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'Commodities are better investment than gold' as inflation could hit 10%, says billionaire 'Bond King' Jeff Gundlach
Inflation in the U.S. could surge to 10% before hitting its peak, forcing the Federal Reserve to be more aggressive, said DoubleLine Capital CEO Jeffrey Gundlach, adding that he prefers to play broader commodities over gold.
"Some people are bringing out the narrative that with the war in Ukraine, the Fed is less likely to be as aggressive in raising rates. I completely disagree with that," Gundlach said during his webcast on Tuesday.
With oil over $120 a barrel, fertilizer prices exploding, and short supplies of natural gas, wheat, and corn, the inflation rate will not peak out at 7.5%, Gundlach pointed out.
"It depends where commodities go, but I think we could be headed to a 10% CPI … before we get any relaxation," he added. "I can't possibly see how the Fed can pull back on interest rate increases. Their job is to fight inflation. They've done a terrible job of it so far."
The inflation prints this year would make the Fed's 2% inflation target look "laughable," DoubleLine Capital CEO said. Read More
Supply chain disruption bigger issue to platinum, palladium than production risks
Risks of production issues for Platinum Group metals remain relatively low. Still, the sector will continue to face significant supply disruptions because of Russia's ongoing war with Ukraine, according to some analysts.
Tuesday, the London Platinum and Palladium Market (LPPM) said it would maintain its accreditation of two Russian precious metals refineries. According to comments from the LPPM, both JSC Krastsvetmet and the Prioksky Plant of Non-Ferrous Metals will be allowed to sell metal in the London market, the world's largest.
"Following a meeting of the Management Committee of the LPPM last night, there will be no changes to our Good Delivery list," the LPPM's Chief Administrative Officer, Jane-Anne Wardley, said in a comment to Reuters. "We will obviously continue to monitor and review the situation." Read More
'I think there is going to be a lot of consolidation' - Sandstorm Gold on intermediate streamers
To get better valuations, Sandstorm Gold (NYSE:SAND) CEO Nolan Watson said the streaming and royalty sector could use consolidation.
Watson spoke to Kitco correspondent Paul Harris at BMO's Global Metals & Mining Conference held in Florida last week.
"I think there is going to be a lot of consolidation not necessarily because of ROIs that are in the market, but I think it's because there has been a proliferation of companies and the valuations of the intermediate size companies...is actually a lot lower than you would traditionally expect," said Watson. Read More
Why mining CEOs are not telling the truth about being acquired
B2Gold (NYSE: BTG) president Clive Johnson said many mining sector CEOs are lying to their shareholders by not disclosing value-creating M&A approaches by other miners.
Johnson spoke to Kitco correspondent Paul Harris at BMO's Global Metals & Mining Conference held in Florida last week.
While gold prices are up and the industry needs consolidation, Johnson said most mining CEOs are not interested in doing deals.
"There's a lot of entrenched management. They are not telling the truth when they tell shareholders they are open to mergers and acquisitions. The reality is a lot are acting in self-interest," said Johnson. Read More
Sharp downside corrections in gold, silver; bulls need to step up
Gold and silver prices are sharply down in midday U.S. trading Wednesday, on heavy profit-taking from the shorter-term futures traders after gold futures hit a record intra-day high and silver hit an eight-month high on Tuesday. Strong losses in crude oil and other commodity markets today are also helping to pressure the precious metals markets. April gold futures were last down $53.40 at $1,989.80 and May Comex silver was last down $0.98 at $25.91 an ounce.
Key for the gold and silver markets will be if the bulls have the courage to step in and buy the big dips. One clue that market tops are in place in the gold and silver markets would be two strong down days in a row. Trading Thursday and Friday will be extra important in gold and silver, and the bulls need to step up and show some power to avoid serious near-term technical damage.
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Technically, April gold futures bulls still have the firm overall near-term technical advantage but now appear exhausted. Prices are still in a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the record high of $2,178.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at $2,000.00 and then at $2,025.00. First support is seen at today's low of $1,981.00 and then at $1,976.50. Wyckoff's Market Rating: 8.0. Read More
Is the long-term upside move in gold over?
