- Currencies rally on Monday as the dollar gets sold…
- All the Precious Metals are on the rally tracks!
Good Day… And a Tom Terrific Tuesday to you! And welcome to July… Pfennig tradition calls for this: There I was on a July morning; I was looking for love…. (Uriah Heep) Well, after starting the 9-game road trip 3-0, my beloved Cardinals bats went into cold storage last night in Pittsburgh… UGH! Is the POTUS going to replace the Fed Chair soon? The dollar is really reeling, have you diversified your investment portfolio yet? There’s still time, no worries… These questions and more await your participation in reading this morning, while as Eric Carmen greets me this morning with his song: All By Myself…
The dollar started drifting lower in the morning yesterday, but the selling really picked up, especially when it was reported that the POTUS wants to replace the Fed Chairman, Jerome Powell, with his Treasury Sec. Bessent… Now, the question would be has the Fed lost its independence (supposedly)? Here’s the Hill.com with a comment from Bessent: “Treasury Secretary Scott Bessent said Monday he’d be open to replacing Federal Reserve Chair Jerome Powell as President Trump looks to replace the central bank chief as soon as possible.
Asked if it’s a job he would want to do, Bessent said he would comply with Trump’s wishes” So, if you want to know what’s pushing the dollar down so rapidly? It’s the idea that if the POTUS’s yes man was in the FOMC chairing the committee, that lower interest rates would be on the way… Trump has been quoted as saying that he wants a cheaper dollar, so that exports have a chance… And he’s always been a low rates kind of guy, so how do you get a cheaper dollar? You debase the heck out of it!
Gold also took advantage of the news at hand, and rallied to the tune of $32, to close the day at $3,304… Silver followed Gold’s lead, and gained 19-cents to close the day at $36.11… Well, it’s now July… so Gold’s June Swoon is over… at least I would hope it is…
The price of Oil slid back to trade with a $64 handle, and the 10-year Treasury bond, stayed in neutral yesterday and ended the day with a 4.28% yield.
In the overnight markets last night, it was more of the same, as the dollar continued to get sold, Gold & Silver rallied, and bonds got bought… Here’s the skinny on all that… The BBDXY starts today at 1,186, down 4 index points from yesterday’s close in the U.S. I’ll get into why the dollar is being treated like a rental car in a bit, but first, Gold is back on the rally tracks as it has gained $44 overnight and starts today trading at $3,349… And Silver joins Gold on the rally tracks having gained 44-cents overnight, and starts today trading at $36.47…
The price of Oil bumped back to the $65 handle overnight, and the 10-year Treasury bond’s yield plummeted to 4.20%… So, what’s causing all this dollar selling and bond buying, along with metals?
Well, how about the slide the dollar is on? And where’s the PPT? I think when I imagined the POTUS telling the PPT to stay on the sidelines, I really didn’t think that would happen, but as time goes on… Maybe, just maybe, ’cause you never know! (Andujar) In fact, this slippage by the dollar has been the worst to start a year since 1973! And a weaker dollar means stronger currencies… even those that struggle from time to time to garner attention from traders get a dart thrown at it when the dollar struggles for more than just a couple of days…
And another Sword of Damocles hangs over the dollar, in the form of Inflation… Inflation eats away at disposable income, and causes the economy to stagnate… And what have I told you many times in the past is what causes inflation? Money Supply… This from MoneyMetals.com “Despite the prevailing notion that the Federal Reserve has implemented “tight” monetary policy, the money supply has expanded by more than $600 billion since its low point in mid-2023.
Based on the “true,” or Rothbard-Salerno, money supply measure (TMS), the money supply expanded by 2.2 percent year-over-year in April. That was up from a 1.4 percent increase in March.
On a month-on-month basis, the money supply grew 0.6 percent from March to April. Over the past year, it has increased month over month during eight of the 12 months.”
Chuck again… Lower rates, climbing inflation, all responsible for the weaker dollar, and should be responsible for a rallying Gold price. And don’t forget the chaos going on right now, and that old reliable Debt… Which is currently at $37 Trillion! You know, the last year that I spoke at the Vancouver Symposium I put up a slide to show the crowd that the current debt then was equal to $50,000 per person… That was in 2016… The current debt is now equal to $108,085 per person, and the Debt Clock has a new column and tells us that the debt is now equal to $323, 052 per Taxpayer! Which is probably the way I should report this going forward…
And circling back to Gold & Silver, and my pleading with people to back up the truck and load up on metals, got a boost from a note I received that said that Premiums on the metals are down… not just by a little, but by a lot! In the past, premiums were so high that to fabricate your pooled Gold or Silver, was about priced out… But, no longer folks… So, what are you waiting for now?
And if you want confirmation of that here’s something I found on Kitco.com this morning: “according to Joseph Wu, Vice President and Portfolio Manager at RBC Wealth Management. Wu said that correctly identifying gold’s price drivers has always been difficult. “Yet one relationship that has held up reasonably well over the past 25 years is gold’s inverse correlation with real interest rates,” he said.
And just a reminder that “real interest rates” are the current rate minus inflation, which would put the U.S. real interest rate at 1.50%… So, there’s your confirmation!
And I don’t want to miss talking about the other Precious Metals… Copper, Platinum and Palladium… These 3 metals have all been on the rally tracks… In Copper, the shortage of the metal is driving the price upward, and Platinum along with Palladium are taking advantage of the weak dollar…
Last week I had a dear reader send me a note and ask me what was going on with the Norwegian krone, as it has lagged its kissin’ cousin, krona in Sweden… Well, I explained that the krone is held hostage by the price of Oil and the price of the euro… When both are moving in the right direction, the krone rallies, and when they are spit, like now, the krone is pulled in two directions, and struggles to rally, but the pull from the euro will win out… But you need to be patient…
I also received a note from a dear reader that wanted to send me his newly issued book… Well, I’m reading it now, and it’s good! Its title is: The Little Book of Buying Precious Metals (The right way and how) by Ronald Caparro… And it’s available on Amazon, so there you go! If you haven’t already bought metals, here’s your guide…
The U.S. Data Cupboard today has the June ISM (manufacturing index) which has been in the contraction side of the ledger for some time now, and I would expect for it to remain on the contraction side…
To recap… The dollar is slip sliding away… and there has been no sign of the PPT, and Chuck is wondering if his idea that the PPT was told to cool their heels, really occured? Gold ended its June Swoon, yesterday by gaining $32 on the last day of the month… The euro is climbing faster than a hit song, and bringing the rest of the currencies along for the rides… Chuck explains what’s going on with the krone, and gives a review of a new book…
For What It’s Worth… A week or so ago, I told you about how Germany and Italy had made requests/ demands to the U.S. to repatriate their physical Gold holdings… This is an interview with a German Parliament member who talks of this and more and it can be found here: Why central banks are pulling gold from the U.S. – and why it started in Germany | Kitco News
Or, here’s your snippet: ” A quiet repatriation campaign launched by Germany more than a decade ago has now evolved into a global rethink of who controls sovereign wealth. Peter Boehringer, the architect of Germany’s gold repatriation program, says what started as a debate in one Parliament is now playing out in central banks around the world.
“I started this in 2007. For many years, I was the only one asking these questions in Parliament,” Boehringer told Kitco News. “It took six years to get an answer, and we only got moving in 2013. We brought back 674 Tonnes – that was a success. But I wanted all of it back.”
Between 2013 and 2017, Germany moved 300 Tonnes of gold from the Federal Reserve Bank of New York and 374 Tonnes from the Banque de France back to Frankfurt. The operation was one of the largest physical gold transfers by a sovereign since the end of the Bretton Woods system in 1971.
“We did not even get the original bars back,” Boehringer said. “They were melted and replaced. We had to accept that. But Fort Knox? Not even an audit in decades. It’s unacceptable.”
“The truth is, we trusted the dollar system after World War II because we had no choice,” Boehringer said. “But it’s no longer just about trust. It’s about control. If your reserves are abroad, you don’t really own them.”
That view is now reflected in broader trends. A new 2025 survey by the Official Monetary and Financial Institutions Forum (OMFIF) found that 70% of central banks say U.S. political instability is discouraging dollar holdings, up from 37% last year. One in three reserve managers plan to increase gold allocations in the next two years, with 40% planning to do so over the next decade.
“The central banks have failed not only economically, but morally,” Boehringer said. “We are printing money out of thin air. There is no solid foundation. The whole fiat system is not sustainable. We need something physical again.”
Spot gold is currently trading around $3,330 an ounce, up 27% year-to-date, according to Bloomberg data. Boehringer credited gold’s performance to global central bank demand, monetary debasement, and a growing awareness of “custodial risk.”
“We were once a country of monetary prudence,” Boehringer said. “Now we are debasing like everyone else. The debt brake is in the constitution, but it gets ignored. There’s no willpower.”
Germany holds 3,352 Tonnes of gold, making it the world’s second-largest official holder after the U.S. The Bundesbank says that as of 2023, 50.5% of that total is now stored in Frankfurt, with the rest in New York and London.
Bitcoin is sometimes cited as an alternative reserve asset. But Boehringer, a long-standing libertarian, was cautious.
“Bitcoin is interesting. I like the idea behind it. But it’s not a sovereign reserve asset,” he said. “Central banks will never trust something they can’t control.”
Chuck again… I know, I know that was a log one, but I liked it a lot, so there was that!
Market Prices for 7/1/2025: American Style: A$.6582, kiwi .6111, C$ .7347, euro 1.1811, sterling 1.3768, Swiss $1.2674, European Style: rand 17.5845, krone 10.0204, SEK 9.4391, forint 337.88, zloty 3.5912, koruna 20.8918, RUB 78.46, yen 142.82, sing 1.2708, HKD 7.8500, INR 85.55, China 7.1620, peso 18.66, BRL 5.4376, BBDXY 1,186, Dollar Index 96.51, Oil $65.57, 10-year 4.20%, Silver $36.47, Platinum $1,360.00, Palladium $1,143.00, Copper $5.14, and Gold… $3,349
That’s it for today… Baseball is fickle… one day the team hits like the 1927 Yankees, and the next day they struggle to not get no-hit! I’ll go back to the eye doctor today, so he can look at his handiwork… I don’t like having to put glasses on just to read, but when you only have one eye, they can’t alternate far and close distances… And I’ll take what I’ve got happily, for I can see clearly now the rain has gone (Nash) and colors are so much more vivid! Hang on to your hats for the next announcement from the POTUS… Bill Withers takes us to the finish line today with his song: Lovely Day… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler