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Fed Cuts Rates, Signals Slower Pace for Future Reductions
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The Federal Reserve cut interest rates by 0.25 percentage points to a range of 4.25% to 4.5%, marking its third consecutive rate reduction in 2024. However, Fed Chair Jerome Powell signaled a more cautious approach to future cuts, indicating fewer reductions in 2025. This announcement led to a market reaction, with stock prices falling and Treasury yields surging. The Fed's decision reflects its ongoing efforts to balance economic growth with inflation control.
Gold's Tug-of-War: Fed Policy vs. Economic Uncertainty
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Gold prices edged higher Thursday, recovering from recent lows as traders reassessed the Federal Reserve's latest policy stance. The precious metal's rebound comes amid a complex economic landscape, with investors balancing the Fed's hawkish signals against ongoing geopolitical uncertainties and upcoming U.S. economic indicators.
Fed's 'New Phase': Balancing Growth and Inflation Concerns
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The Federal Reserve has entered a new phase, with Chair Jerome Powell signaling a renewed focus on inflation despite recent rate cuts. After lowering rates by 1 percentage point, the Fed now aims to move cautiously, citing core inflation still above the 2% target. Policymakers have adjusted their rate projections upward for 2025, indicating a more hawkish stance than previously anticipated.
UBS Bullish on Gold in 2025
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UBS forecasts gold to reach $2,900/oz by the end of 2025, driven by continued central bank accumulation, increased demand for portfolio hedges, and expected lower interest rates. Despite recent price fluctuations, gold has outperformed the S&P 500 this year, and UBS maintains a bullish outlook due to geopolitical uncertainties, potential US dollar weakness, and the Federal Reserve's anticipated rate cuts.
Third Time's the Charm: Fed Cuts Rates, Eyes Slower 2025 Pace
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The Federal Reserve is set to lower interest rates for the third consecutive time, with a 25-basis point cut expected on December 18. This reduction would bring the federal funds rate to a range of 4.25% to 4.50%, marking a full percentage point decrease since September. However, economists anticipate a slower pace of easing in 2025 due to persistent inflation and economic resilience.
Hawkish Cut Expected as Fed Navigates Economic Uncertainties
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Wednesday's Federal Reserve meeting is anticipated to deliver a "hawkish cut," combining a 0.25% rate reduction with a more cautious stance on future cuts. Factors influencing this outlook include above-target inflation, stronger-than-expected economic growth, and uncertainties surrounding President-elect Trump's fiscal policies. The Fed's updated projections and Chair Powell's comments will be closely scrutinized for insights into the pace of future rate cuts.
Fed's 2025 Roadmap Keeps Gold Market on Edge
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Gold traded near $2,648 per ounce ahead of the Federal Reserve's last policy meeting of 2024. Markets expect another rate cut, but uncertainty surrounds the pace and number of cuts in 2025. Traders are keenly awaiting the Fed's economic projections and policy statement for insights into future monetary policy, particularly in light of potential inflationary policies from the incoming Trump administration.
Gold Holds Steady as Markets Await Fed's 2025 Outlook
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Gold prices remained stable on Wednesday as investors cautiously awaited the Federal Reserve's policy decision and 2025 economic projections. Spot gold dipped slightly to $2,643.79 per ounce, with markets anticipating potential interest rate cuts in the coming year. The Fed's guidance on future rate adjustments will be crucial for gold's trajectory, as lower rates typically boost the appeal of non-yielding assets like gold.
Partisan Divide Deepens on Economic Outlook for 2025
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A new AP-NORC poll reveals a stark partisan divide in economic outlook as 2024 ends. Despite positive economic indicators, Democrats' optimism has plummeted following Trump's election victory. Conversely, Republicans, while critical of the current economy, express hope for 2025 under Trump's leadership. This shift highlights how political affiliation increasingly influences economic perceptions, potentially challenging Trump's ability to translate economic policies into political success.
