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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, June 28, 2024, 9:06 am ET No matter what, stocks continue to churn higher. Though Thursday's close, for the week, the Dow is up a whopping 13.73 points; NASDAQ is ahead by nearly one percent, 169 points; and the S&P, even after three straight positive sessions, is only up 18 points. Other than the NASDAQ, that's no great shakes, but Friday will put an exclamation point on the week after the release of the monthly PCE data from the BEA. Not that it matters to the "rate cut" horde, but inflation is persistent. It's just not rising as quickly as it was previously. Higher prices for anything and everything is something U.S. and European citizens should expect to be a permanent fixture of their economies until the fractional reserve fiat currency system is finally laid to rest and replaced by something even worse, for a while, like a CBDC, digital coin, or other invention of the world's financial fraternity at the World Bank, IMF, and United Nations. A replacement for the dollar as reserve currency continues to look like it's going to be gold, but that is still a few years, say, three to eight, away. In the interim, fiat currencies, already having lost 95-98% of their purchasing power, will continue their path towards worthlessness and wholesale rejection. Thus, whether your wealth is held in stocks, bonds, real estate, or commodities, it's still a numbers game with the odds running against meaningful value appreciation. In other words, stocks will go up, your property assessment will be higher (along with the taxes), interest earned will vary according to the time factor, but it will be like trying to run up a down escalator, a losing battle until you finally are exhausted and the value of your assets falls to the ground. This set-up is confirmed today by the May PCE Index and related data. The BEA reports that the PCE Index for May was essentially unchanged, and the core, excluding food and energy, was up 0.1%. On the surface, that sounds OK, but considering that personal income and disposable personal income were both up 0.5% in current dollars, suggesting that you have more money, but it buys less. That alone - more money chasing goods and services - is inflationary. The BEA's own wording is clear on inflation, as far as it is understated using their convoluted methodology:
From the same month one year ago, the PCE price index for May increased 2.6 percent (table 7). Prices for goods decreased 0.1 percent and prices for services increased 3.9 percent. Food prices increased 1.2 percent and energy prices increased 4.8 percent. Excluding food and energy, the PCE price index increased 2.6 percent from one year ago. Anybody who believes that food prices are only 1.2% higher than a year ago must be grocery shopping in an alternate reality. Wall Street enthusiasts will no doubt view this month's minor decrease in the rate of inflation (more a rounding error than anything else) as a win. Stock futures are stoked, heading higher, because, because, it's the Fed's preferred inflation gauge. What a crock of horse manure. Anybody who has to pay rent, or a mortgage, feed themselves and/or a family, pay for utilities, medical bills, taxes, insurance are getting poorer unless they're multi-millionaires or billionaires. People who don't own stocks or significant risk investments, just pay more, more, more, every day. And the Fed wants to lower interest rates to slow down the economy, which grew at a rate of 1.4% in the first quarter (now three months past), if you believe the government's GDP figures. Go ahead and cut those interest rates. Dis-invert the yield curve. FAFO. This is lunacy.
At the Close, Thursday, June 27, 2024:
Thursday, June 27, 2024, 9:20 am ET Real gross domestic product (GDP) increased at an annual rate of 1.4 percent in the first quarter of 2024, according to the third and final estimate released by the Bureau of Economic Analysis. This was a downward revision of 0.2 from the first estimate (1.6%) and an upward revision of 0.1 from the second estimate, which had pegged GDP at 1.3%. Also, according to the BEA, the personal consumption expenditures (PCE) price index increased 3.4 percent, an upward revision of 0.1 percentage point, with core PCE (excluding food and energy) at 3.7%. This comes ahead of the monthly PCE which will be released on Friday and is the Fed's favored inflation metric. Contributions to the final estimate showed the private sector reeling. Private goods-producing industries decreased 1.1 percent, private services-producing industries increased 1.9 percent. These are the lowest readings in those categories since 1Q 2023 (goods) and 2Q 2023 (services). Government contribution showed an increase of 2.3 percent. Taking out government, which actually produces nothing (other than deficits and wars), private GDP increased a paltry 0.8%. Manufacturing of both durable and non-durable goods declined in the quarter. While the final estimate was actually better than the second estimate, first quarter GDP should still be considered a warning sign of the economy faltering, no matter how much one chooses to believe government figures. On the unemployment front, continuing claims for jobless benefits continues rising, at at 1.84 million, the highest since November 2021. The four-week average of initial claims is the highest since August, 2023 after a reported 233,000 filings were reported Thursday morning. After the dual releases (both at 8:30 am ET), gold was seen higher by nearly $20, at $2,333.10 while silver rose 21 cents to $29.47 on the COMEX. Stock futures, seeing more evidence of a weakening economy, turned slightly higher, though all of the majors - Dow, S&P, NASDAQ - remained negative heading toward the opening bell. Stocks have struggled to make gains this week, but today's data offers another opportunity to hype the "bad news is good news" story about the Fed cutting rates sooner than expected.
At the Close, Wednesday, June 26, 2023:
Wednesday, June 26, 2024, 9:18 am ET Speaking in London on Tuesday, Federal Reserve Governor Michelle Bowman, stated that further rate hikes by the Federal Reserve's FOMC may be needed if there is no progress on inflation. "I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse," she said. Bowman, a member of the Federal Open Market Committee (FOMC), also remarked, "we are still not yet at the point where it is appropriate to lower the policy rate." She is regarded as one of the more hawkish members of the FOMC and may dissent on any proposed rate cuts later this year. The FOMC meets only four more times in 2024: July 30-31, September 17-18, November 6-7, and December 17-18, the last two scheduled in the aftermath of the November 6 U.S. elections. Her statements, and others like it, leaves open the questions of if the Fed will eventually lower rates and when. Current consensus on Wall Street is for one 25 basis point cut, most likely at the September meeting. With that in mind, it's worth noting that when the Fed does begin a regimen of either cutting the federal funds target rate or raising it, they usually do so in a series of policy actions, with little to no interruption. Thus, should the Fed decide on a September rate cut, there's a good likelihood that they would issue another one in November or December, and possibly both. Further out, 2025 appears to be chock full of opportunities to cut the rate even more, perhaps to as low as 4.00-4.25% by the middle of the year, from the current 5.25-5.50%. That would constitute five cuts of 0.25% over a series of seven meetings, up until June. There's little doubt - despite the opinion of Ms. Bowman - that the Fed is angling to lower the federal funds rate and normalize the yield curve, but they continue to tap dance around the issue, to the chagrin of many Wall Street players who pine for the halcyon days of ZIRP and the ability to borrow nearly risk-free to fund stock buybacks, the grease that slicks the runway toward ever higher stock prices. Absent rate cuts by the foot-dragging Fed, some companies are taking matters into their own hands, like Nvidia (NVDA), which recently executed a 10-for-1 stock split, making shares more attractive to retail buyers. When NVDA closed June 7 at 1208.65, it re-opened at 120.86 on Monday, June 10. The immediate result was as expected. Shares rose to as high as 135 by June 18, marking a 12% return in just over a week. But, three consecutive sessions of declines left the stock at 118 on Monday, the 24th. Tuesday's snapback rally left shares at 126.00, for a five percent gain since the split. With all the interest and hype over AI and Nvidia's chips in particular, the stock is still expected to make new highs in short order, and that's usually how stock splits work. Next up, Chipotle Mexican Grill (CMG) will price today at around $65.66 per share after closing Tuesday at 3,283.04 thanks to a 50-1 stock split, one of the largest ever on Wall Street. Holders of 1000 shares on Tuesday will find themselves with a bonanza of 50,000 at the market open, albeit at a lower price, but still retaining equal value. The restaurant chain of about 3,200 locations was getting to a point at which only truly wealthy investors could afford more than a few shares. With the new pricing, the stock becomes much more readily available to individual investors and smaller funds. Now, with a bigger pool of stock available at a lower price, some might find this company, which offers no dividend and carries a P/E of around 70, attractive. In any case, approaching Wednesday's opening bell, stock pickers seem to be turning a bit hawkish on sky-high valuations. Stock futures have turned decidedly lower on all the majors. Gold and silver continue to languish, with both metals lower. Silver is bouncing around $29/ounce with gold headed toward $2,320. Maybe there really was something to the three-day NVDA drop and the Sunday-Monday bitcoin slide.
