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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.
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Futures, Options Expiry Sets Up Volatile Friday; Trump's Chances Improving on Tax Proposals Friday, June 21, 2024, 7:45 am ET It's Friday, and, due to Juneteenth on Wednesday, only three days have seen open cash trading sessions in the United States. As of Thursday's close, the Dow is miraculously up 545 points, thanks in part to Thursday's nearly 300-point rise. NASDAQ, which turned sour Thursday, is up a mere 32 points and the S&P is up 41 for the week. Friday is expected to be volatile, as it is the third Friday of the month, and a quad-witching condition with all manner of options and futures on the agenda for the closeout of the second quarter. At 7:30 am ET stock futures are nearly flat across the board, gold and silver are holding gains at $2,378 and $30.84, respectively. Asia was in the red overnight, as is Europe in morning trading. There may be some surprises to close out the week. Donald Trump recently announced that he'd favor ending income tax on tips. Some remember a time in which tips were not taxed. That was prior to 1982, when congress passed a bill to tax tips as regular income. President Ronald Reagan signed it into law (yeah, he was so great?). If voting still matters and the Democrats don't steal another one, who gets your vote? It seems pretty obvious to everybody that Trump is going to beat Biden with a stick. During his four years as president, Donald J. Trump was directly responsible for all the following:
Delivered a future of greater promise and opportunity for citizens of all backgrounds.
Brought jobs, factories, and industries back to the USA.
Hit record stock market numbers. The DOW closed above 20,000 for the first time in 2017 and topped 30,000 in 2020. Compare that record to the phony results during the fake Biden term and all of the usual revisions to the numbers after the fake facts. OK, the stock market is up, but it's always up. That's how Wall Street works. Short analysis reveals that most people earning less than $70,000 a year own very few stocks, if any, and most of those would be in some kind of retirement plan or long-term college fund. Summer began on Thursday. There's one more week of trading left in the second quarter.
At the Close, Thursday, June 20th, 2024:
Tuesday, Juneteenth, 2024, 9:45 am ET Today is June 19, otherwise known in the U.S. as Juneteeth. It's a national holiday, so the U.S. stock markets, U.S. Postal Service, banks, etc. have the day off. Markets around the world - outside the United States - are open for business. Here's what's happening: WTI crude oil hit $81/barrel Wednesday morning, despite U.S. crude inventories falling by around 2.3 million barrels according to data from the American Petroleum Institute (API). Building tensions in the Middle East are supporting higher prices on supply disruption expectations. Asian markets were mixed, with Hong Kong's Hang Seng index bouncing off one-month lows, gaining nearly three percent on the day. European bourses are also mixed, with Germany and France lower, while England's FTSE and Spain's IBEX sport small gains. The U.S. has extended and expanded its sanctions to target countries that are assisting Russia work around sanctions, such as China, the UAE and Turkey. Meanwhile, after the U.S. attacked Russia's financial infrastructure, Russia suspended trading in euros and dollars on its stock exchanges. Additionally, after announcement of the proposed $50 billion "loan" to Ukraine using proceeds from frozen Russian assets to pay back the borrowings, Russia's Ministry of Foreign Affairs warned that it could confiscate Western assets currently within its jurisdiction. Gold, silver, and bitcoin are essentially flat. Trading resumes Thursday, June 20, on all U.S. markets, after the unusual midweek closure because of Juneteenth. With summer officially beginning on the 20th, there have been suggestions to rename June 20th, "Sumteenth."
