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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, June 2, 2023, 9:00 am ET
After the House of Representatives voted to advance the Biden-McCarthy Debt Ceiling bill, 314-117 Wednesday night, the Senate took up the cause to make sure every elected representative could take the weekend (and many more days) off, passing the legislation without amendments, 63-36. 17 Republicans voted against the bill along with four Democrats.
It matters not who the "no" voters were. The deal had been set weeks ago; all of the late-night wrangling and yammering was just for show. Congress was never going to let the money spigot be shut down. Resident Brandon will sign some time Friday (ostensibly, after his morning pudding and regimen of pills and vital fluids, so, sometime after noon).
Now that the past six weeks of drama is past, congress can get back to work betraying their constituents in less visible manners.
On a possibly much more serious note, popular political/economic site, ZeroHedge was offline much of the morning, at least since 5:45 am ET, and likely earlier. Something about criticizing South Carolina senator Lindsay Graham's comment about killing Russians being money well spent. As of 8:00 am ET, it's up again, but the timing of the outage is suspicious, as was Elon Musk's tweeted response. BTW: Tucker Carlson's last tweet was May 9. Black helicopters, kill shot incoming...
These troubling times are not going to end any time soon. Americans are currently whistling past their own graveyard, allowing all manner of noxious behavior by politicians in Washington, DC. It's par for the course when empires begin the death spiral. The US is already $31.8 trillion in debt and has just signed on to another $4 trillion more in spending money they don't have. Southern border remains wide open; money continues to flow to Ukraine.
As far as markets are concerned, the passage of the debt ceiling bill was music to the ears of equity traders, with US stock futures flying high in anticipation of the May Non-farm Payroll data. Consensus is for an additional 180,000 jobs.
Looking to end the week on a high note, as of Thursday's close, the Dow was down 31 points for the week, NASDAQ, +125, and the S&P ahead by 15.
Gold has rebounded sharply from its test of support around $1,960, lately hovering just below the $2,000 level. Gold and silver's brief respite from steady advances March through early May seems to be continuing. It's been more than two weeks since gold futures traded over $2000. Silver, briefly trading above $26/oz in early May, has receded from that level and is holding its ground just above $23. Continued weakness in precious metals should serve as a buying sign for true believers. As long as the US$ is being debased, the traded of FRNs into gold and/or silver bars, rounds, or coins is pretty much a no-brainer.
At 8:30 am ET, the regularly-unreliable BLS released the May data, showing employment up 339,000 in May, and the unemployment rate rising to 3.7%.
The number reported is higher than any of the estimates. Now, about that bridge you're looking to buy...
At the Close, Thursday, June 1, 2023:
Thursday, June 1, 2023, 8:02 am ET
It doesn't get any simpler than this.
1. Pretend there's a real chance of not raising the debt ceiling, which would, purportedly, plunge the entire world into economic chaos.
2. Have the supposed president and Speaker of the House work out a deal (compromise).
3. House of Representatives members wave arms, make short speeches, then quickly vote 314-117 (4 non-voters) to approve the deal. (Wednesday)
4. Send it over to the Senate, get 68-80 votes in favor. (Thursday)
5. Brandon signs it into law Friday. Done. Federal government gets an extra $4 trillion to spend over the next 18 months. Nice.
Since all of these "leaders" had to hang around the Capitol over the Memorial Day weekend - doing nothing other than schmoozing, barbecuing, and boozing, BTW - they feel entitled to take this weekend off. Some may actually head back to their districts to work out
A few select senators and reps will manage to find their ways to network TV studios or get some air time via remote connections for the Sunday morning talk shows. Some will express their remorse over the excessive spending for which they "had" to vote positively; others will proudly proclaim how they saved the country and the world.
Come Monday morning, stocks will fly to the heavens, that is, unless they've already ramped massively Thursday and Friday.
All levels of government - federal, state, and local - along with mainstream media and Wall Street shills, are massive frauds, enriching themselves via uncontrolled money creation via budget deficits.
The Federal Reserve will gladly loan the federal government all the currency they desire at interest rates of four, five, and possibly six percent. None of the principal of these loans will ever be repaid. The government only pays the interest, which is already a sum larger than the entire defense budget. For fiscal 2024, come October 1, 2023, interest on the federal debt will be well in excess of $1 trillion dollars, probably close to $1.4 trillion by mid-2024.
Every member of the House and Senate will reap financial rewards from their own largesse. The silver lining is that most of the currency they receive will be quickly debased, and, since it is loaned, i.e., not the result of taxation, the average citizen is not on the hook for a dime of it. The government would have to tax income at close to 100% for years in order to even come close to paying down the debt.
