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Weekly Survey of Gold and Silver Prices
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.
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.
Friday, January 19, 2024, 9:22 am ET
A few items concerning Thursday's trading were worth noting.
First off, while the assembled masses got all hot and bothered over the fourth quarter report from Taiwan Semiconductor, the excitement came from their forward-looking statement and guidance, in which they projected higher revenues in the first quarter. The company's statement was not a fact, but rather a projection.
Wall Street being essentially nothing more than a gigantic hype machine took the ball and ran with it, especially on the NASDAQ and in individual semiconductor stocks like Nvidia and Advanced Micro Devices (AMD).
What held the Dow down was United Health (UNH) in sympathy with Humana (HUM), which was lambasted by the market, which was down about 12% at the lows of the day.
The rally had run out of steam until 1:30 pm, when the House and Senate decided to kick the fiscal can a little further down the road by agreeing on a continuing resolution that would keep the government operating until the middle of March rather than face a partial shutdown on Friday. Once the deal became public knowledge, stocks took off like rocket ships to Mars. The problem with this is that congress does this on a regular basis, at least every six months, and, recently, more frequently. So, is Wall Street going to rally hard every time the government decides to keep its doors open a few months longer?
That kind of rally mode could send the S&P to 5500 in short order. In reality, Wall Street needed a catalyst and found one just in time. There wasn't any angst or surprise over the governments drooling and doodling. From what was being bantered about, it hardly seemed like anybody was watching congress and their 16% approval rating. Oh, well.
Another item that didn't get much attention was the punishment meted out to Discover Financial (DFS), the holding company for Discover card and associated banking interests. The company missed badly on the fourth quarter, reporting EPS of $1.54 against estimates of $2.50. The stock was punished to the tune of a 10% loss on the day. The main culprit was the high level of defaults in their loan book, now over 4.15%.
So, while Wall Street was busy pumping up stocks on the basis of the govenment not shutting down and some sketchy promises from Taiwan Semiconductor, people across America are beginning to fell the full effect of high grocery prices and even higher rents and are not making credit card payments.
Apparently, Wall Street failed to notice that the war effort in Ukraine is a complete failure and the situation in the Middle East is expanding into a regional conflict with many nations involved. But, hey, anything for a buck, right?
As the week draws to a close, futures are wildly higher once again, based entirely on the obvious, that they were higher yesterday. Also, reporting this morning, State Street Bank (STT), offered the following:
Total revenue decreased by 4% YoY to $3.043 billion. Net income of $210 million, is a 71% decrease YoY. Diluted EPS of $0.55, down 71% YoY. The stock is up four percent in the pre-market. You cannot make this stuff up.
The big story for today will be the S&P making a new all-time high. Unmentioned will be the Dow, which made a new all-time high in December, is down from that level.
Fade the rally. January still appears to be headed for a red finish.
The 10-year note is yielding 4.15%. The 30-year bond is at 4.36%. March rate cut is off the board.
At the Close, Thursday, January 18, 2024:
Thursday, January 18, 2024, 9:27 am ET
Thursday morning stock futures are split, as Taiwan Semiconductor (TSM) issued strong guidance after beating fourth quarter estimates, earning $1.44 per U.S. share on sales of $19.62 billion. In the year-earlier period, the company earned $1.87 per U.S. share on sales of $20.54 billion, so, overall, as has been the case with many companies worldwide, on a comparative, year-ago basis, there is no growth.
However, for the first quarter, Taiwan Semi expects revenue of $18 billion to $18.8 billion, which would be an improvement over the first quarter of 2023, when it generated revenue of $16.62 billion.
That news sent shares higher and boosted most other tech stocks, sending NASDAQ and S&P futures soaring.
Dow futures did not share in the imagined, sudden new wealth in tech after Humana (HUM) warned that a spike in medical care costs at the end of last year could materially impact its fourth quarter earnings and may also affect its 2024 forecast, sending shares of the company down 14% in the pre-market. Though not a Dow component, Humana's surprise announcement had a chilling effect on United Health (UNH), which is a Dow component and had already released fourth quarter earnings last Friday, beating estimates but taking a huge drawdown in share price, dropping from 539 to as low as 513.
This morning, the stock is looking at another decline of possibly four percent or more, which is shading the Dow futures to the downside.
