Metals Minute 141: Bracing for Impact

We have 3/4 metals moving higher this morning, with an arbitrage situation continuing for gold. Gold is trading around 3% higher on the Shanghai exchange than the official LBMA spot price. There continues to be massive demand for physical metal, with much of that metal leaving the COMEX into individual American hands and departing the LBMA for all points East.   It continues to be an excellent time to trade $ for metal while the dollar is inflated in international markets.

There continue to be sticky inflationary pressures building in terms of wages, rising at 6.7%. While lower than the current inflation rate, it continues to impact overall inflation by nudging it higher.

Within a 24-hr period this week, 16 central banks will make interest rate announcements, including the Federal Reserve. The FED is likely to announce an increase of 0.75%. The current yield on the 10-yr Treasury is at 3.5%, the highest since 2011. Today's challenge for the economy is that the national debt is more than twice as high as in 2011, and consumer debt has more than quadrupled. Each interest rate increase makes a soft economic landing less probable. We can lessen the impact by owning precious metals.