The dollar may be king, but its throne is getting a little tippy. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the slow but steady erosion of the dollar’s global dominance and the possible ramifications. He also explains how Federal Reserve monetary policy is like poison.
The February Trade Deficit increased for the third month in a row, rising by $1.9 billion. Net Goods came in at -$92.9B with Net Services at $22.4B to reach a total of -$70.5B.
Based on the latest Commitments of Traders (COT) report, the latest price action is potentially even more bullish than normal. The latest price moves have been supported by Managed Money but the data clearly shows there is more driving the upward movement.
Please note: the CoTs report was published 03/31/2023 for the period ending 03/28/2023. “Managed Money” and “Hedge Funds” are used interchangeably.
Gold has been seeing a large number of contracts roll in the final day of the contract. That did not happen this month. This has resulted in a large delivery volume.
By now it should be common knowledge that the Fed has blown up its balance sheet rather quickly to combat the current banking crisis. As the chart below illustrates, the Fed added a gargantuan sum to its balance sheet in March, netting an increase of $324B.
The Federal Reserve has added nearly $400 billion to its balance sheet in just two weeks while simultaneously claiming to still be in the inflation fight. While things seemed pretty quiet this week after the bank bailout, Friday Gold Wrap host Mike Maharrey says it’s only a matter of time before the next shoe drops. What will that be? In this episode, he talks about one possibility. He also talks about some interesting demand news in the silver market.
The seasonally adjusted Money Supply in February fell $121B and the Money Supply in January was revised from positive $31B to -$142B. This is a major revision and now means the Money Supply has fallen for seven straight months.
Jewelry production is an important driver of overall silver demand. In 2022, the amount of silver used in jewelry was up around 29% as overall silver demand hit record levels. Silver jewelry production used around 235 million ounces of silver.
And according to a recent survey by the Silver Institute, silver jewelry sales are on the rise.
Gold is wrapping up March, which is a minor delivery month. While it was a decent delivery month, it was the smallest minor month since November 2021.
