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Weekly Survey of Gold and Silver Prices
Single Ounce Silver Market Price Benchmark
Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.
PRIOR COVERAGE:
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Friday, January 13, 2023, 9:05 am ET Major US banks offered the first batch of fourth quarter 2022 earnings reporting Friday morning prior to the opening bell. From early indications, the first earnings season of 2023 is not going to encourage many investors to dump money into the financial sector. Out of the gate first was Bank of America (BAC), reporting a bottom line beat of 85 cents per share, three cents better than the same period a year ago. A common theme of the bank reports was additions to loan loss reserves. Bank of America added some $400 million, while JP Morgan Chase upped their provisions for non-performing loans by more than $1 billion. Also reporting this morning are JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC). BlackRock (BLK), and Bank of New York Mellon (BK). Investment banks Goldman Sachs and Morgan Stanley will report next week. Rather than rushing out a post that would only gloss over these results prior to the open, Money Daily will report back this afternoon with a more detailed look at the banks reporting and the effect in the market. Statements such as this from Bank of America...
Provision for credit losses of $1.1 billion increased $1.6 billion ...require some unpacking, as surely most of the lengthy reports will as well. For now, a little more than a half-hour prior to the open, stock futures have tanked, with Dow futures down 260 points, S&P off by 35, and NASDAQ futures shedding 120. Following Thursday's Fed-hope rally, stocks had put in a solid week, but that may come unwound in Friday's trading if futures prove more than just an indication for a lower open and losses extend into the cash session. Through Thursday's close, the major indices are all up nicely, with the Dow gaining 559 points (1.66%), the NASDAQ up 431.81 (4.09%), and the S&P higher by 88.09 (2.26%). The broadest measure, at the NYSE Composite shows a gain of 319.81 (2.06%), close to matching the S&P. The narrowly-focused Dow Jones Transportation Average was up 526.99 (3.80%) through Thursday's close. In international markets, European stocks responded badly to the early bank reportage, selling off from reasonable gains to levels just above unchanged for the day. In Japan, the NIKKEI took a 330-point beating as the Bank of Japan initiated two separate rounds of emergency buying worth around 1.8 trillion yen ($13.9 billion) combined as the benchmark 10-year bond yield surpassed their control level of 0.50%, exposing the central bank's yield curve control mechanism as extremely fragile, subject to breaches beyond the bank's control, and possibly reaching end-game status within months. Friday is looking to be an explosive one in US markets. Money Daily will be back later to cover the action along with more details on bank earnings.
At the Close, Thursday, January 12, 2023:
Thursday, January 12, 2023, 9:15 am ET Stocks put on an anticipation rally Wednesday ahead of Thursday's release of December CPI, due out at 8:30 am ET. The expectation is for headline inflation to fall to 6.4%, which would be the sixth straight decline for the generally-accepted gauge of inflation on a year-over-year basis, from a peak of 9.1% in June, 2022, to 7.1% in November. While any number below 6.8% might be well enough to spark an extension of the new year rally, stock-pickers were greeted with a figure of 6.5%, which sent stock futures soaring. Month-over-month, the decline was a mere 0.1%, following a rise of the same amount in November. Already gathering momentum prior to the official BLS release, stock futures took a tumble as the decline was less than many traders were hoping to see. The idea that lower inflation figures might deter the Federal Reserve from a continuation of their rate-hiking regime that already has the federal funds rate at 4.25-4.50% is probably more wishful thinking on the part of the non-stop bull marketeers who believe the US economy should be running on all cylinders, regardless of whether it is powered by traditional fossil fuels or windmills and solar. Despite getting off to a slow start, so far this year, stocks have found solid footing and have rallied steadily, with the NASDAQ up straight sessions, leading the pack with a 5.44% gain in 2023. Dow Industrials have added 836 points, or 2.52%, while the S&P 500 has been chugging right along, up 145 points, or 3.80%. Just as the November CPI reading of 7.1% was considered outstanding news for the general economy, today's number is likely to have a similar effect on investor sentiment, though judging by the movement in futures, there could be widespread disappointment that the figure wasn't closer to 6.2%. Current betting is for the Fed to add another 50 basis points to their target rate at the January 31 - February 1 meeting, pushing overnight federal funds to 4.75-5.00%, a point that would be very close to the expected terminal rate of 5.00-5.25%, which could be met with a 25 basis point hike at the March FOMC meeting. Dow futures fell from being up more than 115 points to down about 100. NASDAQ and S&P futures took similar paths, giving up all the gains prior to the CPI release. With less than a half hour to the US opening bell, futures are flailing about like ducks in an eddy, seeking direction. It appears the general mood is unsettled, seeking even better results than those produced with December CPI. Impatience with the Fed is turning stock trading into something of a hopeless wishing well. Saddened and deflated by stocks in 2022, the market seems to want quick redemption in the form of higher share prices, but indications from today's pre-market activity is that it will take even steeper declines in inflation to satisfy pent-up profit-seekers. Elsewhere, assets not necessarily tied to the US dollar have been on the rise. Bitcoin is up nearly 10% in the first days of 2023, hitting 18,232.40 this morning. Gold has gained about $45 this year, for a roughly 2.5% gain, though silver, a six percent winner in 2022, is essentially flat on the year, at $24.16. Indicated by declining vault holdings, a silver shortage has been expected for some time, but easier economic conditions may forestall such an event, as cooling inflation works against the interests of hard asset buyers. From what is happening in futures and European markets, it appears that today's CPI release has resolved little. Inflation continues to be a scourge on all classes, the Fed will continue with its ongoing policy direction and stock players will have to be quick and nimble under these conditions. There is still plenty of danger in these markets.
At the Close, Wednesday, January 11, 2023:
Wednesday, January 11, 2023, 9:18 am ET Lately, nary a day goes by without some kind of unexpected failure involving key infrastructure in either government or private systems. Oddly enough, the US government passed a milestone $1.2 trillion infrastructure measure last July. Appearances indicate that the money is coming to rescue America a little too late. This morning, Americans awakened to a nationwide failure at the FAA, grounding all domestic flights until 9:00 am, as the Notice to Air Missions (NOTAM) system suffered a malfunction. The system delivers critical messages to pilots. Thousands of flights have already been delayed and hundreds more cancelled. The current "glitch" comes just after Southwest Airlines cancelled or delayed an inordinate number of flights during the holidays. The culprit in both instances: antiquated software. This is what happens when you don't upgrade or update infrastructure over the course of decades. Things fall apart. UPDATE: Flights have been allowed to take off... crisis averted as of 9:00 am. More than 4,000 flights were delayed. It's a known fact that the federal government and many state governments have avoided spending on roads, bridges, energy, power grid, and other areas crucial to the operation of a dynamic economy, instead focusing on overpaying public servants, diversity in the workplace, healthcare, vaccines, green energy initiatives, and plenty of other wasteful or outright destructive projects, like sending arms and money to people halfway around the world to fight a war that is essentially none of America's business. At the same time, these same government bodies are doing everything they can to dismantle parts of the system that actually work, like shutting down coal-fired power plants, creating disincentives for energy companies to conduct research and exploration projects, and promoting electric vehicles (EVs) that are cost inefficient and actually use more energy to build than traditional internal combustion engine cars and trucks. Just yesterday, the US Consumer Product Safety Commission announced a proposal to potentially ban gas stoves, currently used in 35% of all American homes. Never mind that people have been safely cooking on gas ranges and ovens for more than 60 years. Now, the government seeks to protect us from them. The country - and some states and localities - is being run by lunatics. That's right, Americans have given up their right to live in a top-notch environment, instead allowing people with weird agendas to make the rules. It's probably a good thing that many Americans simply ignore the laws, mandates, and dictates issued by the various overfed governments that continually oppress them. Tax avoidance, civil disobedience, and ignoring rules and regulations are on the rise in response to government overreach. People are fed up. Anything that's not fake is just plain stupid. Government causes problems by proposing to fix things that aren't broken. Enough is enough. Meanwhile, after another baseless raly on Tuesday, Wednesday is shaping up just fine for Wall Street stock enthusiasts. Futures are higher across the board, European stocks are putting on gains. Carry on.
