Main financial assets discussed: SPDR Gold Shares ETF (GLD)
Top 3 key points:
1. Russia's announcement that the BRICS currency will be backed by gold suggests a potential opportunity for gold. Speculation around a BRICS gold standard could strengthen a bullish trend in the market.
2. Multiple factors are fueling the bullish sentiment towards gold, including global central banks diversifying away from U.S. assets, concerns about inflation and US fiscal deficits, and the potential economic downturn indicated by the persistent yield curve inversion.
3. The threat of a functioning BRICS gold standard dethroning the USD is unlikely due to the challenges of building the necessary financial system infrastructure and the lack of trust in the BRICS countries to redeem the currency for actual gold.
Recommended actions: **Buy** gold or GLD now while the rumors of a BRICS gold standard are still circulating, and then **sell** when the news about the gold standard is officially released at the BRICS summit in August. Consider using GLD options to hedge against potential downside risk.
Main financial assets discussed:
- Government debt
- Gold
- Precious metals mining stocks
- Equities
Top 3 key points:
1. Fiscal dominance among major developed economies has led to an escalating debt burden, with government spending representing a substantial percentage of nominal GDP.
2. The US government is issuing a significant amount of debt, while the Federal Reserve is shrinking its balance sheet assets, leading to a rise in the cost of debt.
3. Inflation is expected to increase in the near future, driven by underlying structural issues such as wage-price spirals, supply constraints, government spending, and deglobalization trends.
Recommended actions:
- **Buy gold** as an escape valve and hedge against the deteriorating debt problem.
- Consider investing in **precious metals mining stocks** as they are poised to benefit from increased demand for metals and potential M&A activity.
- Be cautious with **equities**, particularly highly valued tech megacap stocks, as the market is overvalued and there is a risk of a severe economic downturn. Consider short opportunities in the equity market.
Gold and silver prices rise as the weaker U.S. dollar index and dip in U.S. Treasury yields attract futures traders and bargain hunters, while anxieties build over upcoming speeches from the Fed and ECB on future monetary policy direction and the potential shift in the Fed's inflation goal.
Gold has found support at the 50-Week EMA, suggesting consolidation and a potential target of $2000, but breaking below $1900 could have negative implications for the gold market; the bond markets and interest rates should be monitored to determine gold's future direction, and caution is advised due to the end of summer and the absence of major players in the market.
The gold market is in need of a catalyst to break its current downtrend, with the upcoming economic data playing a crucial role in determining its direction.
Gold reaches its highest point in nearly a month due to weak U.S. economic readings, suggesting that the Federal Reserve may halt its interest rate hikes.
Gold and silver prices are higher and hit daily highs in early U.S. trading on the back of a dovish U.S. economic report and expectations of no further interest rate hikes from the Federal Reserve.
The gold market is experiencing selling pressure due to better-than-expected jobless claims data, easing fears of an economic slowdown and potentially leading to a longer maintenance of elevated interest rates by the Federal Reserve.
The strength of the US dollar and rising bond yields are causing gold prices to fall to their lowest level since March, with some analysts predicting that the bearish momentum could push prices down further to their 2023 lows at $1,810 in the spot market.
Costco rapidly sold out of gold bars as investors turn to traditional safe-haven assets like gold during economic uncertainty and rising inflation, but the performance of gold is being overshadowed by Bitcoin's impressive gains and lower equivalent inflation rate.
Gold and silver prices have remained stagnant for over three years despite high inflation and geopolitical turmoil, leading investors to consider the alternatives, such as holding cash, given the decline in the dollar's purchasing power and the potential for a looming recession and economic reckoning, making other conventional assets like bonds, equities, and real estate appear overvalued.
Bitcoin and gold are expected to thrive amidst fiscal problems in the US economy and a potential pivot from the Federal Reserve, according to macro investor Luke Gromen. Gromen also suggests that the launch of a gold-backed currency by the BRICS alliance may weaken the US dollar as the world's reserve currency.
The US economy could be reaching a tipping point as bond yields rise, while gold remains relatively resilient but faces pressure from the bond market.
Although long-term bond yields are surging and putting pressure on the gold market, gold remains an important insurance asset due to growing risks to the U.S. economy and the weakening correlation between gold and bond yields, according to analyst James Robertson. Central bank gold demand continues to have a significant impact on the market, and gold remains an attractive global monetary asset for diversifying away from the U.S. dollar. There is also substantial value and opportunities for investors in the mining sector.
Gold and silver prices are slightly lower as traders await the U.S. employment report, with the possibility of a weakening U.S. economy cooling the ascent in bond yields.
Gold prices have experienced a nine-day losing streak, but some analysts believe the market may be nearing a bottom, with the precious metal showing modest gains at the end of the week.
The gold market has experienced nine consecutive days of losses, its longest losing streak in seven years, due to surging bond yields, but rising bond yields also pose significant risks for the economy, creating potential for short-term challenges and a potential breakdown in the U.S. dollar's international appeal.