At the Close, Tuesday, June 25, 2024:
Tuesday, June 25, 2024, 9:04 am ET In theory, bitcoin is a peer-to-peer currency unit, designed to facilitate financial transactions without the need for any intermediaries. It is also supposed to be anonymous, inherently stable or deflationary and unable to be hacked. Now, let's take a reality check. Bitcoin, since being invaded by Wall Street operators, remains a currency unit, and it can be used to buy and sell just about anything, given agreement by the parties to any transaction. However, with the tentacles of various hedge funds and large financial institutions knee-deep into manipulation via ETFs and other derivative products, it has become more a speculative instrument than a store of value, currency, means of exchange. It has become a slush fund, a cesspool, a vehicle for manipulating anything from the price of gold to individual stocks. As is usually he case, once Wall Street got their ETFs approved by the SEC, all of bitcoins good qualities were overwhelmed by profit-driven, sometimes evil intentions. I usually don't have much to say about bitcoin other than it's pure speculation and probably a scam, but in Sunday's WEEKEND WRAP, I did offer this opinion:
Since June 6, bitcoin is down 9.55% and continues to trend well below the March 13 high ($73,096). The trend is absolutely negative for vapor-dough. Promises made by lunatic liars like Anthony Scaramucci, who predicted bitcoin at $200,000, are falling on deaf ears and diamond-handed "hodlers" are screaming for relief. That was penned Sunday morning, before bitcoin dropped more than $4,000 Sunday afternoon and Monday. It's now getting very close to a technical bear market condition (-20%). When it bottomed at $58,092 late Monday afternoon it was down 19.25% from the March 13 all-time high. It's a wonder why anybody would want their money tied up in this nonsense. Bitcoin - and all the thousands of imitators and derivatives are subject to wild swings and uncertain regulations. To spend it, one has to convert to fiat currency (plus a fee) and it is obviously not a good store of value. At least with gold and silver, there are the usual COMEX smackdowns, but the price is either stable or rising and you also have the history of precious metals being recognized as currency worldwide over thousands of years. You get none of that with bitcoin or other crypto vapor. A slew of analysts and pseudo-economists are falling over each other trying to explain how and why bitcoin does what it does. The number of theories, charts, comparisons, and explanations for its rise, fall, bounce patterns is truly eye-watering, and thus, incoherent. Nobody can tell the future though there's certainly no shortage of seers who focus on the past to make themselves look honest, or right, or, at least, plausible. Of the thousands of predictions, charts, and analyses, probably no more than two percent really have a grip on a bitcoin rationale. It's best to avoid the cyrpto space unless you're a deviant gambler. And then, there's Nvidia, the world's most valuable company, or, at least it was for a while before losing 15% over the past three trading sessions. Nvidia (NVDA) carries a price/earnings ratio of nearly 70 and a dividend yield of 0.03%. It's close to being as wildly speculative as bitcoin. At least Nvidia makes something. Computer chips to be precise. But is the company worth more than the annual GDP of Brazil, Italy, Canada, or Russia? Probably not. Bitcoin and Nvidia and other speculative assets are signs of the end of empire and should be considered extremely risky. One would be better off buying and overpriced used car. Think long term before wading into the deep water. -FR
At the Close, Monday, June 24, 2024:
Sunday, June 23, 2024, 10:40 am ET Juneteenth shortened the week to just four trading sessions and activity was muted overall in stocks and bonds. In another few weeks, action should improve with non-farm payrolls on July 5, then bank stock quarterly reports the following week. After that, there will be three weeks of earnings reports from all sectors for the second quarter. Ahead this week is a final reading on first quarter GDP on Thursday, and the usual flavor of the Fed's happiest inflation gauge, the PCE on Friday. Other than that, it's summer.
