- The dollar ends last week drifting…
- Gold ends the 1st half as the Top Dog!
Good Day… And a Marvelous Monday to you! Well, did you have a nice Holiday weekend? It was a hot one here, but it is, Summer in St. Louis, I recall as a kid that we had a week of 100 days, and we didn’t have air conditioning back then! We finally got a room air conditioner; my mom closed all the doors to the room and didn’t allow the kids to open a door and come in during the day! Ahh, great memories! Shirtless, cut off shorts, and a baseball cap were my daily garments! My beloved Cardinals are sinking quickly into an abyss… UGH! Jim Croce greets me this morning with his great 70’s song: Operator…
Well, last week ended with a dud for the dollar… and not a firework gone bad… Thursday was the last real trading day of the week, and Gold lost $33 after the STUPID Jobs Jamboree showed that 147,000 jobs were created in June, thus the markets surmised that the Fed Heads would delay the July rate cut… Silver found a way to squeeze out a 17-cent gain.. The BDDXY was up 1 index point, whoopee! NOT! The price of oil bumped higher to a 67-cent handle, and the 10-year’s yield increased to 4.35% (no Fed Head buying)
On Friday, our holiday in the U.S. Gold was traded in Asia and Europe, and saw it gain $10 on the day, to end the week at $3,325… Silver added another 6-cents to it’s value. Gold closed the week at $3,335… Silver closed the week at $36.85… The dollar drifted and really didn’t get much love after the abomination of a Labor Report… Do you think the currency traders are beginning to see the light? I doubt it, I think that there wasn’t anyone at the trading desks, except some wet behind the ears assistant who was given instructions to not take any positions! The BBDXY ended the week at 1,191…
The price of Oil remained in the $67 handle on Friday, and the 10-year ended the week with yield of 4.34%…
In the overnight markets last night.. The traders finally came around to thinking that the Jobs report in the U.S. was enough to scare the Fed Heads away from cutting this month, and they bought dollars… The BBDXY gained 4 index points overnight, and starts today at 1,195… Gold and Silver are taking a shellacking this morning, because of the Jobs Report… Gold is down $33 to start our day, and Silver is down 73-cents… It’s the short paper traders again adding to the negative thoughts in the markets about Gold & Silver right now…
My good friends and former publishers, Mary Ann and Pamela Aden still have their weekly newsletter, and they depend on the charts for their forecasts, and this is what they had to say about Gold right now… “As for gold, a mild D decline is now in force, and it’ll stay mild as long as gold stays above $3250. We recommend taking advantage of this weakness to buy more if you want to add to your positions.” Of course, you can find the Aden Sisters at www.Adenforecast.com
And what do I always say when Gold get the snot knocked out of it by the short paper traders? Use it as a buying opportunity to buy Gold & Silver at cheaper prices…
The price of Oil remains trading with a $ 67 handle to start our day today, The Saudis have reported a higher Oil price for their black Gold, Texas Tea… So, that bodes well for the price of WTI the Gold price I use… And the 10-year starts our day/ week with a 4.35% yield…
The Good folks at GATA sent me this note: “Monday was the last trading session of the first half of this calendar year, and precious metals have beaten the socks off all other investment categories. Platinum is up 47%, palladium 24%, gold 23%, and silver 22.7%. Even copper previously recognized as monetary in coinage was up 21%”
So, will the 2nd half of 2025 be as good to the precious metals as the 1st half was? Well, that’s the $64 question now, isn’t it? In my humble country boy opinion, I would say that it will… The chaos in the world is just beginning, and the debt in the U.S. will continue to grow like a weed, and the fact that for the most part, U.S. investors still don’t own any Gold… Once they figure out that the U.S. in deep trouble, they’ll finally call up their investment advisor and ask if they can sell him some Gold… After being told no, they will then hopefully call my metals guru at EverBank, Tim Smith, at 1-800-926-4922…
And the rate cuts in the U.S. are still on the docket, folks… They will come, you can bet your sweet bippy… It was reported on Friday that the POTUS said that he won’t fire Fed Head Chairman, Jerome Powell, but… Powell, might be up for censure from Congress… Any way you look at this, Powell is out, Bessent is in, and there will be a flood of rate cuts… While all of that is good for Gold… it’s bad for the dollar and the U.S. economy… But that’ll be somebody else’s problem in the future… right?