Gold Slips as Fed Signals Caution on 2025 Rate Cuts
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Gold prices fell 0.6% to $2,636.89 per ounce as a stronger U.S. dollar and rising Treasury yields weighed on the market. Investors are focused on the Federal Reserve's upcoming policy meeting, where a 25 basis-point rate cut is expected. However, cautious sentiment surrounds the Fed’s projections for 2025, with expectations of a slower pace of rate cuts amid inflation concerns and economic resilience.
PBOC Reignites Gold Purchases Amid Trump's Comeback
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China's central bank has restarted gold purchases after a six-month hiatus, adding 160,000 ounces to its reserves in November. This move coincides with Donald Trump's re-election and suggests China is preparing for potential trade tensions. The People's Bank of China now holds 72.96 million ounces of gold, reflecting its strategy to diversify reserves amid rising U.S.-China tensions.
Bitcoin Surges Past $106,000 as Trump's Crypto Plans Ignite Market
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Bitcoin hit a new all-time high of $106,533 on Monday, December 16, 2024, driven by President-elect Donald Trump's proposal for a national cryptocurrency reserve. The surge extends Bitcoin's year-to-date gain to 192%, with the total cryptocurrency market value reaching $3.8 trillion. Trump's pivot towards crypto-friendly policies has energized markets, with his plans to establish a strategic Bitcoin reserve comparable to the nation's oil stockpile.
Gold Edges Up as Markets Await Fed's Rate Decision
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Gold prices inched higher on Monday, supported by a softer dollar, as the market braces for the Federal Reserve's policy meeting. Investors are expecting a 25-basis point rate cut and insights into the Fed's 2025 outlook. The anticipation of lower interest rates is bolstering gold's appeal, with analysts projecting further gains in the coming year.
Citi Shares Outlook for Commodities in 2025
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Citigroup's 2025 commodities forecast paints a mixed picture, with oil and base metals facing bearish conditions while gold shines. The bank projects an oversupplied oil market, leading to price declines, but sees gold benefiting from economic uncertainties and a weakening job market in the U.S.
Fed Independence at Crossroads: Powell Braces for Trump Shake-up
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Federal Reserve Chair Jay Powell's commitment to policy independence may be challenged when Donald Trump retakes office in 2025. Despite Powell's firm stance on separating monetary policy from political influence, Trump's potential economic agenda—including mass deportations, tariffs, and tax cuts—could significantly impact the economy. With inflation already above the Fed's 2% target and a resilient economy, the Fed may need to keep interest rates higher for longer, especially when considering the potential effects of Trump's fiscal policies.
Economists Forecast Fed's Cautious Rate Cut Approach
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The Federal Reserve is poised to implement its third consecutive interest rate cut in December, lowering the benchmark rate to a range of 4.25% to 4.50%. However, economists surveyed by Bloomberg anticipate a more cautious approach in 2025, with only three rate cuts expected next year instead of the previously projected four. This shift is attributed to persistent inflation concerns and a robust economy, prompting the Fed to balance its monetary policy carefully.
Unemployment Claims Surge by 17,000 as Labor Market Weakens
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U.S. jobless claims surged to 242,000 last week, marking a two-month high and exceeding economists' forecast of 220,000. The rise, which coincided with the Thanksgiving holiday, reflects a broader trend of elevated unemployment claims near three-year highs. Continuing claims also increased to 1.89 million, suggesting prolonged job searches for many Americans. California, Texas, and New York led the spike in claims, while only four states reported declines.
World Gold Council Forecasts Tempered Growth for Gold in 2025
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The World Gold Council (WGC) predicts a moderate increase in gold prices for 2025, contingent on stable market conditions. This forecast follows an exceptional year for gold in 2024, with prices hitting numerous record highs and total demand surpassing $100 billion in Q3. The WGC suggests potential upside if central bank demand exceeds expectations or if economic instability drives safe-haven demand. However, a reversal in interest rate cuts could pose challenges. The outlook considers factors such as expected rate cuts, geopolitical tensions, and the impact of U.S. policies under a second Trump term.
Big Bank Execs Predict Prosperous 2025
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Several major US banks express optimism for 2025, citing positive economic indicators and the potential impact of the incoming Trump administration. JPMorgan Chase, Citigroup, and PNC executives highlight expectations of increased revenues, higher investment banking fees, and improved trading performance.
Gold Prices Pause Before Key Inflation Figures
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Gold prices remain flat as markets brace for crucial US inflation figures. The upcoming CPI data could influence the Federal Reserve's decision on interest rates and shape expectations for monetary policy in 2025. With spot gold at $2,695.91 per ounce, investors are closely watching for potential catalysts that could drive the precious metal's next move.
Oil Prices Teeter as Syrian Upheaval Meets Chinese Stimulus Plans
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Oil prices wavered Tuesday following Monday's gains, influenced by Syria's regime change and China's economic stimulus plans. WTI crude rose slightly to $68.52 per barrel, while Brent crude dipped to $72.03. The fall of Assad's regime in Syria introduced a modest risk premium, despite Syria not being a major oil producer. Concerns about potential impacts on Iran and Russia, key oil producers and Assad allies, contributed to market uncertainty. Meanwhile, China's pledge for monetary easing and fiscal stimulus provided some support to oil prices.
Crackdown on Corruption: US and UK Target Illegal Gold Networks
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The United States and the United Kingdom have imposed new sanctions targeting the illicit gold trade, which they claim funds Russian President Vladimir Putin's war in Ukraine and fosters corruption. The UK froze the assets of five individuals, including Kamlesh Pattni, a businessman accused of smuggling gold and laundering money through a global network. These sanctions aim to disrupt Russia's use of illegal gold to evade sanctions and bolster its military efforts.
Unexpected Economic Boost in Japan Fuels Monetary Policy Speculation
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Japan's economy grew at an annualized rate of 1.2% in Q3 2024, surpassing initial estimates of 0.9%. This stronger-than-expected growth has intensified speculation about an imminent interest rate hike by the Bank of Japan. The revised data, showing a 0.3% quarter-on-quarter expansion, strengthens the case for monetary policy tightening and has contributed to the yen's recent appreciation.
China's Gold Appetite and Syrian Turmoil Propel Bullion Prices
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Gold prices climbed as China's central bank resumed bullion purchases after a seven-month hiatus, adding 160,000 fine troy ounces to its reserves. The surge was further fueled by heightened geopolitical tensions in Syria, where President Assad's regime collapsed, potentially destabilizing the Middle East and increasing safe-haven demand for gold.
BRICS Stands Ground: Payment System Plans Advance Despite US Warnings
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Despite threats from US President-elect Donald Trump to impose 100% import duties, BRICS nations are continuing their work on a new settlement system. Russian Deputy Foreign Minister Alexander Pankin clarified that the project is not about creating a new currency, but rather developing an alternative payment mechanism. This move signifies BRICS' determination to reduce reliance on the US dollar in international trade.
US Jobs Data in Focus as Gold Prices Hover Near Record Highs
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Gold prices remain stable as investors anticipate the release of the US nonfarm payrolls report, which could influence the Federal Reserve's interest rate decisions. Strong labor data might discourage aggressive rate cuts, potentially impacting gold prices. Despite recent fluctuations, gold has seen significant gains in 2024, supported by rate cut expectations and central bank purchases.
INCREMENTUM Shares Monthly Gold Compass - December 2024
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Incrementum has released its December 2024 Gold Compass report, offering a comprehensive analysis of the gold sector. Co-authored by Ronald-Peter Stöferle and Mark J. Valek, the report examines key factors influencing gold, including real interest rates, debt, and inflation, providing investors with valuable insights into the precious metals market.
Holiday Week Sees Unexpected Surge in Unemployment Applications
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US unemployment benefit applications rose to a one-month high of 224,000 in the week ending November 30, surpassing economists' expectations of 215,000. This increase of 9,000 claims coincided with the Thanksgiving holiday, a period known for data volatility. Despite this uptick, the labor market remains relatively stable, with continuing claims dropping to 1.87 million. The rise in initial claims, coupled with recent job cut announcements from major companies, may indicate subtle changes in the job market, though overall layoffs remain low.
