Precious Metals News

In a rare moment of honesty, Federal Reserve Chairman Jerome Powell admitted he and his fellow central bankers don’t know what they’re doing as they wrapped up the May Federal Open Market Committee (FOMC) meeting. As was expected, the Fed held interest rates steady at the meeting, taking a “wait and see” attitude.

Demand for physical gold surged in the first quarter. But not in the United States. Asian investors primarily drove demand for gold bars and coins as American investors continued to sit on the sidelines. Chinese investors gobbled up 126.7 tonnes of gold bars and coins. That was a 47 percent increase from Q4 ’24 and a 12 percent rise year-on-year.

The LBMA gold price hit multiple record highs in Q1, with the average price coming in at $2,860 an ounce. That was a 38 percent year-on-year increase. The gold price was driven by multiple factors, including the specter of a trade war, geopolitical turmoil in the Middle East and Ukraine, stock market volatility, and dollar weakness.

China ranks as the world’s largest gold market. The price of gold climbed 8.4 percent in yuan terms in March. It was the strongest month for the yellow metal since March 2024. The RMB gold price recorded its strongest Q1 since 2002 when the Shanghai Gold Exchange (SGE) was established.

As gold marches ever higher, silver continues to lag. Don’t get me wrong. Silver hasn’t done horribly so far this year. It is up a little over 12 percent. However, it has failed to close the gap with gold, and that has many investors questioning what’s going on with the white metal.

The American economy is a bubble. The thing about bubbles is that they eventually pop. All they need is a pin. Tariff policy might be the pin that pops this bubble, but even if it isn’t, there is a pin out there with this bubble’s name on it. I’ve been calling this a “debt-riddled, bubble economy” for months (years, really), but…

After plunging for several days, stocks soared Wednesday afternoon after President Trump announced a tariff pause. The S&P 500 rocketed 9 percent, charting its third-largest single-day gain since World War II. Gold also whipsawed, having dipped below $3,000 an ounce, the yellow metal regained much of its loss and closed over $3,100.

If you wonder why so many central banks continue to load up on gold, Russia’s experience with the yellow metal provides the answer. Russia launched a gold buying spree beginning in 2014. Over the next six years, the Bank of Russia increased its reserves by around 40 million ounces (1,244 tonnes).

Indian investors are turning to gold as the domestic stock market tanks. This isn’t a surprise, but there is a twist. Indians are increasingly turning to ETFs to gain exposure to the yellow metal. Indians have a long love affair with gold. The yellow metal is highly valued as a store of wealth, especially in poorer rural regions.

Gold has broken above $3,000 and appears poised to push even higher. So far, platinum has not followed gold’s lead but seems to be watching from the sidelines. What is causing this divergence? To put the platinum price into perspective, the metal hit an all-time high of $2,213 an ounce in March 2008.

The Federal Reserve lost $77.6 billion in 2024. And by the way, a Fed loss is ultimately your loss. The central bank began bleeding red in late 2022. In 2023, it reported an operating loss of $114 billion. On top of its operating loss, the Federal Reserve reported unrealized losses totaling $1.06 trillion.

The Federal Reserve loosened monetary policy significantly during the March FOMC meeting that wrapped up Wednesday. “But wait,” you say. “The Fed held interest rates steady, right?” Yes. Yes, they did. The Federal Reserve ALSO make a BIG move during the March meeting… but it largely flew under the radar.