The October CPI data came in even hotter than expected, and we saw widespread price increases across multiple categories.
The following provides an in-depth analysis of the most recent CPI data.
Last week, Australia, France, India, the US and the UK announced the launch of the “One Sun, One World, On-Grid” initiative. The plan is to connect solar energy grids across borders. This could provide a big boost to silver demand.
After all the drama, Congress finally did what everyone knew it would do. It raised the debt ceiling by $480 billion in October. The Treasury wasted no time and quickly added $480 billion to the national debt in the second half of the month.
With this new debt tagged on, if the Fed has to raise rates to 6% to fight inflation, it would increase interest costs by $250 billion within 6 months and nearly $1 trillion within a few years. This is why the Fed must tell everyone that inflation is transitory.
October jobs came in at 531k, finally beating expectations with strength shown across the board. Furthermore, August and September were both revised upwards by over 100k. ‘
Perhaps even more surprising is the early reaction in the gold/silver market. More on this below.
The September trade deficit smashed the record set just last June.
September 2021 charted a total trade deficit of -$80.9 billion. That was up a massive 11.2% over the August trade deficit of -$72.8 billion and crushed the previous June record of -$73.2 billion by over 10.5%.
The Federal Reserve wrapped up its FOMC meeting on Wednesday and finally announced the much-anticipated QE taper. The Fed will cut its bond-buying program by about $15 billion a month. But so what? In this episode of the Friday Gold Wrap, host Mike Maharrey digs into the Fed announcement and raises some very important questions.
The use of silver in electronics and electrical applications is expected to rise by 10% over the next five years. And this doesn’t include the expected demand increase for silver in the solar energy sector.
This is one of several silver-related stories covered in the latest edition of Silver News published by the Silver Institute.
Hedge funds closed shorts and went long in both gold and silver in October.
Please note: the COTs report was published 10/29/2021 for the period ending 10/26/2021. “Managed Money” and “Hedge Funds” are used interchangeably.
The Commitment of Traders analysis last month highlighted the potential over-extension of the shorts leading to a rebound. This proved to be the case in a big way. Unfortunately, the momentum lost steam and the $1810s for gold presented too much resistance.
I reported last week that Comex delivery activity was looking very quiet in both gold and silver. The results for November are very weak. That being said, October and November are historically slow months, so the real test will come in December.
This analysis focuses on gold and silver physical delivery on the Comex. See the article What is the Comex for more detail.
The Federal Reserve has slightly slowed its asset purchases over the last few months. Was this a trial mini-taper?
If so, the results are not good news for the central bankers over at the Fed.
The Fed balance sheet stands at $8.56 trillion. That’s up by $108 billion from the prior month-end, but down over the past week by $8.7 billion. The chart below shows how the Fed Balance sheet has grown by instrument over the last 18 months.
