Bumble

Total US public debt divided by the gold price. Even though the debt continues to rise, priced in gold it is less than it was in 2001/02.

Total US public debt divided by the gold price. Even though the debt continues to rise, priced in gold it is less than it was in 2001/02.

Financings are low, which is not bullish for the gold mining sector.
 
 

Financings are low, which is not bullish for the gold mining sector.
 
 

Financings are low, which is not bullish for the gold mining sector.
 
 

As of 1 August 2023

As of 1 August 2023

On the issue of American banks... they are indeed not like Lehman Brothers with excessive speculative leverage. But it is a traditional feature of American banking that banks will offer mortgages with a fixed rate for the entire duration of the mortgage. You would never get this in the UK or other countries I know of. A fixed rate mortgage in the UK means one that is fixed for 3 or 4 years before reverting to the floating rate.
For a bank to offer a mortgage at a fixed rate for 20-30 years is reckless and irresponsible. If interest rates rise, as they have, the bank is committed to receiving only the low rate of return from the existing mortgages on their book. While at the same time their savers expect to be paid the prevailing rate. US banks are offering 0.5% interest on their savings accounts because they cannot afford more given the low rate of income they receive from their mortgages.
The result is savers are withdrawing their deposits and putting the money into money market funds or directly buying US government bonds where they can get 4.5%. And why shouldn't they? If I had a savings account at a bank that was paying 0.5% in the current climate I would not put up with it. At present in the UK you can get 3% on a savings account with no restrictions on access or 3.75% if you are willing to have some restrictions. If American banks are unable to provide this return for their savers then they have screwed up.

On the issue of American banks... they are indeed not like Lehman Brothers with excessive speculative leverage. But it is a traditional feature of American banking that banks will offer mortgages with a fixed rate for the entire duration of the mortgage. You would never get this in the UK or other countries I know of. A fixed rate mortgage in the UK means one that is fixed for 3 or 4 years before reverting to the floating rate.
For a bank to offer a mortgage at a fixed rate for 20-30 years is reckless and irresponsible. If interest rates rise, as they have, the bank is committed to receiving only the low rate of return from the existing mortgages on their book. While at the same time their savers expect to be paid the prevailing rate. US banks are offering 0.5% interest on their savings accounts because they cannot afford more given the low rate of income they receive from their mortgages.
The result is savers are withdrawing their deposits and putting the money into money market funds or directly buying US government bonds where they can get 4.5%. And why shouldn't they? If I had a savings account at a bank that was paying 0.5% in the current climate I would not put up with it. At present in the UK you can get 3% on a savings account with no restrictions on access or 3.75% if you are willing to have some restrictions. If American banks are unable to provide this return for their savers then they have screwed up.

On the issue of American banks... they are indeed not like Lehman Brothers with excessive speculative leverage. But it is a traditional feature of American banking that banks will offer mortgages with a fixed rate for the entire duration of the mortgage. You would never get this in the UK or other countries I know of. A fixed rate mortgage in the UK means one that is fixed for 3 or 4 years before reverting to the floating rate.
For a bank to offer a mortgage at a fixed rate for 20-30 years is reckless and irresponsible. If interest rates rise, as they have, the bank is committed to receiving only the low rate of return from the existing mortgages on their book. While at the same time their savers expect to be paid the prevailing rate. US banks are offering 0.5% interest on their savings accounts because they cannot afford more given the low rate of income they receive from their mortgages.
The result is savers are withdrawing their deposits and putting the money into money market funds or directly buying US government bonds where they can get 4.5%. And why shouldn't they? If I had a savings account at a bank that was paying 0.5% in the current climate I would not put up with it. At present in the UK you can get 3% on a savings account with no restrictions on access or 3.75% if you are willing to have some restrictions. If American banks are unable to provide this return for their savers then they have screwed up.

On the issue of American banks... they are indeed not like Lehman Brothers with excessive speculative leverage. But it is a traditional feature of American banking that banks will offer mortgages with a fixed rate for the entire duration of the mortgage. You would never get this in the UK or other countries I know of. A fixed rate mortgage in the UK means one that is fixed for 3 or 4 years before reverting to the floating rate.
For a bank to offer a mortgage at a fixed rate for 20-30 years is reckless and irresponsible. If interest rates rise, as they have, the bank is committed to receiving only the low rate of return from the existing mortgages on their book. While at the same time their savers expect to be paid the prevailing rate. US banks are offering 0.5% interest on their savings accounts because they cannot afford more given the low rate of income they receive from their mortgages.
The result is savers are withdrawing their deposits and putting the money into money market funds or directly buying US government bonds where they can get 4.5%. And why shouldn't they? If I had a savings account at a bank that was paying 0.5% in the current climate I would not put up with it. At present in the UK you can get 3% on a savings account with no restrictions on access or 3.75% if you are willing to have some restrictions. If American banks are unable to provide this return for their savers then they have screwed up.

On the issue of American banks... they are indeed not like Lehman Brothers with excessive speculative leverage. But it is a traditional feature of American banking that banks will offer mortgages with a fixed rate for the entire duration of the mortgage. You would never get this in the UK or other countries I know of. A fixed rate mortgage in the UK means one that is fixed for 3 or 4 years before reverting to the floating rate.
For a bank to offer a mortgage at a fixed rate for 20-30 years is reckless and irresponsible. If interest rates rise, as they have, the bank is committed to receiving only the low rate of return from the existing mortgages on their book. While at the same time their savers expect to be paid the prevailing rate. US banks are offering 0.5% interest on their savings accounts because they cannot afford more given the low rate of income they receive from their mortgages.
The result is savers are withdrawing their deposits and putting the money into money market funds or directly buying US government bonds where they can get 4.5%. And why shouldn't they? If I had a savings account at a bank that was paying 0.5% in the current climate I would not put up with it. At present in the UK you can get 3% on a savings account with no restrictions on access or 3.75% if you are willing to have some restrictions. If American banks are unable to provide this return for their savers then they have screwed up.

This chart compares the cost of some common energy storage solutions (CAES is compressed air). For comparison, a Tesla Megapack currently works out at about $500 per kWh. What charts like this often don't show is that the cost of storing oil, which only requires a steel tank, works out at less than 1 cent per kWh. Astonishing: I had to check the numbers. Storing energy in batteries is about 30,000 times more expensive than storing it as oil. Or, to put it another way, one $2.4 million Tesla Megapack stores 3,900 kWh, which is the same as about two and a quarter barrels of oil, which can be stored for about 35 cents. 

The gold price for the last three days is an almost perfect example of what candelstick technical analysts call an evening star. It is considered to be a reliable bearish indicator.
But one might also point out that we had six days running of the closing price being above the upper Bollinger Band, and two days of the RSI being above 70, both of which indicate an overbought condition. As of today's close, the price is now below the upper BB and the RSI is below 70, so it could be a case of return to normal.

 

Wham, bam. Gold and silver down a lot. On fundamental grounds, one should bear in mind that January has seasonally strong demand for gold, because of the Chinese New Year, when it is common across much of east and southeast Asia to give gifts of gold. Technically, there has been a strong rise during January and it is unsurprising to have some profit-taking and a pullback. The Bollinger bands have been doing a good job of containing the gold price. It is not uncommon to see the price bounce between the top and bottom channels, though not usually this rapidly. After a crawl upwards during January, with the price hugging the upper band, the price has now fallen from the upper band to the lower band in just two days. The closing price on Friday Feb 3 (Comex April futures) was actually $1865, right on the lower band. We could now see the price walk back to $1800, or it might consolidate around the current price. A rise to $2000 now looks unlikely in the short term.

Wham, bam. Gold and silver down a lot. On fundamental grounds, one should bear in mind that January has seasonally strong demand for gold, because of the Chinese New Year, when it is common across much of east and southeast Asia to give gifts of gold. Technically, there has been a strong rise during January and it is unsurprising to have some profit-taking and a pullback. The Bollinger bands have been doing a good job of containing the gold price. It is not uncommon to see the price bounce between the top and bottom channels, though not usually this rapidly. After a crawl upwards during January, with the price hugging the upper band, the price has now fallen from the upper band to the lower band in just two days. The closing price on Friday Feb 3 (Comex April futures) was actually $1865, right on the lower band. We could now see the price walk back to $1800, or it might consolidate around the current price. A rise to $2000 now looks unlikely in the short term.