The US Debt clock, currently at around $31.8 trillion, calculates the debt per US citizen at about $98,000, and the debt per taxpayer at close to $250,000. Add about 12 percent to those figures to get the totals post-debt ceiling boost.
You don't owe it. Most of these cretins were not duly elected. Since Trump won the presidency in 2016, there's been a concerted effort by both parties to keep outsiders OUT. Elections have been rigged all across the country and they will continue to be so. The upcoming 2024 presidential and congressional elections will be complete farce. There is simply no way possible for Donald Trump to win the election. The most likely outcome is for Ron Desantis to become the next president, as he's already shown fealty to the ruling class. He will talk and act like the next savior of "democracy." Sadly, America was founded as a Representative Republic. That concept left the building in 2020.
The United States of America as a sovereign nation is finished. Look to your state government for forward guidance if you intend to stay (resets may vary). Those capable of leaving either have already done so or are considering it.
Let's connect some dots: Over the upcoming weekend, June 3-4, OPEC+ ministers will meet to discuss ongoing production quotas and other agendas. Some reporters from Reuters, Bloomberg and the Wall Street Journal were denied invitations. Speculation is that OPEC+ members will be discussing sensitive matters, such as pricing to "friendly" nations as opposed to pricing for Europe, the UK and the United States, and in what currencies oil will be traded, thus, some news organizations are being excluded.
This is all part of the de-dollarization efforts well underway in the rest of the world. The US dollar is rapidly losing its reserve currency status. Being a banana "democracy" and holding the world's reserve currency somehow doesn't sit well with productive nations, many of them under sanctions from the US and European Union.
Debasing the world's reserve currency, a task upon which the congress and fake president are currently engaged, isn't a very bright idea. The rest of the world is largely rejecting US dollars, a condition which is proceeding apace.
Stocks, well, they're mostly garbage. The S&P 500 index has made gains in 2023 almost entirely on the backs of five stocks - Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Nvidia (NVDA). The other 495 stocks have contributed just four percent to this year's 9.5% advance, meaning the five stocks comprising the "Trillionaire Club" have accounted for 96% of the gains.
Unless you're holding one or more of those big caps, you've been treading water for five months. Conversely, you could have been buying gold (+7.45% ytd) or silver (-2.66, a bargain).
Stocks, priced in US dollars, may not be the best place to invest. Time will tell.
At the Close, Wednesday, May 31, 2023:
Wednesday, May 31, 2023, 9:20 am ET
Getting back to work after the three-day weekend, losses were piling up Tuesday on Wall Street into the afternoon, with the Dow Industrials off more than 100 points just after two 0'clock Eastern.
Back-bench operators, who had been up-ticking the tape most of the session, kicked into higher gear, saving the indices from failure as the debt ceiling dealmaking proceeded as scripted in Washington, DC.
With the so-called X-Date at which the government will run out of money moved conveniently back to Monday, June 5th, the final scene of the six-week Kabuki theater was set, allowing for congress and Biden to engineer a last-minute stick save for the world.
It has become nauseatingly obvious that the entire debt drama is nothing more than a stage show for the masses. As mentioned in previous Money Daily posts, there is literally no rationale to NOT pass a debt ceiling deal. To believe the grifters and skimmers in congress would give up their cash cow so readily stretches credulity past the sell-by date.
In the meantime, there are three more trading days, one of which happens to be the final day of May, a suitable date for window dressing disguised as a relief rally over the predictable successes of the congressional clowns.
There will be signed legislation by Monday night, maybe a bit sooner. The checks will be written and in the mail.
Hold on to your hats, stats, stocks, and jocks. The show must go on.
At the Close, Tuesday, May 30, 2023:
Sunday, May 28, 2023, 11:55 am ET
Now that Joe Biden and Kevin McCarthy have agreed, the serialized narrative over the debt ceiling is coming to a conclusion.
That there was ever any doubt about how this iteration of the debt ceiling "debate" would turn out was a foregone conclusion by those who see through the thin veneer of propaganda foisted upon the public by government and media (aka, the fascists). Employed were the usual scare tactics aimed and grandmothers and senile old folks swathed in the Social Security blanket, that the checks would not arrive on time and that the world would be turned upside-down.
A load of the bunkiest bunk ever to visit Bunkville. Glad it's almost over.
In the coming week, DC politicians will wave their arms, flap their lips, and approve of raising the debt ceiling just in time to save the world. Huzzah!
Up, down, up, down. Same old boring stuff. None of the major indices have even approached new all-time highs in 18 months. This fact alone should tell inform people of just how weak the US economy has become. While it's true that the stock market is not the economy, it is a somewhat tested and reliable barometer. In more normal times, when the economy is humming along, stocks go up. In these recent abnormal days, stocks declined, came back up a little, but don't have any momentum to carry prices higher. In many ways, stocks are overpriced and due for a collapse, though that's unlikely to happen given the controlled nature of the art forms previously known as "markets."
