- Currencies rally on Tuesday, but Gold ran into short sellers…
- Chinese consumers are buying physical Gold despite the price!
Good Day… And a Wonderful Wednesday to you! It was a “rinse, repeat day” weather wise here in S. Florida, an I’ll begin to sound like a broken record if I keep repeating that each day this week… My stomach was felling somewhat iffy yesterday, and I had to cut short my time on the deck in the sun because… But by evening I felt much better… My spring training entourage will be here in 3 weeks, so I had better toughen up! You’ve only got 2 more days, to secure a Valentine’s Day gift for your sweetheart. And, pitchers and catcher began showing up early for Spring training yesterday… The Guess Who greets me this morning with their mega hit song: These Eyes…
Well, the dollar ran into a roadblock yesterday and the BBDXY lost 4 index points. Jerome Powell’s speech on Capitol Hill didn’t help Gold any yesterday, and he’ll repeat his speech to the house today. Gold lost $10 on the day and closed at $2,898. Silver started the day getting whacked, and was down 43-cents to start the day, but Silver rallied and finished the day down 24-cents, and closed at $31.86…
The price of Oil is range bound again, and yesterday it slipped below $73 to end the day trading with a $72 handle. And after Powell’s speech bond yields rose, with the 10-year Treasury’s yield closing the day at 4.54%, the highest it has been in a couple of weeks.
I keep mentioning Powell’s speech, so here’s the skinny… Fed Chairman Jerome Powell, told lawmakers yesterday that the Fed/ Cabal/ Cartel was in “no hurry to cut rates” Apparently there are too many questions surrounding The POTUS’s tariffs and how they affect the economy…
Of course, the architect of these tariffs believes that the tariffs will make American’s rich again… But what about all of us who have never been rich to begin with? You know… The dwindling Middle Class… Will pay the brunt of the inflation that comes with the tariffs…
OK, let’s talk about something else…
In the overnight markets last night…The dollar fought back and starts today up one index point in the BBDXY at 1,301… Ok, I know this isn’t what happened but is sure seems like it… I’m talking about the short paper traders switching over to concentrate on Gold and leave Silver to its own devices… One short paper trader says to another, “hey, we hit Silver pretty hard yesterday, let’s switch to Gold today… And Gold is down $23 to start the day today, while Silver is up 16-cents… As you know I read Ed Steer’s letter each morning, and one of the things he does is give the high and low ticks of Gold & Silver… That way, you sure can see the short paper traders step in and do their thing… Www.edsteergoldsilver.com
The price of oil fell further into the $73 handle overnight, and the 10-year didn’t move much and starts the day trading with a 4.53% yield…
Yesterday, I talked about how we as a country, are going to eliminate minting pennies… While we’re at it… It also costs 12-cents to make a nickel… Is the nickel the next to see the axe? I see a lot of rounding up on prices in the future, don’t you?
The BOE cuts rates last week, of which we’ve discussed previously… The thing that was missing though was that th BOE decided to announce that more rate cuts would be coming…. Notice they said “cuts” and not just “a cut” So, if you hole sterling, you might want to transfer / cross that with another currency from a country that isn’t, so hell bent, and whiskey bound to cut rates multiple times this year.
The pound sterling doesn’t have the offset currency to the dollar claim that the euro has and proudly uses any chance it gets… Speaking of the euro, inflation is still a problem in the Eurozone albeit at a lower rate these days, but still the ECB wants to cut rates too… The Bank of Canada is doing it, the Bank of England is doing it, the ECB has done it and the question is will they do it again? But the Fed/ Cabal/ Cartel, has stated that they are in no hurry to cut rates again… So, that should make the dollar stronger VS these other currencies that seeing their collective rate cut.
Bad news for any thoughts that the dollar’s run is over… However, There are still questions about the tariffs, so we’ll have to wait-n-see… And… Remember, all of the countries out there that are ridding themselves of their dollars in reserve and replacing the dollars with physical Gold… So, there are two main reasons that the currencies may still be able to hold their own VS the dollar in the near future…
Longtime reader, Bob, sent me this from the Moscow Times…”Surging financial flows in January 2025 suggest Russia’s economy is growing more strongly than recently indicated, the Russian Central Bank said Friday.
The volume of incoming payments processed through the Central Bank’s payment system rose by 8.8% compared to the average level of the fourth quarter of 2024. When excluding sectors such as mining, petroleum products and public administration, the increase was even more pronounced at 11.4%.
All major industry groups witnessed growth, with the most substantial uptick coming in sectors driven by investment demand.”
Chuck again… I don’t mean to be waving a flag for Russia here, but when a country shows strong growth despites a slew of economic sanctions, it needs to be talked about… and one of the reasons for Russia’s growth is their dependence on physical Gold….
The U.S. Data Cupboard today will see the STUPID CPI! You may recall that the Dec. STUPID CPI yoy was 3.2%.. And using my fine tuned new math skills, 3.2% is greater than 2.0% (The Fed/ Cabal/ Cartel’s) target inflation rate… MarketWatch had this bit about an alternative inflation calculator: “The five-year breakeven inflation rate — a measure of average expected inflation over the medium term — was at 2.6% on Tuesday and has largely remained above its 50- and 200-day moving averages since late October, according to FactSet data. The message it is currently sending is that inflation could remain above the Federal Reserve’s 2% target for years.”
To recap… The dollar got sold yesterday, but so too was Gold & Silver…. The old saying was that these two (dollar & Gold) moved in opposite directions… But in recent times, these two seem to move in tandem…
The BOE, ECB, CBB, all have cut rates an it will take a lot to keep the dollar from blasting away at these three…
For What It’s Worth… Well, for years the Chinese Gov’t prohibited Chinese consumers from owning physical Gold, but that has all changed for the better, and Gold is the beneficiary of this change… This article is about all that and can be found here: Chinese consumers rush to buy gold, as prices keep rising – Global Times
Or, here’s your snippet: “A customer tries on gold jewelry in a shop in Huzhou, East China’s Zhejiang Province on February 7, 2025. China’s 2025 Spring Festival holidays sparked a gold purchase rush among consumers, even as the price of spot gold hit a record of $2,860 per ounce on Friday. Photo: VCG
Chinese consumers are rushing to buy gold, as gold prices continue to hit new record highs due reportedly to growing uncertainty in the global economy posed by the US’ dramatic trade policy changes.
“I regret not having bought the gold bracelet that was on my list before the Spring Festival. The price is about 1,000 yuan ($136.9) higher now,” a Beijing resident surnamed Qian told the Global Times on Tuesday, while shopping at a Chow Sang Sang store on Wangfujing street, one of the Chinese capital’s busiest shopping areas.
Qian said that she rushed to buy gold products after seeing the continuously rising gold prices. “Buying gold can be a good investment,” she said.
Gold prices hit a record high on Tuesday with spot gold hitting a peak of $2,942.70 per ounce in Asian trading hours, Reuters reported. Reuters attributed the price surge to “safe-haven demand as US President Donald Trump’s new tariffs on steel and aluminum imports heightened concerns about a possible global trade war.”
In addition, following the recent weakening of US economic data, there has been a sharp rise in risk aversion in the market, which greatly boosted demand for gold, according to some reports.
“We have raised our gold forecasts to $3,000 per ounce over the next 12 months, up from $2,850 previously,” UBS Chief Investment Office said in a report released on Monday.”
Chuck Again…Things couldn’t be better for Gold than right now, so $3,000 here we go! Well, there are those bumps in the road when the short paper traders crawl out of the wall boards, and scatter about the kitchen… (now that’s an image that cringe when typing it!)
Market prices 2/12/2025: American Style: A$ .6276, kiwi .5645, C$ .6990, euro 1.0369, sterling 1.2444, Swiss $1.0965, European Style: rand 18.4572, krone 11.2488, SEK 10.8908, forint 388.40, zloty 4.0240, koruna 24.1626, RUB 94.47, yen 153.50, sing 1.3654, HKD 7.7888, INR 86.89, China 7.3089, peso 20.54, BRL 5.7646, BBDXY 1,301, Dollar Index 107.99, Oil $73.53, 10-year 4.53%, Silver $31.69, Platinum $990.00, Palladium $974.00, Copper $4.60, and Gold… $2,875.50
That’s it for today… I sure don’t know what hit me yesterday, but at least it didn’t hang around all day… I sure didn’t get if from something I ate on Monday… I hardly ate anything! Good Old fun-loving Chuck is no longer… I’m down to a weight that I last experienced while on the road playing my guitar 52 years ago! And I haven’t partaken in my fave beverage in over two weeks… This is what 18 years living with cancer does to you… I’m not whining here, because my mother taught me that people don’t want to hear you whine… And they can’t help you! My beloved Mizzou Tigers will get back on the court tonight VS Oklahoma… One of the nurses in the infusion center last week say my Mizzou cap and said: “I went to Mizzou, back when Norm Stewart was the BB coach, back then the BB team was always good, and the football team was awful, and last year it was the other way around, but not this year!” Wild Cherry takes us to the finish line today with their one-hit wonder song: Play That Funky Music.. I hope you have a Wonderful Wednesday today, and Please… Be Good To Yourself!
Chuck Butler