On November 27, 2023, with gold at $1,993 and silver at $24.86, I boldly predicted on my YouTube channel that both precious metals would surge by the end of 2024. My targets were $2,400 for gold and $30 for silver.

Here's my rationale:

I anticipated the Fed easing interest rates around mid-2024. This tends to weaken the dollar, causing gold prices to rise. Historically, the gold-to-silver ratio has stabilized around 80:1. My projections assume this ratio will hold, meaning a $2,400 gold price implies a $30 silver price.

On the verge of breaking out:

Today, April 11, gold touched $2,390. That’s just $10 shy of my end-of-year price prediction. That’s great, right? Actually, for me, it’s not. It’s troubling. I may have got the price right but it’s for the wrong reasons.

The Fed's grip slips:

This week's economic data reveals stubborn inflation, raising fears the Federal Reserve may delay or even forgo those anticipated summer rate cuts. This should spell trouble for precious metals, which usually weaken when rates rise. Yet, gold is defying expectations and soaring towards record highs.

Could it be the Fed's grip is weakening? For over a year, their interest rate decisions dictated the price of gold. But now, powerful new forces are in play – forces that might ultimately outmuscle the Fed's influence.

1. Central Bank Gold Buying:

• Impact: Increased demand from central banks can drive up gold prices. If central banks are diversifying their reserves away from the US dollar and towards gold, it can weaken the dollar's influence and strengthen gold's appeal as a safe haven asset.

• Evidence: Several central banks, particularly in emerging markets such as China, have been increasing their gold holdings in recent years.

2. Risks of Out-of-Control Inflation:

• Impact: Gold is often seen as a hedge against inflation. If investors fear the Fed is losing control of inflation, they might flock to gold as a store of value. Rising inflation can erode the value of paper currencies like the dollar, making gold more attractive.

• Evidence: Recent inflation data is concerning, and the Fed's ability to contain it without harming economic growth is a major question mark. This uncertainty is likely driving some investors towards gold.

3. Conflict in Europe and the Middle East:

• Impact: Geopolitical instability can lead to increased demand for safe-haven assets like gold. Investors might seek to protect their wealth during periods of heightened risk. War creates uncertainty and disrupts traditional markets, making gold a more appealing option.

• Evidence: The ongoing conflict in Ukraine and tensions in the Middle East are contributing to a more volatile global environment. This could be pushing investors towards gold as a hedge against potential economic disruptions.

The interconnected web:

It's important to remember that these factors are interconnected. Inflation fears might be driving central bank gold buying, while geopolitical tensions are adding fuel to the inflationary fire. All these events together can create a complex market dynamic where the Fed's traditional tools, like interest rate manipulation, might have a lessened impact.

What happens next?

I have no idea.

We’re in no-man’s land now with gold at record highs, and thus no ceiling to meet price with resistance.

Costco is taking gold mainstream with sales estimated by Wells Fargo to be as much as $200 million per month. Gold is making the news. Every day new record prices. The new movie "Civil War" (2024) is a dystopian thriller set in a fractured United States, and sure to make people even more nervous. Global thermonuclear war is a real threat.

It’s the 1970s all over again:

With my target price on the verge of getting taken out, here's another bold call: we could be on the cusp of a precious metals mania, just like the wild ride of the late 70s.

I was there, a stacking teenager in the thick of it. What began as a hobby turned surreal overnight: lines around the block to sell the family silverware! Silver soared to $50 per ounce (about $200 today). The whole town caught the fever, a mix of FOMO and panic. Then, just like that, a government crackdown on margin trading killed the frenzy.

It's the closest we've been to that kind of mania since. Will history repeat itself? Only time will tell. But one thing's for sure: the hardest part isn't getting in, it's knowing when to get out before the bubble bursts.

Subscribe now

I’m giving away 5 ounces of silver on my YouTube channel.

Bullion.com asked me to review their website, and they supplied 5 ounces of silver to give away during the review.

So if you haven’t entered already then click on the link below. It’s entirely free to enter. Details are in the video.

Update: The giveaway is closed. Congrats to the winner!

1. Gold prices disconnect from the Fed

The following strong jobs report from the BLS should have sent precious metals prices downward.

The labor market continues to thrive, with March job creation easily surpassing expectations. Nonfarm payrolls jumped by 303,000, well above the projected 200,000 and February's revised growth of 270,000, as reported by the Bureau of Labor Statistics.

After all, that was the reaction in the treasury market.

10-year Treasury yield jumps after stronger-than-expected jobs report.

The Fed has been in the driver’s seat for precious metals prices for well over a year now.