Small Business Wage Spike Breaks Two-Year Trend
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Wage growth at the smallest US firms accelerated in November, with businesses employing fewer than 20 people seeing a 4.2% annual rate increase. This marks the biggest jump since early 2022 and could concern Federal Reserve policymakers monitoring inflation pressures. The trend extends to firms with 20-49 employees, while larger companies saw slower or unchanged wage growth.
Macquarie Bullish on Gold: $3,000 Target for 2025
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Macquarie Group forecasts gold to reach new heights in 2025, potentially challenging $3,000 an ounce. Analysts cite Fed rate cuts, central bank buying, and possible Chinese demand as key drivers. Despite a potential struggle in Q1 due to a strong dollar, gold is expected to rally thereafter, with ETF holdings showing room for growth.
Bitcoin Crosses $100K as Crypto-Friendly Atkins Tapped for SEC
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President-elect Donald Trump has nominated Paul Atkins, a former SEC commissioner and cryptocurrency advocate, to chair the Securities and Exchange Commission. Atkins is known for favoring clearer, less restrictive regulations on cryptocurrencies and has criticized the Dodd-Frank legislation. His appointment signals a potential shift towards a more crypto-friendly regulatory environment, contrasting with the approach of outgoing SEC Chair Gary Gensler. The crypto industry has welcomed this nomination, with bitcoin surging above $100,000 following the announcement.
Mexico's Minimum Wage Hike Undermined by Peso Depreciation
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Mexico has announced a 12% increase in its minimum wage, raising it to 279 pesos per day starting January 1, 2025. Despite this nominal increase, the depreciation of the Mexican peso by 18% over the past year means that the wage effectively decreases in dollar terms, now equating to about $13.75 per day compared to $14.25 last year. This adjustment, decided by a commission including government, labor, and business representatives, aims to counteract domestic inflation, which is currently around 4.75%. However, the new wage still falls short when compared to U.S. minimum wages.
Wall Street Bullish on US Economy for 2025
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Major financial institutions are predicting strong economic growth for the US in 2025, with forecasts exceeding current consensus estimates. Wells Fargo leads with the highest S&P 500 target of 7,007, while Bank of America projects 2.4% GDP growth. Analysts expect a shift from tech dominance to broader market participation, favoring value stocks and GDP-sensitive sectors.
Gold Holds Ground as Global Political Tensions Rise
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Gold prices stabilized around $2,635 an ounce as investors evaluated political unrest in South Korea and France. Despite a 5% decline from October's record high, gold remains up 28% this year, supported by US monetary easing and central bank purchases. Upcoming US jobs data and the Federal Reserve's December meeting are key factors influencing gold's near-term outlook, with a potential 25-point rate cut expected.
Fed Officials Signal Potential December Rate Cut
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Top Fed policymakers have hinted at the possibility of a December interest rate cut while maintaining flexibility in their approach. Christopher Waller, John Williams, and Raphael Bostic all indicated that rate reductions are likely in the coming year, but they stopped short of guaranteeing a cut at the December meeting. The officials emphasized the importance of upcoming economic data in shaping their decision, highlighting the Fed's data-dependent strategy.
Gold Set for Biggest Monthly Fall in 14 Months
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Gold prices rose on Friday due to a weaker dollar and geopolitical tensions, but are still set for their largest monthly decline since September 2023. The 3% drop in November is attributed to Donald Trump's election victory, which sparked a dollar rally and expectations of higher interest rates. Despite Friday's gains, gold remains on track for a 2% weekly fall, with investors now eyeing upcoming U.S. economic data for clues on future Fed rate decisions.
Big Banks Face Steep Decline in Macro Trading Profits
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Wall Street macro traders are facing their worst year since the pandemic, with revenues from foreign exchange and rates trading expected to drop significantly. Over 250 major financial institutions are projected to see a 17% decline in rates trading revenue and a 9% decrease in currency trading revenue compared to last year. This downturn is attributed to tighter margins, reduced investor confidence, and a challenging macroeconomic environment.