At the Close, Tuesday, June 18, 2024:
Tuesday, June 18, 2024, 9:35 am ET Monday's low volume melt-up was just another indication that what's known as the "stock market" is anything but a free, fair trading venue. Inflation will continue to rage on, despite softer readings from the over-detailed CPI and PPI and the Fed's favorite, Personal Consumption Expenditures (PCE), so stocks naturally will rise because money has nowhere else to go. Despite the happy trading on Wall Street, retail sales increased at a slower than expected pace in May as high interest rates and inflation continued to weigh on consumers, increasing by 0.1%, less than the 0.3% economists had expected. In April, retail sales were -0.2%, according the Commerce Department's revised data. Excluding autos and gas, retail sales increased 0.1%, well below estimates for a 0.4% increase. While most expert analysts keep preaching about a strong, resilient economy, recent data suggests that the U.S. is on the cusp of a recession, though nobody is allowed to publicly utter the dreaded "R" word. After all, as the narrative goes, the United States is still number one in everything, winning a war against Russia in Ukraine and helping Israel defeat the terrorist horde known as Hamas by decimating the Gaza Strip. Besides, the current president must win another four years over the upstart populist felon, Donald Trump, come November. Four more years of a bumbling, stumbling administration is exactly what the country needs at this critical time. All sarcasm aside, the United States is doomed by its own policies from Washington, the latest being the most insane proposal of a $50 billion "loan" to Ukraine - since getting congress to approve more funding is now near-impossible with elections looming - that will be paid with proceeds from the stolen Russian assets, currently yielding somewhere between $1.5 and $3.0 billion per year in interest. If Ukraine should default - an absolute certainty - the EU would pay off the loan. That is the level of stupidity currently responsible for running Western nations into the ground. The United States and Europe are being isolated as BRICS expands, with a reported 59 countries seeking to join the trading bloc. The U.S. dollar, the world's reserve currency, will be replaced by some form of international standard set by the BRICS, which will likely be backed by gold. The U.S. also announced new sanctions on Russia, which will eventually be employed to sanction Chinese banks. Eventually, the United States will be a worldwide pariah and Europe a barren wasteland occupied mostly by sub-Saharan immigrants. Tomorrow, markets are closed for the absurdity that is the national holiday of "Juneteenth," a tribute to African Americans freed from slavery and now largely a sub-culture in the United States. Thursday, the final estimate of first quarter GDP, which is expected to remain at 1.3%, though a revision lower would likely be correct. The U.S. produces inflation at home and sanctions and destruction in the rest of the world, wherever possible. That won't have a happy ending.
At the Close, Monday, June 17, 2024:
Sunday, June 16, 2024, 10:00 am ET Inflation expectations were crushed this week, with both CPI and PPI reading for May coming in somewhat softer than expectations. That was just the message stock investors needed to send the S&P and NASDAQ to record highs and spark a buying spree in treasuries, sending yields sharply lower. The Fed stood pat on interest rates, keeping the federal funds target rate at 5.25-5.50%, now approaching a year without change. Inflation appears to be somewhat under control, though current data may be more of a mirage than on the ground reality. Wages continue lagging, but layoffs are looming in the background.
While NASDAQ and S&P were making new all-time highs this week, the Dow Industrials were victimized by Money Markets and CD rates north of 4.5-5.0%, a comparative disadvantage for stocks offering dividend yields of two and three percent with much higher risk structures. It doesn't take much of a loss to evaporate those measly dividends and the Dow overall is close to breakeven on the year, up a mere two percent and change. Along with the Dow, the NYSE Composite and Dow Transportation Average also suffered, with the latter losing ground for the fourth week in the past five and reaching further into correction territory, down 11.3% from the July 28, 2023 high of 16,695.32. The Transports have been in worse shape, hitting a low of 13,556.07 on October 27 of last year, pinpointing the exact date upon which the other major indices - especially the NASDAQ and S&P - starting flying higher and have continued since. The week ahead appears to be light on data. Tuesday sees May retail sales figures, industrial production and capacity utilization (currently 78.4). Residential housing will be the focus Thursday, updating mortgage interest rates, housing starts and building permits along with the usual initial and continuing unemployment data which has been trending higher of late. Markets will have to wait another week for the revealing of the Fed's favorite inflation indicator, the PCE and core PCE (June 27, 28). There's also the final estimate of first quarter GDP on June 27, making the upcoming week something of a "tweener" or "trap." Traders may be prone to suffer whiplash with the expected wild price swings and heaven only knows what the deep state political class has in store. Rushing headlong into summer, the timing is right for a dose of malarky or shenanigans, as Brainless Brandon might quip. Stocks may have some more room to run. Companies like Nvidia (NVDA), with its 10-1 stock split, and Apple (AAPL), via a record-breaking $110 billion stock repurchase scheme, have self-levitating features that distort any manner of price discovery (an ancient art in the age of delusion).
