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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, July 21, 2023, 8:40 am ET
The Dow ended higher Thursday for the ninth consecitive session, finishing with nearly a one-half percent gain, after giving up nearly half of the morning's winnings. Thursday afternoon was devoted almost exclusively to selling.
Through Thursday's close, the Dow is up 716 points, just more than two percent on the week. Thanks entirely to Thursday's 295-point slide, the NASDAQ is actually down 50 points for the week, while the S&P remains tenuously green, up 29 points. The NYSE Composite is up 223.
The Dow is up 6.3% year to date while the NASDAQ has ramped 34.4%. Either the Dow is undervalued (doubtful, since it's only 4.28 percent from its all-time closing high (36,799.65, January 4, 2022) or the NASDAQ is overvalued, though it's further out, 12.42 percent from record territory, (16,057.44, November 19, 2021).
Thursday's divergence of tech and blue chips was attributed to a few stocks. Johnson & Johnson gained six percent after blowing out 2nd quarter numbers. Goldman Sachs, which just a day earlier had reported a profit collapse of 58% from the second quarter a year ago, added to the Dow's gains with a three percent rise.
If one is to take the compulsive narration of financial news media seriously, NASDAQ's fall was the product of Netflix (NFLX), Telsa (TSLA), and Taiwan Semiconductor (TSMC) each having a bad day, though there was probably some impact from the imminent special rebalancing of the NASDAQ 100 index, which becomes effective on Monday, July 24, meaning that Friday is the last chance to make trades before the weightings are adjusted. Of particular interest are the high-fliers known colloquially as the Magnificent Seven - Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta - which are up nearly 90% this year on a combined basis.
No matter the causes for noisy day-to-day fluctuations, everything seems to be a little pricey. The Shiller CAPE measure is at 31.61, though it's lower than it was a few months back, but higher than the reading made on Black Friday, the kickoff of the October, 1929 stock market crash. Stocks like eBay are carrying p/e ratios of 40 or more. META checks in at 39, Microsoft, 37, Apple at 32, Tesla, 77, while Amazon takes home the booby prize with a p/e ratio of 315, followed down the greater fool pathway to the poorhouse by that darling of AI, Nvidia, at 236.
Are these really growth stocks with high multiples? Not really. They're fairly mature as a whole, especially Amazon, Microsoft and Apple, which pretty much are founding fathers of the tech revolution. Let's just call it tech bubble 2.0, or 3.0, or maybe even 6.5.
In case the market isn't convinced that higher prices for stocks are not just another implication of inflation or the ongoing debasement of the US dollar, the Dow Industrial and the Transportation Index appear to have turned the primary trend from bear to bull. After all, it's been more than 18 months since any of the major indices made fresh all-time highs. Wall Street traders need their bonuses and the economy is just humming right along, isn't it?
Here at Money Daily, it's never a good time to shy away from conspiracy theories, especially when the world is dealing with corruption unlike anything ever witnessed. It's easy to contend that stocks are up because the US cannot project weakness as the struggle in Ukraine has been a bust, sanctions haven't dented Russia's economy, and the rest of the world is conducting more and more international trade without using dollars.
The stock market is used by the media and government as a proxy for the general economy even though it's not a wholesome measure, just as GDP is also not. However, according to the official narrative, GDP is growing and stocks are flying high. America is just dandy, or so the story goes.
Quietly, without fanfare, the Federal Reserve officially launched its FedNOW service on Thursday, though the instant payment settlement system is available only to banks at this time. A rollout to businesses and then, individuals is expected later this year or early in 2024. The system allows payments to be settled within seconds, eliminating many cumbersome intermediary steps for clearing between banks, businesses and individuals, but primarily, banks. It has been designed to eliminate those decades-old clearing functions.
A huge amount of editorializing has been given to hype the FedNOW system as the precursor to a federal CBDC, by which the Federal Reserve would control access to all currency, everywhere. The frightening hype over digital money relates to more erosion of individual freedom, something many Americans feel strongly about, despite the fact that freedom has been incrementally eroded in the USA for decades. Still, people are right to fear the rise of authoritarian, centralized functions, especially in monetary matters, but, for all intents and purposes, that ship has sailed.
Friday morning, American Express (AXP), Regions Financial (RF), Comerica (CMA), and AutoNation (AN) reported second quarter results.
American Express beat street estimates for the second quarter, earning $2.17 billion, or $2.89 per share, topping Wall Street expectations for $2.80. A year earlier the company earned $1.96 billion, or $2.57 per share.
However, total reserves for credit losses were $1.2 billion, rising from $410 million a year ago. That spooked investors, who sent shares tumbling four percent in pre-market trading and send Dow futures briefly into negative territory.
Regions Financial met expectations and shares were flat leading toward the opening bell. Comerica reported a solid quarter and shares were up 4/5 percent, while AutoNation earned $6.29 in the quarter, topping estimates of $5.91.
Overnight, both the NIKKEI and India's Sensex were lower. European stocks were mixed to lower, with Germany's DAX down half a percent. An hour prior to the open, US stock futures were modestly higher.
WTI crude oil was up ($76.60), while gold trended slightly lower ($1,968.60).
At the Close, Thursday, July 20, 2023:
Thursday, July 20, 2023, 8:48 am ET
The Dow Industrials rose for the eighth consecutive session on Wednesday and there seems to be little standing in the way of a ninth straight winner for the blue chips.
After the bell Wednesday, Netflix (NFLX) reported for the second quarter, missing revenue estimates while increasing its subscriber base. Investors were skeptical, sending shares down seven percent in after-market trading.
Tesla (TSLA) shares were down marginally despite beating revenue and EPS estimates. Traders were more concerned with margins going forward as competition in the EV market continues to heat up.
Thursday morning, the world's largest computer chip contractor, Taiwan SemiConductor (TSMC), reported its first profit decline in four years. Revenue fell 10 percent from the year-ago period with net income down 23 percent. The company also announced that its Arizona fabrication plant would not be operational until 2025, citing a lack of skilled US workers to move the construction towards completion.
The news just grazed the blue chip index, as Dow component Johnson & Johnson (JNJ) reported strong medical device and pharmaceutical sales amounting to EPS of $2.80 per share, up 8.1% from the same period last year and firmly ahead of forecasts. Revenues were also better than analyst predictions.
In anticipation of the opening bell, stock futures are mixed an hour before the ringing, with NASDAQ taking one for the team, down more than 115 points, S&P down about 10 points and Dow futures pointing to a mildly positive or possibly flat open, up just 15 points and sliding.
While stocks waver as earnings season accelerates, the bulk of companies reporting over the next two weeks, gold continues its quiet ascent back near $2,000 per ounce, topping $1,988 overnight. Interest in gold has been bolstered recently by rumors and some factual reporting that the BRICS nations would introduce a gold-backed trading currency at their annual summit, scheduled for August 22-24 in South Africa.
The immediate ramifications of such an endeavor may not be as dramatic for everyday citizens in countries around the world as some pundits predict, but there's little doubt that BRICS, now 15 years on, is about to plunge the world into a currency and monetary vortex. The five original BRICS nations - Brazil, Russia, India, China, and South Africa - have received requests from 20 other nations wishing to join the organization. Countries already aligned via the Shanghai Cooperative Organization (SCO) are also busy aligning themselves with the BRICS, conceiving of a trading bloc that would include most of Asia, Africa, South America, and the Middle East.
Should the BRICS and their allies move forward with an alternative currency to rival the reserve status of the US dollar, a bi-polar or multi-polar reserve and trading regime would quickly evolve, heightening tensions between the East and West, which are already at extremes.
Countries have been moving away from the US dollar for decades, but the freezing and confiscating of Russian assets by the US, EU and British Commonwealth at the onset of hostilities between NATO and Russia in the Ukraine proxy war was the proverbial straw that broke the camel's back, accelerating the ditching of the dollar as a reserve currency for trade purposes. Countries of what's become known as the "Global South" represent a much larger bloc than the advanced Western economies, accounting for as much as 60% of the world's population. A shift away from the debt-based currencies of the West - dollar, euro, yen, pound - towards a gold-backed replacement appears to be imminent.
