- The dollar is inching higher…
- Gold & Silver have banner days on Tuesday!
Good Day… And a Wonderful Wednesday to you! It was a nice day yesterday, until it wasn’t.. Rain moved in, and that’s OK with me… For one day that is… The weather people tell us that we need the rain, so I’ll go with that and move on to today. No one was outside yesterday, before the rain, I went outside to read, and it was akin to zombie zone… I saw no one on the beach, at the pool, or even walking in the hallway. So, I sat down and read until the rain was 6 minutes away… I’ve had two bad stomach days in a row and hope to end that today! Tommy James and The Shondells greet me this morning with their mega hit song: Crystal Blue Persuasion…
Well, the dollar rocked a bit yesterday, and rolled a little more, but at the end of the day, the BBDXY was trading in the same clothes as it had on at the start of the day… 1,289 is the BBDXY that was stuck in the mud yesterday… But the euro fell further within the 1.04 handle, so my thought that the euro was ready to move past 1.05 proved that the thought was not ready for prime time… But there was news in the land down under that we’ll get to shortly.
But first, Gold & Sliver had banner days yesterday, with Gold gaining $37 on the day to end the day at $2,935, and Silver gained 69-cents to end the day at $32.92… Now, those were “banner days” if there ever were one in metals!
The price of Oil bumped higher to end day with a $72 handle, and the 10-year Treasury’s yield gained a bit to end the day with a 4.55% yield.
In the overnight markets last night… The dollar gained 1 index point last night… Nothing like piling on, eh? What I’m saying is the last two nights the dollar was only able to garner 1 index point in the BBDXY, and sure seems to me, that the dollar is going nowhere right now, as the markets get ready to deal with more tariffs. President Trump announced 25% tariffs on U.S. Autos, drug, and Chip imports… This tariff stuff is really becoming the 200 lb gorilla in the room, and yet we, as a country continue to add to them… Geesh!
The price of Gold is flat to down a penny or two to start our day today… I think at this point, as Gold nears $3,000, that the Gold Bugs will be cautious moving forward, because the short paper traders are like the wolves and they’re always at the door. Silver starts our day today, down 6-cents… Same for Silver as it nears $33… The price of Oil remained trading in the $72 handle overnight and so starts today with that price. And the 10-year Treasury’s yield bumped higher by 2 basis points to 4.57%…
Now, for the news from down under…. Australia’s central bank RBAZ) cut rates for the first time in more than four years but warned it was too early to declare victory over inflation and was cautious about the prospects of further easing. So, I would have liked to be in the room when the RBA made this announcement, and asked “If you’re being cautious about the prospects of further easing then why ease now?
And not to be outdone by their kissin’ Cousins across the Tasman, the Reserve Bank of New Zealand (RBNZ) announced that they had also, cut their Official Cash Rate (OCR) 25 Basis Points (1/4%). To look under the hood here would reveal that the RBNZ’s inflation target is between 1 and 3%… And in this case inflation has not fallen withing those parameters yet… But the RBNZ is sure of their outlook that inflation will get there by midpoint of the year…
So, last week we had the ECB, CCB and BOE cut rates… And this week it’s the RBA and RBNZ, the list is beginning to add some heft, and leaves the U.S. as what would seem to be “The One Left Holding The Bag” as if they were being prudent, when in actuality they were ahead of themselves in cutting rates last year, and now are trying to not have everyone notice their gaff!
And soon these other Central Banks that have decided that they have or will soon defeat inflation will realize that they cut rates too soon… A prime example of this printed in the U.K yesterday, when inflation printed at 3.0%, a 10-,month high, n January and is likely to rise further soon… The Bank of England (BOE) didn’t see that coming, much like all central banks, they have blinders on… But, they’ve made their beds with rate cuts, and soon they’ll have to lay down in their mess!
So, how many of you dear readers remember a Sunday Pfennig written by me, titled “Chuck’s Debt Solutions”… This was written over 10 years ago, maybe even 15 years ago… I went through the items in the deficit spending list that I thought we should dump immediately, but like all things with regard to the Gov’t, there was never any attempt buy either side of the aisle in D.C. Do something about their deficit spending, because? Because cutting spending doesn’t get you reelected, but more deficit spending and waste will make you a star in your local state…
But recently a couple of the departments of the Gov’t that I thought we should take out back and depose of, have been getting some talk about their existence, and that’s a start! One such Dept is The Dept of Education… Did you know that instead of improving test scores for reading and mathematics were lower in 2024 than they were the Dept was formed in 1980? Nice job! NOT! And they have managed to waste Trillions of dollars!
In short, the Dept. of Education has spent Trillions, while the students test scores are lower, but tuition at Universities has soared! Come on Elon, your DOGE can see this as low hanging fruit, right?
Look as far as deficit spending goes, you have to start somewhere, and make a splash… The USAID cut was a start, but the real splash will come from what Musk and Ron Paul find or don’t find at Ft. Knox, and then the Dept of Education shouldn’t be too far down the road…
I read last night that Gold’s banner day yesterday was fueled by the report that the NY Mfg. Index gained 5.7% in January, which was a HUGE move because this data has been negative for so long now… And the Gold bugs said that indicates that inflation is still around and coming back stronger!
The U.S. Data Cupboard today just has some housing data, and the FOMC Meeting Minutes from their last meeting, of which the markets will go over with a fine-tooth comb to see if there are variations from his press conference after the last meeting… Hey! It gives these guys something to do that doesn’t involve other things…
To recap… The dollar fell asleep yesterday an at the end of the day wore the same clothes it had on at the start of the day… Gold & Silver had banner days yesterday, with Gold gaining $37 and Silver gaining 69-cents… The RBA and RBNZ both cut their internal interest rates 25 Basis Points yesterday, and Chuck questions their prudence. And Chuck revisits something he wrote 15 years ago in a Sunday Pfennig…
For What it’s Worth…. Well, the pickings were slim this morning, but I did find this on Bloomberg.com, and it features Lola (Goldman Sachs) and their call for a higher Gold price and it can be found here: Goldman Hoists Gold Target to $3,100 on Central-Bank Appetite – Bloomberg
Or, here’s your snippet: “Goldman Sachs Group Inc. raised its year-end gold target to $3,100 an ounce on central-bank buying and inflows into bullion-backed exchange-traded funds, highlighting Wall Street’s enthusiasm for the metal.
Central-bank demand may average 50 tons a month, more than previously expected, analysts Lina Thomas and Daan Struyven said in a note. Should uncertainty over economic policy persist, including on tariffs, bullion could hit $3,300 an ounce on higher speculative positioning, they said. The latter figure implies an annual gain of 26%, according to Bloomberg calculations.
The precious metal has roared higher this year, setting successive records in a seven-week winning run that’s built on last year’s surge. The commodity’s sustained advance has been driven by increased purchases by central banks, a streak of rate cuts from the Fed and, more recently, mounting investor concern over US President Donald Trump’s disruptive tariff announcements.
“‘We reiterate our ‘Go for Gold’ trading recommendation,” Thomas and Struyven wrote. “We see significant hedging value in long gold positions because of a potential increase in trade tensions.”
In addition, inflation fears and fiscal risks “may push central banks — especially those holding large US Treasury reserves — to buy more gold,” they said.
The more bullish outlook — which came after Goldman pushed back a year-end $3,000 forecast last month — followed official-sector purchases estimated at 108 tons in December, according to the analysts. Elsewhere, there’ll be a “gradual boost” to ETF holdings on two expected Fed cuts, they said.
The revised forecast sits alongside a host of other bullish predictions from leading banks. Among them, Citigroup Inc. said earlier in February that it expects prices to hit $3,000 an ounce within three months, with geopolitical tensions and trade wars stoked by Trump boosting demand for haven assets.”
Chuck Again… Well, you know I always say… Whatever Lola wants, she gets”…
Market Prices 2/19/2025: American Style: A$ .6350, kiwi .5712, C$ .7035, euro 1.0427, sterling 1.2581, Swiss $1.1056, European Style: rand 18.5079, krone 11.1524, SEK 10.7513, forint 385.90, zloty 4.0076, koruna 24.0889, RUB 89.76, yen 151.80, sing 1.3434, HKD 7.7770, INR 86.90, China 7.2855, peso 20.30, BRL 5.7183, BBDXY 1,290, Dollar Index 106.98, Oil $72.46, 10-year 4.57%, Silver $32.86, Platinum $977.00, Palladium $986.00, Copper $4.64, and Gold… $2,935.38
That’s it for today… Only 3 more Pfennigs before my annual spring vacation… Next Wednesday, I will be flying back to St. Louis for an infusion and a brief stay in Cold Missouri! I have to say that I believe the tumor in my jaw has shrunk just a little bit… But dang it, the medicine sure makes me sick and tired all the time… My beloved Mizzou Tigers take on #4 rated Alabama tonight in Columbia, Mo. The home court should be of help for my Tigers… And we’re one day closer to the home spring Training opener for my beloved Cardinals! I just hope I can get through the game without stomach problems… Which means I’ll probably skip the Dean Dog! The Babys take us to the finish line today with their song: Every Time I Think Of You… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler