Global central bank gold reserves increased by an additional 52 tons in February, representing the 11th consecutive month of net purchases of the precious metal, new data show.
According to the latest figures from the World Gold Council (WGC), China was the biggest gold buyer in February, acquiring 24.9 tons. The People’s Bank of China has increased its gold holdings for four straight months, growing its reserves by roughly 102 tons.
As of the fourth quarter of 2022, Beijing possessed more than 2,010 tons of gold.
Ankara maintained its 15-month streak of gold-buying in February, as the Central Bank of Turkey added more than 22 tons.
Turkey has been contending with skyrocketing inflation for the past couple of years, hitting a peak of 85.51 percent in October 2022. However, the annual inflation rate has been slowing since then, coming in at 55.18 percent in March.
Rounding out the top five were the central banks of Uzbekistan (eight tons), Singapore (seven tons), and India (three tons).
The National Bank of Kazakhstan was the only net seller, with the institution’s reserves declining by about 13 tons.
The WGC stated that it anticipates extended central bank demand this year, driven by “geopolitical uncertainty and rampant inflation.”
“Overall, we expect further buying, with EM [emerging market] banks at the forefront of this trend as they continue to redress the imbalance in gold allocations with their developed market peers,” the organization stated in a report.
WGC researchers added that “cracks from unprecedented monetary policy are beginning to show,” particularly in the banking and real estate sectors.
“The case for an economic slowdown remains. Gold is handy in a recession as dry powder, given that a weakened economy is more exposed to these financial cracks becoming systemic,” the report reads.
In 2022, total central bank gold purchases were 1,136 tons, the largest net amount since 1950, and it was the 13th consecutive year of gold buying.
The precious metal has garnered investors’ attention in recent weeks, flirting with record highs.
After approaching the key psychological level of $2,000 in intraday trading, gold finally settled the April 3rd session at $2,000.40 an ounce. May gold futures finished the April 4 trading session at $2,038.20 per ounce.
The all-time high was recorded in August 2020, at $2,069.40.
But why is gold rallying as of late?
The Trifecta
Gold prices have found support on a trifecta of issues: the U.S. dollar, interest rates, and recession fears.
The first reason for gold’s rally is the greenback. Since the Federal Reserve signaled in November 2022 that the end of its quantitative-tightening cycle was near, the dollar has been on a downward trend.
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The U.S. Dollar Index (DXY), a gauge of the greenback against a basket of currencies, hit a peak of 114.78 last year. Today, the DXY is trading at about 102.00, and is down by roughly 1.6 percent year-to-date.
A weaker dollar is good for dollar-denominated commodities, such as gold and silver, because it makes them cheaper for foreign investors to purchase.
Another contributor to the metal’s ascent has been shifting expectations for interest rates.
According to the updated Survey of Economic Projections (pdf) from the Federal Open Market Committee policy meeting in March, the U.S. central bank is penciling in one more rate hike this year. In addition, CME FedWatch Tool data show that the futures market is anticipating rate cuts toward the year’s end.
U.S. Treasury yields have decreased considerably since hitting their peak in early March. The two-year note, for example, is trading below 3.8 percent after reaching a peak of 5.1 percent before the failures of Silicon Valley Bank and Signature Bank.
Gold is generally sensitive to movements in interest rates because they can affect the opportunity cost of holding nonyielding bullion.
Abysmal economic data have supported the upward trajectory in gold prices, experts assert.
The March non-farm payroll report will play an essential role in the commodity’s near-term performance, according to Warren Patterson, the head of commodities strategy at ING.
“Spot gold has closed above the US$2,000 [per ounce] mark this week for the first time since March 2022 after U.S. data showed the job market is loosening, fueling expectations that the Fed is nearing the end of its monetary-tightening cycle,” he wrote in a note.
“Gold has also benefited over the last month from increased safe-haven demand given concerns from the banking sector. Markets will be keeping a close eye on the U.S. jobs report later this week and whether this takes the gold market to striking distance of its all-time high of US$2,075.47 [per ounce] made in August 2020.”
Recession talk has been renewed on Wall Street, according to Ed Moya, the senior market analyst at trading platform OANDA.
“Demand for safe havens has never been better since recession risks have not been this high in decades, banking concerns remain, and excessive pessimism for equities,” he said.
Construction spending and factory orders tumbled by 0.1 percent and 0.7 percent, respectively, in February.
The Institute for Supply Management’s Manufacturing Purchasing Managers’ Index (PMI) contracted for the fifth consecutive month, sliding to 46.3 in March. The ISM Services PMI slowed to 51.2 in March, down from 55.1.
The U.S. labor market is also showing cracks after job openings slipped below 10 million for the first time in nearly two years. Plus, the ADP Employment Report found that the private-sector payroll growth came in less than expected at 145,000.
Markets expect that the March jobs report will show 239,000 new jobs. If accurate, it would be down from 311,000 in February.
The Federal Reserve Bank of Atlanta’s GDPNow model estimate for real GDP growth was trimmed to 1.5 percent for the first quarter, down from a high of 3.5 percent.
“The rate hikes so far, plus financial sector turmoil, will weigh on lending and, consequently, investment and consumption,” ING economists wrote in a research note.
“As a result, we feel more convinced than ever with our recession call for the U.S. economy and a subdued growth forecast for the eurozone.”
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.
