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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, May 31, 2024, 9:10 am ET More than a few people have been expressing a desire for "things to get back to normal." The shocking truth is that "normal" has been eliminated from the United States, most of Europe and the UK lexicon, unless by normal you mean transgender military leaders provoking Russia and/or China into World War III, a president whose mental acuity is severely limited, and convicting former President Donald J. Trump on 34 felony counts in a kangaroo court proceeding. If that passes for normal in your world view, good luck. Most Americans will pass. Americans have no more opportunity to change the course of history than Roman citizens did when their empire was collapsing around them. Today's choices are stark, including waiting until November, electing Trump and hoping for change. As witnessed during the Obama years, "hope and change" aren't actual strategies. They're bumper sticker security blanket catch phrases that merely provide some degree of comfort in a world gone mad. Trump will never win. That's the clear message from the current people in power. It would be wise to accept that and move along. It's clear, whether one believes the current leaders in Washington, D.C. were duly elected or not, the direction of the U.S. and the collective West is destructive and their process unrelenting. At one time, not so long ago, there was a nation between the Atlantic and Pacific Oceans that had morals, values, and the rule of law. That nation is no more, replaced by a fascist oligarchy that does as it pleases. Anybody opposing it is destroyed politically, financially, or by violence or threats of violence. That's what we have. Markets are reflecting the dangerous condition with wild speculation rampant. Not withstanding the insanity of the latest Wall Street fads: AI and Nvidia, wild swings in individual stocks show the desperation of the trading class, as if they're reaching for the last dollar before the walls cave in upon them. It's important to note that the current AI fascination is just another in a series of false hopes thrown as red meat for public consumption, along the lines of, let's see, "the new economy (1999-2001)", "sub-prime mortgages", "blockchain", "the internet of things", and "the green economy." It's all, well, crap, served on silver-plated platters. Mind you, there's nothing real about any of it in any sustainable way. Good examples of desperate momentum trading were Thursday's big movers on earnings reports. Foot Locker (FL) was up 15%; Burlington (BURL), +17.5%; Birkenstock (BIRK), +10%; American Eagle Outfitters (AEO), -7.6%; Kohl's (KSS), -23%; Salesforce (CRM), -19.7%. Those are not normal moves. Whether the earnings results were good, bad, or indifferent, one-day moves in excess of 10% should be the exception, not the rule. All of Wall Street is chasing the same money. Trades are over-crowded and the swings up or down (but especially on the upside) are unlikely to last. Just consider the P/E ratios of some of these names: Foot Locker, none, because they've lost money over the last four quarters; Burlington, 45; Birkenstock, 129 (no, really); Salesforce, 52. These aren't stocks traded on fundamentals. These are stocks trading on momentum, nothing more, and once the momentum has faded, they'll be dumped. Normal. No such thing. The Dow Jones Transportation Average closed at a six-month low Wednesday, down 10.3% from its February high of 16.273. On Thursday, bucking all trends, it gained 194 points because, well, we can't have a correction, now, can we? The stock market, like just about everything else in what used to be known as America, is broken. In a first since early 1991, over 100 tonnes of gold have been moved by the Reserve Bank of India (RBI) from the UK to its vaults in India. De-dollarization, central banks eschewing U.S. treasuries in favor of gold for reserves, is the new normal. Get used to it. Friday's big story will be about the Federal Reserve's favorite measure of inflation (because we want our central bank to play favorites), the PCE Index. At 8:30 am ET, the Bureau of Economic Analysis (BEA) released the figure that roughly matched expectations, with April's increase the same as February and March, +0.3%, with the core down slightly at +0.2%, from +0.3% in March. On an annualized basis, both PCE and core were the same as last month, +2.7 and +2.8, respectively. Those modest changes were enough to ignite the futures, sending Dow futures from flat to +100. NASDAQ were up 47 points at 8:44 am ET and S&P futures were ahead by 16 points. This came on the heels of Thursday's second estimate of first quarter GDP, which was revised lower, to 1.3% from 1.6%, a disappointment (for some) and clear sign that the economy is stalling rather than expanding. GDP figures, like most government statistics, are just lies based on faulty assumptions and bogus calculations. There's no growth in the U.S. economy. None. 1.3% is a rounding error. Linking stock performance to data expectations and massaged statistics on inflation and GDP is a poor substitute for rigorous analysis and exemplifies the laziness of the investing class, reliant upon government figures as opposed to economic realities. Like they say in some circles: fake and gay. Looking ahead to Friday's session, the four-day week appears to be headed for a loss, though excitement over the inflation reading might get the NASDAQ and S&P out of the red. As of Thursday's close, the Dow was down 958 points (-2.45%), the NASDAQ was 183 points lower, and the S&P was down 69. If you noticed a hint of cynicism in this note, that's because feelings of depression and anger were being suppressed. Assessing the current situation as anything other than just plain old cow manure lacks intellectual honesty.
At the Close, Thursday, May 30, 2024:
Thursday, May 30, 2024, 9:12 am ET It's probably difficult to feel sorry for Elon Musk, but, the way things are shaping up for one of the richest men in the world, the people out to get him are, let's say, enjoying the show. Back in January, a Delaware judge voided Musk's $56 billion pay package that had been negotiated with Tesla's (TSLA) board of directors. And now, Tesla, the company most responsible for the emergence of electronic vehicles (EVs) is under fire from competition, particularly in China, where home-grown auto-maker BYD has introduced a pair of plug-in hybrid sedans that boast a 1,305-mile range on a fully charged battery and a full tank of gas. By comparison, the best a Tesla can do is under 500 miles without a recharge. Worse yet, BYD's latest sedans can be purchased for around $13,000 in China. Plug-in hybrids are increasingly taking market share from EVs, which have obvious capacity limitations. Still, Musk's pay package - which granted him stock awards upon achieving certain goals, which the company met or exceeded - was struck down in Delaware as being "unfair." This is the same kind of lawfare that's being used to persecute Donald Trump in various lawsuits. People who were opposed to Musk buying Twitter (now "X") have cheered on the excessive legal tactics in an effort to limit his wealth. Arguably one of the great innovators of the present age, Musk is beset upon by forces outside his considerable control. While Tesla may go down in flames - as have a number of actual Tesla vehicles - Musk, as usual, has a hole card in his hand, notably, his 42% ownership of SpaceX and its subsidiary, Starlink, which provides internet connectivity via satellites put into low earth orbit by his own rockets. SpaceX remains a private company, with some estimates placing its value around $180 billion, making Musk's share worth roughly $75 billion, so, despite ongoing litigation and competition setbacks, our friend Elon shouldn't be too worried. Reinstatement of his Tesla pay package is up for a vote on June 13, at the annual shareholder's meeting, though a number of funds, including CalPERS, the California public employees retirement fund, which originally approved the agreement have expressed reservations and are likely to vote against the reinstatement proposal. Tesla stock is less than half of what it was at its peak (407.36) in November, 2021, currently trading around 175/share. The company's P/E ratio reamins at nose-bleed levels around 45, but it's nothing compared to Nvidia's (NVDA) 67. At 1150 per share, Nvidia is priced to perfection ahead of its 10-1 stock split which will become effective after the June 7 closing bell. Nvidia, which makes high-performance computer chips is also under siege from China's Huawei, which makes faster chips at a competitive price. Nvidia recently cut the price of its chips in China, but is probably going to lose that battle. All of this points to America's increasing need for tariffs on Chinese goods, soon to be followed by sanctions and saber-ratting over Taiwan. BYD's cars are subject to a 100% tariff; Huawei's chips are pretty much off limits in the U.S. and their phones equipped with the latest Chinese technology are reportedly better than Apple's I-phones. Thus, while Nvidia has led the recent surge on the NASDAQ, there seems to be trouble brewing for the rally that's been extended since it began earnestly in late October, 2023. Is the rally over? Possibly, but it's a split decision presently, with the Dow down more than 1,500 points since the May 17 peak, this morning under pressure after Salesforce (CRM) is indicated down 16% after the cloud software vendor reported weaker-than-expected revenue and issued guidance that trailed Wall Street's expectations, sending Dow futures down more than 300 points. Added to the Dow in August, 2020, Salesforce has been an OK performer, but it appears it's about to become a drag, like owning Dow Industrial stocks is quickly becoming. There's a long-overdue reckoning coming for U.S. stocks, and the Dow is leading the way lower. The NASDAQ and S&P will take a little longer to correct their high-flying ways since the Nvidia and AI love affair hasn't yet gotten past second base. U.S. government efforts to stifle China's emergence as the word's #1 economy is having a direct negative effect on Americans, putting tariffs on lower-priced goods produced overseas. Like everything else the federal government does, tariffs, whether by Biden, Trump, or anyone else, aren't good business. Sanctions, which will undoubtedly be put on after tariffs fail, are even worse.