A week ago Friday (June 14), Dow Transports were down 13% intraday from their high of 16,717.04 (July 2023), which apparently triggered some bottom-fishing, sending the average up 2.08% this week to lead all U.S. indices. All of the averages were higher for the week, though the NASDAQ only gained 0.48 points, pulled down by Nvidia (NVDA), and the S&P, though higher for the eighth time in the last nine weeks, saw only a 0.61% rise. At some juncture, a correction would be in order. However, following the "pump and dump" dynamics that have been playing out over the past few months, any downturn would likely be followed by an immediate knee-jerk higher. Fundamentals don't matter; momentum and swing trading do. Friday's Shiller PE stood at 35.58, the third-highest reading ever, below the recent, post-COVID high of 38.58 (July 2021), more than double the mean (17.13) and the median (15.98). Dividend yield on S&P 500 stocks is close to an all-time low at 1.30%, the lowest since April, 2001. With money markets and CDs paying 4-5%, it's obvious that investors are playing a momentum game and not exercising long-term risk-averse strategies. Treasury Yield Curve Rates
Not much happened in the treasury market, with interest rates rising slightly on all maturities of one year or longer, from three basis points on 1s, and 2s, to five basis points on 7s, 10s, and 30s. Pretty boring. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil ended the week higher again, at $80.59, but traded significantly above that, as high as $81.73 on Friday, until options players took out their profits. Last week's Friday close of $78.07, compares well with the prior week's close (June 7) of $75.38. This is WTI crude's first foray above $80 since May 1 and indications are for prices to increase as Middle East tensions accelerate, U.S. sanctions expand, and economic retaliation via production cuts becomes paramount, especially in BRICS-aligned producers, Russia, Saudi Arabia, Iran, etc. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.44 a gallon, close to the lowest since last November and only a penny higher than last week and two cents from the week prior. Higher oil prices haven't yet been factored down into the price of gas and is likely to have little impact unless WTI gets to $85 or $90 per barrel, which is possible, but seems unlikely given current conditions. California is likely to be the most expensive place to buy gas, own a car, or buy an UnHappy Meal for a long, long time, even though the price continues to fall. A gallon of unleaded regular is $4.78 at the latest reading, the lowest price in more than six months. Prices in Pennsylvania eased down another three cents, to $3.62, the Keystone state continuing as the price leader in the Northeast. New York is close by at $3.55, followed by Connecticut at $3.53, and Maryland ($3.52). Prices rose nine cents in Illinois, with a gallon fetching $3.81. Mississippi has the lowest prices in the country, remaining at $2.88 for a second straight week, followed by Arkansas ($2.91), Oklahoma ($2.92), Louisiana ($2.95), and Tennessee ($2.97) rounding out the sub-$3.00 states. The rest of the Southeast ranges from $3.02 (Kansas) to $3.09 (South Carolina), with the exception of ouliers, Georgia ($3.25), and Florida ($3.33). The Midwest ranges between lows in Kansas ($3.02) to highs of $3.52 in Indiana, though most remain in a range between $3.15 and $3.25. Arizona dropped another four cents and remained below $4.00 for a seventh straight week ($3.59), leaving California, Washington ($4.29), Oregon ($4.05), and Nevada ($4.02) alone in the $4+ club. Utah jumped 11 cents ($3.46) while Idaho ($3.50) continued to see an easing of fuel prices.
This week: $64,253.60 Since June 6, bitcoin is down 9.55% and continues to trend well below the March 13 high ($73,096). The trend is absolutely negative for vapor-dough. Promises made by lunatic liars like Anthony Scaramucci, who predicted bitcoin at $200,000, are falling on deaf ears and diamond-handed "hodlers" are screaming for relief. Donald Trump is the bitcoin hero for the week and maybe through the election cycle, though his pronouncements are more vote-getting tactics than concrete proposals on bitcoin regulation (of which there should be none, as in zero). Bitcoin's price has been artificially inflated by the onslaught of ETFs that were officially "kissed off" last year. That boost is at an end as money that was going into those ETFs has now reversed and is flowing out. It shouldn't be more than a few weeks or months (say, by September) before bitcoin is simply yanked lower and the easy gains vanished. Figure a quick drop into the $50-55,000 range in short order. It always happens with bitcoin and is usually similar with any speculation. Almost all of crypto is such a total scam. Sad, really, that people are so gullible and at the same time desperate.