With stocks vacillating in recent days, the boost from Taiwan Semi seems a bit suspicious and over-hyped. Despite NASDAQ and S&P futures pointing to a big upswing at the open, traders may be inclined to fade any rallies, keeping one eye on the treasury market and the other on developments in the Middle East, which show no signs of easing off from current confrontational positions by interested parties.
Wednesday's losses were ameliorated largely by the usual late-session rally, which lifted the major indices about 50% off the lows of the day.
Meanwhile, in Davos, Switzerland, the World Economic Forum (WEF) is trying to remain relevant, just as geo-political conditions overwhelm them. Considering that the theme of this year's confab, Rebuilding Trust, suggests that they, as a group of globalist schemers, are not taken at face value by the world's peons (you), it's worth noting that the last few thematic gatherings have been along the same lines.
"Cooperation in a Fragmented World (2023)," "Working Together, Restoring Trust (2022)" and "A Crucial Year to Rebuild Trust (2021)," compared to prior topics like "Stakeholders for a Cohesive and Sustainable World (2020)" and "Globalization 4.0 (2019)."
Thanks to Wall Street Breakfast for giving us the refresher.
In all seriousness, Klaus Schwab and his invited guests want the world to think they matter. They actually believe they are better than the rest of us, so we should let them set the global agenda. Sadly for them, they're irrelevant and are not quite as bright as they would have us believe.
The world did better under MAGA and will again. Another six months of Trump headlines and a win in November ought to be enough to put these self-satisfied ogres back in their places, well down the totem of human evolution.
At the Close, Wednesday, January 17, 2024:
Wednesday, January 17, 2024, 9:18 am ET
Just in case it wasn't already clear enough, the results from Monday's Iowa Caucuses provided ample evidence that Donald J. Trump will be the next president of the United States.
Not only did he win the state by the largest margin ever, taking 98 of 99 counties and garnering 52% of the vote, even more telling about the mood of many Americans was the CNN entry poll that showed 69% of people who were asked the question, "Do you think Biden legitimately won in 2020?" answered resoundingly, "NO."
Various elements of the mainstream media tried to play down that item or not report on it at all, some suggesting that Iowans are largely white evangelical Christians, as if that were some sort of badge for being racist white supremacists, which is obviously nonsense. Iowans aren't very much different than people who live in Kansas, or Texas, or even Massachusetts. People have seen through the charade of the the 2020 results, the January 6 show trials, the dual impeachment efforts against Trump and the ongoing witch hunt trials meant to sully his reputation and/or keep him off the 2024 ballot.
There is a massive throng of Trump supporters across the country who have kept quiet, gone about their business, and tolerated the follies and failures of the Biden administration, awaiting the 2024 election for the ultimate rebuke of Democrats, the media and their false narratives. Having Trump out in public, on the campaign trail, emboldens the majority of people who want their country returned to civility and honest rule of law, in opposition to the weaponized departments of justice, FBI, ATF, and Homeland Security.
It won't take much to tip over this powder keg of resentment that's been sizzling behind the scene, which is why a downturn in the stock market is something those currently in control fear most.
Americans are weary of being told what to think, sick of the wasteful, destructive conflict in Ukraine and the decimation of Gaza by the Israelis, the war-mongering, finger-pointing, White hatred, and open borders fueled by the media and disingenuous Democrats in congress. The public has been held in abeyance by reasonable returns on their investments and a buoyant economy, despite the ravages of inflation. If stocks fall and the economy fails, the pent-up anger and justifiable desire for retribution will explode like an Icelandic volcano.
Just 10 trading days into the new year, there's growing evidence that the stock market is about to retrace the gains made in November and December of 2023 and perhaps dive back to earlier levels. By just about any metric, many stocks are overvalued. Many companies have been routinely reporting results that fail to match previous quarters or from year-ago figures. Regardless of shrinking profits, stocks have been bid higher largely due to buybacks which reduce the number of shares outstanding and boost the resultant earnings per share. It's not difficult to see right through the flimsy corporate facade that's been holding up markets, especially when it has been led by a "Magnificent 7" cohort of tech stocks, now under assault.
With the current anger and frigid temperatures across the nation as a backdrop, Tuesday's trading left a good deal to be desired as Wall Street began coming to the realization that a rate cut at the Fed's February FOMC meeting is increasingly unlikely. Wednesday morning's reveal of December retail sales at +0.6% being ahead of expectations did not aid the cause of the rate cut fanatics. A seemingly resilient economy is about the last thing the Wall Street free money enthusiasts wanted.
