening: The Federal Reserve kicked off its highly anticipated rate-cutting cycle with a 50-basis point reduction, signaling another cut before the end of 2024. The Fed now projects rates at 4.4% by year’s end. Markets responded by sending both equities and gold to record highs, with gold settling above $2,600.
Why it matters: This aggressive easing comes as inflation remains above the Fed's 2% target. The 50-basis point cut, much larger than anticipated, signals the Fed's growing concern over economic trouble, as seen in the yield curve inversion—a classic indicator of weak growth.
Gold's rise: Gold has surged 45% since its low near $1,800, posting 35 record-high closes this year. It's on track to close Q3 above $2,600, marking a historic rise. Amid geopolitical tensions and looming U.S. election chaos, gold's safe-haven appeal is keeping it well bid.
What’s next: Technical indicators suggest gold could target $3,000-$3,300 before facing a potential correction. Meanwhile, gold miners are set for another strong earnings season, which may draw retail investors back into the sector. The GDX and GDXJ ETFs are consolidating near multi-year resistance levels, and a breakout could drive significant gains.
Gold Price To Surge To $10k Under Harris Administration, Says Peter Schiff
What's happening: Gold could hit $10,000 an ounce if Vice President Kamala Harris wins the 2024 election, according to Peter Schiff, chairman of SchiffGold and chief strategist at Europe Pacific Asset Management.
The big picture: Schiff argues that under a Harris administration, U.S. debt could skyrocket, pushing the total national debt to $50 trillion during her first term. He predicts this would erode the U.S. dollar’s status as the world’s reserve currency, driving gold prices to new heights.
Key drivers:
- Debt explosion: Schiff warns that rising U.S. debt could lead creditors to question the country’s ability to meet its obligations.
- Dollar collapse: Schiff believes the U.S. dollar may not survive as the global reserve currency if these trends continue.
Default vs. inflation: Schiff suggests that defaulting on U.S. debt would be preferable to inflating it away. He argues that inflation could wipe out more than 90% of value, whereas a default might reduce debt to a manageable level.
Why it matters: Schiff notes that gold has already shown a strong uptrend, and further price gains could mirror past significant moves in the precious metal.
What's next: Schiff warns that current Federal Reserve policy is too loose, with record-high gold prices signaling that the Fed’s approach is out of sync with the realities of inflation and monetary tightening. He urges the Fed to pay closer attention to gold prices as a key economic indicator.
Another Attempt On Trump’s Life Highlights Deepening Chaos
The big picture: Former President Trump narrowly survived an assassination attempt while golfing at his West Palm Beach club. A sniper armed with a scoped AK-47 got within a few hundred yards of Trump, marking the second such attempt in two months.
What happened:
- The sniper, identified as Ryan Wesley Routh, was arrested after fleeing in a black Nissan.
- Routh had set up a GoPro camera, intending to film the attack, and was found with a rifle, two backpacks, and ceramic tile in the bushes near the course.
Why it matters: This incident underscores rising tensions ahead of the November election, with Trump being a particular target of heightened emotions. The suspect, reportedly a supporter of left-wing causes, knew Trump’s golf schedule, which isn't publicly available.
The security challenge:
- Law enforcement noted the difficulty of securing Trump while golfing due to limited visibility and the course’s shrubbery.
- Palm Beach County Sheriff Ric Bradshaw acknowledged the vulnerability of the course, suggesting future golf outings will likely have increased security.
Zoom out: This is yet another example of escalating violence and social unrest across the country. A majority of Americans believe violent crime is worsening, with cities like Chicago seeing record levels despite millions spent on crime reduction.
What’s next: As political divisions deepen, security around high-profile figures like Trump will likely intensify, but the broader issue of social chaos remains unresolved.
Wage Growth Still Lagging Behind Inflation
American workers are feeling the squeeze as rising prices continue to outpace wage increases. A new analysis by Bankrate reveals that real wages have been declining since 2021, with inflation outpacing wage growth by a significant margin.
