hernancortes
Fly on the Wall
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Average attendance at my local monthly coin show today
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Gold and the S&P 500 have both rallied to record highs in March, but an analysis provided by Jefferies suggests that the precious metal may perform a bit better than the index in the next month.
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Analysts at Jefferies wrote in a recent note that while easing by the Federal Reserve should benefit both stocks and gold, “it seemed a bit peculiar to us that both would act well together,” so they set out to look at how the index and gold trade following instances when gold is up 5% or more in a month of trading.
“We wanted to see if, easing or not, a rally for each asset could coexist peacefully,” wrote Andrew Greenebaum, senior vice president, equity product management at Jefferies.
He pointed out that gold is “not just making new highs, but really breaking out,” with Fed easing expected to be a “nice catalyst for the yield-free asset,” he wrote. Friday’s “soft” monthly U.S. employment report didn’t do anything to dent those perceived prospects, he said.
Scanning for similar gold rallies going back to 1990, Jefferies found that 5% gold rallies tend to coincide with ”rockier” SPX performance, with one-week to one-month performance “negative to flattish” and while less consistent, gold “tends to see better price performance than SPX in the 12 months after the “initial rip,” averaging 9%-plus, he said.
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The attendance at his local monthly coin show was merely average. [I think. No more interest than usual.]Average attendance at my local monthly coin show today
Wholesale prices accelerated at a faster-than-expected pace in February, another reminder that inflation remains a troublesome issue for the U.S. economy.
The producer price index, which measures pipeline costs for raw, intermediate and finished goods, jumped 0.6% on the month, the Labor Department's Bureau of Labor Statistics reported Thursday. That was higher than the 0.3% forecast from Dow Jones and comes after a 0.3% increase in January.
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Headwind for a rate cut. Headwind for gold.
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What the PPI is telling us. The measure that tracks consumer-facing inflation, the Consumer Price Index, has for months seen hot and rising services inflation, but durable-goods inflation has been negative (deflation) since the peak of the spike in 2022, and these negative readings in durable goods, plus the plunging energy prices of yore provided a big counterweight to services inflation and a downward push for the overall CPI readings in 2023. But this counterweight and downward push is now in the early stages of fizzling – that’s what the PPI is telling us.
Manufacturing activity in the New York region collapsed this month, according to the latest figures published by the New York Federal Reserve.
The regional central bank said on Friday that its Empire State manufacturing survey slid to -20.9 in March, far below February’s reading of -2.4. The data was much worse than expectations, as consensus forecasts called for a shallower decline to -7.
“Manufacturing activity fell significantly in New York State in March, with a decline in new orders pointing to softening demand,” said Richard Deitz, Economic Research Advisor at the New York Fed. “Labor market conditions remained weak as both employment and hours worked decreased.”
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In the end you will still have gold. Right now though crypto is doing exactly what the creators of it wanted and they're benefitting from the taxes generated off it as well.Which horse do you bet your schilling on? The gold pony or the Bitcoin stallion? As far as trading, crypto wins; but the gold is to hold. BTC is still just a hunk of code on a hard drive.
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African cocoa plants reportedly exhaust their bean supply as the worldwide chocolate crisis is intensifying
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One of the world's largest cocoa processors is scouring the globe for beans as weather and disease spark massive crop failures across West Africa and catapult prices in New York to record highs.
"Everybody is panicking," said Brandon Tay Hoe Lian, chief executive officer of Guan Chong Bhd. He said the company is attempting to procure beans from minor growing countries, including Ecuador, Peru, and Indonesia.
The CEO of the Kuala Lumpur-listed company said prices are soaring weekly as coca beans become harder and harder to find: "We not only have to fight for beans, we're also paying premiums."
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Citi Research analysts recently advised clients that prices could reach as high as $10,000 a ton and stay in record-high territory through the second half of 2025.
Meanwhile, US chocolate maker Hershey Company warned last month: "Historic cocoa prices are expected to limit earnings growth this year."
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For gold to set fresh highs, however, Razaqzada said the greenback must resume its downward trajectory.
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Looking ahead, Razaqzada said that the main risk event this week for both the greenback and gold prices will be the Core PCE Price Index on Friday, after which the market’s attention will turn to the March Non-Farm Payrolls and CPI reports early next month.
“The March US data, scheduled for early April release, holds considerable sway over the dollar's trajectory,” he said. “Weakness in these figures, especially in forthcoming inflation data, could precipitate a sustained decline in the dollar, potentially lending support to gold.”
Turning to the technical picture, Razaqzada said that all indications point to gold continuing its recent uptrend in the medium and longer term, even though profit-taking and USD strength have sapped its momentum in recent days.
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Government data Friday, and the end of the quarter. I’d say there’s some window dressing going on.
Full moon this week too, often signal changes in the market
You missed the important details - Monthly and quarterly close above 2200So gold closed the week above $2220. That seems significant. It's likely the $2200 line gets tested on market open on Monday and if it holds, gold is likely going higher next week.
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