With the debt ceiling kabuki theatre nearly concluded, it's a good bet that there will be some kind of celebratory rally, though there's also a good chance of the entire charade falling into a "buy the rumor, sell the news" scenario. Place bets with caution.
For the week, the Dow was down one percent, reversing a two percent loss by half thanks to Friday's well-orchestrated debt ceiling "hope" rally, NASDAQ up 2.51%, all but forty points of that made on Friday; the S&P finished ahead by 13 points (again, up 54 points on Friday, averting a loss); and, the NYSE Composite gained 254.63 points (+1.60%).
Holy economic slowdown, Batman! One-month yields shot up another 40 basis points over the course of the week, ending at an extreme 6.02%, the highest... well, higher than most people alive today can remember. The outsized move is likely more due to confusion and anxiety over the debt ceiling, which, as of Saturday night (just in time for the Sunday talk shows) seems to have been resolved, though the House and Senate still have to iron out details, pass actual legislation and send it off to Joe Brandon, who will have somebody sign it for him. (pardon the snark, just can't help it)
All yields bounced higher this week, particularly at the short end. The 30-year bond was notable for only being 0.01% higher than the previous week. Yields on two-year notes, which shot through four percent the prior week, appear headed right to five, though there might certainly be a reversal to all of this should the debt ceiling be raised by the end of the week ahead, the proverbial $31 trillion can kicked a little further down the third world road.
While rates are likely to remain high over the long term thanks to the relentless efforts of the Fed to fight back against inflation, they're probably not going to remain quite this high. When the politicians finish polishing the debt ceiling turd, interest rates will pause and lower, though another pump may be just a few weeks in the offing, with the FOMC set to meet just a few weeks from now, on June 13-14. Odds clearly favor another 0.25% hike, especially after the Fed's most-favored inflation measure, the PCE (Personal Consumption Expenditures) price index rose 0.4% in April and 4.7% from a year ago.
Spreads became more extremely inverted, as 2s-10s are currently 74 basis points upside-down, and the entire curve inverted by 206 basis points, a degree of magnitude higher than last week's 167.
Nothing in the entire treasury yield curve suggests anything less severe than recession with many analysts having already having scratched all the hair off their heads. For those still mildly confused, "anything less severe of recession" translates into a condition approaching or possibly even more severe than the Great Depression and certainly much worse than the paper tiger that was the GFC of 2007-09.
To the Rate-mobile, Jerome!
WTI Crude traded as high as $74.53, but closed out the week modestly higher at $72.87, just less than a buck higher than the $71.90 clsing the prior Friday (5/19).
There were some developments during the week that shed some light on the global energy condition. Crude prices bumped higher to the peak of the week on Wednesday after Saudi Arabia's Energy Minister warned short sellers in the oil market of pain ahead on Tuesday and the weekly EIA crude inventories experienced large drawdowns.
On Thursday, Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its June 4 meeting, sending prices lower. Russia and other OPEC+ members, outside of Saudi Arabia, have made statements pointing more towards a moderation and balance between producers and consumers rather than a radical price junp.
However, the US-UK-EU cabal supporting Ukraine seems to want to throw a wrench, or, rather, multiple drones, into the mix, targeting Russian pipelines, rail operations and refineries in recent days. The continued assaults, of which no state or faction has claimed responsibility, have not caused much disruption nor damage, but the onslaught seems to be a continuous one which may eventually inflict more serious harm and potentially shut down Russian oil and/or gas flows.
Through its Ukraine proxy, the aforementioned cabal appears hellbent on destroying Russia by any means possible. Thousands of sanctions are in effect globally, with those aimed directly at Russia or Russian citizens numbering in the hundreds. Led by the United States, the military component continues to arm Ukraine with more weapons and ammunition, most recently affirming that Ukraine would be receiving F-16 fighter jets in coming months, though the actual number of aircraft nor the expected date of transfer were not confirmed. No matter how many jets Ukraine receives, a lag of at least six months is expected, so the new flying gear might not arrive fully operational given extensive pilot training until November or December at the earliest.
Even with more than 42 million travelers taking to the road for the Memorial Day weekend, the national average for a gallon of gas at the pump was fairly static, up just two cents over the week, at $3.55, according to gasbuddy.com.
Prices are lowest in the Southeast with Mississippi the only state averaging under $3.00, at $2.97. From South Carolina west to Kansas, southern states are all trending in the low $3 range. Texas and Arkansas check in at $3.11, while Louisiana was higher, rising to $3.10 from $3.04/gallon last Sunday.
