- currencies & metals eke out gains on Friday’
- Trump’s tariffs go into effect
Good day… And a Marvelous Monday to you! And Welcome to February! This is going to take me extra time to type this letter out this morning, as my fingers aren’t exactly cooperating… Do you ever have days like that? No football yesterday after having weeks of being inundated with games… Well, no football as long as you don’t count the silly Pro Bowl… It was a beautiful weekend down in S. Florida, and I took well advantage of the brightly shining Sun… I go back to St Louis on Wednesday this week for my next infusion…. Could be my last we’ll have to wait-n-see. Chris Stapleton greets me this morning with his song: Tennessee Whiskey
Well, yesterday was Groundhog Day, and Punxsutawney Phil has forecast 6 more weeks of winter this year…. Sorry, everyone up north…. There was a woman years and years ago, that worked for me, that adored Groundhog Day, and would hold a big party on that day…
OK enough of all that silliness… The Trump tariffs went into effect on Saturday… And the markets went loco over them with the dollar bugs winning the day, and the BBDXY gaining over 9 index points! The euro, which a couple of days ago was trading in the 1.05 area, has fallen to a 1.02 handle. The Canadian dollar fell 2 -cents to trade with a 67-cent handle, and the peso, which I had begun to think it was stuck at 20 something, an would never move, was trading with a 21 handle…And the Chinese renminbi weakened to 7.24 from 7.22…. Yes, al the currencies came under intense fire from the dollar, but these are the ones targeted by the tariffs right now, that is….
Gold spent a good part of the day on Friday trading above $2,800… And from here I’m going to let Ed Steer tell you his thoughts on what happened to Gold & Silver: “there was no way the collusive short traders were going to let Gold close above $2,800″…
Chuck again, but to me this was a mere pittance to what happened overnight! , And we’ll go there in just a minute, but first… Gold closed Friday up 50cents, to close the week at $2,975.90, and Silver lost 35-cents to close at $31.22… The price of Oil bumped higher to a $73 handle, and the 10-year closed the week at 4.51% yield…
OK now, in the overnight markets last night, but wait, do you really want to know? You do? OK, but you’re not going to like it… The dollar has gained 15 index points to 1,,322… The currencies are in shambles, and Gold is down $26, at this point and Silver is down 50-centsalso to this point…now, did I really have to go through all of that?
Will this engineered takedown of Gold & Silver ruin Gold’s strong demand and start to the new year? I doubt it, if past engineered takedowns indicate anything, Gold & Silver had come back slow at first and then suddenly, and then move past its previous high…
HOLD THE Phone! The markets turned around in the middle of the night! Gold is up $16 and not down $26, and is trading above the $2,800 figure again… Silver is up 15-cents, and is trading above $31… The BBDXY is up just $8 and not 23 index points… I’m sorry about that! Before I retired last night, I made some notes about the goings on in the dollar and metals… I won’t get caught doing that again! the price of Oil trades with a $74 handle…
Everything is a mess this morning folks, so go back to bed if you can or go get another cup of coffee at the office and try to get through the day. I was beside myself this morning when I read what the hell was going on… Something needs to be done about all this market manipulation… I’m serious..
I’ll begin by writing a letter to the SEC, and my congressman…. I doubt it’ll get past their aide, but I’ve got to do something! And I encourage you to join me…
The short paper traders, and the PPT, and the Fed Heads are responsible for these market manipulations… They are enemy #1
Ok, didn’t I tell you that this was going to happen? What? The countries that we placed tariffs on are going to retaliate with tariffs to the U.S. Mexico and Canada have already announced retaliation news, Canada said they will place a 25% tariff on exports to the U.S., Canada hasn’t yet announced their retaliation amount… can you say, “Global Trade War” or “Global Depression”… If not, you’ll need to learn to say then for they will become a daily used phrase in the near future…
Last Friday’s U.S. Data Cupboard had the PCE (Personal Consumption Expenditures) that is the Fed Heads pet inflation calculator printed for Dec, and while one group (the naysayers) called report bang on, the other group (they question at all costs) saw the print and said see! Inflation isn’t going anywhere while the Fed Heads are cutting rates… The PCE year on year, was 2.8%. I don’t have to tell you that I’m a founding member of the 2nd group, and I would have said, inflation is still strong!