Investors expect that falling Federal Reserve interest rates would boost gold prices by weakening the dollar and making gold a more appealing investment. However, a strong labor market reduces the likelihood of those rate cuts, which in turn could keep gold prices down.

Except it didn’t this time.

Today, gold is up 1.64% to $2,345 and silver is up 0.97% to $27.45.

Has the Fed lost control of gold and silver pricing? While it’s too early to tell I think we could say that they are in the process of losing control.

Conflicts around the world are not de-escalating. Internal conflicts are not de-escalating. BRICS is de-dollarizing (the removal of the dollar as a reserve currency). China and other central banks are stacking tonnes of gold. Could this be the Force Majeure moment? Time will tell.

Check out my 40 Emergency 'Go Bag' Essentials From Amazon

2. CME FedWatch chart

Something significant has changed in the CME FedWatch data… There’s now the possibility of rate increases in 2024. Although less than 1% for now, a move up to 550-575 just showed up in the charts.

Still, the most likely scenario is one rate cut in June or July and then two more in September/December for three cuts totaling 75 basis points.

3. Gold and silver charts

Gold

Sale prices (green shade) have reduced overall but physical gold coin buying remains steady. As investors get used to these higher prices, with a floor possibly in at $2,300, buyers aren’t shying away.

Silver

We’ve seen some dealer discounts in silver coin premiums (green shade), but overall those are pulling back. Regular-price bullion volume has been trending down since February showing that buyers are not willing to chase silver prices higher.

Disclaimer: City Stacker is intended to provide general information and personal opinions related to disaster preparedness and investing in precious metals. I am not a certified financial planner (CFP), chartered financial analyst (CFA), or a certified public accountant (CPA). The content of this publication should never be considered a substitute for professional financial advice. Before taking any action based on anything within this publication, you should always consult with a qualified financial professional familiar with your unique situation. Investing involves risks, and I am not liable for any investment decisions made or results obtained from the use of information in this publication.

1. Saudi Arabia plans to dominate mining

Saudi Arabia has set its sights on becoming a dominant force in the global mining industry. The country possesses a wealth of mineral resources, and it aims to leverage these resources to play a key role in the ongoing shift towards renewable energy sources. This ambitious plan involves capturing as much of the mining value chain as possible, from extraction and processing to refining and manufacturing.

However, there are significant hurdles that Saudi Arabia needs to overcome. One challenge is the lack of a skilled workforce in the mining sector. Additionally, the country has limited water resources, which are essential for many mining processes. Despite these obstacles, Saudi Arabia remains confident that its strategic investments and meticulous planning will propel it to the forefront of the mining industry.

Source: Inside Saudi Arabia’s plan to dominate mining

2. CNBC claims gold has only risen 1% in last century

Annie Nova for CNBC offered the following article for us to consider. Like many people who don’t understand gold and why people want to stack the precious metal, she falsely claims that gold has only increased, on average, by 1% since 1924. The author makes this false claim by citing another article without doing her due diligence. Let’s do that for her now.

In 1924 the price of gold was fixed at $20.67 per ounce before getting repriced by FDR in 1933 to $35, and then allowed to float by Nixon in 1971. Yesterday’s closing gold price was $2,168.80 per ounce.

Calculating Compound Annual Growth Rate (CAGR) is simple using those three numbers and the formula:

CAGR = (Ending Value / Beginning Value)^(1 / # of Years) - 1

CAGR = ($2168.80 / $20.67)^(1 / 100) - 1

Which yields a CAGR of 4.76% over the last 100 years, not the 1% that Annie reported. How could she have gotten it so wrong?

One could only speculate, but I think framing the article in the way she did by associating gold investors with extreme doomsday peppers gives us a clue. That is an attempt to discredit gold as sound money and to discourage investment in tangible assets that preserve our wealth. The author apparently would have us rely on the state and its money-printing machine to secure our futures.

Since Jan 2000, gold has yielded a CAGR of 8.89%. With facts free of bias we’re better able to decide our future for ourselves.

Source: How doomsday preppers made gold and silver precious end-of-the-world assets

Check out my 40 Emergency 'Go Bag' Essentials From Amazon

3. Layoffs continue to slow

Rising costs and fears of a recession are leading companies to announce layoffs to cut expenses. So far, March is seeing a reduced velocity of layoffs compared to prior months.

Companies announcing job cuts in 2024:

March

Stach: 25% of workforce
Inscribe: 40% of workforce
Our Next Energy: 13% of workforce
Project Ronin: 100% of workforce
Pristyn Care: 7% of workforce

February

Fisker: 15% of workforce
Electronic Arts: 5% of workforce
Sony Interactive: 8% of workforce
Bumble: 30% of workforce
Expedia: 8% of workforce
Finder: 17% of workforce
Buzzfeed: 16% of workforce
Rivian: 10% of workforce
Farfetch: 25% of workforce
CISCO: 5% of workforce
Wint Wealth: 20% of workforce
Away: 25% of workforce
Instacart: 7% of workforce
Mozilla: 5% of workforce
Riskified: 6% of workforce
Wisense: 100% of workforce
Everybuddy: 100% of workforce
CodeSee: 100% of workforce
Grammarly: 230 employees
Docusign: 6% of workforce
Amazon: 400 employees
Snap: 10% of workforce
Twig: 100% of workforce
Okta: 7% of workforce
Zoom: 2% of workforce
Polygon: 19% of workforce

4. CME FedWatch chart

Red squares continue moving to the right, indicating lower probabilities of upcoming rate cuts. Several recent inflation signals indicate the Fed will have to maintain rates higher for longer. Rate cuts as early as June may be off the table. It also seems increasingly likely there will only be three cuts this year totalling 75 basis points.

5. Gold and silver charts

Gold

Fueled by FOMO, gold buyers eagerly snatched up available inventory despite limited gold coin sales events. During the week volume spiked in discount-priced coins while remaining steady on regular-priced products.

Silver

We’ve seen some pullback in online dealer discounts in silver premiums, indicated by the green-shaded area. The blue shade shows the volume of regular-priced bullion coins, which have remained rangebound since early January.

With gold’s recent surge to all-time highs buyers we eager to jump on gold deals, as indicated by the green peak to the right side of the chart. Silver bullion action remained muted.

Disclaimer: City Stacker is intended to provide general information and personal opinions related to disaster preparedness and investing in precious metals. I am not a certified financial planner (CFP), chartered financial analyst (CFA), or a certified public accountant (CPA). The content of this publication should never be considered a substitute for professional financial advice. Before taking any action based on anything within this publication, you should always consult with a qualified financial professional familiar with your unique situation. Investing involves risks, and I am not liable for any investment decisions made or results obtained from the use of information in this publication.

Precious metals like gold and silver bullion are often considered safe-haven investments. However, understanding the sales tax implications when buying or selling bullion in the United States can be tricky as the rules differ from state to state.

The Patchwork of State Laws

Currently, many states exempt gold, silver, and other precious metals from sales tax. These exemptions are often designed to encourage investment in bullion, recognizing its value as a store of wealth. On the other hand, some states do apply sales tax to bullion purchases, potentially impacting investment decisions.

Factors Affecting Sales Tax

Here are some key factors that determine whether or not you'll pay sales tax on gold and silver bullion:

• State of Purchase: Your state's specific tax laws are the primary factor. Check your local government website or consult a tax advisor for the most up-to-date information.

• Type of Bullion: Sales tax may apply to numismatic coins (those with collectible value beyond their metal content) even in states with bullion exemptions.

• Sales Threshold: Some states have a minimum purchase amount below which bullion transactions are exempt from sales tax.

• Dealer Reputation: Reputable precious metals dealers will clarify the sales tax situation within your state.

State-Specific Tax Guides

Here are some resources to help you track sales tax laws on precious metals:

• APMEX state-specific guide

• Bullion Exchanges state-specific guide

• SD Bullion state-specific guide

Important Considerations:

• Tax Laws Change: Always check for the most current regulations, as sales tax laws can be updated.

• Investment Strategy: Factor in the potential impact of sales tax when making gold or silver bullion investments.

Examples:

Case Study 1: Texas Gold Buyer

• Scenario: A Texas resident purchases a 10 oz. gold bar and several American Silver Eagle coins from a reputable dealer.

• Tax Situation: Texas exempts gold, silver, and platinum bullion from sales tax. The individual pays no sales tax on this purchase.

Case Study 2: California Numismatic Collector

• Scenario: A collector in California purchases a rare, historical gold coin with a significant value beyond its metal content.

• Tax Situation: While California exempts most bullion above a specific sales threshold, numismatic coins may be subject to sales tax due to their collectible status. The collector likely pays sales tax on the coin.

Case Study 3: Investor Crossing State Lines

• Scenario: An investor living in a state with sales tax on bullion seeks a better deal in a neighboring state with an exemption. They travel across the border to purchase a substantial amount of silver bars.

• Tax Situation: The investor might still be liable for "use tax" in their home state, even though the purchase was made elsewhere. It's essential to consult a tax advisor in these situations.

Case Study 4: Online Purchase Considerations

• Scenario: A resident of a state with bullion sales tax buys gold online from a dealer located in an exempt state.

• Tax Situation: In some cases, online retailers might be obligated to collect sales tax even if they are based in a state with exemptions. Additionally, the purchaser might need to declare the purchase and pay use tax in their home state.

Disclaimer: This article is for informational purposes and should not be taken as professional tax advice. Always consult a tax advisor for guidance specific to your situation.

Domestic

1. Gold hits all-time high

Following last week’s core PCE inflation-fueled buying, gold prices continued to be bid up this week on expectations of Fed rate cuts in June.

Gold bugs were eager to buy, bidding gold price up to over $2,200 intra-day on Friday. As FOMO buyers rush in, I expect to see strong gold prices continue into next week. Mainstream news reporting on gold's recent performance and its potential for further gains will likely fuel this momentum.

2. Layoffs ease

Rising costs and fears of a recession are leading companies to announce layoffs to cut expenses. So far, March is seeing a reduced velocity of layoffs compared to prior months.

Companies announcing job cuts in 2024:

March

Inscribe: 40% of workforce
Our Next Energy: 13% of workforce
Project Ronin: 100% of workforce
Pristyn Care: 7% of workforce

February

Fisker: 15% of workforce
Electronic Arts: 5% of workforce
Sony Interactive: 8% of workforce
Bumble: 30% of workforce
Expedia: 8% of workforce
Finder: 17% of workforce
Buzzfeed: 16% of workforce
Rivian: 10% of workforce
Farfetch: 25% of workforce
CISCO: 5% of workforce
Wint Wealth: 20% of workforce
Away: 25% of workforce
Instacart: 7% of workforce
Mozilla: 5% of workforce
Riskified: 6% of workforce
Wisense: 100% of workforce
Everybuddy: 100% of workforce
CodeSee: 100% of workforce
Grammarly: 230 employees
Docusign: 6% of workforce
Amazon: 400 employees
Snap: 10% of workforce
Twig: 100% of workforce
Okta: 7% of workforce
Zoom: 2% of workforce
Polygon: 19% of workforce

3. CME FedWatch chart

Up slightly from the prior week, the first likely cut is expected in June with a 57.4% probability of a 25 basis point reduction. Like last week, the chart suggests four cuts totaling 100 basis points are the most likely scenario for the year.

4. Gold and silver charts

Gold

Fueled by FOMO, gold buyers eagerly snatched up available inventory despite limited gold coin sales events. During the week volume spiked in discount-priced coins while remaining steady on regular-priced products.

Silver

We’ve seen some pullback in online dealer discounts in silver premiums, indicated by the green-shaded area. The blue shade shows the volume of regular-priced bullion coins, which have remained rangebound since early January.

A reduction in discounted premiums volume would potentially indicate a change in the trend toward higher premiums. Watch out for that.

Disclaimer: The Pipeline is intended to provide general information and personal opinions related to disaster preparedness and investing in precious metals. I am not a certified financial planner (CFP), chartered financial analyst (CFA), or a certified public accountant (CPA). The content of this publication should never be considered a substitute for professional financial advice. Before taking any action based on anything within this publication, you should always consult with a qualified financial professional familiar with your unique situation. Investing involves risks, and I am not liable for any investment decisions made or results obtained from the use of information in this publication.

The private sector added 140,000 jobs in February, showing improvement but falling slightly below analyst forecasts for 150,000. This information comes from the payroll processing firm ADP. While slower than predicted, the growth reflects a still-active labor market.

Several industries saw gains. Leisure and hospitality led the way with 41,000 new positions, followed by construction (28,000). Trade, transportation, utilities, finance, and other services also added jobs. Most growth occurred in larger companies and within the services sector.

Importantly, pay increases for workers who didn't switch jobs slowed to 5.1% – the smallest rise since August 2021. This could hint at easing inflation pressures and Fed rate cuts this year.

Gold and silver prices have been inversely coupled with Federal Reserve interest rates. Future rate cut expectations could signal higher precious metals prices.

The ADP report arrives as economists closely watch the labor market for signs of economic health. Will 2024 see a slowdown after a decent 2023?

ADP's chief economist Nela Richardson notes:

Jobs are still being added steadily, and while pay increases are slowing, they're outpacing inflation. There's a lot going on, but nothing yet indicates the Fed will change its approach to interest rates.

The ADP data comes ahead of Friday's official job numbers from the Labor Department. ADP's figures have recently been lower than the government's report. Economists anticipate a Friday count of 198,000 new jobs.