Mike Maloney, who has been following developments closely, offers an incisive view of developments. His most recent presentation, entitled "S-Curve Rejection of US Dollar Is Here NOW", provides a detailed look at recent activity that should be at the top of everybody's "must see" video lists.
At the Close, Wednesday, July 19, 2023:
Wednesday, July 19, 2023, 9:23 am ET
What can be trusted within the "age of delusion" currently being foisted upon the unsuspecting public?
Surely, news media ensconced within the mainstream framework of formerly trusted sources such as network television and old school newspapers like the New York Times and Washington Post have been proven, time after time, to be less than reliable in terms of delivering factual reporting and the unvarnished truth.
A good deal of the "fake news" is conceived and hand-delivered to producers and editors in the media industrial complex by government operatives, mostly under the auspices of the White House or well-connected PR firms and think tanks. Opinion makers and influencers have, in large part, supplanted rigorous informative news gathering and investigation. Today's journalists are routinely relegated to roles of note-readers, passing along some scribbler's handiwork for general consumption.
The complete lack of standards, morals, and accountability has become an enormous problem, especially in Western nations like the United States, EU member states, and those of the British Commonwealth (looking at you, Canada) which used to pride themselves over their inherent loyalty to media honesty and integrity. That's all been thrown onto the great bonfire of the West's "rules based order," which is shorthand for tyrannical control of information and rules which apply only to enemies or citizens and not to the rule-makers themselves.
Thus, nothing much in this age of delusion can be taken at face value. Not the wide-eyed exclamations of "on the scene" reporters, nor the exhortations of federal officials, nor data supplied by government agencies.
None of it.
None of it can be trusted to be anywhere close to being truthful. The government's ticking off of inflation figures like the CPI or PPI are little more than guesses and goal-seeking computations which can be massaged to deliver an appealing message via subtle adjustments to various variables. Measuring the output and pricing of a country as large as the United States, for instance, is an impossible task, yet it is left in the most incompetent and easily-corrupted hands of government employees. Government statistics roughly approach the equivalent of a game of charades on a global level.
GDP is another government game of misinformation and delusion. Producing little more than government deficits, militarism, and misery, the world has been led to believe the United States has the most vigorous, dynamic, robust economy on the planet, when factually, it's a hollow shell.
The government's own calculation of Gross Domestic Product is GDP = Personal Consumption + Business Investment + Government + Net Exports. According to the linked article, in 2019, U.S. GDP was 70% personal consumption, 18% business investment, 17% government spending, and negative 5% net exports. Breaking down those components, it's easy to see how poorly GDP measures the productivity and actual wealth of a country.
Whenever anybody buys a quart of milk, a new or used car, a house or anything else recordable and measurable, it's added to GDP. Business investment includes purchases that companies make to produce consumer goods, which is basically double-counting. Government fudgers add wholesale costs and retail sales without batting an eyelash. Then adding government spending - which is huge and consists of a lot of overpriced military hardware and various misappropriations of largely borrowed money - and laughably, net exports (since the US has consistently run trade deficits for the last 50+ years) this should always be a negative number and usually is.
Government, for whatever it is worth, doesn't produce much of value to anybody except itself, so it is always and everywhere a dubious addition to GDP and the numbers can be adjusted at will. Consider that the government, via the BEA, wants the world to believe that the United States product is today roughly 6.5 times larger than it was in 1984, less than 40 years ago, rising from $4 trillion to over $26 trillion. See the chart. It's hardly believable.
Over the past 40 years the US has produced much less in terms of manufacturing, but it has spent more on everything thanks to the inflatable currency we call Federal Reserve Notes. Therein lies the crux of the GDP calculus: it's measured in inflated dollars, issued as debt by the Federal Reserve, a central bank hell-bent on debasing itself and its so-called "money."
