Private-sector hiring continues to slow, but workers are finding pay increases for remaining in their current positions.

The U.S. economy saw softening private-sector job creation last month, adding to evidence of a slowing labor market heading into December that could boost the case for a final Federal Reserve rate cut.

Payroll-processing group ADP said Wednesday around 146,000 jobs were created in the private sector last month, a decrease from the downwardly revised tally of 188,000 in October.

Economists had expected ADP’s National Employment Report to show gains of around 166,000 as hiring slowed into the middle of the fourth quarter.

Investors are also likely to focus on wage and earnings details provided in the ADP release, which showed a year-on-year increase of 4.8% for so-called job stayers. That’s the first increase in more than two years for those workers who remained in their positions. 

Those seeking new roles saw pay gains of 7.2%, the lowest wage premium for changing jobs in more than three years.

“While overall growth for the month was healthy, industry performance was mixed,” said ADP’s chief economist, Nela Richardson. “Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft.” 

Earlier this week, data from the Bureau of Labor Statistics showed that October job openings rose to around 7.7 million position while the so-called quits rate edged higher, to 2.1%. The report suggested workers are still finding higher-paying roles even amid a broader slowdown in hiring.

Stock futures added to gains in the wake of the ADP release, with the S&P 500 called 18 points higher and the Nasdaq set for a 150-point advance at the start of trading. The Dow is priced for a 165-point gain.

Benchmark 10-year Treasury note yields held steady at 4.271% following the release, while 2-year notes were last pegged at 4.2% following their biggest two-day pullback of the year.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.2% higher 106.58.

Read the full article HERE.

The threat of a tax on imports will be his all-purpose lever in foreign and even domestic policy.

Well, here we go. Donald Trump is still two months from returning to the White House, but he’s already wielding tariffs as an all-purpose bludgeon to achieve his political and foreign-policy goals. Markets will have to get used to it because this is going to be Mr. Trump’s second-term method, no matter the economic and strategic ructions.

The President-elect issued a broadside Monday on Truth Social vowing 25% tariffs against all goods from Mexico and Canada, and a new 10% tariff on imports from China. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” he wrote about the Canada and Mexico levies.

The first political point to note is that Mr. Trump’s tariff justification isn’t economic or based on the traditional claims about cheating or “dumping” products in the U.S. That would typically require studies that find economic harm or a national-security threat.

The tariff here is in service of Trump’s campaign promise to reduce illegal migration and fentanyl smuggling. He vows to take unilateral executive action without any explicit legal rationale. Mr. Trump is threatening the countries, including two neighbors and allies, with economic harm if they don’t help him solve a domestic U.S. problem.

This is an extraordinary use of tariffs, but Mr. Trump is going to use this threat often in his second term. He tried a version of this in his first term to coerce Mexico into assisting him in better policing the border, and he liked the result. Mexico went along with the Remain in Mexico program that held migrants on the Mexican side of the Rio Grande while they awaited asylum rulings.

The hopeful interpretation now is that Mr. Trump is merely using tariffs again as a negotiating strategy to get these countries to help. If they act to reduce the flow of drugs and people, he’ll lift the tariff threat and claim political victory at home.

The problem is that this strategy isn’t cost free and there can be collateral damage. Start with the U.S. auto industry, which depends on cross-border trade to remain competitive. Vehicle components and raw materials move back and forth across North American borders as cars are assembled. A 25% tariff on each border pass would raise prices and cost American jobs. It’s no accident that shares of Ford Motor (-2.6%) and General Motors (-9%) fell sharply on Tuesday on the tariff news. Mr. Trump may not care about stock prices, but what about his new working-class coalition?

There is also the potential risk of retaliation. Mexican President Claudia Sheinbaum on Tuesday offered to talk to Mr. Trump about fentanyl and migration. But she also said she is prepared to respond with tariffs on U.S. exports. Mexico has shown in the past that it can be politically shrewd choosing the American goods and areas it targets with tariffs. Think swing Congressional districts and states.

“One tariff would be followed by another in response, and so on until we put at risk common businesses,” Ms. Sheinbaum said. She has her own economic nationalists to please.

