Articles
US Treasuries Boom: Paying Out $2 Million Per Minute Amidst Rising Yields
US Treasuries are generating unprecedented returns, paying out about $2 million per minute in interest, as yields have surged to over 4% from virtually zero just two years ago. This dramatic shift, spurred by rate hikes from the Federal Reserve, has revitalized Treasuries as a stable source of income, reflecting their traditional economic role. Last year alone, interest payments on US government debt nearly doubled the decade's average to $900 billion, with projections from the Congressional Budget Office expecting this figure to continue rising annually.
Gold's Rally Pauses As Market Consolidates
Gold's price rebound has stalled this week, remaining capped below $2330 as it shows little response to US bond yields, the US dollar, or recent geopolitical developments. The market has entered a phase of consolidation, maintaining a narrow trading range with support near $2286 and resistance at $2330. Despite the general upward momentum, gold has struggled to break above the $2330 mark, largely unaffected by stable US bond yields and the dollar, as well as ongoing geopolitical tensions. For now, traders are favoring a range-bound strategy until a clear directional signal emerges.
2024 U.S. Election: A Turning Point for Gold and Other Key Commodities
The upcoming 2024 U.S. presidential election is poised to significantly influence the markets for gold, silver, Platinum Group Metals (PGMs), copper, and crude oil. Regardless of whether the current political balance of power remains or shifts, the anticipated policy debates and adjustments in response to public opinion are expected to shape market dynamics. Notably, a potential change in administration could lead to reduced environmental spending impacting copper and silver negatively, while possibly benefiting PGMs and fossil fuels. The election's outcome will also affect America's foreign policy stance, particularly towards China and Iran, further influencing gold and oil prices.
China’s Aging Population Catalyzes a New Era in Gold Jewelry Demand
China's "silver economy," driven by the middle-aged and elderly populations, is sparking a new gold rush. In 2023, retail sales from large-scale jewelry enterprises soared to 331 billion RMB ($45.7 billion), marking a 13.3% year-over-year increase, one of the highest growth rates across consumer goods. This surge in demand, both for personal adornment and investment, has prompted a significant uptick in new business registrations in the jewelry sector. Over 2.6 million new companies were registered from January to October 2023 alone, demonstrating an 89.9% increase from the previous year.
Gold and Copper Shine Bright: The Start of a Prolonged Bull Market
In the midst of escalating geopolitical tensions, gold and copper have become key commodities, not just weathering market volatility but flourishing. Gold, a long-established safe-haven asset, has seen prices soar to near record highs due to its appeal in uncertain times, with central banks, especially in emerging markets, significantly boosting their reserves—290 tons in the first quarter of 2024 alone, a record according to the World Gold Council. This trend underscores a strategic pivot towards gold as a reserve currency, moving away from the U.S. dollar, and suggests that both gold and copper may be at the start of a prolonged bull market that investors should closely watch.