Thus, futures extended their early morning losses backed up by across-the-board declines in Europe and a devastating, nearly four percent decline on Hong Kong's Hang Seng index.
On the earnings front, US Bancorp (USB), Charles Schwab (SCHW) and Citizen's Bank (CFG) each showed profit declines for the 2023 fourth quarter, with Schwab taking the worst of it, down nearly four percent in pre-market trading.
Stock futures at 9:00 am ET were down significantly, with Dow futures off by 184, NASDAQ futures down 155, and S&P futures lower by 31.
As of Tuesday's closing bell, the Dow and NASDAQ were both down for the year to date, the S&P just three points higher than where it closed out last year.
Oil is heading below $70 per barrel. Gold and silver are flat.
A reckoning for stocks is overdue. The remainder of January and throughout earnings season could become quite painful.
At the Close, Tuesday, January 16, 2024:
Sunday, January 14, 2024, 4:45 pm ET
More than a few cross-currents made themselves evident the first two weeks of the year, notably, weakness toward the continuing conflicts in both Ukraine and Israel, hostilities spreading out in the Middle East, bank stock weakness, oil price weakness, and a fairly stable employment picture in the US as Europe gets pushed over the edge.
For what it's worth, Wednesday, January 10, was exactly three weeks out from the triple-engulfing pattern seen on the Dow charts back in December, a condition recognizable to chartists as a lagged reversal signal. Additionally, for Dow Theorists, the Dow Jones Transportation Average failed to confirm the record highs on the Industrials, a false flag if ever there was one.
Not to be forgotten, the S&P 500 continued to fail to make new closing highs and the NASDAQ is nowhere near its all-time levels, so, either there's going to be a huge effort by insiders to push stocks higher right out of the gate on Tuesday or the implied signal is for a wicked turn to the downside, which would be the probable circumstance given the horrific results by the banks that reported fourth quarter and full year on Friday and a trend that will continue given the companies reporting in the week ahead, heavily weighted with financials. Those include Morgan Stanley (MS), Goldman Sachs (GS), State Street (STT), PNC (PNC), Citizens Financial (CFG), US Bancorp (USB), Discover Financial (DFS), Truist (TFC), M&T Bank (MTB), Charles Schwab (SCHW), KeyCorp (KEY), Ally (ALLY), Northern Trust (NTRS), and Traveler's (TRV).
That's a long list of vulnerable financials and hardly a complete one. There are more regional banks and financials in line this week.
Stocks did a bit of a dipsy-doo this week as the Dow was the weakest of hands while the NASDAQ recovered much of the loss from the first week of 2024 but still remains down for the year thus far. These next three weeks, amid earnings surprises and flops will be a strong determinant on how stocks fare the remainder of the quarter and full year. It's not looking pretty.
Notably, the 30-year bond remains elevated in yield at 4.20% while the rest of the yield curve yields were lower on the week. 10-year notes were yileding just less than 4.00%, dripping a full nine basis points to 3.96%, dis-inverting from 3s, 5s, and 7s, leaving the 2s-10s spread at its lowest since October.
With economic conditions seemingly at a juncture inconsistent with the chance for rate cuts anytime soon, the Fed finds itself in an enviable situation, where it can stand still on rates and allow the market to lead the way. Eventually, they will have to cut the federal funds rate, though that would likely be predicated upon recessionary forces appearing in the United States. Otherwise, the 30-year bond can continue to offer exceptional value, rising above five percent, cutting into the inversion from the long end. It's more than likely that longer-dated bonds and notes will move higher before the Fed takes the knife to the federal funds rate. There's little appetite for anything longer than 10 years, so the 30-year should be able to chart its on course going forward.
Anybody still hoping for a rate cut at either the March 19-20 or April 30-May 1 FOMC meetings either doesn't understand election year policy or economics as a whole. Without significant weakness in employment, rate cuts are completely unwarranted and out of the picture at last until June, barring any unforeseen geo-political events.
Spreads on 2s-10s are at their lowest point since the end of October, coincident with the huge stock and bond rallies that put a lid on 2023 (and maybe 2024).
