Gold has traded between $1,318 and $1,343 so far today on this “Jackson Hole Friday”…as of 9:30 am Pacific, bullion is flat at $1,322…Silver is up a dime at $18.60…Copper is unchanged at $2.09…Crude Oil is off slightly at $47.29 while the U.S. Dollar Index has jumped nearly half a point to 95.22…
Holdings of SPDR Gold Trust, the world’s largest Gold-backed ETF, fell 0.19% to 956.59 tonnes yesterday…
Russia and Kazakhstan continued to boost their Gold reserves in July, data from the International Monetary Fund showed yesterday…meanwhile, top consumer China’s net Gold imports via main conduit Hong Kong rose 28.6% last month…
The “seller” who stopped the Gold market several times over the course of the past several weeks at the $1,350-$1,355 level remains, said Dennis Gartman in his Thursday newsletter. “We are more and more convinced that seller is the Venezuelan government and further because the economic conditions there are deteriorating as quickly and as badly as they are, that ‘seller’ has no choice but to lower its target,” he explained…
Fed Remains In A Hole As Ma Yellen Delivers Speech From Jackson Hole
In a much-anticipated speech this morning at the central bank’s annual Jackson Hole summit, Fed Chair Janet Yellen voiced optimism about the economy and an expectation that interest rate hikes are ahead…of course that’s exactly what she said so vociferously last December, and we all know what the result has been (not 1 rate hike yet in 2016 after as many as 4 were predicted)…
The FOMC “continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives,” Yellen said in prepared remarks…more pointedly, she added, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”
The Fed has had a spotty record at gauging economic trends, and Yellen’s words this morning came from staring again at the rear view mirror…the upcoming U.S. elections, in our view, are also likely to deliver fresh uncertainty around the economy (before and immediately after November 8) and this will further handcuff the Fed and prevent it from implementing another rate hike until at least December – perhaps well beyond…
Fischer Raises Possibility Of 2 Near-Term Rate Hikes
Gold strengthened into the $1,340’s immediately after Yellen’s speech, but then bullion and equity markets quickly reversed after Fed Vice-Chair Stanely Fischer commented in an interview that Yellen’s words were consistent with a possible September rate hike and that investors should prepare for the possibility of 2 rate hikes before year-end…that spooked the markets, though it shouldn’t have…why do traders keep taking words from Fed officials as gospel and why doesn’t the mainstream media challenge them?…
Fed’s Bullard: “I’m Agnostic On Exactly When We Do That”
Earlier this morning, prior to Yellen’s speech, St. Louis Federal Reserve President James Bullard, an FOMC voting member this year, told CNBC that the September Fed meeting might be a good time to raise interest rates – or it might not be!..
Bullard has said he favors a single hike in the Fed funds overnight lending rate to 0.63% and a hold for about 2-and-a-half years…the current rate, bumped up for the first time in more than 9 year sin December, ranges from 0.25% to 0.50%…
“I’m agnostic on exactly when we do that,” Bullard said on “Squawk Box”…he said he’d like to hike rates for the 2nd time in 10 years on good economic news. “If we got to a meeting and we felt things were looking stronger, that might be a good time to do that.”
Now that’s conviction!…
The Bottom Line
Nothing has really changed today – the Fed remains all over the map with inconsistent messaging, and words that are never backed with action…it seems quite likely they are simply confused…
The bullish case for Gold continues as strong as ever, no matter what the Fed does, actually…they are behind the curve and have lost enormous credibility this year…
Did You Know?
Only 3 U.S. states have set aside enough money to fully pay retirement benefits owed to current and futures retirees: South Dakota (107% of liabilities), Oregon (104%) and Wisconsin (103%), according to a new analysis from The Pew Cheritable Trusts…
State pension fund debts have been growing since 2000, after falling in the preceding decades…the last time they were fully funded was the late 1990’s when a stock market boom generated returns that left them with a surplus of funds to pay benefits…
Overall, U.S. state pension funds are looking at a $1 trillion shortfall in what they owe workers in benefits…
Iron Ore & Coal To Cool Off, Says Citibank
Iron Ore, dubbed by Citigroup as one of the hot commodities of 2016, looks set to cool off…prices may soon sag as supply rises and steel demand fades, the bank said, adding to a chorus of forecasters who are calling time on an unexpected rally…the raw material will average $51 a metric ton in the final quarter and $45 in 2017 under the base-case scenario, analysts led by Ed Morse said in a report earlier this week…that compares with Metal Bulletin’s 62% content price of $61.75 a dry ton and a year-to-date average of $53.64…
“Believe it or not Iron Ore and Coal are the hot commodities of 2016,” the bank said in the note, advising that investors “fade them as commodities stumble to rebalance.” It added, “Don’t expect the strength to last. Structurally the world remains oversupplied with relatively low-cost material.”
