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  • Metal Market Report December 2022 - Week 2 Edition

Metal Market Report December 2022 - Week 2 Edition

December 2022 - Week 2 Edition

Gold and Silver Move Upwards on Market Fluctuations

Gold and silver shot higher Tuesday morning after the Consumer Price Index (CPI) release came in at a tamer-than-expected increase. The reasoning is convoluted but it basically means the Federal Reserve will likely stop raising interest rates after this week, if inflation stays low, keeping a lid on rates and putting pressure on the U.S. dollar as the euro keeps raising rates to match the dollar. The news sent Gold up from $1,799 to $1,830 in 15 minutes and silver rose from $23.60 to over $24 per ounce before settling back.

Don’t look now, but as we go into the final two weeks of 2022, silver is sporting up almost 4%, year-to-date, and gold is slightly positive. Much of this is due to the sudden decline of the dollar, as inflation recedes and the euro begins to raise rates to match the dollar’s rates, giving the dollar no advantage. 

The Consumer Price Index for November rose just 0.1% over October and is up 7.1% over November last year, down from the 7.3% annual rate last month. “Core” inflation, which deletes volatile food and energy prices, rose 6.0% in the 12 months ending November 30. The core Producer Price Index (PPI), released last Friday, grew by only 4.9% in the past 12 months after running at a 5.4% annual pace in October, so it now looks like inflation may have peaked last June, so the Fed may stop raising rates after this week.

Denmark’s Saxo Bank Analyst Ole Hansen Sees $3,000 to $4,000 Gold in 2023

We haven’t seen a bold gold prediction from a leading global bank in a long time but last week Ole Hansen, the respected commodity strategist at Denmark’s Saxo Bank, says it’s possible for gold to climb as high as $4,000 next year. He cites his reasons being global inflation – despite rising interest rates – on top of a “war economy mentality,” rising deficit spending and a possible global recession in 2023.

In an interview on December 6, Hansen said the Fed will not only end its tightening cycle early in 2023 but the threat of a global recession will force the Fed and other central banks to start pumping liquidity back into the system later in the year. This could drive gold dramatically higher, he said. Hansen sees gold slicing through its double top near $2,075 “as if it wasn’t there and hurtles to at least $3,000 next year.”

On top of all that, global central banks are going on a gold-buying spree, since no leading paper currency looks like the next “global reserve currency” as the dollar is falling from its former leadership perch. In the third quarter, central banks bought approximately 400 metric tons of gold, worth over $20 billion. That’s the most central bank gold buying in over 50 years of record keeping. Most buyers are in Asia, not Europe. Turkey was the top gold buyer last quarter, with regular buyers Uzbekistan, India and China coming in next. With a rising gold and silver market, more people buy gold and silver for the first time and we know that a good percentage of new bullion customers become rare coin investors and collectors over the next two years. This, in turn, drives up the demand and prices of rare coins in the rare coin market.

Morgan Freeman (“Almighty” in two Movies) Discovers the “The Christmas Scale”

Morgan Freeman has played God in two movies, “Bruce Almighty” (2003) and the sequel, “Evan Almighty” (2007). The only actor to exceed that total was George Burns (1896-1996), in “Oh, God!” (1977), “Oh, God! Book II” (1980) and “Oh, God! You Devil” (1984).  I was inspired by Freeman’s story of how his mother taught him a new version of “The Christmas Scale,” which he only played after she had died. Click the Christmas Scale link above to hear his story, in a production from Igniter Media. 

We can all hope that Morgan Freeman, like George Burns (and Bob Hope), will reach 100 (in 2037).

Merry Christmas!

 

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