Domestic

1. Gold hits 1-month high on PCE data

Gold bugs were eager to buy, and the in-line core PCE inflation data provided the perfect excuse. Data was only on-consensus yet investors bid spot gold up by 0.57% to $2,054 per ounce.

If gold prices rise as inflation data meets analysts’ expectations, what can we expect when inflation data comes in better than expected? Citi Bank said gold could reach $3,000 within the next year or so.

The News

Gold prices climbed to a one-month high on Thursday, fueled by a softer dollar following in-line inflation numbers. Investors are now closely watching Federal Reserve officials for any hints about potential interest rate cuts.

The recent inflation data, while not surprising, provided enough encouragement for gold investors to buy. The PCE price index (excluding food and energy) rose 0.4% in the last month and 2.8% year-over-year, aligning with market expectations.

This data release weakened the dollar, making gold more affordable for international buyers. However, the Fed's preferred inflation measure (core CPE) held steady at 0.4%, indicating that any near-term rate cuts remain unlikely.

Key Points:

• Gold often benefits from a weaker dollar.

• Investors are eagerly analyzing any economic signals that could influence the Federal Reserve's interest rate decisions.

The Fed's preferred inflation measure (core CPE) excludes food and energy.

Source: Bureau of Economic Analysis

Personal income increased $233.7 billion (1.0 percent at a monthly rate) in January, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $67.6 billion (0.3 percent) and personal consumption expenditures (PCE) increased $43.9 billion (0.2 percent).

The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.4 percent. Real DPI decreased less than 0.1 percent in January and real PCE decreased 0.1 percent; goods decreased 1.1 percent and services increased 0.4 percent.

Keep in mind these numbers are always revised down at a later date.

2. Layoffs mount

Workers are bearing the brunt of economic uncertainty. Rising costs and fears of a recession are leading companies to announce layoffs to cut expenses.

Companies announcing job cuts in 2024:

February

Fisker: 15% of workforce
Electronic Arts: 5% of workforce
Sony Interactive: 8% of workforce
Bumble: 30% of workforce
Expedia: 8% of workforce
Finder: 17% of workforce
Buzzfeed: 16% of workforce
Rivian: 10% of workforce
Farfetch: 25% of workforce
CISCO: 5% of workforce
Wint Wealth: 20% of workforce
Away: 25% of workforce
Instacart: 7% of workforce
Mozilla: 5% of workforce
Riskified: 6% of workforce
Wisense: 100% of workforce
Everybuddy: 100% of workforce
CodeSee: 100% of workforce
Grammarly: 230 employees
Docusign: 6% of workforce
Amazon: 400 employees
Snap: 10% of workforce
Twig: 100% of workforce
Okta: 7% of workforce
Zoom: 2% of workforce
Polygon: 19% of workforce

January

Paypal: 9% of workforce
Block: 10% of workforce
Kiwi.com: 18% of workforce
Salesforce: 1% of workforce
Microsoft: 1900 employees
Business Insider: 8% of workforce
SAP: 7% of workforce
eBay: 9% of workforce
Wayfair: 13% of workforce
Amazon: 13 employees
YouTube: 100 employees
Discord: 17% of workforce
Audible: 5% of workforce
Citrix: 12% of workforce
Google: 1,000 employees
Instagram: 60 employees
Twitch: 35% of workforce

3. CME FedWatch chart

The CME Group has revised its projections for near-term interest rate cuts. March and May cuts are now off the table, confirming the previous outlook. The first likely cut is expected in June with a 54.2% probability of a 25 basis point reduction. Compared to last week, the chart now indicates a higher probability of earlier rate cuts (red boxes shifted left). Additionally, the chart suggests four cuts totaling 100 basis points are the most likely scenario for the year.

4. Gold and silver charts

We’ve seen some pullback in online dealer discounts in premiums, indicated by the green-shaded area. The blue shade shows the volume of regular-priced bullion coins, which have remained rangebound since early January.

A reduction in discounted premiums volume would potentially indicate a change in the trend toward higher premiums. Watch out for that.

Disclaimer: City Stacker is intended to provide general information and personal opinions related to disaster preparedness and investing in precious metals. I am not a certified financial planner (CFP), chartered financial analyst (CFA), or a certified public accountant (CPA). The content of this publication should never be considered a substitute for professional financial advice. Before taking any action based on anything within this publication, you should always consult with a qualified financial professional familiar with your unique situation. Investing involves risks, and I am not liable for any investment decisions made or results obtained from the use of information in this publication.