Precious Metals Analysis

The yellow metal gained over $20 per ounce on the news. The jobs report was a major piece of economic data-possibly the most important of the month.

Is it a temporary blip… or the beginning of a long-term trend? That’s the key question facing consumers, investors, and retirees when it comes to inflation.

Strong demand for bullion products amid tight market conditions and unprecedented “stimulus” measures from Washington have lots of people asking lots of questions. Here we will answer a few of the most pressing questions currently on the minds of precious metals investors.

Prices for the cryptocurrency have slid from a high of over $64,000 on April 14th to under $48,000 in trading this past weekend. The 25% sell-off would be akin to a crash in the S&P 500. But for crypto markets, that kind of volatility is fairly routine.

As top officials around the world convene this week for a “climate summit,” President Joe Biden’s administration is planning the most radical expansion of government’s role in the economy since FDR’s New Deal.

Gold rallied last week toward the top of a down-trending channel that has been in force since prices peaked last summer. A breakout attempt in early January failed. The gold market subsequently slumped to a potential double-bottom low in March around $1,675/oz.

Ignore what central bankers are saying; instead, watch what they are doing. While they poo-poo gold or pretend it doesn’t exist, global central banks have been quietly but aggressively accumulating gold bullion for several years now. The Central Bank of Russia, for example, has been a consistent buyer of gold.

Housing costs are skyrocketing. The median sales price of existing homes has spiked 16% over the past 12 months – the fastest pace in 15 years. The real estate market is being pressured not only by a low inventories of houses listed for sale, but also by rising prices for construction materials.

Rarely do markets move straight up or straight down. The stock market has, however, essentially moved straight up since the March 2020 mini-crash. As the market moves higher, an increasing number of “analysts” are calling for even higher equity prices.

The federal government is spending and redistributing newly created cash so rapidly, it’s becoming difficult to keep track of which trillions are going where. This week, President Joe Biden will pitch a $3 trillion “green” infrastructure package. That’s on top of the $1.9 trillion economic “relief” bill he recently signed into law.

On Monday, Federal Reserve Chairman Jerome Powell spoke at a virtual “Innovation Summit” hosted by the Bank for International Settlements, the central bank for central banks around the world. Powell aimed his remarks specifically at digital currencies.

Precious metals markets traded into an important technical juncture ahead of Wednesday’s Federal Reserve policy announcement. Bank of America analysts stated that this week’s meeting is “one of the most critical events for the Fed in some time.”