1. The Federal Reserve’s interest rate cut last week has given prospective homebuyers something to celebrate – lower borrowing costs. The half-percentage-point cut took rates off a 23-year high, where they’d been for more than a year, and the central bank signaled that more cuts could be on the way. But while lower mortgage rates may translate to more buying power for homebuyers, America’s housing market woes aren’t likely to be solved solely by rate cuts. A shortage of homes for sale, combined with rising expenses like homeowners’ insurance and rent, have made the cost of both owning and renting a home in America increasingly unaffordable for many, taking an ever-growing share of Americans’ paychecks and savings accounts. “No question this is good news,” said Shaun Donovan, a former Secretary of Housing and Urban Development. “But there’s a lot more we have to do to solve an unprecedented housing crisis in this country.”
2. Gold rose to fresh all-time high as traders digested data showing a moderation in U.S. business activity while awaiting a slew of key economic readings that may offer clues on the scope of further easing by the Federal Reserve. Bullion rose as much as 0.5% to a record $2,634.90 an ounce, beating the previous all-time high posted on Friday. Gold has advanced since the Fed lowered its benchmark interest rate by half a percentage point last week, building on what was already a record-setting year for the precious metal. Federal Reserve Bank of Minneapolis President Neel Kashkari said he expects to lower interest rates by smaller, quarter-point moves at each of the central bank’s two remaining meetings this year. “After 50 basis points, we’re still in a net tight position so I was comfortable taking a larger first step,” Kashkari said on Monday. “As we go forward, I expect, on balance, we will probably take smaller steps unless the data changes materially.”
3. The U.S. economy grew at a 3% annualized pace in the second quarter, a faster rate than Wall Street had expected. The Bureau of Economic Analysis’s third estimate of second quarter U.S. gross domestic product (GDP) was unchanged from the second estimate which had shown 3% annualized growth. Economists had estimated the reading to show annualized growth of 2.9%. The third estimate for second quarter GDP confirms that economic growth was higher than the 1.4% annualized growth seen in the first quarter. “The revisions only strengthen our conviction that the economy will continue to expand at a decent pace over the coming year, which suggests labor market conditions are unlikely to deteriorate markedly from here,” Oxford Economics deputy chief economist Michael Pearce wrote in a note to clients on Thursday.
4. General Motors and Ford Motor would need to stop exporting vehicles from China to the United States under a proposed rule cracking down on Chinese software and hardware, a Commerce Department official stated on Monday. GM sells the Buick Envision and Ford sells the Lincoln Nautilus — both assembled in China for the U.S. market. The automakers did not immediately comment. “We anticipate at this point that any vehicle that is manufactured in China and sold in the U.S. would fall within the prohibitions,” said Liz Cannon, who heads the Commerce Department’s information and communications technology office. GM and Ford are aware, she added, that “going forward” that production in China for the United States market “would need to be shut down in China and moved elsewhere.”
5. The next administration “must grapple with widening budget deficits,” warned Moody’s Ratings in a report published Tuesday, nearly a year after it announced a negative outlook for the country’s sovereign credit profile. “The administration’s tax and spending policies will affect the size of future budget deficits and the expected decline in U.S. fiscal strength, which could have a significant effect on the sovereign credit profile,” analysts led by Claire Li and William Foster wrote in the report. “These debt dynamics would be increasingly unsustainable and inconsistent with a Aaa rating if no policy actions are taken to course correct.” Last November, Moody’s lowered the U.S. sovereign outlook to negative from stable while affirming the nation’s rating at Aaa, the highest investment-grade notch. Moody’s is the only one of the three main credit companies with a top rating on the U.S. after Fitch Ratings downgraded the government in August 2023 after another debt-ceiling battle in Congress. S&P Global Ratings stripped the U.S. of its top score in 2011 amid that year’s debt-limit crisis.
6. A fresh reading on inflation Friday keeps the Federal Reserve on track to continue cutting interest rates this fall, likely in 25 basis point increments. The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index that excludes volatile food and energy prices clocked in at 2.7% over the prior year during the month of August. That was in line with expectations and up a tenth of a percent from 2.6% in July. It remains above the Fed’s 2% target. The result means that a bigger 50 basis point cut may be hard to justify at the Fed’s next meeting in November, according to some Fed watchers.
7. The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, pointing to a still low level of layoffs that could ease fears over the labor market’s health. Initial claims for state unemployment benefits dropped 4,000 last week to a seasonally adjusted 218,000 for the week ended Sept. 21, the Labor Department said on Thursday. Economists polled had forecast 225,000 claims for the latest week. Though the labor market has lost momentum amid declining job openings and a step-down in hiring, layoffs have remained low and there are no signs of deterioration.