Full Spectrum (30-days - 30-years)
With tensions in the Middle East ratcheted up again this week, the price of a barrel of WTI crude soared to $75.24 prior to collapsing into the New York close at $72.88. As much as those who wish to see a higher price for crude, it just hasn't happened. In fact, Saudi Arabia recently cut the price of Arab Light crude to Asia to the lowest level in 27 months amid a climate of continued weak demand and foreign competition.
The oil flow in and out of the Persian Gulf remains largely unimpeded, especially tankers headed toward Asian destinations, a condition all parties in the region understand must be maintained. What's being contested by Houthis out of Yemen are commercial shipments headed to Israel and the West, so the impact expected by media talking heads is largely nonsense and hyperbole.
According to gasbuddy.com, the national average for a gallon of unleaded regular gas at the pump dipped slightly for another week, down to $3.04, from last week and $3.09 the prior Sunday (New Year's Eve).
The Northeast and the West coast continue to be the highest price regimes. In between is an enormous swath of states with prices below $3.00, now numbering 29 in all, the notable exception being Illinois at $3.07. By far, the cheapest gas is found in Oklahoma ($2.49), down a three cents in the past week. Arkansas is at $2.57, followed by Texas ($2.63), Kansas ($2.64), Missouri and Mississippi, both at $2.65. Prices in Florida remain elevated, at $3.08, the highest in the Southeast, off seven cents this week.
Sub-$3 gas pushes through the Midwest all the way up to North Dakota ($2.75), Wisconsin ($2.76), Minnesota ($2.78) and Montana ($2.88).
California ($4.66) is now the only state on the mainland with prices above $4.00, as Washington slipped just below, a $3.99. Nevada is next at $3.79, followed by Oregon ($3.69), Arizona ($3.15), and Idaho ($3.01).
In the Northeast, Pennsylvania ($3.32) remains the most expensive, followed by New York ($3.25). The lowest prices in the region is Ohio ($2.82).
This week: $42,441.30
The much-ballyhooed and overhyped approval by the SEC of 11 spot bitcoin ETFs produced just the opposite of what the hucksters and promoters had been selling for months. Instead of seeing massive demand for bitcoin due to retail demand, the dominating whales inside the crypto crime syndicate chose to take the opportunity to cash out at high levels, reaching above $48,000 before the roof caved in on all those very, very late to the bitcoin party.
Anybody with half a brain should not be plunging into bitcoin itself or any derivative plays. Those with diminished mental capacity will continue to keep alive the bitcoin mystique until Wall Street vultures swoop in and take all of their cash.
Gold:Silver Ratio: 87.91; last week: 87.76
Per COMEX continuous contracts:
Gold price 12/15: $2,033.80
Silver price 12/15: $24.17
Even though gold finished the week only one dollar higher than on the previous Friday (1/5) it did manage to rally off a significant drawdown from Thursday, falling to as low as $2,018, the lowest price since December 13 ($1,997). Gold rallied powerfully, rising by $35 from Thursday's low. Silver dipped to $22.77 on Thursday, but followed gold's lead to end the week down only three cents on the COMEX.
What is currently underway is a great deal of confusion, evident in all markets, with no true direction indicated anywhere. The gold price remains determined to reach for new highs. It's been over $2,000 for more than a month now, and the premia demanded at retail is evidence that sellers are reluctant to give up the goods at current levels. An ounce of gold in the real world costs upwards of $2,150, the price target of more than a few analysts.
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) rose dramatically from the prior week, to $38.57, a gain of $2.65 from the January 7 price of $35.92 per troy ounce.
The amount of inventory available to buyers on eBay and at online dealers is sufficient to meet demand for now, but there's nothing to suggest that supply might not tighten if gold and silver continue marching forward. Buyers are beginning to drift away from the contrived COMEX derivative pricing and more towards a Global South standard, dominated by Asian purchasers.
Bear in mind that gold has been shifting ownership from West to East for more than a decade, a trend that shows no signs of diminishing. Rather, gold as a trading standard will continue to put pressure on treasuries as the reserve of choice. Silver remains largely and industrial staple, and, while there's nothing wrong with that as a value incentive, it should still be kept in mind as a store of value and a counterpart to gold, both of which remain the world's only real money.
It's cold outside, especially in the Midwest and Northeast, but economic forces appear about to heat up considerably. Money in nearly every market appears vulnerable as gold remains near all-time highs with silver lagging.
Inflation has surely not left the party and may return with a vengeance as geo-politics force the hands of politicians.
At the Close, Friday, Janaury 12, 2024:
For the Week:
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