This week’s Data Cupboard has Dec. Factory Orders tomorrow… Wednesday we get the ADP Employment Report and Friday we get the Jobs Jamboree… Ooh Boy! I wonder what the BLS has cooked up for us this month?
To recap, Gold spent most of the day on Friday t… trading above $2,800, only to run into short paper trading to bring it back below $2,800, and then at first last night it was sinking faster than the Titanic only to turn around in the middle of the night and trade over $2,800 this morning..
For What It’s Worth… Well, a long time ago, I told you dear reader that anytime I saw something that David Rosenberg had done for free, I would use it! And so it is with piece as David goes through the tariffs… And it can be found here:Trump’s tariff gamble: Economic fallout, market chaos, and gold’s record surge – David Rosenberg | Kitco News
Or, here’s your snippet: “President Donald Trump is moving forward with his plan to impose 25% tariffs on imports from Canada and Mexico starting Saturday, the White House confirmed, rejecting earlier reports that the deadline might be pushed back to March 1. The move threatens to disrupt nearly $1.6 trillion in annual trade, impacting businesses, consumers, and financial markets as uncertainty spreads.
Economist David Rosenberg, Chief Strategist at Rosenberg Research, warns that Trump’s aggressive trade policy could lead to severe economic consequences. However, there is still a chance Trump could “wiggle out” of the tariffs.
While Trump insists the tariffs are aimed at pressuring Canada and Mexico to curb illegal immigration and fentanyl trafficking, Rosenberg believes there’s more at play. “It’s always hard to know with Donald Trump what’s going to happen in the end—he’s so unpredictable.”
The tariff threats have already hit the Canadian dollar, with USD/CAD briefly surging past 1.45 before reports of a possible delay sent it lower. Rosenberg pointed out a simple trade opportunity if Trump backs off: “If the threat was fully alleviated, we’d probably rally back to 1.40—right where the loonie was before Trump first mentioned tariffs back in November.”
While inflation has moderated in recent months, Rosenberg emphasized that tariffs could complicate the Federal Reserve’s policy stance. “Inflation is a process, not a one-time event. If oil is hit with a tariff, you get a price shock, but that’s not necessarily inflationary unless it feeds into wages. That’s what the Fed will be watching.”
Gold’s Surge and the Trade War Hedge
Amid trade tensions, gold has surged past $2,850 an ounce, hitting new all-time highs and looking at its strongest month since March 2024. Rosenberg sees gold’s rally as a direct response to market instability. “Gold is 100% proportionally correlated with uncertainty. And this is the most uncertainty we’ve seen in a long time.”
Chuck again… Someone that I respect fully, in David Rosenberg, so listen to “Rosey”!
Market Prices 2/3/2024: American Style: A$ 6164, kiwi .5586, C$ .6826, euro 1.0282, sterling 1.2371, Swiss $1.1062, European style: rand 18.7906, krone 11.3881, SEK 11.1686, forint 396.39, zloty 4.1075, koruna 24.5592, RUB 99.83, yen 154.62, sing 1.3650, HKD 7.7737, INR 87.19, China 7.2446, peso 20.91, BRL 58517, BBDXY 1,315.55, Dollar Index 109.21, Oil $74.23, 10-year 4.52%, Silver $31.42, Platinum $981.00, Palladium $1, 044.00, Copper $4.25, and Gold…. $2,813.40
That’s it for today… Well, we get started on our countdown to a very important data in Feb… And I’m not talking about Valentine’s Day, I’m talking about the day that pitchers and catchers report… Right now, it’s 9 days till we get to Feb 12! Now, regarding Valentine’s Day… You have 11 days to pick out something special for your someone special. And since we’re talking about events… The first week of March will be the week I take my annual spring vacation… March 3 through March 11… Mark your calendars now…. Both my older sisters (now deceased) were born in February, and I was born in Mach, so mom and dad… Oh well, they timed things right… Three Dog Night takes us to the finish line today with my favorite TDN song: Out In The Country… I hope you have a Marvelous Monday today, despite the markets’ crazy swings, and please Be Good To Yourself….
Chuck Butler
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