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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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Stocks Take a Breather; Gold, Silver Continue Advancing; Rate Cut Expectations for September High Friday, May 17, 2024, 8:56 am ET One day after the major indices made new all-time highs, the Dow Jones Industrial Average topped 40,000 for the first time but failed to hold it, finishing nearly 200 points below the highs of the day. There isn't much to say regarding this one-day respite other than it was timely and expected. Following an unpleasant April, stocks have been on a tear in May, fueled by speculation that the Federal Reserve plans to cut interest rates sometime this year, possibly as early as September. That consideration has been on the minds of traders since the Fed began hiking rates in 2022, first as subdued talk of a Fed "pivot", and more recently in response to the Fed's dot-plots and dovish talk by Fed Chairman, Jerome Powell, back in October, 2023. So far, the Fed hasn't budged from its current federal funds target rate of 5.25-5.50% that has been in effect since July of last year. Most of the gains in stocks lately have been the result of buybacks and good, but not spectacular, earnings results from the first quarter. More than 85% of listed stocks have submitted their quarterly earnings, with more than 60% of those either matching or exceeding expectations. On the data side, surveys from various Fed districts have been less encouraging, led by declines in the NY Fed, Philly Fed, and Dallas Fed. Additionally, GDP at 1.6% for the first quarter was lower than expected, though that and other negative indicators are just the kind of data that keep fanning the flames of the rate cut fire. At the same time, gold and silver have tested recent highs, with the metals regaining ground over the past two weeks, pushing gold close to the $2,400 mark and silver near $30 per ounce. As of 8:00 am ET, gold is sitting at $2,394 and silver twice topped $30. With the gold:silver ratio continuing to come down (currently 79.76), silver appears to be the preferred speculative asset. It remains to be seen how influential suppression efforts by the COMEX, LBMA, and other entrenched U.S. interests will be going forward. Demand from China and other Eastern nations remains a strong component to the gold rally, while China itself may be putting downward pressure on silver, keeping its cost low for manufacturers of solar panels, EVs, and other electronics. Friday looks to be marginally entertaining. Stocks lost some momentum on Thursday and profit-taking could drive them lower again today, though there's still the overwhelming influence of FOMO, even at all-time highs. For what its worth, skeptics have joined up with the bull camp, citing upcoming elections as the driving force behind gains in the major indices. There will likely be more talk about a "summer rally" soon, giving speculators another leg on their stool. Stocks are pointing towards a positive open. As of Thursday's close, the Dow is up 356 points for the week, the NASDAQ is ahead 357 (2.19%), and the S&P has gained 74 points. Holding those gains Friday would mark the fifth straight weekly rise for the Dow, and fourth straight for the NASDAQ and S&P indices.
At the Close, Thursday, May 16, 2024:
Thursday, May 16, 2024, 9:00 am ET It can't get much better for stock-holders, but it's very likely that it will. All of the major indices closed at record highs on Wednesday. Historic precedent says that there are higher levels ahead, potentially much higher, through summer and into the fall. There's no fighting it, especially if the Federal Reserve lowers interest rates in June, July or September. They've done their job - getting stocks to all-time highs - so now it's just a matter of fine-tuning up until elections. Inflation continues to rise, but that's OK by the Fed. Anybody who matters has enough money to pay up for anything and everything. For the rest of the world, there's gold and silver. Overnight, gold touched $2,400 again and has backed off to around $2,388 on the COMEX. Silver topped $30 for an instant, and is close to breaking out. Just before 9:00 am ET, the COMEX has it at $29.83. Though silver remains well below its own record price of $49 per troy ounce, current conditions suggest that prices may be more sustainable, given a global silver mining shortage and its function as an industrial metal as well as an investment vehicle. Silver's price is already a 13-year high and it is poised to reach new levels. How high depends on the degree to which it is suppressed by interested parties, global demand, mania buying, and macro-economic conditions. There's also the question of the gold:silver ratio, still above 80, when the historical ratio is somewhere between 12 and 20. There are distortions too numerous to mention in stocks, fixed income, commodities, and elsewhere, but to most investors holding stocks... Happy days!
At the Close, Wednesday, May 16, 2024:
Wednesday, May 15, 2024, 9:05 am ET On the heels of Tuesday's slightly hotter than expected April PPI release, at 8:30 am ET Wednesday, the BLS let out the April CPI, which showed US consumer price increases cooled ever-so-slightly during the month. The Consumer Price Index (CPI) rose 0.3% over the previous month and 3.4% over the prior year in April, a slight slowing from March's 3.5% annual figure and 0.4% month-over-month increase. Stripping out food and gas, core prices in April climbed 0.3% over the prior month and 3.6% over last year. Both measures met expectations. At the same time, April retail sales figures were released by the Census Bureau. On a month-to-month basis, April retail sales were unchanged from March, and up three percent from April of 2023. Prices are still rising and people are still spending. Wall Street sees this as highly positive, with stock futures exploding higher. Oddly enough, gold and silver also gained, with gold rising above $2,380 and silver shooting past $29 per ounce. Does any of this matter?
At the Close, Tuesday, May 14, 2024:
Tuesday, May 14, 2024, 9:09 am ET Following a torrid week, especially on the Dow, which gained 837.16 points (+2.16%), stocks took a breather to open the new week, which will be punctuated by data drops with April PPI on Tuesday, April Retail Sales and CPI, Wednesday. Investors appeared a little gun-shy after the Dow gained eight straight sessions. One could not blame them to be apprehensive in advance of fresh inflation figures or with the Dow in a seriously overbought condition. Over the eight-day run, the Dow advanced some 1,696.92 points from the April 30 close of 37,815.92, reaching a high of 39,512.84 at Friday's close. All of the Dow's gains came in May, the month often regarded as a selling time, as in the ancient adage, "sell in May and go away." Monday's drop was hardly noticeable. The S&P lost just over a point, the NYSE Composite was down a mere 28 points while the NASDAQ spoiled the party for the bears, gaining 47. All this was in anticipation of PPI, which was released at 8:30 am ET, giving the impression that inflation was still not under control. To wit, per the BLS press release:
The Producer Price Index for final demand rose 0.5 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in March and advanced 0.6 percent in February. (See table A.) On an unadjusted basis, the index for final demand moved up 2.2 percent for the 12 months ended in April, the largest increase since rising 2.3 percent for the 12 months ended April 2023. The news was not good for the rate cut cheerleading mob, with the main index and the core up by the most in a year. Naturally, the messy condition was reflected in stock futures, which were at session highs prior to the announcement, but were slammed lower. For instance, Dow futures, which were up about 41 points, took a 150-point nosedive on the news, splashing deep into the red. On the contrary, gold and silver began to post gains after being mushed lower on Monday. Gold was seen around $2,350, with silver at $28.50 per troy ounce. Crude oil, which was nearly unchanged overnight, started to bleed lower. WTI crude dropped about 35 cents to $78.77, though oil is likely to come under more pressure as Spring advances due to considerable demand destruction at the fuel pumps in Europe and the U.S. It's too early to tell how stocks will respond to the high PPI reading, though thy should head lower since the bad news on inflation is also bad news on interest rates, which will stay where they are for the time being, at least until the next FOMC meeting, June 11-12. If CPI comes in hot on Wednesday, look out below, though today might be the real deal as investors are unlikely to take a wait-and-see position by the closing bell. If PPI is unrelenting, it's a pretty good bet that CPI will also show inflation not nearly as well-behaved as the Fed would like. The worst part of all this PPI, CPI, and rate cut game of musical chairs is that none of these reading are showing negative numbers, as in "deflation", which is what's needed to reduce prices that are bleeding Americans dry. Just going up by a little bit every month isn't a cure, especially at the grocery store. Food costs have risen by 25-35% overall in the past three years and consumers are tapped out. Unless the Fed acts soon and does the right thing by hiking rates, they might as well be saying: "if you like your hyper-inflation, you can keep your hyper-inflation." In the final analysis, it is the Fed and the spendthrift U.S. congress that caused the current malaise with their "safe and effective" COVID shots and the massive injection to the money supply in 2020. The choices of what to do with them ranges from hanging to secession. Americans are having their standard of living reduced right before their eyes, yet sit back and wait for somebody else to do something. Buy gold and silver. Stop paying taxes. The government wastes every dime of your money and then borrows more and wastes that.
At the Close, Monday, May 13, 2024:
Sunday, May 12, 2024, 1:50 pm ET Fun week to own Dow stocks! Up eight straight sessions. Stocks The Dow took home the blue ribbon this week, with dividend-seekers reaching for some of these leading gainers:
CAT Caterpillar Inc. +5.36% While dividend yields for most stocks are currently below what a six-month or one-year CD returns, investors have high hopes that company share repurchase programs will send these and other Dow stocks higher. They'd better be right, since inflation is gnawing away at all asset bases. The financial press continues to cling to the rate cut story, which refuses to go away despite the fact that there are only three (June, July, September) FOMC meetings before the elections. Any meaningful rate cuts will have to take into account inflation, woefully under-reported by CPI. Earnings reports from the first quarter have all but dried up, though this week has some major retail oomph. AliBaba (BABA) and Home Depot report Tuesday before the market open, Walmart (WMT) prior to the open Thursday. Other companies of interest are youtube rival, Rumble (RUM) and Cisco Systems (CSCO), both after the close, Tuesday and Wednesday, respectively. The next big jolt for the market might come May 22, when Nvidia (NVDA) reports. On the docket in data are retail sales and April CPI, both due out Wednesday morning. PPI will precede both, Tuesday morning. Thursday features reports on Industrial Production, Capacity Utilization and the Philly Fed. Treasury Yield Curve Rates
While stocks continue drifting higher towards all-time highs, yields have not come down all that much, indicating some stress in the treasury complex. The yield curve has been inverted for well over two years now, with no end in sight. In case the Fed does not find reasons to cut the federal funds target rate soon, the other solution is for long-dated maturites to rise beyond the current yields on one, two, and three-month bills. That is a scenario for which the Fed is not prepared (one questions whether or not they're ever prepared for anything, being historically a reactionary bunch), though it might be a more realistic scenario for treasuries than bold and probably wrong Fed decisions, i.e., cuts. Yield on the 10-year note closed out the week at 4.50%, same as the week prior and not too distant from the high yield of 2024 of 4.70%, which was just a few weeks ago (April 25). Two-year yields, which flirted with 5.00% recently and only exceded it on one occasion (5.04%, April 30), jumped 7 basis points to 4.87%, which isn't quite cause for alarm, but it's close. Spreads remain in the safety zones. 2s-10s at -37 is comfortably within the range of -19 to -41 that's held since February 2nd. Anything below -45 would be cause for concern, indicating that dis-inversion is stalled. It's very likely that the curve will remain inverted until the elections, although the Fed, we've been told, is apolitical. That's because dis-inverting the curve and returning to normalcy would likely trigger all sorts of bad effects, like higher unemployment, deflation, and a recession. Perish the thought! A recesson will only likely happen if Donald J. Trump is elected president in November, to make a mockery of his second term. Full spctrum spread stands at -87, far removed from its lowest level at the end of 2023 (-157). Whenever either of these spreads begins to approach zero or positive (normal) numbers, primary dealers step up the buying impulse to ensure that notes and bonds don't get too close to the raging fire in bills. It's an odd game that the Fed and the entire global bond market is playing, but it's close to the breaking point as a few central banks have initiated cuts, the latest Sweden's Riksbank cut its key rate from 4.00% to 3.75% this week. Switzerland was the first to cut, in late March.
The key takeaway: After eight rate hikes in less than two years, Sweden's economy has ground to a halt and many households are struggling with mortgage payments at their highest level for more than 15 years. Sound familiar? The Fed hasn't seen nearly enough evidence to convince them to cut at all. The next FOMC meeting is June 11-12. CPI and PPI figures from April will be out this week and should offer more direction. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil rose through the week until Friday, when the price fell from a high of $79.40 to $77.79 per barrel, down another 20 cents on the week. Consumers, who are spending more of their money on food, insurance, and mortgage and rent payments, are formenting serious demand destruction in the U.S., the world's foremost consumer of petroleum products. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump eased in response to recent declines in crude prices, down another three cents to $3.60, still an unacceptably high level. California is and probably always will be the state with the highest price for gas, with a gallon of unleaded regular running $5.26 on Sunday, down eight cents from last week. Pennsylvania is still the leading consumer crusher of Northeast states, at $3.77, with New York close behind at $3.70. Prices remained elevated in the Mideast leader, Illinois, actually up a coule of pennies, to $3.90 a gallon. There have been no states with gas prices under $3.00 for nine straight weeks. Mississippi ($3.04) is nearest, followed by Oklahoma at $3.06. Other than Georgia ($3.39) and Florida ($3.43), the Southeast cluster from Oklahoma east to South Carolina are all hovering in a range between $3.06 and $3.22, with Tennessee topping the list at $3.22. The upper Midwest is challenging the Southeast for lows, with prices ranging from $3.25 (Minnesota) to $3.31 (Nebraska). Arizona dipped below $4.00, down to $3.98, leaving California, Washington ($4.62), Nevada ($4.43), and Oregon ($4.41) in the $4+ club, though each of those states saw prices come down last week. Utah ($3.75) and Idaho ($3.84) continue to see prices easing away from the dreaded $4.00 level.
This week: $61,095.90 Heads up, all you "hodlers." You're screwed. Eventually, bitcoin and all the other fake alt-coins will be worth less, until they become worthless, like the U.S. dollar, in which they're denominated.
Gold:Silver Ratio: 83.34; last week: 86.26 Per COMEX continuous contracts:
Gold price 4/12: $2,360.20
Silver price 4/12: $27.97 The price of gold on the COMEX reversed direction this week and gained $56.80, a significant move that resulted in the second highest Friday closing on record. Silver made a mammoth move, gaining $1.62 on the week and approaching breakout levels at $29 and then $30, which, if indications are correct, could happen within weeks or even days. Year-to-date, gold is up 14.16%, silver, 18.56%. Even with dumping the past two weeks, they're still even with or beating stocks in 2024. 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) gained spectacularly, to $40.17, a rise of $1.63 from the May 5 price of $38.54 per troy ounce. The cram-down by the COMEX the past two weeks was entirely ineffective in terms of crimping demand. The gold-silver mania is about to take the next step forward, it appears. Finally, Gregory Mannarino's video Sunday morning was entertaining, addressing Alan Hibbard's recent $20,000 Gold? vlog and the future of markets and prices.
WEEKEND WRAP Happy Mother's Day!
At the Close, Friday, May 10, 2024:
For the Week:
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