The price of gold peaked above $2,000 on April 5, boosted by weak U.S. economic data as well as fears from the banking crisis shaking up the financial sector.
Spot gold prices hit $2,028 an ounce in early trading on Wednesday, hitting the highest level since March 2022. U.S. gold futures hit a high of around $2,040 per ounce. Meanwhile, the U.S. Dollar Index was hovering near two-month lows, making gold a cheaper investment option for investors holding other currencies. Gold prices in sterling and euros were at their highest level in over a week. The commodity had previously peaked above the $2,000 level in March 2022 and in August 2000.
The boost in gold prices comes amid weak U.S. economic data and the ongoing banking crisis facing the country.
U.S. job openings fell to its lowest level in almost two years in February, suggesting a cooling down in labor market conditions. Meanwhile, new orders for U.S. manufactured goods registered a monthly decline of 0.7 percent in February after falling by 2.1 percent in January.
The collapse of Silicon Valley Bank (SVB) and its after-effects have shaken confidence in the American banking industry. The risk of more bank failures and potential tightening of credit availability are also pushing up gold prices.
In an interview with The Epoch Times, Gabe Wright, co-owner of the store Coin Heaven in Arizona, said that SVB collapse has spurred demand for the yellow metal.
“After that bank fell, it created quite a panic, and people wanted to get their funds out of banks and into something real and tangible—gold and silver,” Wright said. Gold is “something you own. There’s no third party involved. It’s solely yours.”
Federal Reserve Rates
Gold prices are also buoyed by investor expectations that the Federal Reserve will pause its interest-rate hikes and even start cutting rates soon. According to the CME FedWatch Tool, the majority of interest-rate traders (65.4 percent), as of April 5, expect the Fed to keep rates unchanged at its upcoming May meeting.
Over the past year, the Fed had pushed up its benchmark rate from around 0.5 percent to a range of 4.75–5.0 percent. High interest rates usually decrease investor appeal for gold as it is a non-yielding asset.
With expectations about Fed pausing and reversing its rate hike growing, the yellow metal is once more becoming an attractive investment option.
In another Epoch Times interview, Peter Schiff, the CEO of Euro Pacific Asset Management, said that inflation will remain “significantly above” the Fed’s 2 percent inflation rate target “as far as the eye can see.”
“Gold needs to be repriced much higher to reflect that reality. The adjustment still has a long way to go,” he predicted.
However, if the Fed makes it clear that it intends to keep raising interest rates till inflation is brought down, it could negatively affect the price of gold. James Bullard, president of the Federal Reserve Bank of St. Louis, had recently batted for more rate hikes to fight inflation.
Rising Demand
Gold demand has been rising over the past year amid economic uncertainties. According to data from the World Gold Council (WGC), annual gold demand jumped by 18 percent year over year in 2022, hitting 4,741 tons, which is the highest annual total since 2011.
Louise Street, senior markets analyst at WGC, pointed out that gold demand last year was partly driven by “colossal” demand from central banks as a safe haven asset.
“Turning to 2023, economic forecasts are pointing to a challenging environment and a likely global recession, which could lead to a role reversal in gold investment trends. If inflation comes down, this could be a headwind for gold bar and coin investment,” he said.
“Conversely, continued weakening of the U.S. dollar and the moderating pace of interest-rate hikes could have positive implications for gold-backed ETF [exchange=traded fund] demand.”
Article cross-posted from our premium news partners at The Epoch Times.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