There’s also the not-so-small matter that Mr. Trump’s tariffs, if imposed, would shatter the U.S.-Mexico-Canada Agreement that he negotiated and signed in his first term. The pact’s terms say it can’t be reviewed until 2026, and then the parties have another decade to negotiate new terms or abandon it.

In 2019 Mr. Trump said the USMCA would be “the best and most important trade deal ever made by the USA.” If he blows it up based on his own short-term political needs, he’ll send a message around the world that his—and America’s—treaty word can’t be trusted. U.S. trading partners and allies everywhere will get the message, and China will be courting them with promises of a more reliable export market. Using trade to punish allies is especially short-sighted if you want their help against Chinese mercantilism.

It’s also possible that Mr. Trump views tariffs not merely as a tool for ad hoc negotiation but as a lever to remake the entire global trading system. In that case he’ll try to build high tariff walls in an attempt to force U.S. and foreign companies to build nearly everything in America. The economic and political harm from that strategy is for another day, but investors can’t rule it out and members of Congress would be wise not to give him that power.

As we wrote during the campaign, tariffs were the main economic risk of his candidacy. Mr. Trump campaigned as the Tariff Man, and he aims to impose them early and often. Get ready for what could be a wild ride.

Read the full article HERE.

Key Takeaways

Retirement savings are crucial for a secure future, but Americans in their 50s face unprecedented challenges. They’ll need to overcome these issues to experience a comfortable retirement, but it’s important to understand the most significant burdens.

Here are five key roadblocks Americans in their 50s will need to overcome in order to build a secure future.

1. Shifts in retirement planning

One of the biggest challenges near-retirees face in the U.S. today is shortfalls in retirement savings accounts that result from getting caught in a transformational period.

Defined benefit pension plans were once the norm when it came to retirement savings. Workers did their jobs and employers offered a pension that provided a guaranteed lifetime income in retirement, with the amount paid dependent on things like salary and years of service.

In 1978, however, 401(k) deferred compensation plans were introduced, and a seismic shift occurred. Employers began moving toward defined contribution plans that required workers to decide how much and where to invest funds. This pension alternative became increasingly popular over time and is now standard practice in the private sector.

Americans in their 50s were among the first given the complex task of investing enough to support themselves in their later years. Many were unprepared to take on this obligation, potentially leading to shortfalls in retirement savings accounts.

To overcome this, workers must invest wisely. Those in their 50s should get as close as possible to maxing out their 401(k), including taking advantage of catch-up contributions available for those 50 and over. Build a budget around this goal and automate the process to maximize your chances of success.

2. Lifestyle inflation

Lifestyle inflation is another issue. This can occur when you increase your spending and living standards as your income increases. For example, while you might have once been happy with an older used car or a smaller home, you’re now eyeing that sprawling property or BMW after getting a big raise.

While there’s nothing inherently wrong with upgrading your standard of living slowly over time, it can become a problem if you aren’t living within your means or don’t prioritize saving for the future over consumption.

Unfortunately, many Americans may not be capable of exercising this level of discipline. Bank of America data shows that the proportion of people living paycheck-to-paycheck increases with age.

One way to help curb this problem is to bank at least a portion of your raises or bonuses. If you’re comfortable living your current lifestyle, any salary increases can go toward savings rather than spending more.

3. Student loan debt

While student loans are often considered a young person’s issue, that’s not necessarily the case. In fact, according to Pew Research Center, 14% of adults ages 40 to 49 still have student debt, as do 7% of people between 50 and 59, from their own education.

Some Americans in their 50s might also have student loans taken out on behalf of their kids. While this certainly may have a positive impact on a child’s future prospects, burdening yourself with student debt at this age can also place your retirement security at risk.

Those who still carry student debt may want to check out different repayment plans and possibly assistance programs offered through employers. Parents thinking about taking on debt for their kids need to review their finances closely to ensure it’s affordable, or explore alternative ways to secure funding.

4. High housing costs

Home prices, along with mortgage rates, remain elevated. The median sale price of a house sold in the U.S. in the third quarter of 2024 was $420,400, according to the Federal Reserve Bank of St. Louis. As of Nov. 27, 30-year fixed-rate mortgages averaged 6.81%, per Freddie Mac.

Furthermore, those who purchased a home when mortgage rates plummeted during the pandemic may find themselves trapped by their low-rate loan and unable to afford to move because of present-day home prices and borrowing costs.

Those struggling with housing expenses may want to carefully consider their options. Downsizing could make sense if you can use your home equity to buy a smaller home with cash and avoid today’s high rates. Looking into non-traditional homes, such as multi-generational living arrangements, could also be a viable solution for some families as many young people are also struggling to buy.

5. Supporting adult kids

Finally, supporting adult kids can be a significant roadblock to saving for retirement, and it’s a common one. In fact, a Savings.com study found 47% of parents with grown kids provide them with some kind of financial support (not including adult children with disabilities). On average, these parents fork over twice as much to support their kids as the average working parent contributed to their own retirement account. This can be a serious drain on resources.

Overcoming this obstacle can mean tough conversations between parents and children. Parents can still help by offering non-financial assistance, such as tips on budgeting, or both sides can work together on developing a roadmap to financial independence.

Fortunately, all of these common roadblocks can be overcome. Start planning today to help yourself retire in time and with the money you need.

Read the full story HERE.

Earlier this year, the Czech Republic’s central bank chief flew to London to have a look at a swelling stack of gold bars stored in the Bank of England’s concrete-encased vaults beneath Threadneedle Street.

Ales Michl’s mission to inspect the precious metal held for the Czech National Bank was part of the governor’s stated ambition to double the country’s stockpile to 100 metric tons in the next three years. It’s increased fivefold since he took office in 2022 with an aim to diversify the bank’s reserves.

“We need to reduce volatility,” Michl, who grew animated when queried on the subject, told Bloomberg Television earlier this month. “And for that, we need an asset with zero correlation to stocks, and that asset is gold.”

The Czech policymaker isn’t alone in accelerating bullion purchases. Peers from Warsaw to Belgrade are joining the gold rush as a way to diversify investments and bet on future price increases, making eastern Europe one of the biggest buyers of the metal and helping to drive the gold rally.

Central banks around the world are stocking their gold arsenals as a shield against external shocks such as prospective trade wars brought on by Donald Trump’s second presidency and geopolitical tensions in Ukraine and the Middle East. But eastern European monetary guardians have made a particular show of topping up their gold piles.

In addition to Michl’s foray to London, his counterpart in Warsaw has penned a movie script on the history of Polish gold. Serbian authorities hauled their stockpile held abroad home to keep it safer in Belgrade — and help cut storage costs.

Striving for a sense of security is a powerful motive in a region that’s been ravaged by Europe’s wars of the past — and that now finds itself next door to the continent’s deadliest conflict since World War II.

An exclusive club

Poland, which shares a border with Ukraine and is a staunch supporter of Kyiv’s war aims, was the largest buyer of gold globally in the second quarter, according to the World Gold Council’s latest data.

Poland’s central bank governor, Adam Glapinski, said gold and hard currency reserves are crucial to protecting the economy against catastrophic events. He increased bullion holdings to some 420 tons as of September, about half the stockpile of India or Japan.

“We are entering the exclusive club of the world’s biggest gold owners,” Glapinski gloated during a news conference last month, reinforcing his aim to raise gold’s share to 20% of all reserves.

The head of the National Bank of Poland lamented having no time to work on his draft script. A YouTube video produced by the central bank in February shows Glapinski basking in a vault lined with sealed boxes of six thousand gold bars, intoning that the stash “is the property of all Polish people.”

The Czechs are also prospective club members. The central bank in Prague boasts about $150 billion in foreign reserves — nearly half of gross domestic product — one of the world’s biggest by proportion.

Michl, whose diversification drive includes US stock purchases, has confronted some criticism for buying gold as it reached a market record this year. Monetary officials have pushed back by insisting that the long-term purchases are gradual, reducing the impact of price volatility.

With the geopolitical winds churning, gold purchases have been a good bet for monetary policymakers. Goldman Sachs Group Inc. listed the metal among top commodity trades for 2025, saying prices could extend gains during Trump’s presidency and reach $3,000 an ounce by December next year.

“Geopolitical fragmentation is favorable for gold, while gradual dollar weakening should be a further tailwind,” Bank J. Safra Sarasin said in a report from Nov. 10.

For eastern Europe’s leaders, gold is viewed as a safe harbor — and a political selling point — as they maintain often complex balancing acts between the West, Russia and China. The Hungarian central bank has boosted its gold stash by more than a 10th to 110 tons this year.

The country’s Prime Minister Viktor Orban has relished being the EU’s chief disruptor with his ties to the Kremlin and Trump.

The central bank in Budapest has also lauded the metal as a safe haven. But gold has a role in the country’s historic identity.

The Money Museum, located in one of the palaces owned by the Hungarian National Bank, features a steam locomotive fashioned from yellow bars. The sculpture, called “The Rumble,” depicts the central bank’s staff, which fled the Soviet military at the end of World War II on a train loaded with gold reserves to prevent it from falling into foreign hands.

The associations figure no less in Serbia, where President Aleksandar Vucic, who like Orban holds a firm grip on power, had the country’s stockpile held outside the country repatriated in 2021. This year, he promised to buy bullion with “every surplus of money” that’s left in state coffers “to be safe and secure in hard times.”

Serbia’s central bank governor, Jorgovanka Tabakovic, has overseen a tripling of gold reserves to 48 tons since taking office in 2012. The accumulation was handled closely with Vucic, who provided the “strategic thinking, knowledge of global geopolitical relations and information” to back the gold purchases, she said.

“Gold is gaining value and importance in times of global turbulences, especially in geopolitical conflicts and periods of high inflation,” Tabakovic said in emailed response to questions. “Unfortunately, in recent years we’ve seen both factors at play.”

Read the full article HERE.

Inflation edged higher in October as the Federal Reserve is looking for clues on how much it should lower interest rates, the Commerce Department reported Wednesday.

The personal consumption expenditures price index, a broad measure that the Fed prefers as its inflation gauge, increased 0.2% on the month and showed a 12-month inflation rate of 2.3%. Both were in line with the Dow Jones consensus forecast, though the annual rate was higher than the 2.1% level in September.

Excluding food and energy, core inflation showed even stronger readings, with the increase at 0.3% on a monthly basis and an annual reading of 2.8%. Both also met expectations. The annual rate was 0.1 percentage point above the prior month.

Services prices generated most of the inflation for the month, rising 0.4% while goods fell 0.1%. Food prices were little changed while energy was off 0.1%.

Fed policymakers target inflation at a 2% annual rate; PCE inflation has been above that level since March 2021 and peaked around 7.2% in June 2022, prompting the Fed to go an on aggressive rate-hiking campaign.

While the inflation rate has fallen significantly since the Fed started tightening, it remains a nettlesome problem for households and figured prominently into the presidential race. Despite its deceleration over the past two years, the cumulative impacts of inflation have hit consumers hard, particularly on the lower end of the wage scale.

Consumer spending was still solid in October, though it tailed off a bit from September. Current-dollar expenditures rose 0.4% on the month, as forecast, while personal income jumped 0.6%, well above the 0.3% estimate, the report showed.

On the inflation side, housing-related costs have continued to boost the numbers, despite expectations that the pace would cool as rents eased. Housing prices rose 0.4% in October.

Read the full article HERE.

President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the US’s top trading partners since his election win three weeks ago.

Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada, in posts to his Truth Social network on Monday.

The US dollar staged a broad advance Tuesday, with the Mexican peso and the Canadian dollar among the worst performers. US Treasuries fell, with the yield on 10-year notes rising two basis points to 4.3%, partially reversing the reaction to Scott Bessent’s nomination last week as Treasury secretary, which weighed on the dollar and boosted US bonds amid optimism of a more measured approach to trade relations.

Trump’s market-moving threats were a stark reminder that he plans to wield tariff authority, or at least threaten to use it, as leverage against allies and adversaries alike. It’s another sign of his break from the international order where low tariffs are the goal and rules exist to discourage overreach of punitive trade actions.

In his Truth Social posts, Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders.

He accused China of failing to follow through on promises to institute the death penalty for traffickers of fentanyl, writing that “drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”

“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.

In another post, the incoming president also vowed to hit Mexico and Canada with a 25% tariff on “ALL products,” saying he would sign an executive order to that effect on his first day in office.

“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” he said. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Shortly after Trump’s post, Canadian Prime Minister Justin Trudeau contacted the president-elect and the two leaders had a phone call to discuss border security and trade, according to a government official with knowledge of the matter.

Immigration Response

Trudeau pointed out to Trump that the number of migrants who cross the Canadian border into the US is minuscule compared to those who cross from Mexico, said the official, who spoke on condition of anonymity.

Canada said it’s working closely with US law enforcement agencies every day to disrupt the “scourge of the fentanyl coming from China and other countries,” according to a statement by Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.

Liu Pengyu, spokesman for the Chinese embassy in the US, said economic and trade cooperation between both countries is mutually beneficial. “No one will win a trade war or a tariff war,” he wrote in an X post.

The Foreign Ministry in Beijing said in a statement Tuesday that China has provided support to America’s fight against fentanyl which is “US’s problem,” though it stopped short of mentioning any planned trade retaliation.

Representatives for the Mexican Foreign Affairs Ministry and Economy Ministry, as well as China’s Commerce Ministry, didn’t immediately respond to requests to comment. Spokespeople for Trump didn’t immediately answer a question about whether there would be exemptions from the duties.

Trump campaigned on pledges to implement sweeping tariffs, vowing to hike tariffs to 60% for all goods imported from China and as high as 20% for those brought in from the rest of the world — policies he says will help pressure companies to re-shore manufacturing jobs in the US and raise revenue for the federal government.

President Joe Biden has already hiked tariffs on a variety of Chinese imports this year, including semiconductors, solar cells and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The move was the culmination of a review of Trump’s tariff increases in his first term — none of which were rolled back.

While it was unclear how Trump’s 10% tariff threat on China fit in with his previous statements calling for even higher duties, analysts saw this as an opening gambit aimed at the drug problem.

China’s Response

This “does not necessarily mean that Trump’s promised 60% tariffs on all Chinese imports are off the table,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “China will register its opposition and consider limited retaliation but is likely to respond cautiously at first to Trump’s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term.”

While public health experts say fentanyl overdoses remain a major issue, provisional data released earlier this month by the Centers for Disease Control and Prevention showed a 14% drop in drug overdose deaths from June 2023 to June 2024. President Biden hailed US-China cooperation on counter-narcotics this month during a meeting with counterpart Xi Jinping in Peru.

Higher North American tariffs would upend the auto industry and other consumer sectors, including food, in which the three countries are highly integrated.

Mexico’s auto sector is particularly exposed to a trade conflict with the US, along with factories that export electronics, plastics and other manufactured goods to US consumers. Mexico became the US’s largest trading partner as China’s import share declined in recent years. The Mexican government estimates there’s now $800 billion annually in total trade between the nations.

‘Stir the Debate’

The Canadian and US auto industries are so intertwined, and work on such thin profit margins, that a 25% tariff is “not a real conversation,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, a Canadian industry group.

“The president-elect has done what he’s famous for, which is try to stir the debate. The only surprise is how early he’s done it,” Volpe said. “What we learned in the first term was he uses strong rhetoric, public rhetoric. But the negotiations are always tough, but reasonable — and I’m just telling everybody to be patient.”

A 25% tariff applied to all imports from Canada would put pressure on energy costs. Oil, gas and other energy products are Canada’s largest export to its southern neighbor; it’s by far the largest external supplier of crude to the US. Wilbur Ross, Trump’s former Commerce secretary, said earlier this month it would make no sense to place tariffs on Canadian energy.

The move on Mexico and Canada would reignite a trade feud that simmered across the continental bloc during Trump’s first term, where he forced a renegotiation of the North American Free Trade Agreement and imposed tariffs on certain sectors, including steel.

Currently, the re-branded trade pact, known as the United States-Mexico-Canada Agreement, allows for duty-free trade across a wide range of sectors. It’s not clear what recourse American importers, who would pay the duties, would have under the pact to head off any levy.

Beyond Bessent, Trump still has a number of top economic roles to fill in his administration. One of the chief architects of Trump’s tariff agenda, former United States Trade Representative Robert Lighthizer has yet to land a role in the second term.

Read full article HERE.

Democrats still refuse to admit that their policies caused inflation—and cost them the election.

Election defeats are never easy to accept, but the Bidenomics rear-guard action now underway among Democratic economists takes the denial stage of grief to a whole new level. The argument is two-fold: What the Biden Administration did worked fine, and if you didn’t like it, the next Trump Administration will be worse. Voters didn’t believe it, and neither should Democratic politicians.

The political problem Team Biden’s pugnacious rump (and its cheerleaders in academia and on Wall Street) must confront is inflation. The price level rose by more than 20% over President Biden’s term while inflation-adjusted wages lagged. While this crew touts disinflation since 2022—the economics term for a deceleration in price rises—this doesn’t mean prices are returning to their prepandemic level. Far from it: Inflation rates persistently above 2.6% mean prices continue to rise faster than the Federal Reserve’s 2% target.

Voters blamed President Biden and Congressional Democrats. A prime culprit is the $1.9 trillion American Rescue Plan (ARP) passed on a party-line vote in March 2021. Even some liberal economists such as Larry Summers warned it would be inflationary, and consumer prices began their rapid ascent soon after passage. It didn’t help that the Fed effectively monetized much of this debt via a quantitative-easing program that saw the central bank’s holdings of Treasury securities increase by $3.2 trillion between March 2020 and spring 2022.

One element of the rear-guard defense of Bidenomics is to argue inflation was a consequence of pandemic disruptions, almost entirely independent of Washington’s spending spree. An example comes via Peter Orszag, the Obama-era head of the Office of Management and Budget, who recently blamed supply-chain disruptions for 79% of the inflation experienced in 2021.

A growing body of economics research attempts to separate the supply and demand-side causes of the inflation in this way. These papers typically conclude the demand side (meaning, the target of the Biden spending) had relatively little to do with it.

But this elides the question of how and why consumers were able to pay the higher prices caused by supply-chain disruptions, and why prices for other goods and services didn’t fall to offset. A big part of the answer is the Biden budget blowout, and voters seem to have spotted the omission before the election.

That leaves other revisionists to argue that even if the Biden spending bills were inflationary, they were worth doing because the economy would have been worse without them. “Any scenario that envisions less inflation from a reduced ARP also has to wrestle with slower growth, higher unemployment and more child poverty,” Jared Bernstein of the White House Council of Economic Advisers told a Journal reporter.

Really? By March 2021, gross domestic product (in nominal and real terms) had returned to its prepandemic level and the unemployment rate had fallen to about 6% from a high of nearly 15%. The main impediment to growth was the supply-side drag from lingering school closures, persistent social distancing and attempted workplace vaccine mandates. Oh, and the chronic threat of tax increases, high-cost energy policies and overregulation.

Voters saw through this argument, too, perhaps because Mr. Trump himself was on the ballot. His first term delivered impressive pre-Covid economic growth and low unemployment without a spike in inflation. Voters didn’t believe that Mr. Bernstein’s trade-off between inflation and employment exists.

Undeterred by any self-awareness, the Biden rear guard now warns Mr. Trump will deliver, well, the same bad outcomes they did. In particular, they caution his tariffs and big deficits from tax reform will be inflationary.

One can say a lot of negative things about Mr. Trump’s tariffs—we have and will—but this is the wrong argument. It highlights the revisionists’ confusion about the difference between relative prices (which the tariffs will change) and the overall price level (which depends on many factors).

As for fiscal policy, a lot hangs on the nature of the tax cut, the size of the deficit, and whether households and businesses think taxing and spending decisions will generate enough economic growth to pay off the debt. Mr. Trump has to prove he can strike this balance, but don’t trust the revisionists to judge whether he has. They’ll oppose any tax cut because what they want is more spending.

The story of the Biden years is that Democrats pumped up demand via massive spending while sitting on the supply side of the economy with pandemic policies and measures that made it harder for businesses to invest. Voters understood the failure, and Democrats anxious to rebuild trust would be wise to reflect on it.

Read the full article HERE.

Gold prices rose over 1% to hit a two-week peak on Friday, heading for the best weekly performance in more than a year, buoyed by safe-haven demand as Russia-Ukraine tensions intensified.

Spot gold jumped 1.3% to $2,703.05 per ounce, hitting its highest since Nov. 8. U.S. gold futures gained 1.1% to $2,705.30.

Bullion rose despite the U.S. dollar hitting a 13-month high, while bitcoin hit a record peak and neared the $100,000 level.

“With both gold and USD (U.S. dollar) rising, it seems that safe-haven demand is lifting both assets,” said UBS analyst Giovanni Staunovo.

Ukraine’s military said its drones struck four oil refineries, radar stations and other military installations in Russia.

Gold has gained over 5% so far this week, its best weekly performance since October 2023. Prices have gained around $173 after slipping to a two-month low last week.

“We understand that the price setback has been used by ‘Western world’ investors under-allocated to gold to build exposure considering the geopolitical risks that are still around. So we continue to expect gold to rise further over the coming months,” Staunovo said.

Bullion tends to shine during geopolitical tensions, economic risks, and a low interest rate environment. Markets are pricing in a 59.4% chance of a 25-basis-points cut at the Fed’s December meeting, per the CME Fedwatch tool.

However, “if Fed skips or pauses its rate cut in December, that will be negative for gold prices and we could see some pullback,” said Soni Kumari, a commodity strategist at ANZ.

The Chicago Federal Reserve president reiterated his support for further U.S. interest rate cuts on Thursday.

On Friday, spot silver rose 1.8% to $31.34 per ounce, platinum eased 0.1% to $960.13 and palladium fell 0.6% to $1,023.55. All three metals were on track for a weekly rise.

Read full article HERE.

Gold prices rose in on Thursday as heightened tensions between Russia and Ukraine underpinned safe haven demand, helping bullion weather strength in the dollar.

Gold rose for a fourth consecutive session, extending a rebound from over two-month lows. But the yellow metal’s pace of gains now appeared to be slowing amid pressure from the dollar, as traders second-guessed expectations for lower U.S. interest rates. 

Spot gold rose 0.8% to $2,670.80 an ounce, while gold futures expiring in December rose 0.8% to $2,673.45 an ounce by 09:19 ET (02:19 GMT). 

Russia-Ukraine tensions support gold demand 

The yellow metal was underpinned by higher safe haven demand in the face of increased tensions between Russia and Ukraine, after the U.S. authorized the use of long-range missiles by Kyiv.

Russia had responded by lowering its threshold for nuclear retaliation, and warned of a dire escalation in the conflict over the U.S. move. Ukraine launched a series of missile strikes against Russian territories this week, using Western-made weapons. 

Fears of an escalation in the conflict drove traders towards gold, helping the yellow metal recover after it plummeted from record highs over the past two weeks.

Dollar, yield strength limits gold recovery 

Gold was nursing steep losses in the past two weeks as risk appetite was initially boosted by Donald Trump winning the 2024 presidential election.

Trump’s victory also saw traders pricing in the prospect of higher U.S. interest rates in the long term, which supported the dollar and Treasury yields. The greenback traded just below a one-year high on Thursday.

Uncertainty over U.S. interest rates was furthered by sticky inflation data released last week, while the Federal Reserve struck a less dovish tone in recent addresses. 

Traders were seen scaling back expectations for a December rate cut. 

CME Fedwatch showed traders pricing in a 57.3% chance for a 25 basis point cut in December, compared to a 85.7% chance seen last week. Bets on a hold rose to 42.7% from 14.3% a week ago.

This notion pressured gold, given that higher rates increase the opportunity cost of investing in the yellow metal.

Other precious metals rose on Thursday but were also nursing losses over the past two weeks. Platinum futures fell 0.03% to $965.65 an ounce, while silver futures rose 0.4% to $31.125 an ounce. 

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.3% to $9,060.50 a ton, while December copper futures fell 0.6% to $4.1303 a pound.

Copper prices were walloped by increased concerns over slowing Chinese demand, especially as recent stimulus measures and economic readings from the country underwhelmed.

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Sentiment readings currently don’t suggest a major top is near

Looking to 2025, I am reiterating my bullish call on gold  — even, and over U.S. stocks.

Going back to 1980, there have been several distinct gold bull-bear cycles. For example, gold topped out at 850 in early 1980 and began a bear market that bottomed in 1985. It traded sideways and made a second bottom in 1999 and then made new recovery highs in 2004 before topping out in 2011. It subsequently broke out again at 2,100 in early 2024 and the rally has continued.