However sobering the truth may be, we've all fallen for the lies and distortions over the years. In 1984, the median price of an existing home was around $68,000. Today, it over $390,000. What's changed is the purchasing power of the US dollar. We get less for our money every day than the day before. GDP is about the worst measurement of economic strength or weakness possible, perfect for the "woke" amongst us.
The American public, and by extension, that of the entire world, has been fooled by central bankers and their debt-based, fiat currency nomenclature. It will end at some point, but not well.
In the meantime, Wall Street, billionaire investors, and 401k holders alike, all respond like Pavlovian dogs to government pronouncements, announcements, and dictates. Inflation is down, GDP is up. Buy more stocks!
The Dow Jones Industrial Average recorded another winning session on Tuesday, the seventh straight, even after retail sales were shown to be horrible, indicating that nobody's paying attention to data, even when it's lousy. Today, the Dow will go for an eighth straight winner. The longest win streak on record is 13 trading sessions, which ended on January 14, 1987, so there's room to run before getting all excited.
Bear in mind that all of these gains are based on very obviously poor, manipulated, estimated data or just plain apathetic ignorance, greed, and corruption.
Just in: Goldman Sachs Q2 profit falls 62%. Oh, how the mighty are falling. Pay no attention to the man behind the curtain. This ain't Kansas, Toto.
At the Close, Tuesday, July 18, 2023:
Tuesday, July 18, 2023, 9:17 am ET
Stocks started off the week in a stumbling manner, anticipating Tuesday morning's release of the Commerce Department's June retail sales estimates.
The results were mixed, with the headline number of an 0.2% gain rather disappointing. The street estimate was for +0.5%. Even with inflation down to the CPI-reported 3.0%, unadjusted retail sales should be correctly interpreted as flat on a monthly basis.
A number of banks reported earnings, with Bank of America reporting net income up 19% from a year ago, to $7.4 billion, and revenue up 11%, to $25.2 billion. In the pre-market, shares of BAC were criss-crossing the flatline as traders amp up for what appears to be a challenging day ahead.
PNC (PNC), Charles Schwab (SCHW), Bank of NY Mellon (BK), and Morgan Stanley each reported second quarter results, which were mixed. PNC was sharply lower, clipping its full-year forecast for net interest income. Morgan Staley and Mellon were flat to a quarter percent higher, while Charles Schwab was up nearly a full percentage point in the pre-market.
Judging by futures reaction, the retail sales report has soured the mood prior to the opening bell. Dow and NASDAQ futures are both off 36 points, with the S&P down six.
WTI Crude oil, which was as high as $77.26 per barrel last Thursday, is hovering just above unchanged at $74.24. Precious metals are on the move again, with gold up $14 to $$1,970.40. Silver is higher, currently trending around $25.15. Bitcoin is being sold off, down to $29,780.32.
European stock markets are flat to lower, after Asia's mixed returns overnight.
Looks like reality is rearing up again in the form of a crumbling consumer, something Wall Street finds just a bit dismaying. Though bank honchos have been making statements about how resilient consumers have been, they seem to be whistling past their own graves as the economy deteriorates and everybody knows time is running out on dollar hegemony, Ukraine, and the toothless Biden folks.
Things could get really ugly really fast.
At the Close, Monday, July 17, 2023:
Sunday, July 16, 2023, 10:30 am ET
CBDC, otherwise known as Central Bank Digital Coin, is supposed to come closer to realization this month in the form of FedNOW, the Federal Reserve's latest digital payment service. Since March, the Fed has been moving rapidly toward a launch of the new service, with more than 170 financial institutions already in the pipeline.
The bogeyman that is "cashless society", in which a programmable CBDC can determine an end user's limits on anything from travel to alcohol to coffee intake, has been at the forefront of conspiracy theory central for the better part of three years, and yet, here it is July 16, and um, nothing.
FedNOW needn't frighten anybody. It's design is to make moving money more efficient and faster, resulting in real-time payments, which, in case anybody hasn't noticed, have been generally advancing for the past 20 years, via ATMs, credit and debit card payments and online shopping and banking. FedNOW is just a better use of existing technology. It is not a CBDC and it's not based on blockchain, another misconstrued concept, which is nothing more than a digital ledger with added security and safeguards.