Well, these knuckleheads had better be ready to eject from this mess, if it comes back to bite us all before their terms are up…
If I were king… The first thing I would do is fire all the accountants in the Gov. That has anything to do with all the fraudulent economic reports… Then I would order all of DOGE’s findings to be corrected… Speaking fraudulent reports… The Jobs Jamboree last week for June was nothing but fiction, folks… The ADP Employment Report for the same period was negative -33,000 jobs in June… Now, would you prefer to rely on the ADP, or the Gov’t for correct reporting of jobs created?
The dollar is in trouble folks… Got Gold? The dollar has lost over 10% in the first half of this year, and that means your stocks and bonds are down 10% before they start adding up their gains… And to me, I think that this 10% loss is just a harbinger of what is to come for the dollar… I could be wrong about that, but as far as I can see with the ways things are going, it’s just logical thinking…
Oh, and I almost forget to include this from the daily hodl.com “And add this little ditty to the Jobs report, that many won’t take the time to see: The latest data from the Federal Reserve Bank of St. Louis (FRED) shows that M2, which tracks the total amount of readily available money circulating in the US financial system, stood at $21.942 trillion as of May 2025, shattering its previous peak of $21.749 trillion recorded in April 2022.”
Chuck again… and you know what I say about money supply, don’t you? Well, you should by now… But here goes: Money Supply is inflation… So, with the money supply rising at this pace, why should the Fed Heads cut rates? There’s plenty of money circulation on the economy, and along with it comes…. inflation!
See? I’ve got a bag full of reasons why the dollar is in trouble, but… I can’t go through them all here, maybe tomorrow, I’ll go through some more!
And longtime reader, Bob, sent me a note that he found, that explains why the Chinese have stopped showing up that the Treasury auction window… here it is: In 2011, three years after it rescued the US from the great financial crisis, the Fed asked the PBOC to buy an outsize portfolio of Treasuries. China obliged, then watched helplessly as Quantitative Easing devalued them. Now, says central banker Kathleen Tyson, “China holds its USTs to maturity rather than sell at discount, then reinvests the proceeds in its BRI and BRICS partners”. In 2015, the US Treasury began weaponizing Treasury Bonds through sanctions and expropriations of Venezuelan, Afghani and Russian central bank reserves, alarming the PBOC (and most central banks). This year the US dollar has lost 15% of its value against global currencies. By 2025, says Ray Dalio, unsupportable borrowing will keep the economy in permanent recession⁴.
Chuck again… This is all going to come to tears folks… The Gov’t keeps spending like a drunken sailor, and needing to sell Treasuries to finance their spending sprees, and that requires someone to buy those Treasuries… What happens when only the Banks required to take on Treasuries (the Primaries) when the Primaries are the only buyers? Uh-Oh!
The U.S. Data Cupboard late last week had the Trade Deficit for May, which was $71.5 Billion… And the Jobs Jamboree, which I told you last Thursday at the end of the letter that it had printed like that… I just don’t get how the markets can take the fraudulent numbers that the BLS prints each month at face value… The markets seemed to think that 147,000 jobs created in June was a good number, and showed a strong economy… Let me be the first to tell them that 24,000 jobs were created out of thin air by the BLS after they had received the surveys… Now, would the markets have a different outlook if the number had been reported as surveyed at 123,00 jobs? Maybe, but who knows, because the markets never stop to look under the hood… And then there was this little ditty:
And add this little ditty to the Jobs report, that many won’t take the time to see: A June jobs report that is consistent with negative prints for real wages and industrial production is deemed by the masses and the markets to be solid. Adjust for the decline in the workweek and the Birth-Death model skew, and guess what? Private sector payrolls sank -400k last month. Let’s hope the Fed finds the time to scratch the surface, just a little. This was a weak report, my friends!
