- currencies get sold on Tuesday…
- Silver kicks some tail and takes names later!
Good Day… And a Wonderful Wednesday to you! Well, our pitcher, last night, was going along fine and dandy, until the 2nd baseman made an error, and the Orioles tied the game. UGH! Then the rain came… The teams will attempt to finish the game this morning, and then play the regularly scheduled game. Sort of 2 for the price of 1 today! REO Speedwagon greets me this morning with their song: Riding The Storm Out… which is what we were doing last night, when the loud Thunder Storms rolled through!
The dollar held onto its early morning gains yesterday, and finished the day up 5 index points in the BBDXY… Now would be the time for the Fed Heads led by Jay Powell, to cut rates, to surprise the markets, who have written off a rate cut right now… Do not get me wrong here, I am NOT calling for a rate cut, I’m just saying that the Fed Heads have long been known to attempt to surprise the markets, and this would be their opportunity to do so…
I don’t want to see a rate cut, instead, I would prefer that the Fed/ Cabal/ Cartel, would hike rates or at the very least, leave them unchanged… Which is what I think we’ll see when the Fed Heads meet this month. and then the BIG news will be centered around what Jay Powell, has to say about the future of interest rates… And the markets will trade those words for the future, as if he said this is what we did today… I’m just saying…
Inflation is like kryptonite for me… I abhor it, because it is Gov’t driven, and not a market driven thing… I can’t decide whether I dislike more: taxes or inflation… But, in reality, inflation is just a tax, so I don’t have to choose between the two!
Gold didn’t fare too well on Tuesday, losing the $3 it was down in the early markets, and couldn’t recover, thus ending the day at $2,422.00… Silver kicked some more tail and took names later yesterday, gaining 52-cents to close at $32.03! I love that Silver is marching higher finally… I told you longtime readers years ago, that Silver was in short supply… And with the advent of Solar Panels, that use Silver, that we would see Silver finally get off its duff, and rally… Well, Ok, you’re right, I’m like a broken clock, I give the right time, 2 times a day… Eventually, things come around to my way of thinking… just proving that 1. I was right, 2. things may be evident, but they are imminent…
Up and down, up and down, $79 one day, $78 the next day, then $79 again the next day… That’s what Oil has been doing lately, very narrow trade range, eh? The price of Oil bumped higher yesterday to trade with a $79 handle once again… And the 10-year lost 2 basis points of yield and closed the day at 4.42%…
In The overnight markets last night… The dollar drifted higher overnight, and the currencies all look like they’re ready to go back to their sick beds… A brief reprieve for the currencies sure didn’t last very long… I have a sneaky feeling that the PPT was intervening again, keeping the dollar relevant… Nothing concrete there, just a sneaky feeling… Because sentiment had changed and there were reports all over about how the dollar’s rally had come to an end, and then… Poof! All those stories are gone, and replaced by king dollar articles!
Gold is getting sold this morning, to the the tune of a $12 selloff… And Silver couldn’t hold the $32 figure, as selling as brought Silver back down by 20-cents… Still, a $31.83 price on Silver still looks good to me… But then I used to tell the folks on the trading desk a story about how many years before, I had bought some silver coins for $20, and how I had waited years for Silver to return to that level… And now, it’s $31.83? That’s like manna from heaven for me!
Oil slipped again overnight back to the $78 handle… this is the trading pattern this week so far… During the U.S. session, Oil rises to $79, and overnight it gets brought back down to $78… I know, it’s only a buck difference, but the back and forth gets to me…
And the 10-year’s yield has bumped higher to 4.44%… I keep looking for this yield to have to rise… I’ve told you all before my feelings about how with major buyers of Treasuries walking away from the auction window, it leaves a few to buy plenty of supply of Treasuries, and when they balk at the low yield, not taking in the risk factor, the Gov’t will have no choice other than to raise yields to attract investors… That’s my story and I’m sticking to it!
Last night, the Reserve Bank of New Zealand (RBNZ) announced that they would leave their OCR (official Cash Rate) unchanged, or “restrictive”, as they called it… Their OCR remains at 5.5%… The RBNZ uses a inflation target of 1-3%… In the old days of the RBNZ, The Gov. of the Bank’s job was tied to keeping inflation below 2%! But those were the days my friend, we thought they’d never end, we’d sing and dance… no wait… Yes, those were the days, but it was not useful to start singing a song Chuck!
Any way, the inflation rate in New Zealand remains above their target rate, which is why I among many who observe these things, thought the RBNZ would hike rates again… But they didn’t, an we were wrong!