Get a grip. CBDCs are not going to become reality for at least another three to five years, if ever, and, even if governments or central banks institute draconian measures, there will still be alternatives like cash, barter, gold, silver, and soon, a BRICS currency.
People need to relax and think clearly when it comes to the dangers of different currencies. The biggest threat to the safety of what you believe to be your money is that it's all a part of a debt-based system, the very one that's eroded the value of the dollar by 98% since the inception of the Federal Reserve, 110 years ago.
That's something people should have concerned themselves with a long, long time ago. Now, it's almost too late.
Earnings season is ramping up and stock pickers are taking note. No matter that companies are smashing expectations (JP Morgan) or just going through the motions (Citi), he generally-accepted narrative is that the economy is doing just fine, the Fed has inflation finally under its thumb, and there may not be a recession after all. So, unless there's some kind of rug-pull event (see BRICS summit, August 22-24) between now and the end of the year, all financial advisors, analysts, and fund managers will receive participation trophies whether they beat the S&P or not.
Bulls will not be whipped nor branded; bears will be spanked and sent back into hibernation by October, unless... BRICS, Ukraine, Biden, writers/actors strike, government shutdown (Sept. 30). Of course, even if half the world was blown up by a meteor strike, Wall Street would find a way to make that a positive for stocks.
Big money must have interpreted wrongly the Fed motto of "higher for longer", thinking they meant stocks. Away we go.
Companies reporting this week:
Wednesday: Goldman Sachs (GS), Haliburton (HAL), Tesla (TSLA), United Airlines (UAL), IBM (IBM), Netflix (NFLX), Ally Financial (ALLY), Zion's Bancorporation (ZION), Discover Financial (DFS), Las Vegas Sands (LVS).
Thursday: Freeport MacMoRan (FCX), Johnson & Johnson (JNJ), American Airlines (AAL), Nokia (NOK), DR Horton (DHI), CapitalOne (COF), CSX (CSX).
Friday: American Express (AXP), Regions Financial (RF), Comerica (CMA), AutoNation (AN).
Strange as it may seem, every time yield on the 10-year note exceeds four percent, it is immediately taken lower, a phenomena that has been in force since the middle of last year, when the Fed's anti-inflation, whatever-it-takes, higher-for-longer rate-hiking mechanism was in full swing. Now that the Eccles Building has nearly an equal share of monetary hawks and doves, the panacea may be close to being fully played out.
This sick kind of game being played at the highest levels of international finance - with the 10-year yielding 3.81% on 6/30, then 4.06% on 7/7, and, finally, back down to 3.83% on 7/14 - should come to a conclusion soon, now that CPI is rising at a mere three percent year-over-year, with PPI almost flat.
The Fed will hike in July and maybe again in September or November, or not at all. Then the market pundits can start playing the "pivot" game again, guessing when the Fed will begin dropping rates, if and when (fill in the blank ___________, choose one or more) unemployment hits 5 1/2 percent, the Ukraine issue is settled, Russia nukes us (or maybe, fingers crossed, just Washington DC), Trump pulls well ahead of all other candidates (wait, he's not already?), the yield curve dis-inverts, the S&P falls below 3,800, BRICS unleash a gold-backed currency, Elon Musk and Mark Zuckerberg are found to be distant cousins.
At that point the Fed can play another evil game with their debt-based currency. After a while, it just becomes tiresome.
The so-called "belly" of the curve and the long end got serious relief this past week, with yield on the 2-year note down 20 basis points, three-year down 29 (wowser!), 5s down 31, 7s down 29, and the 10-year off 23. The 30-year bond didn't like the company above 4.00%, dropping an almost-impossible 12 basis points over the week after rising 20 just the week prior.
Spreads: 2s-10s, -91 basis points, full curve (1-month to 30-year) -144 bps, going in the wrong direction, further inverted from last week, -89, and -127, respectively.