At the Close, Wednesday, May 29, 2024:
Wednesday, May 29, 2024, 9:44 am ET A commentator on ZeroHedge with the monker, "Quick" posted the following, which caught my attention:
Lunch at IHOP ... Throw in a $6 tip, and you're out $44, and that includes whatever discount was afforded on that senior breakfast. That seemed a little on the high side, so I decided to check it out, employing online resources. Fortunately, IHOP has a pretty good website and I was able to order a steak burger with onion rings, a 55+ breakfast of two eggs, prepackaged hash browns and two strips of bacon, plus two cups of coffee for the price of $29.26, plus another $2.86 tax, for a total of $32.12. So, pretty close. Sorry, but I'm not going to eat there. Here's my rationale. First a burger with onion rings should be about $6, not $16. Two eggs, two strips of bacon and some hash browns costs IHOP about $1.50, if that. Taking the normal restaurant rule of thumb of tripling the food cost, that meal should be $4.50. Coffee, which was somewhere in the neighborhood of $3.50, should be closer to $1.00. The price of these items should be around $12, not nearly $30. Besides the food probably being sh-t, imagine being stuffed into a booth with screaming, unruly kids on all sides. I'll pass. Another personal experience worth sharing occurred a few days ago, when I and a friend attended a "meet and greet" for a neighbor running as a candidate for state senate (TN). We were the only people to show up, and, while our guest was amicable and would probably do a swell job representing us, the dismal turnout was the focal point of our visit. It appears that people - at least people in our area - have thrown in the towel on government being either meaningful or pragmatic. Although our candidate had good ideas, we shared two overwhelming conclusions: 1) he was likely in the running for this job because it was made available to him by party bosses and he was looking to pad his already swelling (he made a point of telling us he could not be "bought') retirement income; and, 2) nobody really gives a damn who will represent them going forward. One more item before I rush to my e-trade app to buy some of that red-hot Nvidia stock (not really, j/k), is about Substack, the glorified blogging platform that is taking many of the best writers and commentators out of the free internet and pushing them to create subscription models. One such writer is the esteemed Alasdair Macleod, of goldmoney.com. I have read Macleod's work for years because he's normally on-point and rational, making clear-cut arguments. I'm sure he still does that on Substack, but I have no intention of paying $10 a month for what used to be free. My reasoning is that I tend to read quite a bit online and there's no shortage of free articles (supported by advertising or a large budget) by many people with good knowledge on a variety of subjects. If I was to pay all the writers I follow $10 a month, it would cost me somewhere between $80 and $150 dollars. Heck, I could eat at IHOP 4-6 times with that money, and, for what it's worth, eating comes well before making writers rich on my scale of importance. Macleod is boasting over 6,000 subscribers total of which 1,000 are paid, so, while a one-for-six average wouldn't get you a starting job as a second-baseman anywhere, Alasdair will be knocking down $10,000 a month for his work. Good for him. I hope he buys more gold or fixes his teeth or does something useful with the money. Besides, 1,000 paid subscribers is nothing to write home about when there's 3-5 billion people online. Plus, what I've read of Macleod in the past helped me form some useful economic and investing strategies. I don't need for him to tell me incessantly that gold and silver are money. I already know that, making his columns worth less to me, not more. The bottom line in all this personal insight is a perception that everything is overpriced and people cannot depend on government to fix it. Rather, government is a big part of the problem itself. Anybody wishing to become part of the utterly corrupt system that is essentially legalized theft of the public via taxes and fees, is most likely only in it for the money, just like writers who feel a need to be paid king's ransoms for their screed. Macleod would probably convert better than one-in-six subscribers if his monthly rate was something along the lines of $2. I'd gladly make $2000 a month for my work, as would anybody else, and I'd also shell out $20-30 a month to support the work of 10-15 writers not $80-150. $10 a month is over the top, and, it's self-censoring. People need to understand what it is. $3 coffee, $12 burgers, and $10/month subscriptions only serve to fuel inflation, not fix it. There has to be a better way. It's likely that the solution will come not from the West, but the BRICS may have it.
