Summary
- The U.S. continues to face challenges with illegal immigration, which has contributed to shifting job dynamics.
- While non-farm job postings are declining, the hiring of illegal workers has increased, while jobs for native-born citizens are decreasing.
- In August 2024, 635,000 immigrants gained jobs, while 1.325 million native-born workers lost theirs.
- Since the pre-COVID period, native-born U.S. workers have lost approximately 2 million jobs, with immigrants capturing the net job gains.
- The U.S. stock market had a significant sell-off in August, losing $1.78 trillion in value.
- Gold has been outperforming global stock market indexes but still awaits a stronger breakout in value against the U.S. stock market.
- Silver remains relatively undervalued compared to the S&P 500, though it is expected to outperform later in the decade.
- Ole Hansen of SAXO Bank remains bullish on gold due to factors such as geopolitical risks, a global economic slowdown, and strong demand from China.
- Russia announced plans to significantly increase its gold reserves in September, adding 24 metric tonnes.
- The global silver market faces supply deficits, with demand consistently exceeding mining production, driving up prices in markets like Australia.
To say that the United States has an ongoing problem on illegal immigration and its southern border is an understatement and has been so for years now.
And while current non-farm job postings in the USA are in sharp decline, we learned this month that while the hiring of illegal workers is on the rise, job holdings for native born workers is on the decline.
In just last month August 2024, 635k immigrants (legal and illegal) gained a job. Meanwhile, 1.325 million native-born US citizens lost their jobs.
Since pre-Covid, native-born workers have lost an estimated 2 million jobs. Since then, basically all of the net job gains are immigrants signified by the climbing red colored line on the FRED chart here.
The US Stock market sold off today on the weak August jobs number finishing its worst week since March 2023.
Thus far in this month over $1.78 trillion in value has fallen out of the current stock market bubble.
Gold has only to date been outperforming world stock market indexes, we still await its further breakout in relative value versus the current US stock market bubble.
Currently it still takes over two troy ounces of gold to afford the nominal S&P 500, but on a longer term chart a revisit towards the parity of 1 and below akin to the 2011 gold price high is likely later this decade perhaps stretched into next.
On the silver side of the relative value equation, we still patiently await silver spot prices in fiat US dollars to begin reacting to the bullish fundamentals with eventual momentum moves to the upside.
In terms of spot silver versus the current US stock market bubble, we're still hovering around the second most elevated level of silver being relatively cheap to US stocks at least for now.
For me this chart suggest an eventual rollover in which silver will outperform the S&P 500 by a factor of more than 4 later this decade, as it makes its eventual way back to and likely beyond the old 2011 lows of this S&P 500 / Silver ratio chart.
Ole Hansen of SAXO Bank listed a few of his reasons for staying long term bullish gold as follows.
- supported by a global economic slowdown and a more aggressive US rate cutting cycle.
- continued geopolitical risks with Russia / Ukraine, the Middle East, and the upcoming US Presidential election in November 2024.
- continued strong retail demand for gold in China as Chinese look to park money in gold over its struggling economy and real estate sector.
- rising debt to GDP ratios in major developed economies spurring increasing concerns about the qualities of ballooning debt levels, and driving further rich individuals and family offices into record gold demand in Q2 2024 in the London over-the-counter gold market.
- Given the coming rate cuts the potential continued return of western investor capital flows into unsecured gold ETFs.
- continued record size central bank gold buying ongoing.
Considering that final point about record central bank gold buying, here is Indian CNBC covering the latest countries to admit adding to their Official Gold Reserves over the last few weeks.
Russia made gold news this week by declaring she is going to increase her gold buying this month by a factor of 7 fold over last month August.
Looking to move upwards of $172.9 billion rubles into gold bullion reserves this month. And while that sounds like a lot it nets out to about 24 metric tonnes of gold buying this month which was typical during the Russian Federation's admitted monthly gold bullion buying spree volumes in the latter 2010s.
This recent Russian declaration has of course led many October 2024 BRICS summit watchers to speculate on the reasons for publicly declaring the nation's intentions ahead of time.
But this kind of news and common gold knowledge is not only slowly spreading in the west, we turn to Taiwan to hear how a common local gold jeweler talks about the current gold market drivers in 2024.
On the other side of this break we will look at where in the west silver is threatening to already breakout to new nominal record price highs in 2024 and how well gold has performed before the coming fiat Federal Reserve rate cut cycle.
The spot silver price sold off on the week finishing just below $28 oz bid while the spot gold price sold off slightly to finish the week's trading priced just under $2,500 oz bid.
The spot gold silver ratio rose again on silver's relative weakness versus gold to a historically high level of 89.
Given that a large amount of US banks are still sitting on unrealized bond market losses estimated at nearly a half trillions by the end of Q2 2024. It is most certain they are hoping that the coming rate cut cycle by the Federal Reserve might save them from bank bankruptcy and receivership.
Even in the face of a rising US interest rate cycle the spot gold price in US dollar terms has climbed nearly by a thousand dollars a troy ounce since the final quarter low of 2022.
Think of this relatively recent strength in the global gold price already before it becomes obvious the Federal Reserve has shifted its longer term policy to heavier secular price inflation and fiat US dollar debasement to come.
In bullion industry news, the Australian Perth Mint reported weaker silver and gold bullion sales figures continue down under.
Not surprisingly given the real estate debt bubble ongoing there and record nominal price highs for Aussie gold year after year.
But it is the silver side of the equation in Australia I want to focus on to close this week.
You see the local price in fiat Australian dollars for silver is closing in on it's all time record price high, and this is happening without scapegoated Hunt Brothers, or JP Morgan caught naked short on the COMEX circa late 2010 early 2011.
Rather it is mainly bullish underlying silver market deficits and demand outstripping supply facts that are leading to inevitable new record price highs to come.
It is estimated that from 2021 into the end of this year 2024. The world has demanded almost a full year more of new line supply silver than we were able to mine.
And there is no sign of increasing industrial silver demand factors building ahead.
So while I know personally waiting for the spot silver price in fiat US dollars to begin really reacting to these ongoing facts has been frustratingly slow to come.
All one has to do is simply look over at the silver price chart down under to realize what goes on down under in gold and silver prices eventually comes around to the history's largest debt and promise laden nation.
That will be all for our weekly SD Bullion Market Update.
And as always to you out there, take great care of yourselves and those you love.
