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5.27.22 -Gold Could Reach $5,000 by 2030

Gold last traded at $1,853 an ounce. Silver at $22.10 an ounce.

News Summary: Gold and silver rose Friday on a weakening dollar. Stocks attempted recovery as inflation reportedly cools.

Gold Could Reach $5,000 by 2030-ETF Database
"The gold market remains on track to end the year above $2,000 per ounce and rise to nearly $5,000 per ounce by the end of the decade, according to the latest In Gold We Trust Report from the European investment firm Incrementum AG.

Per the report, Incrementum's analysts are bullish on gold as rising inflation threatens to edge the global economy into a recession. The company warned that normalizing global monetary policies has revealed serious problems in the global economy that were papered over by loose monetary policies and huge amounts of liquidity.

'Just as in 2018, when we warned of the inevitable consequences of the attempted turning of the monetary tides, we are now issuing another explicit warning,' the report stated. 'In addition to wolfish inflation, a bearish recession now looms.'...

With inflation expected to hold above 5% through 2022, Incrementum said that equity markets could see further losses this year, adding that holding precious metals has proven to provide a cushion for those losses.

The S&P 500 has declined 18% so far this year, approaching bear territory. Meanwhile, gold prices are up 1% on the year as prices push back above critical resistance at $1,850 an ounce.

'The historical performance of gold, silver, and commodities in past periods of stagflation argue for a correspondingly higher weighting of these assets than under normal circumstances,' said analysts. 'But also, the relative valuation of technology companies to commodity producers is an argument for a countercyclical investment in the latter.'"

Davos Top financiers and millionaires just met up in the Swiss Alps. And the mood was terrible. - CNBC
"The world's financial elite gathered in Davos, Switzerland, at the World Economic Forum this week, and a darkening global economic outlook was the number one talking point.

While some foresaw regional pockets of recession in countries or continents particularly exposed to the Russia-Ukraine war and global supply chain problems - with Europe a particular concern - others painted a far bleaker global picture.

Inflation has soared worldwide, with food and energy costs skyrocketing as the war and supply chain bottlenecks bite, along with the residual effects of the Covid-19 pandemic. This has forced central banks to start tightening monetary policy against a backdrop of slowing economic activity.

Recent data indicates that price increases have begun to spill into the underlying economy, posing further risks to global growth and causing headaches for central bank policymakers, who face the unenviable task of tightening monetary policy to rein in inflation without pushing economies into recession....

The surge in food prices was also raised as a central threat by International Monetary Fund Managing Director Kristalina Georgieva, who said during a panel on Monday that the economic horizon has 'darkened' due to the combination of the Russia-Ukraine war, tightening financial conditions, dollar appreciation and the slowdown in China.

'We have a commodity price shock in many countries, and the particular shock I want to bring your attention to is food price shock. Over the last week, because of that sense that maybe the economy is getting into tougher waters, the oil price went down but food price continues to go up, up, up, up,' Georgieva said.

'Why? We can shrink the use of petrol when growth slows down but we have to eat every day, and the anxiety about access to food at a reasonable price globally is hitting the roof.'"

Interest on the debt is a huge threat- The Hill
"The justifiable and unavoidable focus on the highest inflation in 40 years should look beyond its visible impact on the economy and the cost of goods and services. While the most noticeable sign of increased prices appears at gas stations, where they are reaching record highs every day, there are less noticeable but more destructive long-term consequences of higher costs that should be made clearer to the American people.

Over the past two years, $4.6 trillion has been provided by Congress in response to the COVID-19 pandemic. The impact on inflation.... is subject to some debate, but what cannot be denied is the impact this spending has had on the interest paid on the national debt. Between 2011-2018, interest on debt held by the public averaged $272 billion annually. Between 2019-2021, annual interest on the debt averaged $389 billion, an increase of $117 billion, or 43 percent. The president's fiscal 2022 budget, which is the first to project deficits of more than $1 trillion for 10 consecutive years, estimates that FY 2022 interest on debt of $26.3 trillion will be $305 billion and reach $941 billion in FY 2031, or more than triple the amount for the current fiscal year. By that time, interest payments will account for 59 percent of the projected $1.6 trillion deficit.

The projected interest payments in the budget were made with the assumption that 10-year Treasury interest rates would be 1.4 percent in FY 2022, then average 2.2 percent for the next four years and average 2.8 percent for the following five years. But the 10-year Treasury interest rate is already 2.8 percent and likely to go higher given the Federal Reserve Bank's plan to continue raising interest rates....

Overcoming Congress's lack of fiscal responsibility and preventing interest on the debt from becoming not only the largest federal expenditure, but also using up all tax revenue, will be difficult. Far too many members of Congress believe the answer to every problem is to create a program, and if that program does not work, they create another program rather than fixing what went wrong....

President Biden and Congress need to stop spending and start cutting before it becomes too late to stop interest on the debt from growing to become the government's largest expenditure, crowding out all other federal programs, and using up all tax revenue."

Great Resignation regret is sweeping the nation as workers who quit for more money quit again - Business Insider
"The Great Resignation hasn't been so great for everyone.

Even though a record-high 4.5 million Americans quit their jobs in March, fewer appear to be choosing to remain in their new positions, according to a LinkedIn study of 500,000 job changes in 2021 and first reported by Bloomberg.

LinkedIn found that among workers who started new jobs last year, the number who had been in their previous position for less than a year rose by 6.5% compared with the year before. That's the highest percentage of job migration the platform has recorded since it started tracking data in 2016....

LinkedIn's study backs up data from the Bureau of Labor Statistics indicating that a growing number of people who left their jobs to pursue better pay and opportunities are continuing to leave. Even among those who stay put in their new role, one in five polled in a March Harris Poll survey by USA Today said they regretted quitting in the first place.

Though the US economy has recovered about 93% of all the jobs it lost during the coronavirus pandemic, those employed workers are moving around a lot. March was the 10th consecutive month in which more than 4 million Americans resigned. A desire for higher pay, more benefits, and remote flexibility are among the reasons people have been quitting, especially Gen Zers and millennials. But if the LinkedIn study is any indicator, those perks don't necessarily mean they will love their new workplace.

'At the end of the day, you spend most of your life working,' Laurel Camirand, who quit her job for a better one only to leave the new position, told Bloomberg. 'It sucks to be miserable.'"

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5.26.22 - Gold price still on pace to push above $2,000

Gold last traded at $1,850 an ounce. Silver at $21.95 an ounce.

News Summary: Precious metal prices remained stable Thursday as investors weighed the latest U.S. economic reports and upbeat earnings. Stocks higher as Wall Street tried to rebound from a long string of declines.

Gold price still on pace to push above $2,000 as stagflation, recession risks rise - In Gold We Trust- Kitco

"While the gold market remains off its highs from the first quarter, it is still on track to end the year above $2,000 an ounce and push close to $5,000 an ounce by the end of the decade, according to the latest In Gold We Trust Report.

In its annual gold outlook, analysts at Incrementum AG remain bullish on gold as rising inflation threatens to push the global economy into a recession and create a stagflationary environment. The European investment firm issued a warning, saying that normalizing monetary policies worldwide is started to expose major issues in the global economy that were papered over by loose monetary policies and massive amounts of liquidity.

'Just as in 2018, when we warned of the inevitable consequences of the attempted turning of the monetary tides, we are now issuing another explicit warning. In addition to wolfish inflation, a bearish recession now looms,' the analysts said in the report...

With the threat of stagflation looming large, the analysts noted that most investors are inadequately positioned to protect their capital as the traditional 60/40 portfolio structure is expected to see negative returns for only the fifth time in 90 years.

With inflation expected to hold above 5% through 2022, Incrementum said that equity markets could see further losses this year. The analysts said that holding precious metals has proven to provide a cushion for those losses. So far this year, the S&P 500 has lost 18%, dropping below 4,000 points; however, gold prices are up 1% on the year as prices push back above critical resistance at $1,850 an ounce.

'The historical performance of gold, silver and commodities in past periods of stagflation argue for a correspondingly higher weighting of these assets than under normal circumstances,' the analysts said. 'But also, the relative valuation of technology companies to commodity producers is an argument for a countercyclical investment in the latter.'"

inflation Recession, inflation fears creating 'complicated' market for investors to navigate: Citi exec - Fox Business

"Co-Head of Citi's Banking, Capital Markets and Advisory division Tyler Dickson stressed that U.S. investors are dealing with a 'complicated market to navigate' as stocks have experienced weeks of turbulence.