Key Points:
- Inflationary pressures: The Consumer Price Index (CPI) rose slightly in August, indicating that inflationary pressures are still present.
- Housing costs: Shelter costs remain a major contributor to inflation, rising significantly over the past year.
- Wage recovery: The projected timeline for wage growth to catch up with inflation has been pushed back.
- Economic concerns: The Federal Reserve faces the challenge of balancing economic growth with inflation control.
What Experts are Saying: "A slowdown in the job market is a side effect of higher interest rates," said Bankrate analyst Sarah Foster. "Our projections were never meant to be a forecast. They were simply a model for how things would look if the economy kept evolving the way it had been."
What it Means: American workers are facing a growing financial challenge as inflation continues to outpace wage growth. While there are signs that inflation may be moderating, the ongoing gap between prices and wages is putting a strain on household budgets. As the Federal Reserve navigates the delicate balance of economic growth and inflation control, workers will be closely watching for signs of relief in their paychecks.
Next Week’s Key Events
Monday, Sept. 23
- 9:45 am: S&P Flash U.S. Services PMI (Sept.)
- 9:45 am: S&P Flash U.S. Manufacturing PMI (Sept.)
Tuesday, Sept. 24
- 9:00 am: S&P Case-Shiller Home Price Index (20 cities) (July)
- 10:00 am: Consumer Confidence (Sept.)
Wednesday, Sept. 25
- 10:00 am: New Home Sales (Aug.)
Thursday, Sept. 26
- 8:30 am: Initial Jobless Claims (Sept. 21)
- 8:30 am: GDP (second revision) (Q2)
- 10:00 am: Pending Home Sales (Aug.)
Friday, Sept. 27
- 8:30 am: PCE Index (Aug.)
- 10:00 am: Consumer Sentiment (final) (Sept.)
IMPACT ON PRECIOUS METALS MARKETS
S&P Flash U.S. Services & Manufacturing PMI
The PMIs provide an early snapshot of business conditions. A stronger-than-expected PMI suggests economic growth, which can bolster the U.S. dollar and hurt gold and silver prices, as they are negatively correlated with a strong dollar. Conversely, weaker PMIs signal economic contraction, increasing demand for safe-haven assets like gold and silver.
S&P Case-Shiller Home Price Index
Home price trends influence inflation expectations. Higher-than-expected home prices could signal inflationary pressure, which often boosts gold and silver as they are viewed as hedges against inflation. If home prices fall, inflation concerns ease, possibly reducing demand for precious metals.
Consumer Confidence
Consumer sentiment affects spending and economic growth. If consumer confidence is high, gold and silver could decline as investors flock to riskier assets. Conversely, low confidence can drive investors toward gold and silver for stability.
New Home Sales
Higher sales indicate a robust housing market, potentially strengthening the dollar and weakening precious metals. Weak home sales could signal economic trouble, increasing demand for gold and silver as safe-haven assets.
Initial Jobless Claims
An increase in jobless claims signals a weakening labor market, potentially stoking fears of economic slowdown. This could push gold and silver prices higher. Conversely, a drop in jobless claims suggests a strong economy, which may weaken demand for precious metals.
GDP
A higher-than-expected GDP revision would signal economic strength, likely strengthening the dollar and reducing gold and silver prices. A downward revision, however, could signal slowing growth and drive investors toward precious metals for safety.
Pending Home Sales
Strong pending home sales indicate economic resilience, which could negatively impact gold and silver. Weak sales could signal economic trouble, potentially boosting demand for these safe-haven metals.
PCE Index
The Personal Consumption Expenditures (PCE) index is a key inflation measure. Higher PCE values can boost gold and silver prices as investors hedge against inflation. A lower-than-expected PCE could reduce inflation concerns, weakening demand for precious metals.
Consumer Sentiment
Similar to consumer confidence, if sentiment is high, gold and silver may decline as risk appetite increases. If sentiment is low, demand for safe-haven assets like gold and silver could rise
