There is a growing consensus that the Federal Reserve can successfully slay price inflation and bring the economy to a soft landing. After all, the economy appears to be chugging along. But as Friday Gold Wrap host Mike Maharrey explains, there are a lot of things bubbling under the surface that should temper that optimism. In fact, what we’re seeing today looks a lot like 2007.
Turkey’s love affair with gold has had a major impact on global gold flows, especially through the first half of 2023.
Turks have historically held a lot of gold, both in jewelry and investment form. The country ranks as the fifth-largest gold market in the world. But with recent economic turmoil in the country demand for gold has exploded.
Credit cards are great until the bill comes due. And the US economy has about maxed out the plastic. The Federal Reserve incentivized borrowing and the economy is buried under trillions of dollars in debt. As Friday Gold Wrap host Mike Maharrey explains in this episode, the bill is about to come due. He also goes over the July CPI data and digs into some of the ramifications.
After three straight months of net sales, central banks globally became net buyers of gold again in June.
On net, central banks bought 55 tons of gold in June as the Central Bank of Turkey switched from selling back to buying, according to the most recent data compiled by the World Gold Council.
With much stronger-than-expected second-quarter GDP growth and continued labor market strength, a growing number of people in the mainstream now think the US has escaped the clutches of a recession despite the Fed driving interest rates to the highest level in 16 years. But there are plenty of signs that a recession is looming. For instance, a big plunge in the sale of cardboard boxes indicates a slowdown in economic activity.
There’s another off-the-beaten-path indicator that flashes recession — a big drop in the demand for gold in the technology sector.
In this special episode of the Friday Gold Wrap podcast, host Mike Maharrey answers listeners’ questions. He covers topics including the precious metals markets, investment strategies, the trajectory of the economy, the future of the US dollar, central bank digital currencies (CBDCs), and more.
On August 1, a law making gold and silver legal tender in Arkansas went into effect. The new law also effectively repeals the state capital gains tax on gold and silver.
Enactment of this legislation will relieve some of the tax burden on investors, and take a step toward treating precious metal bullion as money instead of a commodity.
Despite significant selling by Turkey that slowed net central bank gold buying in the second quarter, central banks added a record amount of gold to their reserves through the first half of 2023.
Investment demand for physical gold was up by 20% in the second quarter compared to last year, continuing a trend we’ve seen over the last 12 months. This helped push overall gold demand up 7% year on year when including over-the-counter (OTC) sales and stock flows.
JP Morgan forecasts $2,000 gold by the end of the year with the price continuing to rise to record highs in 2024.
In his latest note, JP Morgan executive director of global commodities research Greg Shearer projects the price of gold will average around $2,175 an ounce by the fourth quarter of 2024. That would represent an 11% increase from the current price.