The thing it did, no change, was bring the spotlight on New Zealand’s interest rate of 5.5%… I say that because, kiwi rallied last night…
Ok, onto other things on my mind this morning… Well, Gold & Silver’s rise has been well documented in this letter. But what I have left out is the rest of the commodities, which have also climbed on the rally tracks… Copper is a bright spot, Uranium is up almost double from where it was a year ago, aluminum, and nickel are also rallying… I think investors around the world, see the $315 Trillion in debt that Countries around the world are holding, and thinking that this is all going to come crumbling down, and only real hard assets will be left as valuable… The dollar, yen, sterling, all circling the bowl, when it all comes crumbling down… I’m just saying…
My friend, Rich Checken of Asset Strategies, had this to say yesterday, in his daily note to his clients: ” The market for precious metals is set for more growth over the next few years. A choppy economy, global geopolitical conflict, and a move to de-dollarization by central banks will continue to drive gold higher. And where gold goes, the rest of the precious metals complex tends to follow.”
Chuck again… I would also add that where Gold Goes, the commodities follow… You know the great investor guru, Jim Rogers, wrote a book many years ago, titled: Hot Commodities… And in it, he proved that historically Commodity bull runs lasted about 17 years… So, if we’re starting a new Commodities bull run… get ready, because the gains now would potentially be much greater as we go along!
For What It’s Worth… I can’t believe he’s doing it again! I’m talking about putting the Special Oil Reserves up for sale… And the article can be found here: US Puts Northeast Gasoline Supply Reserve Up for Sale – Bloomberg
Or, here’s your snippet: “The Biden administration is putting its cache of 1 million barrels of gasoline on the market, after being ordered to liquidate the reserve by Congress.
The sale of the Northeast Gasoline Supply Reserve, equal to 42 million gallons, was announced Tuesday by the Energy Department, which said it was timed to help lower gasoline prices during the summer driving season. Gasoline futures hit a fresh session low of $2.4895 a gallon after the news.
The reserve was authorized in 2014, two years after Hurricane Sandy damaged refineries and left terminals underwater leading some gas stations in New York to go without fuel for as long as 30 days. But the cache, kept in commercial storage terminals in Maine and New Jersey, has never been used, according to a 2022 Government Accountability Office report.
Retail gasoline prices are up about 15% this year, and experts have warned that costs could keep climbing during the busy summer travel season.”
Chuck again… what about that last paragraph that says that gasoline prices are up 15% this year… Ahem, that was after the Oil Reserves were sold before, in an effort to get gas prices down… Fat chance that worked, and the only two things that this release will accomplish is 1. enough supply for the summer driving season (as if there was a question about that in the first place!) and 2. an attempt to sway voters…
Today’s U.S. Data Cupboard finally has something for us today other than Fed Head speakers! The FOMC’s Meeting Minutes from the last meeting on May 1, 2024… The markets take deep interest in these minutes to see if there was something said that they weren’t told in the after meeting press conference… Again, the markets are dying for any indication that rates could be cut… They’ll read into something to make it go the way they want it to go!
To recap… Well, the dollar gained a couple more index points yesterday to add to its 3 index point gain overnight… So, for the day, the dollar gained 5 index points… Gold lost a couple of bucks but Silver kicked some tail and took names later gaining 52-cents on the day! More Oil reserves are being sold… And Chuck’s not happy about that one iota! And the RBNZ lefts their OCR unchanged at 5.50%
Market Prices 5/22/2024: American Style: A$ .6660, kiwi .6117, C$ .7322, euro 1.0833, sterling 1.2718, Swiss $1.0932, European Style: rand 18.2710, krone 10.6981, SEK 10.7352, forint 357.80, zloty 3.9335, koruna 22.8454, RUB 90.34, yen 156.40, sing 1.3490, HKD 7.8060, INR 83.28, China 7.2397, peso 16.62, BRL 5.1233, BBDXY 1,248.39, Dollar Index 104.83, Oil $78.25, 10-year 4.44%, Silver $31.83, Platinum $1,057.00, Palladium $1.018.00, Copper $4.98, and Gold… $2,413.30
That’s it for today… Today, I’m going to be meeting with my good friend, and former boss, Frank Trotter… Tomorrow, I’ll be meeting with classmates, and Friday, I have a lunch with a good friend, Rick S.! I told Kathy that she would be rid of me 3 days in a row, and she smiled like the Cheshire Cat! I’m well aware of the fact that me being here every day, gets in the way of her normal activities… But, there’s nothing I can do about that! Thanks to those of you who sent along good wishes for my darling daughter, Dawn… She’s back in the classroom teaching her kindergartners so all’s well that ends well… The Outfield takes us to the finish line today with their song: Your Love… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler