- the dollar inches higher on Wednesday
- Gold & Silver are subjected to another short paper trading raid!
Good Day… And a Tub Thumpin’ Thursday to one and all! Yesterday was a rotten day, weather wise here in the Deep South… Rain and chilly weather took place all day… UGH! But the silver lining was that Kathy, and I made the trek north to Stuart Fla, where a good friend lives, and we talked about all kinds of stuff for hours! Thank you, Walt, for your excellent hosting! The Neon Trees greet me this morning with their one-hit wonder song: Everybody Talks…
Well, the dollar didn’t excite anyone yesterday by moving in either direction, although the BBDXY did manage to eke out a 1 index point gain. I really do believe that the markets are trying to work through the fact that the new POTUS said that he will add tariffs to the imports from Canada and Mexico, but not China at this time…. The euro held onto the 1.04 figure even with the BBDXY Gaining 2 index points that last two trading sessions I forgot to mention yesterday, when talking about the currencies that the Russian Ruble is the best performing currency of the emerging markets sector, gaining 10% in recent trading… It’s still halfway around the world from the price of the ruble when I first started talking about it which was 35… It now trades just below 100… They have a tough row to hoe, to get back to 35!
The price of Gold started the day, up $10 and ended the day up $13 to close at $2,757.90… And Silver started the day down 11-cents, and ended the day down just 2-cents to close at $30.86… I came across an article on Kitco.com that I’m going to feature in the FWIW section today, so stay tuned, same bat time, same bat channel… Don’t touch that dial!
The price of oil slipped back by a buck yesterday and ended the day trading with a $75 handle. The U.S. Treasury 10-year’s yield rose yesterday to 4.61%… Maybe the Fed Heads got concerned that the public was catching on as to who was buying the large quantities of bonds….. Nah…. They aren’t that smart to figure that out!
In The Overnight Markets Last Night…. the dollar remained trading at 1,303 in the BBDXY index… The euro remained above 1.04, and the oft forgotten Brazilian real has moved below 6 for the first time in a month full of Sundays…. Remember the real is a European Priced currency, which means the lower the price the better the return VS the dollar. I don’t feel the dollar bugs have any idea which way the dollar should be going right now… And that’s a problem for the dollar…. We’ll have to wait this one out to see which way the dollar goes, but to me it should be going down, in the face of the already announced Tariffs…. I’m just saying….
Well, I warned everyone that we should have left sleeping dogs asleep…. The short paper traders were bright eyed, and bushy tailed this morning, and began taking down Silver from the get-go… Gold is getting caught up in the raid on Silver and is down $16 to start the day today, while Silver’s loss is 61-cents! The folks at Kitco would never bring themselves to call the raid a short paper trading intervention… Instead, they call this sell off a “correction”… I would say that 61-cents is more than a “correction”…
The price of Oil remained trading with a $75 handle overnight, and the 10-year Treasury saw its yield rise again and begins today trading with a 4.65% yield….
This trading in the 10-year (and other bonds) is a prime example of why intervention doesn’t work in the long run… Yes, it does deliver some short-term relief, but in the end the entity spent a ton of money intervening, only to see the prevailing trend come right back after the dust settles….
Well, the dolts at the BLS have changed the calculation for the STUPID CPI… Again! here’s the skinny from zerohedge.com “The FED changed the definition of CPI now to exclude food (groceries), fuel, health insurance, tax, and increased costs of goods and services which are arbitrarily assigned a value. Has your cost of living only increased by 2.6% per year over the last 5 years as stated by the FED? Has your cost of health insurance only gone up 2.6% per year? Have your groceries only gone up 2.6% per year? How about your rent? The purchasing power of the U.S Dollar has declined by at least 7.5% compounded per year over the last 5 years.
Inflation is the devaluation of your purchasing power, and the CPI is the Ultimate Big Lie.”
Chuck again, you see what I mean about the hedonic adjustments? This calculation is utterly ridiculous and has been for years, but now it’s even worse! Why on earth would anyone pay attention to this report now? Excluding groceries? Health Insurance? Fuel? They must be missing something here, why didn’t they just include everything in their exclusions?
This article really got me riled up and I need to calm down… SERENITY NOW!
I don’t have much more for you this morning, The newswires are full of writers opining about what they think will happen with the Trump Tariffs, and others opining about how they see Gold trading at $3,000 this year, and so on…. We’ve talked about all that’s out there right now, and I’m not in the mood to rehash it again! So, as my good friend, and former Big Boss Frank Trotter is known to say: Onward and Upward!