Gold now is tracing out saucer-shaped multi-year bases against different regional stock indices. The gold/Dow ratio is the weakest owing to the strength of U.S. stocks, but it is nevertheless distinctive. The Gold/EAFE ratio is poised for a relative breakout, and the gold/emerging-markets ratio has marginally broken out of a 12-year base.

These technical patterns argue for a bullish commitment to gold for 2025 and beyond for all investors in all major currencies from an asset allocation perspective.

Favorable technical picture

Here is another long-term technical reason to be bullish. Not only did gold prices stage upside breakouts in U.S. dollars but in all major currencies. The chart below shows gold’s long-term breakout to all-time highs in selected currencies, even the Swiss Franc which is considered to be a “hard” currency.

The bottom panel in the chart shows the silver/gold ratio as an indicator of speculation in precious metals. The last major gold peak was accompanied by a spike in this ratio, which is not in evidence today. Sentiment readings are not in place for a major gold top.

The chart below, meanwhile, is a close-up of the recent corrective action in gold. The violation of the rising trend line in USD is concerning, but gold did not violate the rising trend line in most other currencies. Arguably, the recent spike in the silver/gold ratio in October was a sign for traders that sentiment had become overly frothy and a pullback was due. Nevertheless, the overall technical structure of price action remains bullish.


The end of disinflation?

Gold is useful as a diversifier in a portfolio because it’s a hedge against unexpected inflation. Bloomberg columnist John Authers recently made the point that the latest October CPI report is showing signs that the disinflation trend is fading. Different measures of CPI are above the Fed’s 2% target and they may have stopped falling (see Inflation Needs Subtlety Right Now. It’s Getting Trump). In particular, Authers observed: “Both core services excluding shelter (the Fed’s so-called supercore, which has been given much emphasis over the last couple of years) and shelter ticked up very slightly and remain above 4%”.

Authers concluded: “Taken together, the data probably don’t justify another rate cut next month. However, the Fed has a dual mandate. The latest employment figures showed weakness, and so on balance the path of least resistance is to cut again, but only by 25 basis points. Further, there’s a general expectation in the market that another cut is coming, and it might be dangerous to disappoint those hopes when the post-election markets are already volatile.”

Yet U.S. Federal Reserve Chair Powell signaled in a recent speech that the Fed may not need to cut rates at the December FOMC meeting: “We are moving policy over time to a more neutral setting…we will carefully assess incoming data, the evolving outlook, and the balance of risks. The economy is not sending any signals that we need to be in a hurry to lower rates.” [Emphasis added]

All of these trends are in place even before U.S. President-elect Donald Trump takes office — and none of them are attributable to his policies. Trump’s plans to raise tariffs, extend tax cuts, and his stated intention of interfering with the Federal Reserve’s conduct of monetary policy is inflationary (see my analysis Revisiting the Trump Trade). Even as gold prices corrected, inflation expectations, as measured by the five-year breakeven rate, have been rising.

Waiting for a bottom

Tactically, I am waiting for the gold correction to bottom. Here is what I am watching. Jason Goepfert at SentimenTrader observes that gold typically hits bottom when it falls 2% below its 50 daily-moving-average, which just happened. Will history repeat?

Another way of spotting a possible corrective bottom is to monitor the technical conditions of gold mining stocks. VanEck Gold Miners ETF a proxy for this group, is in a clear corrective phase and looks oversold. The gold miner-to-gold ratio is near the bottom of its historical range, but readings are not at levels seen at recent bottoms. In addition, I would watch for percentage bullish to decline into, or at least near, the oversold zone before becoming turning tactically bullish. 

Lastly, keep an eye on the U.S. Dollar Index . The dollar rallied in the wake of Trump’s victory to the top of a range, and technical conditions appear extended. If it were to be rejected at resistance, a decline would be a tailwind for gold prices as the two tend to be inversely correlated.

Overall, the picture is bright. Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook. In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead. The macro outlook calls for a reacceleration of inflation, which is also positive for gold. Investors should be accumulating gold in anticipation of superior returns in the years ahead.

Read the full article HERE.