8. Oil prices sank more than 2% on Thursday after it was reported Saudi Arabia is determined to start unwinding voluntary production cuts starting Dec. 1, even if it leads to a “prolonged period” of lower crude prices. The report, which cited people familiar with Saudi Arabia’s thinking, said the country is ready to abandon its unofficial price target of $100 a barrel for crude in order to regain market share. On Thursday, West Texas Intermediate fell more than 2% to trade below $68 per barrel. Brent, the international benchmark price, also dropped as much as 3% to hover around $71 per barrel.
9. EUR/USD edges higher in Thursday’s North American session after correcting to near 1.1120 on Wednesday. The major currency pair rebounds even as U.S. macroeconomic data came in higher than expected and amid a big day for Federal Reserve speakers. On Wednesday, the shared currency pair faced selling pressure after testing territory above the round-level resistance of 1.1200 as the U.S. Dollar bounced back. The Dollar Index, which tracks the Greenback’s value against six major currencies, hovers near Wednesday’s high around 101.00.
10. The Japanese Yen receives downward pressure as traders expect the BoJ to delay further rate hikes. The BoJ Meeting Minutes highlighted a consensus among members on the need to remain vigilant regarding inflation risks. Advance in U.S. Dollar has scope to extend above 145.00; the major resistance at 145.50 is likely out of reach for now. In the longer run, sharp advance reinforces view that USD could recover further to 145.50.
Consumer confidence tumbled in September as Americans grow increasingly worried about a cooling labor market. The latest index reading from the Conference Board was 98.7, below the 105.6 seen in August and lower than the 104 economists had expected. The drop in consumer confidence from August to September was the largest decline since August 2021, according to the Conference Board. “Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further,” Conference Board chief economist Dana Peterson said in the release. “Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income.” Unemployment has steadily risen throughout 2024 and sits at 4.2%, just below its highest level in almost three years. Meanwhile, job openings declined in July to their lowest level since January 2021.
Mortgage applications have jumped to the highest levels since July 2022, driven by homeowners seeking to refinance their loans as rates drop. Applications to refinance or purchase a home in the week that ended Sept. 20 rose 11% week over week, according to the Mortgage Bankers Association (MBA). Refinancing applications jumped 20% during that period as more consumers sought to take advantage of falling mortgage rates. It’s the second consecutive week of double-digit application gains. Refinancings made up nearly 56% of applications as the typical summer homebuying season wraps up, according to the MBA. The average rate on a 30-year fixed mortgage dropped steadily over the summer, falling to 6.09% as of Sept. 19, according to Freddie Mac data. That’s down more than a percentage point from a year earlier. Refinancing applications were 175% higher than a year ago. The signs of life in the mortgage market follow a slow summer homebuying season that saw many potential buyers stay on the sidelines amid limited inventory and record-high home prices.
Gold hit another all-time high this week. Recent gains for the precious metal are largely credited to ongoing economic uncertainty, geopolitical tensions and strong demand from central banks around the world. If trends continue, analysts have bullish outlooks on the price of gold for the months ahead. This week’s record high means that the price of gold has climbed hundreds of dollars per Troy ounce over the last year. Tuesday’s price is up nearly $145 from a month ago and more than $740 from this time in 2023. The price of gold is up nearly 30% year to date, outpacing the benchmark S&P 500’s roughly 20% gain since the start of 2024. Silver hit the highest level since 2012, while gold reached a new record as expectations for additional Federal Reserve interest-rate cuts boosted precious metals. The white metal climbed as much as 2.8% to $32.71 an ounce on Thursday, extending this year’s gain to 37%. Silver has been one of the year’s best-performing major commodities.
Volatility should be expected to remain high as investors will be closely watching for hints on upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hopes that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Sept. 20, 2024 | Sept. 27, 2024 | Net Change | ||
| Gold | $2,619.60 | $2,644.99 | 25.39 | 0.97% |
| Silver | $31.13 | $31.47 | 0.34 | 1.09% |
| Platinum | $979.30 | $1,005.90 | 26.60 | 2.72% |
| Palladium | $1,076.99 | $1,015.49 | -61.50 | -5.71% |
| Dow | 42061.85 | 42333.07 | 271.22 | 0.64% |
Previous Year Comparisons
| Sept. 29, 2023 | Sept. 27, 2024 | Net Change | ||
| Gold | $1,849.92 | $2,644.99 | 795.07 | 42.98% |
| Silver | $22.19 | $31.47 | 9.28 | 41.82% |
| Platinum | $906.60 | $1,005.90 | 99.30 | 10.95% |
| Palladium | $1,250.42 | $1,015.49 | -234.93 | -18.79% |
| Dow | 33508.85 | 42333.07 | 8824.22 | 26.33% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2598/2570/2515 | 30.75/30.05/28.99 |
| Resistance | 2649/2677/2728 | 31.81/32.51/33.56 |
| Platinum | Palladium | |
| Support | 982/966/958 | 1012/985/950 |
| Resistance | 1007/1015/1035 | 1187/1107/1121 |