- currencies & metals rally on Wednesday
- Florida cuts sales taxes on precious metals…
Good Day.. And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals went and did the dirty deed, and it wasn’t done cheap! They got shut out for the 3rd consecutive game by the Pirates! After sweeping the Indians, I mean the Guardians, they get swept by the Pirates! See why I say this team is so frustrating at times? Yesterday’s game was a day game, you know they kind I like!, so that meant I had nothing to do with myself last night, Kathy was out for the evening, and so I went outside and read until it got dark… That was a good time of day to be out, as th sun had set and the temps were dropping.. Not much, but dropping nonetheless… Steely Dan greets me this morning with their great song: Do It Again…
Well, the dollar selling stopped yesterday, but there was no dollar buying either, so it was a wash of a day for the dollar… I think that today’s trading could go one of two ways… The first way is that the selling continues, and with skeleton crews manning trading desk, this could get to be a real ugly day for the dollar… Or, the jobs jamboree is miraculously strong, and the dollar rallies with traders knowing that the fed is going to wet their powder this month. Or, and here’s a third possibility, and that is that there’s no one on the trading desks to make a difference, and the dollar does nothing again today… Got that? I sure hope so, because I got confused typing it all up! HA!
The euro inched higher in the 1.17 handle yesterday, and came within spitting distance reaching the 1.18 handle again…
The price of Gold was allowed to gain yesterday by the short paper traders, although the short paper traders did test the Gold trader’s mettle… But soon found that the Gold traders had the physical buyers ready and waiting to buy, and the SPT’s decided to go home… Gold gained $20 yesterday and closed at $3,358…. And Silver saw the same kind of action and gained 64-cents to close at $36.61… The Price of remained trading with a $66 handle yesterday, and the 10-year Treasury saw its yield drop a couple o basis points to yield 4.26%
In the overnight markets last night… the dollar drifted around a bit last night but in the end, it starts today in the same clothes it wore yesterday, with the BBDXY at 1,189… Gold starts today down $14, but Silver starts today up a shiny quarter! The price of Oil bumped higher again last night and trades this morning with a $67 handle… It looks like the cease fire in Israel / Iran is holding, and that takes the worry out of the price of Oil… And the 10-year Treasury remains trading with a 4.26% yield this morning… So far that is, as we all await the Jobs Jamboree jobs created report for June, that will, I’m certain, contain some jobs created out of thin air, but how many will be the question…
I read a report this past weekend that I just now remembered that I wanted to talk about… UGH! The report was about how Hungary has shifted it’s favored trading partner from the U.S. to China… I’m just the POTUS was screaming at the walls when he was told that! Well, Mr. POTUS, you’ve got to get those interest rates lower, so the dollar continues this march to a long-term weak trend… When you figure out how to kick Jerome Powell out the door and implant your yes man, Mr. Bessent, in his place things will get much easier! Just giving some help to the POTUS!
And it’s not just Hungary that has shifted their trade agreements to… With all the chaos going on, the war in the Middle East, and Ukraine, and after just going through a period of cycle-wise highs in inflation.. .The rest of the word is looking for some place that is calm, and the doesn’t have problems like those hanging over the heads… I read where The U.S. dollar’s share of global foreign exchange reserves has decreased from around 70% in the early 2000s to below 60%. Some estimates place it as low as 48%. It’s called de-dollarization, and it seems to be catching on…
It’s not a laughing matter folks… The Central Banks around the world know what’s going on here in the U.S. and the dollar is long for a weak trend, and they are just attempting to get ahead of rush to the dollar’s exit door…
And that brings me to the question… How’s your investment portfolio diversification going? Or better yet… Got Gold? The first weak dollar trend started in 1971, and went through the 70’s until 1979, and volcker’s rare hikes brought dollar buyers back… The dollar has gone through a few trends since Nixon set it free in August 1971… I used to show these trends on slides when I used to give presentations at conferences… I think they went like this: 1971-1979 weak dollar trend (WDT) 1979 – 1986 Strong dollar trend (SDT), In 1985 finance ministers met at the Plaza Hotel in NYC, and decided that the dollar was too strong, and came out with what was called the Plaza Accord.. So, in 1986 we started the next WDT, and that ended in 1,994 when then Sec. Treasury Robert Rubin began telling the markets that “a strong dollar is in the best interest of the U.S.” and that strong trend ended in 2002… When it was first discovered that the U.S. was running debts and printing money… That WDT lasted until 2013, when the debts of the Eurozone were discovered, and the PIIGS were named… And the SDT that began in 2013 remained in place even through the Financial meltdown of 2007&8, until this year… That’s when I first noticed cracks in the dollar’s armor… I had seen these cracks a few times in the past, but they proved to be false dawns… But this one is different, and I do believe the dollar has begun its trek through a Weak Dollar Trend… Whew! My fat fingers need a break after typing all of that!
I’ve long thought that when the Euro Wannabes rally then the dollar is in trouble… The Euro Wannabes are: Hungarian forint, Polish zloty, and Check Republic koruna… I’ve added another currency to the ones I watch for indication that the dollar is in real trouble and that is the Chinese renminbi… And I don’t know if you have noticed the renminbi has been getting allowed to gain VS the dollar… But it is! So, go check the currency round up out… Go ahead, skip ahead I won’t mind… but make sure you come back!
Circling back to Gold & Silver this morning… this from Kitco.com ” In an interview with Kitco News, Ryan McIntyre, Senior Managing Partner at Sprott, said that while he remains bullish on gold, he is currently paying a bit more attention to silver in the near term.
McIntyre’s bullish outlook comes as the gold/silver ratio trades below 92, down sharply from April’s multi-year highs above 100. Spot silver last traded at $36.40 an ounce, up more than 1% on the day. Meanwhile, spot gold last traded at $3,344.28 an ounce, up 0.24% on the day.”
See how fickle traders are? Gold stumbles out of the gate in June for its traditional June Swoon, and all the attention shifts to Silver… What have you done for me lately? Is a trader’s mantra… One of my first speaking engagements was in Phoenix Arizona, and I followed a woman who painted a very scary picture of traders and how fickle they are… I got up on stage and told people that I was a trader and I would bet that they would like to invite me to dinner! I got a big laugh out of that from the crowd, and it relieved all the metal pressure that came from my first speaking engagement…
Well, Florida joined the list of states yesterday that have removed sales tax from the sale of metals… Good for you Florida! There was another state that had announced this same result earlier in the week, but for some reason I can’t remember who that was… The point is that the states are making it easier to accumulate Gold & Silver and not worry about being taxed when you pass it down to your kids, and they decide to sell it because they don’t want to deal with storing it.. Sad scenario, right? I hope this doesn’t happen to any of you!
I had a meeting yesterday with my wealth advisor, who’s retiring… And the thought came to me of how many of the professionals in my life have retired… I’ve had 2 oncologists retire, a handy man I used retired, 1 PCP retire, and now 1 wealth advisor… I guess it just shows that I’m getting old… UGH!
The U.S. Data Cupboard yesterday day had the ADP Employment Report, and it showed that the economy lost 33,000 jobs in June… Wait, What? Our strong and resilient country (according to the Feds) lost 33,000 jobs in a month where all the grads were finding jobs? Well, today’s Data Cupboard has the Jobs Jamboree for June and unless the BLS adds 10’s of thousands of jobs to the surveys to dress up the report, a very weak labor report would push the Fed Heads to cut rates later this month…
So, why’s Gold down this morning? Short paper traders… easy question to answer…
To recap… The dollar continued to drift lower yesterday and last night… Traders are thinning out ahead of the Holiday Weekend, and no one wants to make a call on the direction of the dollar with the Jobs Jamboree coming up very soon this morning… Chuck goes through the dollar trends in our history since Nixon pulled the dollar off of the Gold backing in August 1971…
For What It’s Worth… I found this article this morning, yes I get up quite early, and thought it was FWIW worthy, as its about where this fellow thinks Gold & Silver are going… spoiler alert, he thinks they are going to soar… And it can be found here: Why gold revaluation charts put prices at $25,000-$55,000 if history rhymes, silver poised for breakout: Crescat Capital Strategist | Kitco News
Or, here’s your snippet: “Speaking at the PDAC 2025 conference in Toronto, Costa told Kitco News that historical comparisons suggest a dramatic revaluation of gold could be in store.
Costa highlighted his firm’s recent report, which examines the potential for gold prices to reach extraordinary levels if the U.S. were to revalue its gold inventory relative to outstanding Treasuries.
“To me, it comes down to the treasury. How much treasuries are outstanding out there – 36 trillion. How much do we own of gold?” Costa stated.
Currently, the value of U.S. gold reserves is about 2% of those Treasuries outstanding, compared to roughly 17% in the 1970s and close to 40% in the 1940s.
“And if we’re going to go back to the 17%, it takes us back to $25,000 dollars an ounce, or if we go back to the 40%, it’s close to $55,000 an ounce,” Costa explained, noting that these are not price targets but serve to illustrate the potential for significant valuation shifts.
He pointed out that central banks have been accumulating gold at 50-year highs since the global financial crisis, while U.S. gold reserves are at their lowest levels in 90 years. This divergence, Costa suggests, could pressure the U.S. to reconsider its gold policy.”
Chuck again… that is the wildest forecast for the price of Gold folks, so take it with a grain of salt, but remember that things are crazy these days, so a crazy price isn’t out of the realm of imagination… I’m just saying…
Market Prices 7/3/2025: American Style: A$ .6574, kiwi .6069, C$ .7361, euro 1.1791, Swiss $1.2602, European Style: rand 17.5191, krone 10.0711, SEK 9.6471, forint 338.94, zloty 3.5041, koruna 20.9049, RUB 78.79, yen 143.88, sing 1.2733, HKD 7.8500, INR 85.31, China 7.1609, peso 18.76, BRL 5.4248, BBDXY 1,189.60, Dollar Index 96.80, Oil $67.30, 10-year 4.26%, Silver $36.86, Platinum $1,381.00, Palladium $1,151.00, Copper $5.18, and Gold… $3.345
That’s it for today… Well, The BLS just printed the Jobs number for June, and they say the economy added 147,000 jobs… OK, the ADP says we lost 33,000, and the BLS says we added 147,000… The difference here is too great to attribute it to a rounding error… I’m of the opinion that this result will give the short paper traders the opportunity to take Gold down further… Watch out for that… look for buying opportunities… Well, tomorrow we, as a country, celebrate our Independence Day… This was always a BIG Day at the Butler House where I grew up… The BBQ pit smoking and smelling great, friends and family dropping by, and my dad shooting off fireworks in the alley… Great Memories… OK, enough Simon And Garfunkel take us to the finish line today with their catchy song: Cecilia… I hope you have a Tub Thumpin’ Thursday today, and please try to Be Good To Yourself!!
Chuck Butler