Today was an absolute game-changer. Given that the recent ascent in gold to just under the record high of $2088 was absolutely news and headline-driven, changes in those headlines will have a dramatic and profound impact on the direction and price gains or losses in gold.
The President of Ukraine, Volodymyr Zelensky, said he is open to a compromise with Russia. That single statement had a profound impact on multiple asset classes. It resulted in U.S. equities having a strong rally with the Dow Jones industrial average gaining 653 points or 2%. The NASDAQ composite gained 3.58%, and the S&P 500 had a net gain of 2.57%.
The safe-haven assets such as gold and the dollar also sustained strong price declines. The dollar lost 1.12%, and the dollar index is currently fixed at 97.97. Gold sustained a strong selloff and as of 5:15 PM EST, the most active August futures contract has declined by $47.60, or 2.33%, and is currently fixed at $1995.70. Silver lost 3.1%, and after factoring in today's price decline of $0.84, it is currently fixed at $26.06.
Image Source: Kitco News
In an exclusive interview by the German newspaper "Bild," the Ukrainian President acknowledged that he is open to a compromise to end the war between Russia and Ukraine. Read More
Rick Rule: How likely is WW3? Here's why Gold price will triple over the next 5 years
Russia's President Vladimir Putin's war in Ukraine has caused significant moves in major commodities. Since the invasion of Ukraine on the 24th of February, the prices of oil, gold, uranium, and even soft commodities like wheat have all rallied.
Although a diplomatic resolution to this conflict will most likely be reached, the war will leave a deep impact on markets for years to come, according to Rick Rule, director of Sprott U.S. Holdings.
Speaking to Michelle Makori, Editor-in-Chief of Kitco News, Rule said that it's only a matter of time before Russia runs out of resources to continue a protracted war.
"I think Putin probably believes that his hand was forced into that circumstance, and I think that he has been surprised by the lack of conventional capabilities enjoyed by the Russian forces. I think too that Mr. Putin, as a politician, didn't understand enough about the Russian economy to understand the real pain and the fact that he will, sooner rather than later, be unable to afford this war," Rule said. "I'm reminded of less combatants, which is to say Eritrea and Ethiopia…their war 15 or 20 years ago ended because neither side could pay the gasoline bill. They literally ran out of fuel." Read More
Gold price sheds $70, bitcoin price surges $3k as oil crashes, but all eyes on CPI number
The gold market was trading near daily lows after losing more than $70 and falling below $2,000 an ounce. The selloff coincided with oil plummeting 10% and risk assets, such as stocks and crypto seeing strong gains.
The commodities rally cooled on Wednesday, with oil, platinum, silver, copper, wheat, and corn reporting losses. West Texas Intermediate crude fell 10% to $110, while Brent crude was down 11% at $114.
"WTI crude is now 10% lower from the highs made at the start of the trading week, but pullback seems premature given the short-term supply disruption risk remains extremely elevated," said OANDA senior market analyst Edward Moya. "Coordinated efforts to tackle the global energy crisis will help ease some of the pressures we've seen, but the key to risk appetite will depend on how long the war in Ukraine lasts." Read More
Gold and silver have fallen ahead of the European open
Gold (-0.63%) has retraced somewhat over the last two sessions to trade at $1979.51/oz ahead of the European open. Silver (-1.54%) is also trading lower and is holding at $25.3/oz. In the rest of the commodities complex, copper is 0.56% higher and spot WTI has risen 1.55%.
Risk sentiment was positive overnight as the Nikkei 225 (3.94%), ASX (1.10%), and Shanghai Composite (1.22%) all pushed higher. Futures in Europe are looking mixed despite the positive risk tone overnight.
The biggest mover in FX markets was AUD/USD which rose 0.30%. USD/JPY also pushed higher by 0.20%. In the crypto space, BTC/USD dropped 6.40%. Read More
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.
