Talking Heads Predict No Recession While Shrinkflation Clips Consumers
Precious metals markets are extending their losing streak as the U.S. dollar pushes higher. The Dollar Index rose for a fifth straight week through Thursday's close.
As of this Friday recording, gold is posting a weekly loss of 1.2% to bring spot prices to $1,901 per ounce. Silver is essentially unchanged for the week to trade at $22.93 an ounce.
Turning to the PGMs, platinum is looking at a slight weekly decline of 0.8% to come in at $925. And finally, palladium prices are down 5.0% this week to trade at $1,292 per ounce as of this Friday morning recording.
Although the downward momentum in metals markets has been fairly steady for over a month, the total amount of price retracement has been modest. Volatility in gold and silver markets has actually been coming down.
When volatility gets compressed, that tends to precede a big move – often in the opposite direction of the prevailing trend, which has been down.
But for the time being, superficially good news on the economy is depressing investment demand for gold and silver. The talking heads on CNBC are now confidently declaring there will be no recession. The official unemployment remains low while inflation measures are moderating.
Meanwhile, though, the average 30-year mortgage rate climbed this week to its highest level in more than two decades. Higher borrowing costs are eating into consumers’ pocketbooks as well as the balance sheets of businesses. The full effects of tighter credit conditions won’t make their way through the economy for months.