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Exploring Finance

POSTED ON July 11, 2022  - POSTED IN Exploring Finance

The US government increased its total debt by $69 billion in June. The average interest rate on all of that debt is also going up, a growing problem for the borrow and spend government.

The Treasury Department continues to roll short-term Treasury Bills into longer-dated securities, allowing $148B in Bills to roll off the debt statement this month.

POSTED ON July 8, 2022  - POSTED IN Exploring Finance

According to the BLS, the economy added 372k jobs in June. This exceeded the 250k market expectations and seems to indicate the labor market is more resilient than the rest of the economy which the Atlanta Fed currently forecasts as being already in recession. While resiliency is a positive sign for the economy, a strong job market will make it harder for the Fed to bring down inflation.

And there are some signs of weakness when you dig into the data – particularly the revisions.

POSTED ON July 7, 2022  - POSTED IN Exploring Finance

The May trade deficit came in at -$86B. This was another MoM decline but the monthly deficit is still significantly larger than it was at any point before 2022 as shown below. One of the biggest concerns is the Services Surplus contracting by 8.1%.

POSTED ON July 3, 2022  - POSTED IN Exploring Finance

The technical analysis last weekend highlighted that gold looks to be in a bottoming structure. Despite the sell-off this week, $1800 held, which could be another indication that gold is in the process of bottoming, with some final weak hands getting pushed out of the market.

Please note: the COTs report was published 7/3/2022 for the period ending 6/28/2022. “Managed Money” and “Hedge Funds” are used interchangeably.

POSTED ON July 1, 2022  - POSTED IN Exploring Finance

Both silver and gold had their weakest COMEX delivery months in several years.

Gold started July delivery with 937 contracts outstanding. This is the lowest level since November of last year and the second-lowest since the start of Covid (see figure 2).

POSTED ON July 1, 2022  - POSTED IN Exploring Finance

The first month of Federal Reserve balance sheet reduction turned out to be a big dud. As it turns out, the balance sheet shrank by less than $1 billion in June during the first month of quantitative tightening.

As part of its vaunted inflation fight, the Fed announced in May that Quantitative Tightening (QT) was set to begin last month. From Reuters:

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