Weaker US dollar adds fuel to precious metals fire
Frankfurt (Jun 9) Coming under the influence of strong outside bullish forces, gold rose over 1.40% today. Little sister silver is up around 4.00%.
We are not looking at safe haven plays today, surely, but rather at a general sense that gold and silver have been trading too low for too long and now are fulfilling their potential as strong investments with the upside looking very positive.
A weaker U.S. dollar added some fuel to the precious metals fire but it was in regular trading that gold and silver found their renewed action.
Additionally, the yield on the 10-year U.S. bond fell to roughly 1.70, making gold more attractive to those who like their investments slow but steady. The lower yield, like the softening greenback, are further reflection of sentiment that says there will be no interest-rate hike next week after the FOMC meets.
U.S. equities moved modestly higher mostly on the continuing bounce in crude, but on other materials as well. Yet transportation issues were down. Always a fly in the ointment, isn’t there?
Asian stocks were mixed in the midst of a 6.8% growth rate prediction by China’s central bank but a slashing (and burning) of China’s stumbling export levels. If you believe domestic consumption will compensate for the halving of export growth, we have a slightly used bridge in Brooklyn for sale, cheap.
The world bank sees through the Chinese charade. It lowered global growth forecasts from 2.9% to 2.4%. Care to guess what country most of that dip will come from?
Worries about world growth also weighed on Europe’s bourses, although the London FTSE was up mildly. Best to shy away from London till after the Brexit vote on the 23rd of June.
There seems to be a conundrum of galactic proportions going on in the United States labor market. The labor participation rate is terrible, as it has been for some time.
There are a number of silver linings in the statistics. Elder people (read that to be over 55) are retiring rather than hassling with searches for a new position. More young people are staying in school longer or are returning quickly after graduation for more training or enhancement.
However, many people simply will not take minimum wage positions anymore and that is leading to some serious labor shortages in unskilled fields.
Job openings and labor turnover (JOLTs) data for April showed a larger-than-expected jump in openings, which totaled 5.8 million. Economists who keep an eye on labor statistics thought the number would come in at 5.7 million.
The next time someone tells you that they can’t find a job, tell them they’re not looking hard enough. There are close to 6 million openings going begging.
Maybe it’s time to take a closer look at standards for those receiving government benefits? It can be done judiciously and without rancor.
At the same time, it’s time to raise the minimum wage to a livable level. $7.25? We need to get serious about it.