- the dollar continues to get sold…
- China’s payment system is kicking tail and taking names later!
Good Day… And a Tub Thumpin’ Thursday to one and all! Well, the Cardinals and Royals were rained out last night as heavy showers and thunderstorms moved through our area… The area of St. Louis that got hit hardest by the tornado on May 16th, are still trying to clean up, and they get hit with another rainstorm… I know the feeling of having thoughts that every thing you do, turns our badly… I’m just saying… When you have metastatic cancer, like I do, every little pain brings about thoughts that it’s cancer that has popped up somewhere else! Del Shannon greets me this morning with his song: Runaway… (they don’t make music like that any longer!)
Well, the dollar didn’t get bought overnight again last night, thus making Monday night this week the only time the dollar saw some love… I told you yesterday that I truly believed it was the PPT’s work to intervene and buy dollars Monday night… I’m getting ahead of myself here…
The dollar saw some selling yesterday, and the BBDXY closeed down 4 index points to 1,209.. The euro moved higher in the 1.14 handle, and the rest of the currencies added to the perkiness they showed yesterday morning. The economic data lately isn’t doing the dollar any favors… Durabe Goods were negative, Factory Orders were negative, the Manufacturing index (ISM) was below 50 again, showing contraction, Personal Spending dropped Big Time in April, the weekly jobless claims climb a little more each week, and yesterday the ADP Employment Report for May showed that only 37,000 jobs were added…
All this bad data leads to the markets putting pressure on the Fed Heads to cut rates… To the Fed Heads credit, they have resisted so far, so they can have a look at what the tariffs do to inflation… But if the economic data continues to print all these bad numbers I don’t think the FOMC will think they have no other choice but to cut rates on July 29, their next meeting…
The price of Gold gained $24 and closed the day at $3,375, while Silver gained 11-cents to close at $34.60… Gold is moving along just fine folks, I know it’s not running away here, but we really don’t want that, instead, we would like for Gold to make slow, steady gains, so that new buyers can get on board without having to chase the market higher, which I fear has scared the bejeebers out of potential buyers in the past…
The price of Oil remained trading with a $63 handle yesterday, and the 10-year Treasury took the rate cut sentiment at saw buyers lower the bond’s yield to 4.37%…
In the overnight markets last night… there was more slippage in the dollar, with the BBDXY down 1 index point to start the day today at 1,208… The currencies all look healthier this morning, after a few days of dollar weakness… I’ll point out a few of them that have moved to a new level… Currencies like the Aussie dollar, and the Chinese renminbi, Canadian Loonie, Mexican peso, S.African rand, and the euro… IF the dollar is allowed to continue to weaken, then we’ll see more of these currencies rise to new levels…
Gold is up $20 to start the day today, and Silver is the bright shining start this morning, as it is up over a buck! Silver start the day today trading $35.88 up over $1.20… What bee has gotten in Silver’s bonnet this morning? Well, it appears to me that this is a classic short covering… And if that’s the case, I welcome all those that have closed out their short positions…
The price of Oil remains trading with a $63 handle this morning, and the 10-year Treasury didn’t see any movement last night from yesterday’s close of a 4.34% yield…
But this is Silver’s day!
You know, the bond boys have gone against the market’s sentiment to cut rates for several months now, but all the bad/ weak data now has them willing to see a rate cut is coming, and they shouldn’t keep marking up yields in bonds…
And the dollar, without the PPT, is moving weaker all the time, bit, by bit, step, by step, after awhile they all add up and the dollar is in a weak trend… I found this on Boomberg.com last night regarding something else that could be harmful to the dollar going forward: “A foreign tax provision in US President Donald Trump’s massive fiscal package could trigger a 5% plunge in the dollar and send equities reeling if it takes effect, according to Allianz SE’s chief investment officer Ludovic Subran.
The item, introduced in legislation that passed the US House in May as Section 899, is “exactly what people don’t spend enough time on,” Subran said in an interview on Bloomberg TV on Tuesday. The provision would increase tax rates for individuals and companies from countries whose tax policies the US deems “discriminatory.”
Chuck again… You know, it’s bad when foreign banks begin to diss the dollar… I’m just saying!