Crude oil (WTI) closed out the week with a drop of $1.56 on Friday, pushing the price back to a more rational $75.20, though it was up nicely from last week's $73.59. Monday's (July 13) peak above $77 was short-lived, but there's no telling how much more bold oil bulls may become, given the recent production quota cuts in OPEC+.
Monday's price for WTI crude was the highest since late April. Earlier this year crude was bouncing between $73 and $83 per barrel, and it pulled back significantly from those levels. While the bulls favor higher prices for fuel (and, consequently, everything else), they may not get their wishes granted as the global economy remains on somewhat shaky ground.
The national average for a gallon of unleaded regular gas increased by three cents this week, to $3.55/gallon. If recent upward price pressure in oil persists, gas could be rising for the rest of the summer, though there seems to be limits to just how high gas prices get before demand slackens. Bearing in mind that there's only a month and a half before kids go back to school and conditions generally slow down come September, so any price increase in gas may be short-lived.
The Southeast remains the cheapest place to buy gas. For the eighth straight week, Mississippi is the only state averaging under $3.00, though it jumped this week to $2.98, the price having been generally flat for nearly two months. Tennessee is next-lowest at $3.07, followed by Louisiana ($3.10), and Alabama ($3.10). Oklahoma checks in at $3.12 and Texas is up four cents to $3.15.
Washington ($4.91) keeps the top spot in the country, but California is closing fast to regain #1 status, up to $4.88 this week. Oregon ($4.58) was up a penny, while Nevada ($4.21) stayed flat, the foursome making up the $4+ club. Arizona ($3.75) and Utah ($3.80) continue to experience relief at the pump.
Prices in Illinois remain elevated at $3.84, the highest in the Northeast/Midwest region. The remainder range between Kentucky ($3.29) and New York ($3.63).
This week: $30,312.80
BlackRock is pushing hard for SEC approval of a Bitcoin Spot ETF. Considering that most of the current SEC officials are either former BlackRock or Goldman Sachs alumni or soon will be working for them, this looks like a sure thing to be implemented within months, likely by the end of September if not much sooner.
With a company like BlackRock looking to take up residence in crypto-land, is that really a desirable neighborhood?
Silver:Gold Ratio: 77.87; last week: 82.93
Per COMEX continuous contracts:
Gold price 06/16: $1,970.70
Silver price 06/16: $24.27
Precious metals priced in $US surged this week, as bottoms seem to have been put in for both gold and silver. Lines in the sand are approximately at $1,930 for gold and $22.50 for silver. Bears were on the prowl, prevailing the past three weeks, but eventually giving in to demand pressure that's been evident for months if not years.
While gold had an excellent week, moving nearly $30 higher, silver was the real story, with a Friday-to-Friday gain of nearly $2.00 per ounce, pushing the silver:gold ratio to a level indicating a potential take-off for the cheaper but more approachable of the pair. There has been a growing chorus of silver bulls crooning about how much higher silver should be. With this week's move, silver has reached a two-month high. How soon we forget that silver was rocketing higher until abruptly stopped short May 4 at $26.23. Should the rally continue, silver might soon be reaching for levels not seen since the heyday of the "great silver squeeze" of 2020 and 2021.
In any case, at some point, possibly quite soon, silver is going to pop beyond $30/ounce, gold to new highs in excess of $2,150. That moment may be about a month from now, at the BRICS summit in South Africa August 22-24, when leading finance ministers of the BRICS countries are likely to make some kind of pronouncement about a rival reserve currency to the US dollar, one that is backed by gold, and possibly even partially backed by silver, a commodity that has been sadly undervalued for a very long time.
It may be of significant utility to keep a close eye on the silver:gold ratio, especially if the current trend holds or accelerates. Silver often leads gold in price movement, so this week's ramp-up may be just the beginning of a trend higher in price and lower on the ratio. A dive in the ratio to as low as the mid-60s by year-end cannot be ruled out.
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) gained significantly through the week, up to $38.51, an increase of $1.37 from the July 16 price of $37.14 per troy ounce.
One more thing: the trend is your friend, not your partner. Don't abuse it.
At the Close, Friday, July 14, 2023:
For the Week:
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