Spreads are warming up, spreading more negative, shrieking like the robotic voice from Lost in Space: "Danger, Will Robinson," as they expand out of the safety zone of the past eight months. A continuance of the bond rally that was set off this week by soft inflation data will widen those spreads as longer-dated maturities lose yield at a faster clip than those of the shorter term variety. This is especially true for the full spectrum reading. If the 30-year yield falls close to four percent, without a rate cut, the spread could approach 140-145, a further depression of the two-year-old inverted yield curve. 2s-10s might not be as much of a problem. Yield on the two year fell 20 basis points over the week, while the 10-year yield fell by 23, so the difference wasn't that great. Should investors begin placing greater trust in the long-term potential of the U.S. economy and global hegemony, the 10-year might see yields fall to levels last seen a summer ago, after the last rate hike, when the 10-year yield was as low as 3.86% (July 26), though such a scenario is unlikely. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil ended the week sharply higher, at $78.07, up significantly from last week's Friday close of $75.38. WTI crude has held below $80/barrel since May 1, a span of just six weeks, so there's really no real price trend in place other than that produced from a combination of slowing production and slack demand, even in the busy North Hemisphere summer season. Given the massive number of producers and consumers involved, it's difficult to pin a price on the world's greatest energy commodity, but it is a certainty that the Brent or WTI price is not maintained globally. Prices in the Asian and African regions are sharply lower. Widespread reports of the demise of the Saudi-US "petro-dollar" have proven to be more hot air than actual fact. The reality is that there never was any formal agreement and the Saudi rulers have been selling oil in currencies other than the U.S. dollar for years, to China, India, and elsewhere. The sketchy reports insinuated that there was a major disruption in the flow of oil and how it is purchased, another nail in the coffin of the world's reserve currency. While these reports offer little in the way of substantive knowledge or new information, de-dollarization continues apace. More and more countries are abandoning use of the U.S. dollar as a reserve, opting for gold or bi-lateral agreements. The net result of the flurry of fake reports was probably a boost to the price of WTI and Brent, which will likely be erased as trading resumes on Monday. According to Gasbuddy.com, which reports the national average for a gallon of unleaded regular gas at the pump at $3.43 a gallon, close to the lowest since last November and only a penny higher than last week. California is likely to be the most expensive place to buy gas, own a car, or buy an UnHappy Meal, a gallon of unleaded regular running $4.80 on at the latest reading, the lowest price in more than six months and down nine cents from a week ago. Prices in Pennsylvania eased down another two cents, to $3.65, the Keystone state continuing to be the price leader in the Northeast. Maryland is close by at $3.60, with New York at $3.57, and Connecticut at $3.53. Prices continue falling in Illinois, with a gallon fetching a mere $3.72. Mississippi has the lowest prices in the country, checking in on Sunday at $2.88, followed by Arkansas ($2.90), Louisiana ($2.93), Oklahoma ($2.95) and Texas ($2.97) rounding out the sub-$3.00 states. The rest of the Southeast ranges from $3.01 (Kansas) to $3.08 (South Carolina). Georgia ($3.28), and Florida ($3.23) remain outliers in the region. The Midwest ranges between lows in Kansas ($3.01) to highs of $3.57 in Michigan, though most fall in a range between $3.15 and $3.30. Arizona dropped another nine cents and remained below $4.00 for a sixth straight week ($3.63), leaving California, Washington ($4.34), Oregon ($4.07), and Nevada ($4.01) - all lower - a gang of four comprising the $4+ club. Utah ($3.35) and Idaho ($3.56) continue to see an easing of fuel prices.