Edward Dowd @DowdEdward
The U.S. Data Cupboard this week is pretty barren… Only the FOMC Meeting Minutes from their last meeting are offered up for us to view on Wednesday… Other than that it’s all junk reports… Like Consumer Credit (read debt), and the Initial Weekly Jobless Claims… that last one is not so much junk, but it’s not market moving, unless it is… Like I always say, the markets are fickle…
To recap… Last week ended like a dud for the dollar… Gold was treated badly, but Silver was a welcome guest… There was no Fed Head buying of Treasuries, so the yields of those bonds rose…. The 10-year, that we follow ended the week with a 4.34% yield, it started the month at 4.25%… That was when the markets thought the Fed Heads would cut rates this month… That, no longer, is the case…
For What It’s Worth… This article came to me late last week, after I had already quit writing for the week. It’s from MarketMetals.com and its author is Mike Maharry, who is a well-respected analyst… The article is about are interest rates too high? And it can be found here: Are Interest Rates Too High?
Or, here’s your snippet: “A lot of people think they are, and a growing chorus of voices is calling on Federal Reserve Chairman Jerome Powell to cut rates.
Are they right? Does the central bank need to step in, slash interest rates, and loosen monetary policy?
The honest answer to the question is that nobody really knows. However, from a historical perspective, interest rates are low, and monetary policy remains loose.
What Are Interest Rates?
Before we delve into whether the current interest rate environment is too high or too low, we need to understand exactly what an interest rate is.
Fundamentally, it is a price – the price of borrowing money.
Since interest rates are prices, they behave in the same way as any other price in a free market. As the demand for money increases, interest rates (the cost of money) tend to rise. When the demand for money wanes, rates fall. In other words, if left alone, interest rates will set themselves based on market activity.
When central planners intervene and “set” interest rates, it inevitably creates problems.
Think about it. Would you trust government central planners to set the price of tennis shoes? Or iPhones? Or automobiles? Imagine what would happen.
In fact, we don’t have to imagine. We have countless examples of government price controls going haywire. Inevitably, we end up with shortages and/or overproduction.
Historically, rates aren’t high.”
Chuck Again… Regular Readers of this letter know that I side with Jerome Powell, keeping rates unchanged for now, there will come a time in the near future when cutting rates will make some sense, but to do it now, while money supply is soaring would be disastrous! I’m just saying…
Market Prices 7/7/2025: American Style: A$ .6502, kiwi .6000, C$ .7317, euro 1.1727, sterling 1.3615, Swiss $1.2631, European Style: rand 17.7532, krone 10.1243, SEK 9.52, forint 340.70, zloty 3.6234, koruna 20.9933, RUB 78.65, yen 145.43, sing 1.2787, HKD 7.8499, INR 85.56, China 7.1742, peso 18.73, BRL 5.4211, BBDXY 1,195, Dollar Index 97.36, Oil $67.00, 10-year 4.35%, Silver $36.15, Platinum $1,350.00, Palladium $1.136.00, Copper $5.03, and Gold… $3,303
That’s it for today… On July 4 & 5, I smoked some pork steaks that turned out to be ultra-yummy! The secret of cooking pork steaks is to take it slow and low… 6.5 hours later we sat down to eat… Friday and Saturday were beautiful hot days, and then Sunday it rained… I started reading a new book titled: November 22nd , 1963, because it came highly recommended by good friend Duane… It’s a thick book, like my Cormoran Strike books, so I’ll read 100 pages or more a day… Earth, Wind & Fire take us to the finish line today with their great song: September… Now, if that song doesn’t get you movin’ and groovin’ Well, I’ve said enough! I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler