x
Don’t get spooked by today’s gold spot price
According to the Fear & Greed Index, greed is still the dominant emotion controlling the markets presently. The Fear & Greed Index is a compilation of seven different indicators; market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages to measure whether investors are acting on fear on or greed.
With a stock market continuing to show positive momentum and market volatility remaining relatively neutral, this index indicates a strong disposition toward greed in 2024. And yet, when you look outside the narrow view provided by the index, there is evidence to the contrary.
While safe haven demand appears low compared to the appetite for risk, the index only measures that demand by whether investors are weighted towards stocks over bonds. Yet, we know that safe haven demand over conflict in the Middle East and Europe is driving investors towards other safe haven assets like gold, which has seen an increase of roughly 33% since the start of 2024.
The other factors driving gold high right now are central bank gold buying, election year uncertainties, and the anticipation of further interest rate cuts before year’s end. Read More
Gold price consolidates as U.S. core PCE rises 0.3% in September
The gold market is experiencing some technical selling pressure, largely ignoring the Federal Reserve’s preferred inflation gauge, which shows that consumer prices remain stubbornly elevated.
The U.S. Department of Commerce reported Thursday that its core Personal Consumption Expenditures (PCE) index increased by 0.3% last month, compared to August’s increase of 0.1%. The data rose in line with expectations.
On an annual basis, core PCE rose 2.7% and has remained unchanged over the last three months.
However, headline inflation for the year rose by 2.1%, down from September’s increase of 2.3%.
The gold market is not reacting significantly to the latest inflation data, as some investors are taking profits after Wednesday’s rally to record highs above $2,800 an ounce. December gold futures last traded at $2,786.80 an ounce, down 0.50% on the day.
Although elevated inflation remains embedded in the broader economy, analysts have noted that they don’t expect it to impact the Federal Reserve’s easing cycle. Read More
Gold prices under pressure but largely ignore drop in weekly jobless claims
The U.S. economy continues to move closer to a soft landing scenario as the U.S. labor market continues to remain resilient as the number of American workers applying for first-time unemployment benefits dropped unexpectedly
Initial claims for state unemployment benefits fell to a seasonally adjusted 216,000 for the week ending Oct. 26, the Labor Department announced on Thursday. The number of claims dropped by 12,000 from last week’s revised estimate of 228,000.
The data beat expectations, as consensus estimates forecasted a reading of 229,000 claims.
Many economists have been expecting to see a sharp increase in unemployment claims as many Southeastern states have been impacted by hurricanes during these survey periods. Despite some extreme weather issues, the data shows initial jobless claims continue to trend lower.
The gold market is not reacting much to the latest labor market data. It is experiencing some technical selling pressure after briefly pushing above $2,800 an ounce on Wednesday. December gold futures last traded at $2,784.10 an ounce, down 0.59% on the day. Read More
Market euphoria cools as Bitcoin, gold, and stocks see losses in early trading
The market euphoria seen in recent weeks faded in early trading on Thursday as stocks, gold, and Bitcoin (BTC) slid lower after the latest Personal Consumption Expenditures (PCE) index reading was in line with expectations and did little to change the outlook on interest rate cuts in November.
The annual “core” PCE for September, which excludes food and energy prices, rose by 2.7%, more than 2.6% expected by economists, and equal to the 2.7% rise in August. On the job front, initial jobless claims declined by 12,000 to a five-month low of 216,000, versus estimates for 230,000.
This was the final inflation data ahead of the Federal Reserve’s interest rate decision next week, but there will be one final monthly jobs report, set for release on Friday, for the Fed to take into account before they decide if they plan to announce another interest rate cut. The CME FedWatch Tool currently puts the odds of a 25 basis point cut at the November 7 FOMC meeting at 96%.
“Today’s PCE numbers, coming in as expected, have reinforced the dovish sentiment sparked by last month's FOMC rate cut, boosting confidence that the Fed is on the right track to cooling inflation,” said Matt Mena, Crypto Research Strategist at 21Shares. “This supportive backdrop has given Bitcoin a notable lift as investors gravitate toward risk assets, anticipating a continued accommodative approach from the Fed.” Read More
Debt doomsday countdown: U.S. heads into one of the most challenging periods in history – Peter Grandich
The United States is facing an economic and political reckoning that could be the most challenging period in its history, warned financial expert Peter Grandich.