This week: $66,550.70 Bitcoin remains below the March 13 high ($73,096). The trend has turned slightly negative again.
Gold:Silver Ratio: 79.28; last week: 78.96 Per COMEX continuous contracts:
Gold price 5/17: $2,419.80
Silver price 5/17: $31.77 With a spate of soft inflation data in the U.S. via CPI and PPI data for May, precious metals prices rebounded over the course of the week and apparently have more upside should the Federal Reserve actually lower the federal funds target rate at some point. Whether or not the data is accurate, lower inflation implies lower interest rates, ergo, higher prices for precious metals. Suppression tactics endorsed primarily by the United States and its proxies at the COMEX and LBMA have shown to have diminishing effect as prices quickly snap back from shorting efforts. Prices for finished goods still command fairly hefty premiums, with one ounce silver items averaging well above $35 with the COMEX traded price remaining around $30. Gold bars and coins are typically running $85-90 above spot for bars and $110-$118 for coins, the latter becoming more difficult to source in one ounce increments. Fractional coins (1/2 ounce, 1/10 ounce, grams) are being offered at rates equal to $260-$280/ounce, indicating serious demand and tightening supply. The heavy buying by central banks over the past five years has piqued the interest of family offices, hedge fund managers, retirement funds, and buyers from the casual collector to the serious generational wealth investor. With Asian and African nations opting for bi-lateral trade bypassing the U.S. dollar with gold as the final settlement instrument, precious metals are now becoming must-have assets for not only central banks but also multi-national corporations and interests with eyes toward a golden future. As much as Western parties would like to keep real money currencies under wraps, there is little doubt that gold will supplant U.S. treasury bills, notes, and bonds as primary vehicles for international trade, supplanting dollar hegemony. It's only a matter of time, and time is not on the side of the promoters of fiat currencies, which have been increasingly under siege since the beginning of the Ukraine conflict and seizure of Russian reserves held outside the country, mainly in the U.S. and Europe. Since there's little chance that the UK, EU, and USA will relent, there's no choice for countries other than to pursue alternatives in trading and central bank reserves. Adding hordes of individuals seeking the financial security of precious metals only exacerbates the drive in prices. The recent run of gold above $2000 per ounce and silver breaching upside above $26 per ounce seems to be only the beginning of a larger commodities super-cycle that has years of price appreciation ahead. Those who denied or questioned the claims of Peter Schiff, Mike Maloney, James Rickards, Alisdair Macleod and others for gold prices above $5,000 per troy ounce and triple-digit silver had best re-adjust their thinking because there has yet to be panic buying and only a trickle of "cash-for-gold" advertisements. The longer gold stays in a range just below $2,500 and silver hovers around $30, the better the chance for another massive price upswing to new levels respecting the ultimate debasing of fiat currencies and a return to real money. Conditions have rarely looked as bullish for precious metals as presently expressed. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):
The Single Ounce Silver Market Price Benchmark (SOSMPB) bounced off last week's cram-down, up to $39.91, gaining 33 cents from the June 9th price of $39.58 per troy ounce. One ounce gold coins were difficult to procure at any price; prices for non-numismatic gold were well supported. There appears to be no shortage of finished silver in one to 10 ounce weights, but buyers are becoming less concerned about price and more focused on getting what they want regardless of cost.
It's almost summer. Much of what's been working on Wall Street is unlikely to hold serve as the major players are off to the Hamptons or Europe or some Pride parade. A low-volume melt-up cannot be discounted. Sentiment remains bullish for the same reasons that have held for the past eight months. The Fed is going to cut rates. Big deal. Companies like Apple are buying back their own stock to improve their reported EPS at a record pace. However long this rally lasts, it won't end well, but the end could still be years away, or merely weeks or months. Timing isn't everything, but, it certainly can bolster the bottom line.
At the Close, Friday, June 14, 2024:
For the Week:
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