Canada’s Self-Inflicted Damage To Its Oil Sector
As Alberta struggles with its most devastating recession ever, aided by a far left, economically illiterate government filled with “climate change” fanatics, a new study highlights why different climate change policy choices made by Canada and the U.S. point to continued hardship for Canada’s top Oil producing province…
“This is a concern for Canada’s large Oil and gas sector, which competes globally for investment and export markets,” stated a newly released report from IHS Energy. “Unilateral climate policy adds cost that could move investment, activity, and associated emissions from Canada to regions with less-stringent policies, with little or no net reduction in global emissions.”
The unfortunate fact is that certain Canadian governments have implemented policies and procedures that are going to prevent this country from reaping the full economic benefits of any Oil price increase in the years ahead…
The Alberta government’s fiscal update this week said energy investment is forecast to be about half 2014 levels, and non-energy investment is also in decline as the Oil patch recession spread to housing, retail activity, labour markets and manufacturing…
Canada and the U.S. have similar GHG reduction targets – a 30% reduction by 2030 in Canada and a 26–28% cut by 2025 in the U.S., over 2005 levels…
However, keep in the mind that the U.S. was the world’s 2nd-largest emitter in 2013, responsible for 15.9% of global emissions, while Canada was the 8th largest with 1.7% of world emissions…also, Canada is a major Oil exporter, while the U.S. is an Oil importer despite growth in its own Oil production…
In 2015, about one-third of Canada’s total GHG emissions were covered by some form of provincial carbon pricing…additional initiatives mean up to two-thirds of Canada’s emissions will be covered by carbon prices in 2017, the report says…meanwhile, only 7% of U.S. emissions are subject to a carbon price…
To top it off, Alberta is pursuing unilateral initiatives penalizing its Oil sands industry (all in the name of “saving the planet”), such as putting a cap on emissions, while there are no such constraints south of the border…
Governments in Canada are going to do such a great job “saving the planet” and “stimulating the economy” with reckless spending and taxation schemes, they are going to destroy this country’s wealth in the process…just give them a few more years…
In Today’s Morning Musings…
1. This week’s Venture volatility further underscores the case for a bullish September…
2. An 8.5-cent stock to accumulate NOW…
3. Northern Shield Resources (NRN, TSX-V) mobilizes for drilling at Huckleberry…
4. Almadex Minerals’ (AMZ, TSX-V) discovery bodes well for September drama at El Cobre…
5. Daniel’s Den – TAG – you’re it!…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
11 Comments
Turbulent today eh?
shulda stuck with my 1310 lower limit:)
You should have, Jeremy….you may have won!….Gold was building nice momentum until Fischler spoke up after Yellen, but that’s ok…the market will sort that out soon enough and the Fed will look silly yet again…only a sucker would buy into the greenback rally today, and that’s what the Venture is confirming as well…
Fischler would have us believe there could be 2 rate hikes over the next 4 months (in an election year, no less) from a Fed that has had the courage to raise rates only once in the last DECADE…
Does he think we’re all fools?…
Maybe if the mainstream media were to take some of these Fed officials to task for being so wildly off the mark, they’d be lose prone to opening their mouths…
Just hard to watch gold continue to trade off the $US, at
some point gold has to decouple and go it alone, I think the
Fed confusion is deliberate because they know they can’t raise
rates, but they want to dampen the equity markets and gold….
If the Fed confusion is deliberate, Bob, that’s even a more bullish case for Gold and shows how stupid they are…I think for sure there are times when they deliberately try to manipulate the markets, but I tend to believe they’re genuinely confused about a lot of things right now…however, after being so wrong so many times, and crying wolf for as long as they have, you’d think they’d want to shut up for a while as their credibility continues to erode…that’s a big reason for Gold’s strength this year – waning credibility of central bankers…
The set up right now is perfect for Gold to explode higher at some point in September…
Mainstream media Jon?ha, what a joke, they’re too busy slamming trump.your right on the sucker trade on the $. I’m thinking next week a lot of people will image bill Clinton/ caught with their pants down.
Jon, will you be releasing the info on KSK this weekend?
shortly, Dan1, likely by Monday anyway…
Hey all… I didnt want to win:) but it is what it is… and the fed speak continues to astound intelligence..
it seems they are trying to do the one upmanship trick.. like I am more important because I caused this to happen or some childish notion.
simply unbelievable.. but it happened.. and I wonder if Fischer owned DOW puts b4 he opened his trap, or got a call from Goldman… something stinks!!
There are plenty of reports out there on how the fed has no clue what their doing, thanks to google, but I see more and more that the fed gang insist this is not political, well yet another lie, just like the next job number to come out will be as well, pathetic…the rest of the world is in decline and it’s time the us admit they are as well…..join the club.
Most of the stuff that comes out of the fed meeting is just a bunch of noise, the markets will do what they will do and has taken much of this into account already.