Grandich told Jeremy Szafron, an anchor at Kitco News, that as the BRICS bloc continues its rapid expansion and intensifies its push for de-dollarization, the U.S. dollar's traditional dominance is under threat.
At the 2024 BRICS Summit, representatives from over 40 nations discussed alternatives to the dollar, which could reshape global trade and lead to the emergence of a gold-backed currency—a move many analysts predict would weaken the dollar's standing and increase global gold demand. Watch the podcast
Gold could drop another $50 but prices are still going broadly from bottom left to top right - Dennis Gartman
While gold’s long-term uptrend remains well supported by bullish fundamentals, the market is looking a little frothy and could be due for a correction, according to famed commodity investor Dennis Gartman.
In an interview with Kitco News, Gartman expressed some concern over how much attention gold has attracted in the last few weeks. Renewed investment demand has pushed prices above $2,800 an ounce.
“I remain long-term bullish on gold, but in the short term, I am modestly concerned,” he said in last week’s Gartman Letter.
“The public has become somewhat enamored of gold over the past two weeks. That bothers me a bit,” he said in the interview.
Gold prices have dropped sharply from Wednesday’s all-time highs, with December gold futures last trading at $2,746.20 an ounce, down nearly 2% on the day. The selloff in gold has intensified as the U.S. economy has remained fairly resilient, and inflation pressures have held steady for the last three months. Read More
Bitcoin falls below $70k, stocks and gold struggle as bond yields surge
Bitcoin (BTC), gold, and stocks all struggled to find their footing on Thursday amid a surge in bond yields, with the U.S. 10-year Treasury (TNX) climbing to as high as 4.33%.
The spike in yields followed the latest Personal Consumption Expenditures (PCE) report, which showed a slight uptick in “core” inflation, coming in at 2.7% versus the expected 2.6%.
While the CME FedWatch Tool shows the market still widely expects a 25 basis point interest rate cut at each of the final two FOMC meetings of 2024, investors remain cautious ahead of next week’s Presidential election in the U.S. and are also closely watching the mounting geopolitical headwinds for any major developments.
The major indices all recorded sharp losses, with the S&P, Dow, and Nasdaq closing down 1.86%, 0.90%, and 2.76%, respectively.
Gold also experienced a rapid sell-off during the morning session, hitting a low of $2,731.81 before bouncing back above $2,745. At the time of writing, spot gold trades at $2,746.90 for a decrease of 1.44% on the 24-hour chart. Read More
Has the correction in gold come or will the dip be bought?
After holding support above $2,600 at the start of the month, gold is once again seeing solid selling pressure as prices were unable to hold gains at all-time record highs above $2,800 an ounce. Investors are now once again wondering if this is the long-awaited correction or just another shallow dip that will be quickly bought.
Some analysts note that better-than-expected economic data this week could put pressure on gold in the near term. The real test comes Friday with the release of October’s nonfarm payrolls data.
Ahead of the official government numbers, private-sector payroll data showed robust job gains last month. While the ADP payrolls report has an inconsistent history of tracking government numbers, some analysts have said there are upside risks to October’s labor market.
“These figures could shift the market sentiment around gold. Strong data would reduce the likelihood of aggressive Fed rate cuts, which could prompt a sell-off in Treasuries, push yields higher, and boost dollar demand,” said Ricardo Evangelista, Senior Analyst at Activates. Read More
Linking gold to U.S. dollar: How America's debt and fiat dependence threaten stability – exclusive interview with Dr. Judy Shelton
With quickly rising debt levels in the U.S., dollar stability and America's economy are facing an "existential threat," warned Dr. Judy Shelton, Senior Fellow at Independent Institute and former economic advisor to President Donald Trump. She added that it is time to get back to sound money, and one historically proven option is linking gold to the U.S. dollar.
The U.S. national debt is fast approaching $36 trillion, and servicing this debt is already costing taxpayers billions of dollars yearly.
"It's come to everyone's attention now that paying the interest on the debt is now costing more taxpayer money … than to pay for our defense needs," Dr. Shelton told Jeremy Szafron, Anchor at Kitco News. Watch the podcast
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
Featured Image - Source: Unsplash
