Gold Hits 1-Month High, Layoffs Mount, FedWatch Says Four Cuts, Gold and Silver Charts
Gold Hits 1-Month High, Layoffs Mount, FedWatch Says Four Cuts, Gold and Silver Charts
Weekly Recap for the Week Ending March 1, 2024
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.