The U.S. Data Cupboard yesterday had the leading Indicators and once again they printed negative at -.1%…. I said yesterday that this economic report had printed negative for so long that for it not to print negative would be BIG NEWS! Today’s Cupboard already printed the Weekly Initial Jobless Claims and they inched higher to 223,000 for the last week… No biggie…
To recap…. The dollar inched higher again yesterday by 1 index point… Gold gained $13 yesterday, but has given that back and more this morning as the short paper traders do their “thing”… Silver is down 61-cents as it appears the short paper traders were concentrating on taking down Silver…. The BLS has Chuck all riled up this morning, along with the short paper traders…. He’s exclaiming SERENITY NIOW!
For What It’s Worth…. Well, like I said above this article was on Kitco.com and featured Bart Melek, global head of commodity strategy at TD Securities. Mr. Melek talks about how the tariffs could affect the metals…. And it can be found here: Trump tariffs could have a massive impact on precious metals prices, but not the way many think – TD Securities’ Melek | Kitco News
Or, here’s your snippet: “Malek believes the tariffs would have a very significant impact on precious metals prices, though not in the way many market experts have suggested, but more in terms of rising demand for the monetary metals to protect against skyrocketing inflation.
“If we do see these broad tariffs against commodities, against manufactured goods, ultimately I equate them to a negative supply shock,” he said. “In essence, aggregate prices take a lift almost immediately. Some get fully paid by the U.S. consumer, some of the incidences of these tariffs get passed on to producers, but overall, prices move higher.”
“Now, it depends… what is the Fed going to do?” Melek emphasized. “If the Federal Reserve accommodates the shock – in essence, it gets worried about the negative impact on employment, and let’s say it lowers the rate a lot at a time when you have inflation from these tariffs – you could have a bit of an early 1980s, [late] 1970s phenomenon where you have a supply shock from tariffs and then you have monetary policy that accommodates it, and then you have an inflation problem, probably not only in the United States, but globally.”
Asked whether TD Securities sees the Trump tariffs as the largest threat facing the global commodities market in 2025, Melek said that may well be the case, but other massive threats were already there.
“We’ll see what happens, [Trump] will apparently have consultation,” he said. “The other big one, of course, is the fairly weak performance of China, and that certainly was the big story right before tariffs and right before Mr. Trump won the election – which I think, for the most part, was unexpected.”
Chuck again…. All that makes sense to me… I’ve said all along that the tariffs would mean higher prices in the U.S., and shortages, which would also negatively impact prices… And inflation? We could be looking at inflation similar to the late 70’s, early 80’s… Are you ready? OK… Ready, set, go!
Market Prices 1/23/2025: American Style: A$ .6274, kiwi .5666, C$ .6945, Euro 1.0414, sterling 1.2323, Swiss $1.1020, European Style: rand 18.5467, krone 11.2748, SEK 11.0117, forint 394.14, zloty 4.0494, koruna 24.1409, RUB 99.00, yen 156.28, sing 1.3664, HKD 7.7896, INR 86.46, China 7.2874, peso 20.48, BRL 5.9788, BBDXY 1,303, Dollar Index 108.22, Oil $75.60, 10-year 4.65%, Silver $30.25, Platinum $949.00, Palladium $999.00, Copper $4.28, and Gold…. $2,741.25
That’s it for today… I forgot to question you all who took my advice and read Dennis Miller’s letter last week regarding tariffs? You can still find it in his archives on his website: www.milleronthemoney.com So, the NFL’s Divisional Playoffs are this weekend to decide which two teams go to the Super Bowl. Th Final Four for the NFL.. Go Chiefs! And I’ll be rooting for the Redskins to beat the Eagles… Wait, What? They don’t call them the Redskins any longer? They are the Commanders? Who’s lame brain idea was that to change the legendary name? Coach Allen is turning in his grave… And Coach Gibbs has his walking orders not to talk about it… (I think) The U.S. Men’s Soccer Team won their game last night 3-0, that’s two straight wins under a new coach… Hmmm…. The team actually looked good… I wonder if my former colleague, Ty Keough saw the game like I did.? Ok… Jonathan Edwards takes us to the finish line today with his song: Shanty… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!
Chuck Butler