From the Heraeus Weekly Bulletin:
The probability that the ECB will outperform the Fed with its rate hikes is decreasing. The two central banks hiked interest rates by 25 basis points last week, although markets were unconvinced that the ECB intends to raise interest rates further. Following Lagarde's announcement, the euro fell significantly against the dollar. Traders are betting that the European Central Bank is nearing the end of its tightening cycle. The ECB has a firm medium-term inflation target of 2%, which is within reach as economic indicators are weak, particularly in Europe's manufacturing sector. This could lead to less aggressive monetary policy going forward, barring a surprise uptick in inflation in the second half of 2023. In the US, economic data remains strong, leading rate traders late last week to price in a 22% possibility of another 25 basis point rate hike at the next September meeting.
Despite major economic difficulties, gold demand in China is recovering. Gold consumption in China increased by 16.4% to 555 tons in the first half of 2022 (source: China Gold Association). Demand for gold bars and coins increased by 30% to 146.3 tons compared to H1 2022, while demand for jewelry also increased by 14.8% to 368.3 tons. Demand has recovered significantly since the start of 2022, which was marked by the lockdown. At the time, demand was down 23% year-on-year (source: World Gold Council). The recovery in demand is beyond normalization and is now 6% above pre-pandemic levels. Total Chinese demand could reach more than 1,000 tons for 2023. In addition to consumer demand, China's central bank increased its gold reserves by 103 tons in the first half of the year. By the end of June, China's total gold reserves amounted to 2,113 tons.
The dollar found support last Thursday. The euro fell 0.8% on the day following the release of the US second quarter preliminary GDP figure, which came in well ahead of expectations at 2.4%q/q. This again demonstrated the resilience of the US economy and put pressure on gold and the other precious metals towards the end of the week. Gold fell to an intraday low of $1,943 before recovering slightly after the market digested the surprising news. Gold ended the week at $1,961/ounce.
Silver demand for PV applications should benefit from investments in the EU and US. The US Department of Energy is providing $45 million for domestic solar cell production, and in the EU various private companies have received public funding to develop multi-GW production projects. The solar sector is the sector with the fastest growing silver demand (13% CAGR since 2014). Consumption is expected to reach a record 161 million ounces of silver this year (source: Silver Institute), accounting for approximately 14% of total demand. Investments in non-Chinese manufacturing assets will likely only result in a shift in silver demand from east to west, while expected growth in solar capacity installations in the EU and US should result in higher demand for silver pastes globally. Installed PV solar capacity increased by 18.5% and 19.8% in the US and Europe, respectively, in 2022 (source: The Energy Institute).
Labor disputes in Mexico could impact second half silver production. Newmont's Penasquito mine in Mexico is the second largest silver mine in the world, producing 29.7 million ounces of silver in 2022. The mine was closed in June due to labor disputes, however production remained relatively stable for the first half of 2023. Silver production fell 13% to 13.7 million ounces while gold production fell 52% to 123,000 ounces.
It is unclear if the mine will resume operations in the second half of 2023, leading to the original production forecast being withdrawn. Should the mine remain closed for the remainder of the year, approximately 20 million ounces of silver production, or approximately 2.4% of global mine production, would be lost. The ramp-up at Fresnillo's Juanicipio mine may partially offset this. After 4.2 million ounces were produced there in the first half of 2023, stable production is expected to be achieved in the third quarter of 2023.
The dollar rally put pressure on silver prices last Thursday. After a modest recovery, it ended the week at $24.37/oz, down 1.11%.
Especially in Germany, the economic data are collapsing massively. Not only that we are now in a recession here, we are relegated in almost every class comparison from the once innovative economic engine of the world to the soon to be completely deindustrialized emerging country.
But even though the money supply in the euro area is retreating due to the ever-rising interest rates, the stock markets are in the last phase of their melt-up boom, similar to the last quarter of 21, and the only question now is when they will start the second rapid downward wave .
It's not unlikely that something similar to the following will unfold very soon. It doesn't really matter whether the elevator starts its journey down this week, later in August or in September.
Until then, markets may still be up a bit, but we are getting closer to that day and a fall in stock markets would also push gold and silver prices towards cheaper buy prices for the last, very last time.
An increasingly likely tightening of both DXY and Yen further supports this thesis.
The money end game is now evident to everyone in its final stages. Interest payments for the US household are now approaching $1 trillion per year due to rapidly increasing interest rates! This means that even with a balanced budget, another 1 trillion would be added every year just for interest payments. Crazy!
The fiat-US dollar air-covered Ponzi scheme is now absolutely unstoppable and there is only a short time before the return to gold and silver will be implemented for all to see, which is why Stacker is at the around the world to expand their stocks through regular purchases.
Our Trust customers know this and the Trust inventory was able to increase again this week to 219,666.89 grams of silver. The gold stock has remained the same at 1803.64 grams.
The Trust continues to hope that everyone has been able to take advantage of our TempleCoin 5783 discount offer, which runs through tonight.
You can enter the PromoCode "Zion23" in the shopping cart until midnight and get the issue of the year 5783 for 2 euros below the standard price. Absolute bargain!
This year, instead of our biblical 7.775g half-shekel, the Trust is planning to issue a full ounce of silver at an attractive investment price, since our Shavuot special edition in the classic TempleCoin format was only released in May.
You can order this Shavuot special edition here:
Some coins from our first issue of the year 5782 are still available.
You can find the TempleCoin gold edition of the Jewish year 5782 here:
You can find our 1 gram GoldCard here:
You will find the real highlight of our offer in our Trust_Exchange, where you can buy gold and silver-covered certificates at the absolute best price without the classic storage problem.
Each certificate is individually covered by us with one gram of silver or gold, which is held in our own LBMA account. Each certificate can be traded in our own trading system and company certificates are also available.
You can easily and quickly join the Ephraim National Gold & Silver Trust:
You can gain access to the trust for a one-off membership payment of 100 euros with the Ephi-Card as a prerequisite for access. So make sure that the TrustAccount is only for EphiCard holders.
If you don't have an Ephi ID card yet, you can take out one here together with the trust account for an additional 100 euros for the Ephi card.
Check out the TempleCoin Shop for more exciting products . Shalom