Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today
Discussion: Gold Price Targets and Fed Policy
Premium: Gold Price Targets and Fed Policy [updated and extended]
Discussion: Gold Price Targets and Fed Policy
From **Goldman’s Gold Price Forecasts: What to Watch.
Important for 2025
Bank price targets for Gold are comprised of two main factors: Physcial and Financial Demand. Supply doesnt enter into the equation here.1 Physical Demand is exactly what it is— How much Gold do they want for Gold’s sake? Financial Demand is driven by Monetary Policy (MonPol) by Central Banks
Last year Physical Demand (for multiple reasons like Geopol, Collateral needs, and Mutipolar Dedollarization) obliterated most MonPol factors as manifest in resetting financial correlations.
This has measurably gone on for two years. Will it continue? That depends on Monetary Policy
The question of correlations now resurfaces for 2025. Has the physical demand side been satisfied enough in order for MonPol and rates to reassert themselves as significant drivers of Gold price once again?
Some banks think yes. Others think no.
Two weeks ago Goldman reiterated their $3,000 Gold call forcefully. Their reasons were physical demand will trump Fed policy. Keep that in mind as the next few weeks
This discussion continues in Premium….
News/Analysis:
Equity Recap:
US equities gained on Monday as chip shares rallied after contract electronics manufacturer Foxconn announced record Q4 revenue. Large caps bested small caps: S&P 500 (+0.55%) vs. Russell 2000 (-0.08%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) added 0.36% and 0.95% respectively.
Market News:
"China’s regulators sought to reassure markets on Monday as equities and the renminbi extended losses in a rocky start to the year, following weak economic data and geopolitical uncertainty ahead of Donald Trump’s inauguration... FT
"U.S. Steel and Nippon Steel filed a pair of lawsuits Monday accusing President Biden, the president of the steelworkers union and the chief executive of a rival company of conspiring to scuttle their $14.1 billion tie-up. Biden on Friday rejected Nippon Steel’s purchase of the storied American steelmaker, citing national-security concerns." Source: WSJ
"Taiwan’s Foxconn raked in a record amount of revenue for the fourth quarter, helped by robust demand for servers to power burgeoning artificial-intelligence technologies. Bloomberg
"Disney will combine its Hulu+ Live TV service with Fubo, merging together two internet TV bundles CNBC
"Uber Technologies and Lyft gave up on big plans to develop their own driverless taxis years ago. Now, they are revamping their businesses to accommodate competitors who may have figured it out. WSJ
"The private equity industry is preparing to lobby the incoming Donald Trump administration to give it access to broad pools of capital it has not historically been allowed to tap, including retirement savings, in a move that could unlock trillions of dollars for their firms. FT
Geopolitics/ Politics
Senior Israeli Foreign Ministry official says Israel is fully committed to conclude a hostage deal; the only way to get a deal is to put pressure on Hamas
Hamas leader said they asked for maps outlining the withdrawal process and the atmosphere pointing to an integrated deal to end the war in Gaza, according to Asharq News.
"Iranian media report that the first phase of manoeuvres to test the defense systems of the Natanz nuclear facility has begun", according to journalist Elster.
North Korea confirmed Monday's launch of a new hypersonic missile, while it was separately reported that North Korea plans to launch an ICBM before the Trump inauguration, according to Chosun Ilbo.
Data on Deck: Unemployment Rate
MONDAY, JAN. 6 S&P final PMI
TUESDAY, JAN. 7 Speakers, ISM
WEDNESDAY, JAN. 8 Minutes of Fed's December FOMC meeting
THURSDAY, JAN. 9 Wholesale inventories
FRIDAY, JAN. 10 U.S. unemployment rate1
Final Market Check
Premium: Goldman Moves $3,000 Target into 2026
Global Bank rate cut assessments
Bank Top-Down information flow logistics
How it affects Gold and Silver
What trade we put on