'We have to deal with three Rs on the risk side,' Dickson told 'Mornings with Maria' on Wednesday, noting that the U.S. is dealing with the risk of rates, Russia and recession 'that are weighing heavy on the markets.'...

'Certainly higher rates are creating complexities across various asset classes and from our perspective we do see pressure on housing just like we see pressure on energy and food,' Dickson told host Maria Bartiromo....

'We’re in an inflationary environment,' Dickson stressed. 'We have energy prices high. We have labor prices high. We certainly are seeing challenges with the supply chain.'

He then noted that he believes inflation 'is expected to continue' and that the situation is a 'challenge for the Fed.'

Stocks have had some rough weeks in anticipation of and following the half-point interest rate hike by the Federal Reserve. It was the second of several anticipated increases this year as the central bank seeks to combat soaring inflation, which is at a high not seen in four decades."

Fed minutes point to more rate hikes that go further than the market anticipates- CNBC

"Federal Reserve officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, minutes from their meeting released Wednesday showed.

Not only did policymakers see the need to increase benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings

They further noted that policy may have to move past a 'neutral' stance in which it is neither supportive nor restrictive of growth, an important consideration for central bankers that could echo through the economy....

The May 3-4 session saw the rate-setting FOMC approve a half percentage point hike and lay out a plan, starting in June, to reduce the central bank’s $9 trillion balance sheet consisting mostly of Treasurys and mortgage-backed securities.

That was the biggest rate increase in 22 years and came as the Fed is trying to pull down inflation running at a 40-year high...

The minutes mentioned inflation 60 times, with members expressing concern about rising prices even amid confidence that Fed policy and the easing of several contributing factors, such as supply chain problems, combined with tighter monetary policy would help the situation. On the other hand, officials noted that the war in Ukraine and the Covid-associated lockdowns in China would exacerbate inflation...

Along with their resolve to bring down inflation came concerns about financial stability.

Officials expressed concern that tighter policy could cause instability in both the Treasury and commodities market. Specifically, the minutes cautioned about 'the trading and risk-management practices of some key participants in commodities markets [that] were not fully visible to regulatory authorities.'"

A Comfortable Retirement Appears Out of Reach for Most Americans- Bloomberg

"American workers say it will take $1.1 million on average to retire comfortably — but less than one in four figure they’ll be able to save that much.

Just 22% of people approaching retirement age said they’ll have enough money to maintain a comfortable standard of living, according to the 2022 Schroders US Retirement Survey, down from 26% a year ago. The survey of 1,000 workers was conducted in mid-February, when the S&P 500 Index was higher than it is now.

Many Americans expect a significant shortfall in their retirement savings. Fifty-six percent said they expect to have less than $500,000 saved by the time they retire, including 36% who anticipate having less than $250,000.

The leading concern among American workers about retirement was, not surprisingly, that inflation would shrink the value of their assets. The second most-feared event has likely become a reality, at least right now — 53% worried about 'a major market downturn significantly reducing assets.'....

For those already in retirement, a good chunk of people said they are comfortable, or described their situation as 'not great, not bad.' But 18% said they are struggling, and 5% said retirement is a nightmare."

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5.25.22 - Food Crisis Fuels Fears of Protectionism

Gold last traded at $1,852 an ounce. Silver at $21.95 an ounce.

News Summary: Precious metal prices pulled back Wednesday after a four-day streak of gains, as traders braced for the release of Fed minutes. U.S. stocks climbed despite the fact that Treasury yields were on the downswing.

The S&P 500 is headed lower, which is good for gold - Kitco

"After a one-day reprieve, the S&P 500 is once again seeing some intense selling pressure, and the gold market continues to benefit from the market volatility as prices hold above another critical resistance level at $1,850 an ounce.

As the broad-equity market index continues to struggle and flirt with bear-market territory, the chorus of negative sentiment among economists and market analysts grows. Many analysts are looking for significantly lower price prices through the end of the year....

In the current environment, some market analysts continue to see gold as an important market diversifier and risk hedge against falling equity markets. Gold prices are significantly outperforming the S&P 500.

The broad market index is down 18% this year; meanwhile, gold, trading above $1,850 an ounce, is up more than 1%.

In a recent interview with Kitco News, Axel Merk, President and Chief Investment Officer of Merk Investments, said that although gold faces some challenging headwinds as real interest rates turn positive, it continues to do its job.

He added that rising inflation and market instability will continue to support gold prices.

'The Federal Reserve has one tool and that is not good for risk assets,' he said."

returns

‘Real wealth destruction’: This Deutsche Bank chart shows what could happen to assets in a repeat of the stagflationary 1970s.- Market Watch

"While the decade is still young, if inflation sticks around for the next few years, things could get pretty ugly for investors.

That’s according to this chart from Deutsche Bank, which shows how a range of assets performed during the disco and stagflation days of the 1970s.

While history never exactly repeats, Deutsche Bank strategists were aiming to offer a framework to clients on how to think about the next few years if inflation stays high even after a Fed-induced recession.

'The short answer is that for traditional financial assets like bonds and equities you would expect real wealth destruction rather than the massive real wealth creation seen over the last four decades,' the bank’s strategists Jim Reid and Henry Allen, told clients in a note on Tuesday.

Commodities would likely be a better bet, although given the run up already seen so far this decade, the easy gains have perhaps been made, they noted.

'However, gold and silver haven’t made much progress over the last two years so if the playbook follows the 1970s they are the standout cheap asset from this starting point,' said the strategists"

Food crisis fuels fears of protectionism compounding shortages- Reuters

"A growing world food crisis is precipitating protectionist moves by countries which are likely to compound the problem and could lead to a wider trade war, business leaders and policymakers at the World Economic Forum said.

In a sign of the escalating squeeze on food supplies and rising prices, a government source told Reuters that India could restrict sugar exports for the first time in six years to prevent a surge in domestic prices.

Meanwhile Indonesia, the world's biggest palm oil exporter, will remove a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.

'It is a major issue, and frankly I think the problem is even bigger ahead of us than it is behind us,' Gita Gopinath, first deputy managing director of the International Monetary Fund, told Reuters of rising food security concerns.

Protectionism is looming large at Davos, prompting calls for urgent negotiations to avoid a full-blown trade war.

'It's very important for the leaders of the world to sit at the table with calm and talk about how we will manage trade and food and investment,' Jay Collins, vice chairman of banking, capital markets and advisory at Citigroup told the Reuters Global Markets Forum in Davos....

Russia's invasion of Ukraine, which Moscow describes as a 'special military operation', has led to a sudden crunch in a crisis that was already in the offing.

'We were facing an extraordinary food crisis before Ukraine, food costs, commodity prices, shipping costs were already doubling, tripling, quadrupling,' David Beasley, Executive Director for the United Nations World Food Programme, said."

New home sales plunge nearly 17% in April - Fox Business

"Sales of new single-family houses in the U.S. dropped significantly more than expected last month to the lowest level in two years as rising construction costs, home prices, interest rates and supply chain woes continue to batter the industry.

The U.S. Census Bureau's latest data shows the pace of new home sales fell by 16.6% in April from the month before at a seasonally adjusted rate of 591,000. Analysts surveyed by Refinitiv anticipated a dip of 1.7%.

The drop is 26.9% lower than a year ago, and the lowest since April 2020. This is the fourth straight month new home sales have declined.

'April’s dismal new home sales data shows an industry besieged by higher construction costs, supply chain disruptions and by higher mortgage rates that are giving many potential buyers cold feet,' said Robert Frick, corporate economist at Navy Federal Credit Union.

'Given the pipeline for bringing new homes to market is stretched so thin, we shouldn’t expect home building to add much to housing stock for the foreseeable future,' he added."

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5.24.22 - 1 in 5 Will Change Jobs in the Next Year

Gold last traded at $1,865 an ounce. Silver at $22.08 an ounce.

NEWS SUMMARY: Precious metal prices continued their climb Tuesday - aiming for a fourth straight gain - as the U.S. dollar falls. U.S. stocks resume sell-off on fears of a recession following a brief sell-off reprieve.

Gold ticks higher, aiming for 4-day winning streak as dollar pulls back- Market Watch

"Gold futures ticked higher early Tuesday, aiming for a fourth straight gain, as the U.S. dollar continued to edge back from recent highs....

Gold, which bounced after hitting a three-month low in early May, has benefited as the 10-year Treasury yield pulled back from 3 1/2-year high above 3.2% in recent weeks as a selloff in equities spurred demand for safe-haven assets.

The dollar, as measured by the ICE U.S. Dollar Index, meanwhile, has retreated from a roughly 20-year high.

Gold 'is benefiting from the drop in Treasury yields together with some dollar weakness —- with which it has an inverted price correlation. The stabilization of Treasury yields and the dollar, which have retreated from peaks reached in mid-May, occurs as the markets appear to have priced-in the Fed’s hawkish tilt, and the appearance of some rays of hope for a brighter global economic outlook,' said Ricardo Evangelista, senior analyst at ActivTrades, in a note.

The expected easing of Covid lockdowns across China and a surprising statement from President Biden, hinting at a potential reduction of tariffs applied to Chinese imports on Monday, lifted the mood in the markets and created scope for further gold gains, as dollar demand decreases, he said."

earnings Social Media Stocks Sink to Erase $180 Billion on Snap Warning -Yahoo! Finance/Bloomberg

"Social media stocks lost more than $180 billion in market value Tuesday after Snap Inc.’s profit warning, adding to woes for a sector that is already reeling from stalling user growth and rate-hike fears.

Shares in digital ad-dependent Snap tumbled as much as 41%, their biggest intraday decline ever to trade below its 2017 initial public offering price of $17. The selloff erased about $15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group has seen $181.1 billion billion wiped out....

'At this point, our sense is this is more macro and industry-driven versus Snap specific,' Piper Sandler analyst Tom Champion wrote in a note.

Others on Wall Street agreed, with Citi analyst Ronald Josey saying 'a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising—like Twitter, Google’s YouTube, and Pinterest—are likely experiencing a greater impact overall.'

The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment."

Why Is It Normal For You To Worry About Retirement Before You Retire?- Forbes

"The clock is ticking towards your final day on the job. On the other side sits the promise of a proverbial pot of gold at the end of the rainbow.

Or so you have always been told. And you’ve always believed retirement would be just that.

If that’s all true, why are you so anxious?

'Change is inevitably hard for everyone, and the shift from working to not working is huge!' says Wes Moss, Managing Partner and Chief Investment Strategist at Capital Investment Advisors in Atlanta. 'For many people, they’ve been working since they were in their teens, and they know how to manage a steady incoming stream of income. We’re talking about decades of consistent habits and lifestyle. From a human and psychological level, the transition will nearly always create anxiety. Will I run out of money once there are no more paychecks? What will my purpose be once my career and steady work income stop? So, it’s completely understandable that the transition will create worry.'

Worry comes in many flavors. It exists for many reasons. As you might imagine, money stands as the taproot of this fear. The funny thing, though, is that money may merely be a symptom, or at the very least a metaphor for the real problem....

'Often, people don’t think they have ‘enough’ money,' says Christopher J, Mackin, Partner and Wealth Advisor at Bleakley Financial Group in Boca Raton, Florida. 'It comes from a common scarcity of money mindset where people focus on what is lacking versus how to grow. Shifting this mindset begins with having a plan for your money.'...

'Initially people seem most worried about whether or not they will have enough saved to have a comfortable retirement, where they can take care of themselves and not place any financial burden on their children,' says Matthew Grishman, Principal at the Gebhardt Group, Inc. in Roseville, California. 'Quite often, even when people know they have enough, they still worry about retirement...'"

The Great Resignation looks set to continue — 1 in 5 say they’ll change jobs in the next year- CNBC

"The Great Resignation is set to continue, according to a new global survey by PwC, with one in five saying they are likely to switch jobs in the next 12 months....

The consulting firm said in a press release that higher pay, more job fulfillment and wanting to be 'truly themselves' at work are the factors pushing workers to change jobs.

Some 35% of respondents are planning to ask their employers for more money in the next 12 months.

'The findings are very clear ... you see a significant number of employees concerned about their future employment and their job security,' Bob Moritz, global chairman of PwC, said at the forum.

However, 'the power is now, we would argue — in the hands of individuals that are employed.'

The pressure for more compensation is highest in the tech sector, where 44% of respondents who work in the industry said they plan to ask for a raise, according to PwC. Conversely, only 25% in the public sector said they plan to do the same....

More money is the biggest motivator for a job change, yet finding fulfillment at work is 'just as important,' according to PwC.

Some 71% of survey respondents said a pay increase would prompt them to change jobs, yet 69% said they would change employers for better job fulfillment too."

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