Gold:Silver Ratio: 78.08; last week: 79.28 Per COMEX continuous contracts:
Silver price 5/24: $30.54 Since the May 21 all-time high of $2449.10, some pattern recognition was detected in COMEX trading. For the past three weeks, gold's price held up well early in the week, then was knocked down either on a Thursday or Friday, with a plausible explanation being economic data suggesting inflation easing or strong economic numbers. It's almost laughable at this point that the anti-gold, pro-fiat enforcers even need an excuse of any kind to mask their overt rigging of the gold (and silver) price. The only more foolish endeavors out of the current boneheads in "official Washington" of late have been the kind of "well, um, we support Israel" mumbling and last week's "Ukraine peace conference" in Switzerland in which neither Russia nor China were invited. Freezing Russian assets at the onset of the Special Military Operation in Ukraine has been exacerbated recently by the equally moronic $50 billion Ukraine "loan" using interest gains on that frozen Russian money to pay it. At some point, people will awaken to the fact that the U.S. and EU are playing bankers with monopoly money and realize the futility of measuring wealth in dollars, euros, yen or any other fiat currency. Rather, weight will become of primary importance, as in grams, ounces, kilos, and tonnes. It's useful to keep in mind the poignant adage, "he who owns the gold makes the rules," when dealing with liars and thieves boasting over their "rules-based order," which is nothing but bluster and propaganda. The East, especially BRICS-aligned countries are prepared to run roughshod over the broken economies of the West and little mercy will be shown as gold accumulation continues at a frantic pace by central banks in Asia, the Middle East, and Africa, and, to a lesser extent, South America, where there are a plethora of mining operations. Despite late-stage, heavy-handed tactics by the suppression forces at the COMEX, LBMA, and elsewhere, conditions have rarely looked as bullish for precious metals as at the present time. Anybody with a sense of history and economic realities should be well aware that the prices of gold and silver are about to skyrocket. From 1971 to 1980, gold increased by a factor of 25, from $35 to $850. The ongoing multi-stage bull market which began in 2001 at $250, is now nearly 10x from that starting point. A repeat of the 25x in the 70s, puts gold at $6,250. Estimates of repricing gold at $10,000 or higher cannot be ignored at this juncture. The coming 3-8 years may well mark the end of the fiat era, replaced by the ultimate arbiter of wealth, gold. Silver, also recognized as money is most of the world, but also used extensively in industry, might even rise at a faster rate. A 25x return from the 2000 level around $6/ounce gets silver to $150. Many estimates are higher. Again, no matter the "price," it's ounces, kilos or tonnes that matter more. 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) rose ever-so-slightly, to $39.95, gaining four cents from the June 16th price of $39.91 per troy ounce. One ounce non-numismatic gold coins were in short supply, while one once bars were easy to locate and priced only $15-25 below coins. The small savings in bars is probably meaningless in the long term since gold is gold, be it bars, coins, or decorative arts. There appears to be no shortage of finished silver in one to 10 ounce weights, with bars slightly more in demand than coins, carrying a higher premium.
With the rarity of a mid-week national holiday (Juneteenth) in the rear-view mirror, the final week of the month first half of the year, and second quarter will be concluded neatly on Friday, June 28. The following week, which includes U.S. Independence Day on Thursday, July 4, will be truncated as well, with markets closed on the actual holiday and a half session on Wednesday, July 3, closing at 1:00 pm and a full session, Friday, July 5, though one can safely assume that trading will be ultra-light the entire week and especially so on the 5th as most sane people will take advantage of a four-day weekend. Following the 4th of July, there will not be another short week until Monday, September 2 (Labor Day), so those unfortunate junior traders will be at their posts throughout the summer doldrums. Many happy returns to them!
At the Close, Friday, June 21, 2024:
For the Week:
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IdleGuy.com June 2024, Vol. 1 #5