Sunday, May 26, 2024, 1:23 pm ET Nvidia was the theme for the entire week. The stock (NVDA) gained 140 points or 15%. It was bought both before Wednesday's earnings report and afterwards. That kind of result used to be a good return for a year. Now, it's done in a week, which speaks volumes about the bubble of not just AI and chips stocks, but the entire financial system. To wit, Doug Noland's Credit Bubble Bulletin lead-in:
May 24 Bloomberg (David Ingles): "Nvidia's 110% gain this year is enough to slingshot the company's value above the entire market capitalization of Germany along with a range of other major bourses. The AI-boom poster child overtook Australia in early February, topped South Korea a few weeks later and as of the Thursday close, is now also above Germany. The next 20% leg higher would likely add Saudi Arabia and Canada to the list. And if the prediction from one of Bloomberg TV's guests on Thursday is correct and Nvidia does top $10 trillion, that would make it larger than all the world's stock markets except the US." So, one stock is valued at more than the aggregate of every publicly-owned company in Germany. Nothing unusual about that. The company makes computer chips for high-intensity processing. It's even better than bitcoin and the entire crypto-verse.
The con that is AI and Nvidia stock was well represented this week, though all the effort into pumping the story relentlessly for four days only resulted in a +1.41% gain on the NASDAQ and a measly 1.45-point blip on the S&P 500. Take note that the three exchanges listed at the conclusion of this post that do not have NVDA as a component - Dow Industrials, Dow Transports, and NYSE Composite - all suffered sizable losses this week, the 20-component Transportation Average and 30-component Industrials taking the worst of it with declines of 418.49 (-2.70%) and 934.00 (-2.33%), respectively. Remember how just a week ago Dow Industrials were the stocks to own, up eight straight sessions at one point and ahead by 2,187.67 points from April 30 through May 17 (37,815.92 to 40,003.59)? The Industrials gave back nearly half of that this week, aided greatly by Thursday's 606-point rout. Whether or not disdain of the Dow becomes a trend or just a bump in the road depends more on investor sentiment than fundamental analysis, and sentiment is all that is fueling the market these days. That, and the woefully misplaced desire for the Federal Reserve to reduce the overnight federal funds target rate by a quarter of a point, please. Pretty, please. Dow Transports are down 9.66% from the closing high of 16,695.32 (July 28, 2023) and off 4.39% year-to-date. The 20 component stocks are definitely on the "do not own" list, including such stalwarts as Avis (CAR), FedEx (FDX), United Parcel Service (UPS) CSX (CSX), and airlines, American (AAL), Delta (DAL), Southwest (LUV), and United (UAL), though, of the airline group, all but Southwest (-5.76%) are sporting gains on the year. United is up 27%; Delta, 28%. True laggards in the transports are UPS (UPS, -12.43), Old Dominion (ODFL, -12.98) and Expeditors (EXPD, -7.18), companies responsible for moving stuff from one place to another, mostly, consumer and industrial goods. The real culprit is former meme-dream, Avis Budget Group (CAR). It's down 36% in 2024. Bubbles do pop, eventually. The coming short, four-day week will be focused on Friday's release of the Personal Consumption Expenditures (PCE) core index, the Fed's "most-favored" (read: least accurate) inflation gauge, which excludes food and energy, the two most essential items to everyday consumers and businesses. There's nothing "core" about the core index. It's the Fed's underhanded way of keeping a lid on public arousal over the higher costs of, well, everything. The last reading, from March, saw the core at +2.8 year-over-year, a three-year low, but still higher than the Fed's two percent target. Concerning is the recent trend, with the 3-month core annualized at 4.4%, and rising. Prior to the PCE hoopla, a second reading on first quarter GDP, before the open Thursday. The initial estimate of 1.6% GDP growth will be tested. Retail earnings will spotlighted mid-week. Wednesday, prior to the opening bell, reports from Abercrombie & Fitch (ANF), Dick's Sporting Goods (DKS), Advance Auto Parts (AAP) and Chewy (CHWY). After the close, Dow component and serial bubble-blower with a P/E ratio of 65, Salesforce (CRM), and American Eagle Outfitters (AEO). Thursday, reports from Burlington (BURL), Foot Locker (FL), Kohl's (KSS), Dollar General (DG), and Best Buy (BBY) are released before the bell, but the big one is Costco (COST), after the close. Costco is a core of many portfolios, and for good reason. The stock is up 24.45% year-to-date, 227% the past five years, and a stunning 22,268% since its inception in 1984. Not bad for a 40 year run. With a net profit margin under three percent, the company is likely to continue churning out gains for a long time, the only drawback being its other-worldly P/E ratio of 53. Buy in bulk cheap, sell cheap. Who knew?