California remains the price leader of the nation, averaging $4.79. Prices in the West, particularly coastal states, remain elevated, with Washington ($4.60) and Oregon ($4.19) ranging upwards towards California. Arizona ($4.51), Utah ($4.05), and Nevada ($4.22) make up the rest of the $4+ club, totaling six, though Illinois ($3.94) continues to inch closer to the $4 mark.
The Northeast and Midwest (other than Illinois) range between Virginia ($3.34) and New York ($3.67), which leap-frogged over Pennsylvania ($3.66) in just the past week. Indiana and Michigan both came in at $3.61.
This week: $27,187.50
It's been just over two months since Bitcoin advanced from around $20,000 to nearly $28,000 (March 10-20). The level has held up fairly well, though the past two weeks have seen it at the lower end of the range from mid-to-high-$26k to just above $27k, where it can be found today.
Among the numerous problems associated with bitcoin valuation are that it is measured in a depreciating US dollar and that the value itself is subject to multiple external forces, such as government intervention and regulation and investment flows from individuals and companies armed with what appears to be unlimited funding.
Propping up the price of bitcoin resides in the province of the same kind of people who offered to the investing world sub-prime loans, credit default swaps, and, most recently, 0DTE (Zero Days to Expiration) stock and index options. These are among the dodgiest characters deep within the bowels of Wall Street's money machine, creating derivate products that distort and contort markets in myriad ways.
Once Wall Street embraced cryptocurrencies back in 2020, it became a different game, no longer the anonymous, critical, global currency envisioned by Satoshi. It's been copied, maligned, abused, and distorted to a degree that renders it nearly a caricature of its former self. Given the degree of animosity embraced by governments and central banks, there appears to be a future for bitcoin, though just not in any advanced economy.
It is merely another trading vehicle, devoid of intrinsic value. Adoption rates for bitcoin and all copiers have fallen significantly in recent months. It looks more and more like dead money every day.
Silver:Gold Ratio: 83.83; last week: 83.20
Per COMEX continuous contracts:
Gold price 04/28: $1,999.40
Silver price 04/28: $25.08
Gold, and more significantly, silver, suffered severe beatdowns over the past week, just as - not uncoincidentally - the US government was on its way to a resolution of the debt ceiling debacle.
The forces of low supply, inflation, and low confidence in fiat currencies that were responsible for pushing precious metals higher have conveniently been swept away or swept under some rug, allowing for the suppression mechanisms to kick back into higher gears. Dreams of $2,500 gold and $35 silver are currently being eviscerated, replaced by the ugly reality of a freshly-repaired US dollar, manufactured restoration of confidence, and lower inflation.
Directionally, gold appears headed more towards the $1800 level than $2100, with silver looking squarely at $20 per ounce or lower. As long as the LBMA, COMEX traders, bullion banks and the BIS has their grubby hands in markets, there will be no breakout of prices allowed. At the same time, new buyers, though mostly small ones, have emerged, given some of the outrageous prices paid for finished silver items on eBay. While gold will remain the more stable metal, silver may be subject to a degree of buyer's remorse in months ahead, especially if the highly-anticipated recession appears in the second half of the year.
The brighter side of the coin, however, is the undebatable fact that owners of precious metals will have something tangible and tradable, regardless of what price was paid. There is, in this regard - pardon the pun - a silver lining.
A signal from the weekly SOSMBP and the eBay survey results is suggesting that a mania, largely in silver, may have been sparked over the past few months, and instead of slowing due to more recent price declines, appears to be gathering momentum. While the general public may be swayed somewhat by the media circus surrounding the debt ceiling "agreement" there seems to be a growing subset of the general population with strong desires to de-dollarize themselves, with silver designated as the preferred escape vehicle.
There's absolutely nothing wrong with the idea of a silver breakout mania, except that the blowback at its conclusion will inflict some degree of damage to the confidence levels of some players. As in all manias, there are more than a fair share of profit-seekers, charlatans, cheats, and liars. If a silver mania is about to become realized, it's liable to be rather disorderly. Already there are prices well beyond what most would consider rational for graded items and supposed "rarities" which could lead to ill-feelings down the road.
On the other hand, a breakout in silver might just be the catalyst to propel precious metals forward. As it stands, central banks have been the primary movers in the gold market. If a silver mania ensues, that could develop into an odd couple of a marriage between the haves and the have-not, with a storybook ending. Just as metal continues to be mined, hope springs eternal.
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) remains elevated, higher this week, at $39.91, an advance of $1.44 from the May 21 level of $38.47.
Fearless Rick's quotable quote of the week: "Even the smart people are stupid."
Not much to add here, so enjoy the long weekend and short work week ahead (for those still in the slave caste).
At the Close, Friday, May 26, 2023:
For the Week:
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