At the Close, Tuesday, January 10, 2023:
Tuesday, January 10, 2023, 10:00 am ET What better way to start off a week than with an old-fashioned pump and dump? Those masters of the universe seem to have run out of tricks, resorting to time-tested models of market skimming. The supply of available money - currency, actually, money substitutes - to steal continues shrinking on a global basis, but, not to worry, because China and the BRICS nations seemingly have a plan. There's been a lot of discussion over China's recent gold accumulation and their intentions for the splurge of spending by the world's largest gold producer. Seriously, since China mines approximately 11% of the world's annual supply (about 35 ounces), why in the world would they be out in the market buying more? In the second and third quarters of 2022, the People's Bank of China (PBoC) topped off its gold reserves by purchasing another 32 tonnes, putting their admitted reserves at 1,980 tonnes. By most accounts, China's official reserves are probably low by orders of magnitude. Current speculation puts China's total gold holdings closer to 12,000 tonnes. There are 32,666.67 troy ounces in a ton of gold and 31.1034768 grams in an ounce. So a ton of gold contains roughly 1,016,031.43 grams of shiny money, the same applying to silver, or, for that matter, anything measured in troy ounces. For purposes of this experiment, we'll just round down to an even million grams of gold in every tonne, so the hordes of real money deniers who maintain that there's not enough gold for the world to return to a gold standard won't get too confused. It's like saying all the people in the world can't afford new sneakers, a statement that is probably true if new sneakers are going for 35 to 50 bucks a pair, even for the cheap ones, but what if currency and money gets re-valued, to a different level, one that equates an average pair of sneakers to a five dollar bill? Well, as Oprah might say, you get a pair of sneakers, and you, and you... everybody gets a new pair of sneakers. If China does actually have 12,000 tonnes of gold, that equates to roughly 12 billion grams. At current rates of roughly $1870/ounce or $60 per gram, China, if it chose to back its currency 100% with gold, could have about $720 billion in circulation. With its 1.425 billion citizens, that would be about $500 (505.26) per person, which, far from being an ideal number, is a pretty good start. Ways in which a gold-backed or commodity-backed currency (exactly what the BRICS nations have proposed as a new reserve currency to replace the US dollar) could work is to have gold backing up to 50% of the currency, the rest backed by reserves of silver, platinum, nickel, copper, rare earth metals, oil, or a combination of any other stable commodities which could be stored, like crude oil, iron ore, sulpher, you get the idea. Taking the proposition of a new gold-type standard for currency further, China would not likely be alone in backing a new reserve currency. Four of the BRICS countries just so happen to be among the top 15 gold producing nations in the world. China is #1, Russia second or third, South Africa and Brazil are ranked anywhere from 8th to 15th, according to many diffuse estimates. India being the "I" in BRICS is the outlier, but with a caveat. India doesn't mine much gold, but the people of India, in aggregate, own tonnes and tonnes of the stuff, mostly in jewelry and ornaments, but a sizable amount in bards and coins. Indians wouldn't become wealthy overnight (some would), but they certainly wouldn't be poor, either. Some kind of new currency is going to emerge from China, China and Russia, or the BRICS nations plus other countries like Saudi Arabia and Argentina (#10 silver producer). North America need not worry, however, as Canada, the United States and Mexico are major miners of both gold and silver. That the world will end its 50+ year affair with fiat currencies backed by nothing more than good faith and credit (both on the wane lately) of governments and return to using currency backed by something, ostensibly gold, silver, and other commodities, has gone from being possible to now probable, and probably within one to three years. The value of the current reserve currency, the Federal Reserve Note (US$), has declined by 97% since its inception in 1913 and continues on its path to zero along with the yen, euro, Swiss franc, pound and all the rest. Floating currencies has been the standard since after then-president Richard M. Nixon took the world off the gold standard in 1971. Approaching 52 years of the world dealing with debasing currencies is already too long. People of the world have been having their wealth stolen by the stealth tax of inflation, which is just a kinder, gentler way of saying "debasing currency." The time has come for a reawakening and a modernization of currency standards. China and the BRICS countries seem to be on the cutting edge of what will emerge. How this will affect the price of gold and silver as a new standard evolves is not well known, though most experts believe holders and stackers of precious metals will be rewarded. Central banks of the largest countries own gold, and they're not likely to allow their precious metal reserves to be marked down, though that is a possibility. In the end, gold and silver will not be measured entirely in dollars, yen, euros, or any other fiat currency. An ounce of gold may equal an acre of arable land, or a gram of silver a dressed, uncooked chicken. There's a question to ponder: how well prepared are you for a silver/chicken standard? Change is coming, and it will be for the better. Fiat currencies are fading fast. For more on this topic, here are a few links: Investing News: Precious Metals
At the Close, Monday, January 9, 2023:
Sunday, January 8, 2023, 12:09 pm ET No matter how one chooses to define current market dynamics, the flow of the past year and first week of 2023 leaves one with the unmistakable feeling that it is not one for amateurs. Institutional money continues to move markets in radical fashion with volatile moves in all directions. The short week just concluded was characterized by a series of downdrafts countered by a wildly positive move to close out Friday, the catalyst being what was perceived as a weak jobs report from December which saw job gains of 223,000, the lowest raw number since December, 2020, when the number was -115,000. With November revised down to 256,000, the December NFP was the fifth consecutive decline in job creation, beginning in August of last year. As the BLS, which regularly produces the Establishment and Household surveys, has been under fire recently for an enormous gap between the two and has been accused of politicizing the numbers in the past, an assumption that the numbers are wildly off kilter is not mere hyperbole. Government figures of any type should always be viewed with a healthy dose of skepticism no matter what, but especially so in the current environment of goal-seeking narratives and mass delusion. That said, Wall Street responded with a massive one-off rally Friday, turning what appeared to be a losing week into a jackpot winner.
With Friday's gains, the NASDAQ and S&P closed off a string of four straight weekly losses, starting the new year out on a positive footing. The NYSE Composite and Dow Jones Industrial Average recorded a second winning week in the last five, hoping to turn the tide of 2022 into a ripple for 2023.
For the Week: In advance of next week's December CPI report due out on Thursday, January 18, plus options expiration and the first batch of substantial Q4 and year-end earnings reports on Friday, including a number of prominent financial institutions - Bank of America (BAC), JP Morgan Chase (JPM), Wells Fargo (WFC), Citibank (C), BlackRock (BLK), and BNY Mellon (BK) - market participants have positioned themselves for further advances. Expectations that December CPI will show a decline from November's 7.1% year-over-year reading bolsters the bull case for stocks, as does the current consensus that a US recession will be a mild one if one even develops. Recent talk has shifted to a belief that the US could actually avoid a recession despite circumstantial evidence that it has been generally slowing and contracting since January of last year regardless of official GDP reports to the contrary. In case handicapping the fudging of US economic reports becomes too challenging for the financial punditry, they can always count on Joe Brandon and his DC allies to pump up the US economy with reminders. Such is the manner in which stocks are traded, not on their individual merits, but according to the prevailing narrative. Welcome to Bolshevism, USA style.
Over the course of the first four trading sessions of 2023, short end maturities sold off, with the one-month bill gaining 20 basis points to 4.32, the two-month up 14 basis points (4.55%) and the six-month rising by only 0.03, from 4.76% to 4.79. Notes and bonds were being snatched up like donuts at a police chief convention, the longer the maturity, the more buyers were willing to pay. This activity pushed the 30-year bond down a stunning 30 basis points, from 3.97% at the close of 2022, to 3.67% just a week later. 10-year notes were yielding 3.88% last Friday, closing out this week at 3.55%, a move of 33 basis points, matched by the 7-year note, which fell in yield to 3.63%. While the pricing of notes and bonds was dramatic, it was anything but historic. As recently as December 15, the ten-year note was yielding 3.44% and the 30-year bond, 3.48%. Selling the short end to lock in lower rates for longer is more or less normal turnover in what has become a rapidly-moving environment, the assumption being that the curve will eventually flatten, inflation will soon be tamed and the Fed will stop hiking rates, making sense if the consideration is that the Fed will pause in May or even possibly March and begin lowering rates as the US economy dips into recession. Talk of a mild recession is making the rounds in the usual places by the regular stone-heads who are almost always wrong. That being the case, buying six-month bills and one-year notes with yields approaching 5.00% seems like a no-brainer to ultra-savvy fixed income buyers with an eye toward immediate income. Recession deniers and moderates (just about all of the financial talkers) simply do not wish to see a repeat of 2022, when rates blew out. Figuring on a Fed "pivot" or at least a pause runs contrary to recent statements by Fed talkers, this week led by Neel Kashkari, president of the Minneapolis Fed, who this week forecast that the federal funds rate should initially pause at 5.4%. Should Kashkari's crystal ball gazing turn out to be prophetic, such a move would be nearly a full percentage point higher than the current 4.25-4.50% rate, requiring a minimum of a 50 basis point hike at the next FOMC meeting on January 31 - February 1 and a raise of another 25 to 50 basis points at the May meeting. Inverted remains the primary makeup of the curve, as 1-month to 30-year is currently sporting a -65 spread, with 2s-10s at -69 and the worst of it in the six-month/10-year pair, at a blowout -119 spread. If anything, the mind-numbing inversion suggests a deep, long retraction in the US economy, in opposition to the short and shallow narrative favored by Wall Street types generally interested in nothing other than higher stock prices.
WTI crude oil continued to grind lower, finishing near a one-month low ($71.02, 12/9/22) at $73.73 after closing out last week and 2022 at $80.26. Some of the decline was attributed to the Brandon administration balking at some prices relating to refilling the depleted SPR, currently at a 35-year low. This should come as no surprise to the administrative experts who have bad-mouthed the energy industry and its producers for years. They are not the brightest bulbs in the box, but expect silk glove treatment because they are... special. Not to worry, demand destruction should commence soon enough, sending prices spiraling like a vortex into the $60 range. Either that or military expansion will suck all the remaining oil on the planet away or embargo it in foreign ports and destinations unreachable to the public. Meanwhile, Russia continues to pump and sell oil to friendly nations at a discount and China has replaced the petrodollar with the petroyuan, soon to be the petrogold standard. Continued apprehension and confusion over the price of basic energy needs such as gasoline, diesel, heating fuel and the like have caused considerable consternation among consumers and businesses alike, a condition unfavorable to any kind of inflation/deflation expectations and to business in general. Prices at the pump were up marginally in the first week of the new year, with the national average for a gallon of regular 87 octane at $3.28, up about a dime from the prior week. The lowest prices are found in the Southeast and lower Midwest, all below $3.00 with the exception of Florida ($3.27) and Alabama ($3.03), according to gasbuddy.com. California remain the only state with average pricing above $4.00, checking in at $4.39 this morning. Most of the midwest states are within pennies of $3.00, with the obvious exception of Illinois ($3.38). Montana has joined the sub-$3 club, at $2.98 Sunday morning.
Bitcoin continues to show signs of life, getting some boosting Wednesday, Friday and this morning, as it attempts to run past $17,000. The current reading of $16,982.80 is the highest in three weeks. The recent strength displayed by the only crypto that matters comes amid more acrimonious accusations of fraud, malfeasance, and manipulation concerning Genesis, which this week announced layoffs of 30% of its workforce in a second round of cuts in less than six months. On Thursday, crypto-focused bank, Silvergate Capital Corp., also said it was slashing headcount by 40%. After the recent blowup of Sam Bankman Fried's FTX, a rash of crypto firms have come under fire from investors and regulators. As the fakers, frauds, and pretenders are exposed, more than 5,000 cryptocurrencies have failed since January 2020. Eventually, there will be only a few, led by the only coin true to its roots, bitcoin.
Gold/Silver Ratio: 78.00; last week: 75.69
Gold price 12/09: $1,809.40
Silver price 12/09: $23.68 Gold took a quantum leap this week, gaining $40 on the COMEX, leaving silver in the dust, the poor cousin losing 20 cents to $23.98. The moves left the ratio at 78 even, a signal to silver stackers to buy up remaining inventory with gusto as the central bank haters, in conjunction with EV and solar panel industries, before the general shortage comes. The rise of gold and reversal of fortune for silver should serve as yet another reminder that central banks hate silver with unbridled passion as it serves as currency for the common man and competition to their fiat dream world. Gold will be revalued in time, probably making new record highs this year, and silver will follow or lead. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):
The Single Ounce Silver Market Price Benchmark (SOSMPB) was higher this week, rising to $37.18, a gain of 22 cents from the January 1 level of $36.96.
Stocks continue to bounce around between the lows of October and December highs, but they're a side show to the movements in currencies and geo-politics. A massive shift of wealth is moving West to East as the developed nations in the US-EU-UK bloc remain relentless in the destruction of civility in their societies and denigration of anybody and any nations not so aligned to their prospects of a New World Order, Great Reset or Building Back Better. In the East, the mood swings toward cooperation and coordination toward a greater good for what is becoming known as the Global South, including the BRICS nations, and counties aligned with China's Belt and Road Initiative (BRI), which stretches from China to the Middle East, Africa and South America. Western nations, despite their great influence on economies and markets, is being left behind, or, more explicitly, left out, mostly by their own doing. Offering nothing better than propaganda, foreign wars, and civil repression, the US-led coalition has managed to not only shoot itself in the foot, but continues firing shots through the holster toward the floor, without hesitation or any sense of propriety. Time is running out on fiat currencies everywhere. A turn to money backed by something, anything, approaches post haste.
At the Close, Friday, January 6, 2023:
For the Week:
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