Yields gained some ground on long-dated treasury notes and bonds, though the pace continues moderate. The 30-year yield of 4.57% and the ten-year note yield of 4.46% moved gradually higher this week. 5s, 7s, and 10s are all dis-inverted as related to 30s, but the 2-year note is troubling, gaining 10 basis points in yield, to 4.93%. A two-year yield at or above 5.00% is an inflection point and it's getting closer. Spreads moved out of the safety zones. 2s-10s moved outside the the range of -19 to -41 that's held since February 2nd, to -47, the highest since December, 2023. Full spectrum spread steepened again, to -94. Both spreads have moved more negative four straight weeks, a signal of unsettled policy. If spreads continue to steepen (i.e., turn more negative), it's a good sign for stocks, which is probably what the Fed wants. Is sell 30-year, buy 30-day and buy 10s, sell 2s the preferred primary dealer straddle? Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil ended the week at $77.80, down sharply from last week's $79.52. With the Biden team announcing plans to drain the Northeast Gasoline Supply Reserve of its 1 million barrels between Memorial Day and the 4th of July, cynics point out the obvious vote-buying scheme of the current Democrat nominee for president. Biden has drained 43% of the Strategic Petroleum Reserve since taking office, bringing the total down from 638 million to 361 million barrels. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump the same as last week, at $3.58 a gallon, as a record number of Americans hit the highways for the three-day Memorial Day weekend. California continues with highest price for gas, a gallon of unleaded regular running $5.10 on Sunday, down eight cents from last week and well off recent nose-bleed highs. Pennsylvania continues to rise, up to $3.77, the leader in the Northeast. Maryland is now second, at $3.67, New York ranks third at $3.66. Illinois has joined the Western states in the $4+ club, showing up Sunday at an even $4.00 per gallon. There have been no states with gas prices sub-$3.00 for nine straight weeks, until now, with Mississippi checking in at $2.99. Following are by Oklahoma and Arkansas, both at $3.04. Texas is down to $3.09, with Louisiana and Kansas at $3.10. Other than Mississippi, Georgia ($3.33), and Florida ($3.51), the Southeast cluster from Oklahoma east to South Carolina are all hovering in a range between $3.04 and $3.18. The upper Midwest is approaching Southeast levels. South Dakota each reported a price of $3.20; North Dakota, $3.28. Arizona dropped another seven cents and remained below $4.00 for a third straight week ($3.85), leaving California, Washington ($4.54), Nevada ($4.26), and Oregon ($4.30) - all lower - and Illinois now five members of the $4+ club. Utah ($3.56) and Idaho ($3.74) continue to see prices easing. Happy motoring!
This week: $68,890.70 Bitcoin got a little boost, but gave back from above $70,000 mid-week. It remains below the March 13 high ($73,096). The trend remains to the downside.
Gold:Silver Ratio: 77.19; last week: 76.17 Per COMEX continuous contracts:
Gold price 4/26: $2,349.60
Silver price 4/26: $27.51 Gold and silver got body slammed on the COMEX this week, with gold down $62.30 and silver off $1.23. That didn't seem to matter much to retail buyers other than to offer more incentive to get more at a little lower price. COMEX rigging hasn't been as good as it used to be, especially with the emergence of the BRICS+ and exchanges in Shanghai, Moscow, and Dubai offering alternative spot prices. Like the Black Knight in Monty Python's Search for the Holy Grail said, "it's just a flesh wound." Gold:Silver ratio continues to moderate. Year-to-date, gold is up 13.70%, silver, 27.52%. 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 for the week, to $41.59, advancing 16 cents from the May 17 price of $41.43 per troy ounce, representing the highest price in our survey since September, 2022.
Finally, New York state is the official headquarters of Clown World, as the Executive Director of the Office of Cannabis Management (OCM) stepped down amid a scandalous number of "dispensaries" operating without licenses. Seriously, what did they think would happen? Remember our passed veterans tomorrow and every day.
At the Close, Friday, May 24, 2024:
For the Week:
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IdleGuy.com June 2024, Vol. 1 #5