Reaction & Commentary
Silver is over 25 dollars it’s up more than it was up more than a dollar at one point today and they’re reacting to a variety of things higher oil prices uh a job openings report that uh might suggest to some people at least uh weakness in the jobs markets uh and other things
Which have caused the dollar and interest rates to both decline so it was a lot to cover today we had started the year late last year early this year our our videos were talking about how we saw the year 2023 to be a year of transition and a year
Transition across a wide range of issues economic Financial Market uh political personal uh and I think that what we’re seeing right now is exactly that people have continually asked us and we’ve continually spoken about what will be the cause of the next big recession or the next political storm uh you know
What’s going to cause that and we have repeatedly said recessions and political issues and financial Market problems occur because of a combination of factors coming together in growing worse simultaneously it’s never or it’s hardly ever one thing that causes the next recession or the next financial crisis and that’s
What we’re seeing right now we’re seeing concerns over Bank industry stability we have had a couple Bank problems over the last month in the course of March and gold prices have responded by Rising silver two uh silver prices Rose very strongly in March and they basically caught up with what
Gold was doing in January and February when when silver was kind of lagging um okay job opportunities report I’ll show you a chart in a second uh I think that you know there could be some misreading going on into what that is um our expectation is let me just go back here
And these are our gold and silver prices through yesterday you can see that gold was testing 2000 yesterday it broke above it we had issued a trade recommendation yesterday saying that if you got to prices at 2010 you might want to reevaluate it and if it goes over
2010 you might want to buy uh and it blew right through 2010 when the Java openings uh report came out today it went to 2040. it’s off a little bit about 2038 the last I looked just before recording this silver was testing uh trying to to prove that it could stay
Above two thousand uh 24 an ounce and in fact it went above 25 an ounce this morning um one of the factors the occasion for those spikes was the jobs opening and labor turnover survey that was released by the Bureau of Labor and you can see from this chart the number of job
Openings were at the lowest level in 21 months you can also see from this chart that the jobs openings remain a multiple of historic uh historic levels so what we saw were fewer job openings left unfilled but still very high levels compared to pre-pandemic uh realities and I think
That’s important because what we saw today was the financial markets looking at the sharp drop in jobs openings and saying ah the FED is going to happen this is another piece of evidence that’s reconfirming our predisposition to believing and insisting that the FED is going to have to stop raising interest
Rates and start lowering it much sooner than the FED thinks and says it’s going to do so looking for justification for the idea that interest rates have got to stop rising and have to fall and one of the big questions is you know the FED is the Fed misreading the
Economy or is the financial markets misreading the fed and the economy and we’ll find out the next fomc meeting is in May but little known fact probably in the markets today the reality is that the Federal Reserve board can change interest rates at any point it does not
Have to wait for a meeting of the fomc it can call a telephonic meeting uh and make a change in interest rates at any time that it wants it tends to do it at fomc meetings but it can actually intervene in the markets and change interest rates at any point I don’t
Think it’s going to but I think that that’s something that’s worth noting because there’s a lot of suppositions about the fed and the fed’s policies and the fed’s intentions and the fed’s future actions and I worry and I think to some extent the other analysts at CPM group will worry that
The markets may be misreading not only the fed’s policies intentions and likely future actions but also other central banks uh policies as I said you know the the market has this predisposed predisposition to seeing interest rates stop and interest rates falling the fed and other central banks well other
Central banks recently have increased their interest rates the FED has said that it expects to raise interest rates at least one more time probably at the fomc meeting in late May uh and it probably it foresees interest rates remaining relatively high around five percent or so uh for for an extended
Period of time until we start seeing economic weakness the question is are we seeing what we have described as the Foothills a precursor to a more serious combination of factors or is this the beginning of that big thing our expectation is still that it is the precursor that we will
Probably see financial markets say oh we have been misreading the Fed it may not occur until the FED raises interest rates let’s fast forward into May uh the end of May and the fomc meets they raise interest rates another 25 basis points the banking industry has not collapsed economic data comes out
Showing that while the economy is slowing it still has a lot of oomph left to IT jobs report comes out this Friday and says okay yes we do have people now coming back into the workforce taking jobs and reducing the number of job openings but we still have twice as many
Job openings as we used to have on a regular basis and a lot of jobs going unfulfilled so it’s possible that you could see the market say we have been misreading the economy and fed policy and interest rates aren’t going to quote pivot as soon as we think and that five percent
Interest rates really isn’t so high as to turn off economic activity and then the correction when such a misreading is realized could be very painful for a lot of Investments so gold and silver prices May uh remain high for now uh but they are vulnerable to a downward
Correction along with a lot of other markets should things change that’s one of the factors that’s there the unemployment report interest rates I think we’ve talked about in this reading next one is oil prices there was a sharp decline announced in production I’m sorry you have to be very
Careful with OPEC and OPEC plus OPEC announced a commitment to reduce production sometimes OPEC announces increases and decreases in production that don’t actually occur there’s a compliance issue with Opex agreements and what its members actually do but on Sunday OPEC plus which includes Russia made an unscheduled announcement that it
Was reducing oil output by 1.16 million barrels per day to 3.66 billion barrels per day that’s a 24 cut in OPEC production that’s really a dramatic factor and we have seen the oil price rise sharply from around 66 dollars in mid march to around 81 dollars for WTI today
Putting it in a broader context it’s a 3.7 percent decline in World production to 31 million uh barrels per day so OPEC is less important to oil than a lot of people think it is uh prices have well they had risen five and a half percent uh yesterday they’ve risen further today
WTI peaked last June at 122 dollars a barrel if bottomed at 66 dollars in the middle of March 46 declining prices over nine months no one should have been surprised that OPEC plus cup production production costs at a lot of OPEC Plus members including Russia are very high I
Got into trouble a year ago when I was talking about the average cost of production within Russia and I put out a number which basically pointed out that uh OPEC that Russia had been suffering from lower oil prices earlier and certain Russian oil producers pointed out to me that their costs were very
Lower and I said that’s true but on average the Russian cost of production is relatively high so too are the costs in Iran and Nigeria and Venezuela and and you saw at 66 a lot of oil exporting countries and OPEC members and Russia losing money on every barrel of oil that
They shipped out and by the way the vast majority the largest portion of Russian trade over the last year has continued to be in the US dollar settlement it has declined the U.S dollar settlements but it is still the bulk of Russian trade settled in U.S dollars So
When you start hearing people talk about how the Russians don’t use the dollar anymore um don’t believe it also the state of international Affairs they’re very important to the oil price they’re very important to oil we’ve gotten uh China coming in and helping broker a partial reproachment between
Iran and Saudi Arabia in that they reopen their embassies which they closed a few years ago they’re still bitter Rivals but you know the enemy of my enemy is my friend uh and the enemy of my enemy can be uh my my enemy too in which case I’m going to befriend my
Enemy so the politics are much more complicated than the simplistic views you’ll hear from Talking Heads on television and on the internet and you have to watch out for that oil prices have risen uh it’s not clear how much higher they will rise the dollar has
Fallen if not much clearer how much more dollar weakness we may see politics continue to be problematic and internationally you still have the US versus China and that’s growing probably worse the Russian war and Ukraine continues uh Finland is joining NATO uh NATO is supplying Advanced tanks and and
Old Soviet era Jets to Ukraine which could actually turn the the the war there are increasing signs of cracks within the Russian government and Russian military uh that we remain to be seen how that’s all going to shake out and then there’s domestic U.S domestic politics France the UK Hungary Germany turkey
There are a range of Islamic countries that have problems and China is probably having some internal discussions within the Communist Party of China about the direction of the country so there is a combination of factors that have caused investors to increase their interest in gold and silver over the last two days
And over the last few weeks and that has led to this elevated price in gold and silver we still think that the prices will rise sharply we do think that there is the potential for prices to come off in the second and third quarters of this year
On a temporary basis before we see a more forceful upward move possibly later this year more likely in our mind in 2024. because we think that all of those that Litany of issues that I just ran through will probably be even more problematic for economic growth in 2024 than they are in 2023.
That’s pretty much what I’ve got to say today um I will say the gold yearbook our our annual review and Outlook of gold is out now we released it uh late last week or actually Tuesday of last week you can buy it online download it it’s an e-book
It’s about 240 Pages or so uh you can buy that and you can pre-order not pre-order but you can Pro proactively order our silver yearbook and our Platinum yearbooks I’d been making a mistake and saying that the silver yearbook would be launched in late April actually we have we’ll launch it on the
16th of may we have a variety of other issues that I think that we have to do in late April and early May so we will be launching the silver yearbook on May 16th with an online briefing you can pre-order that book you can pre-order the Platinum
Group metal share book which we will release in July uh that’s about all I have right now go to YouTube and see our earlier uh videos um you can go to our website and download a variety of things including some of our videos and some of our free reports and presentations and speeches
Um and you can buy some of our research if you need it take care and enjoy yourself