I have a longtime reader, Bob, who sends me stuff all the time, and I use quite a bit of his submissions to me… Some time ago, Bob, sent me a note regarding China’s payment system that’s an alternative to SWIFT (U.S. Run) And here’s something to show you regarding how well, China’s system is working, in rivaling SWIFT…
A growing number of countries now prioritize trade with China over the U.S., which has broad implications for diplomacy, investments, and trade agreements.
In 2002, most countries traded more with the U.S. than China.
- The U.S. was the top trading partner for Brazil, Canada, Japan, Korea, Malaysia, Mexico, and the U.K.
- China was the top partner only for Hong Kong.
By 2022, China had surpassed the U.S. as the top trading partner for many countries.
- The U.S. was the top partner for Canada, China, India, Ireland, Mexico, and the U.K.
- China was the top partner for Australia, Brazil, Germany, Hong Kong, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, South Africa, Thailand, and Vietnam.”
Pretty evident isn’t it that these countries using China’s system find it easier and faster to use than SWIFT… That’s just my opinion… and add to that thought these countries don’t want to have their trade frozen if the U.S. decides to not like them any longer!
The U.S. Data Cupboard today has the usual Thursday print… The Weekly Initial Jobless Claims… and the April trade Balance (read deficit) We’ll also see the 1st QTR Productivity print for us… This of course is something that I diss whenever I get the chance, because in essence it’s a pulse on how hard and long did workers work…
Yesterday’s Data Cupboard had the aforementioned ADP Employment Report, and it was a surprise print at just 37,000 jobs created in May… We also had the Fed’s Beige Book print, and in it, it was revealed that the Fed Heads reported a slower economy… hey! I could’ve told them that!
To recap… the dollar got sold again yesterday, and the previous night there was no buying… Chuck lists the problems with the economic data that’s weighing on the dollar right now… Gold sees a slow, steady increase in price, and that’s just fine with Chuck! China’s payment system is beating the pants off SWIFT!
For What It’s Worth… Well, I grew tired of reading all the articles about the upcoming FOMC meeting in July, and the prospects for a rate cut, so I turned to this article about what happens when bad things happen in the world, to Gold… and it can be found here: Gold Soars When Sh*t Hits the Fan – The Daily Reckoning
Or, here’s your snippet: “After a disturbing weekend where the world flirted with WW3, gold and silver flew higher on Monday.
Silver stood out, popping nearly 5%, with the largest silver miner ETF (SIL) rising more than 6%. Spot gold rose mildly, but gold miners jumped by about 5%.
This is the strange part of being a gold/silver bug. Bad news can be great for your portfolio.
It’s important to maintain the right state of mind. We do not root for bad events to happen, we prepare for them.
In this case, gold and silver are soaring due to a combination of factors:
Threat of WW3
Worsening trade war
Global debt bubble
We aren’t happy about these events. We are prepared for them. This is an important distinction. One needs to be careful to not get into a mindset of rooting for negative developments.”
Chuck again… Yes, I find myself at times thinking about how if this bad thing happens then Gold will respond favorably, and then I shake myself out of that dream, and then think about how the economy will suffer… UGH!
Market Prices 6/5/2025: American Style: A$ .6510, kiwi .6047, C$ .7320, euro 1.1421. Sterling 1.3570, Swiss $1.2196, European Style: rand 17.7474, krone 10.0813, SEK 9.5786, forint 353.41, zloty 3.7577, koruna 21.7204, RUB 79.27, yen 143.29, sing 1.2846. HKD 7.8470, INR 85.79, China 7.1788, peso 18.21, BRL 5.6371, BBDXY 1,208, Dollar Index 98.85, Oil $63.00, 10-year 4.34%, Silver $35.88, Platinum $1,130.00, Palladium $1,039.00, Copper $4.99, and Gold… $3,394
That’s it for today, and this week… The Big Bad Dodgers come to town tomorrow night for a weekend series with the Cardinals… Baseball is interesting in that pre-season forecasts for the Dodgers were for them to win more than 100 games… And then the Baseball Gods decided to devastate their pitching staff with injuries, and now they are just 1.5 games in first place! Rain here for the next few days… UGH! I wonder if they will get that doubleheader in today… The Marmalade takes us to the finish line today with their great 60’s song: Reflections Of My Life… (They don’t make music like that any longer!) I know, I already said that above but it holds true here too! I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!
Chuck Butler