Hello, my friends!

To the surprise of no one, this economic week proved to be another heavily influenced by the Iran war and related developments in the Middle East. Oil prices were greatly impacted, of course, with Brent futures closing above $100 per barrel on Thursday for the first time since August 2022.

Stocks again wilted under the pressure of spiking oil prices and broader war-induced uncertainty this week. The S&P 500 sank 1.6% to close at 6,632.19 on Friday, while the Dow Jones Industrial Index tumbled roughly 2% to land at 46,558.47. For its part, the tech-heavy Nasdaq Composite fell 1.3% to close the week out at 22,105.36.

As for this week’s array of scheduled economic data reveals, it turned out to be “inflation week” with the releases of the economy’s two most prominent price-pressure measures – the consumer price index (CPI) and the personal consumption expenditures (PCE) price index – coming just days apart.

It’s unusual for us to see the data generated by these high-profile inflation gauges revealed in quick succession, but ongoing backlogs caused by the government shutdown conspired to make it happen; while CPI is back on its normal schedule, the PCE report, which normally comes out at the end of each calendar month, remains about two weeks behind schedule.

First up this week was CPI for February, which showed that while price pressures continue to struggle in their effort to get all the way back to the 2% target, neither do they seem prone to intensifying in the face of ongoing tariff pressures.

According to the Labor Department’s report, released Wednesday, headline CPI increased by 0.3% on a monthly basis in February while annual inflation rose at a pace of 2.4%. Both numbers were in line with estimates.

As for core CPI, which excludes more volatile food and energy prices, that climbed 0.2% for the month and 2.5% year over year. Those numbers also matched economists’ projections.

Notably, the annual rates for both headline and core CPI remained unchanged from January.

Overall, the report suggested a prevailing stability in consumer prices, including within the notoriously challenging shelter category. The shelter index stood fast on its January readings, rising 0.2% monthly and 3.0% for the year.

That said, many observers think the continued stabilization of prices is now suddenly at risk from an oil shock triggered by the Iran conflict, with Sonu Varghese, chief macro strategist for the Carson Group, telling CNBC:

“CPI inflation for February was along expectations but this is the calm before the storm that will show up due to surging gasoline prices in March.”

Commerce Department’s Inflation Gauge Confirms Ongoing Price-Pressure “Stickiness”

It was more of the same on Friday with the release of the shutdown-delayed personal consumption expenditures price index for January, which – like February’s CPI data – showed inflation still perched comfortably above the 2% target level.

According to the Commerce Department’s report, headline, or all-items, PCE rose 0.3% on a monthly basis in January while climbing at a year-over-year pace of 2.8%.

Core PCE moved even faster, spiking 0.4% from December while increasing at an annual rate of 3.1%. Notably, the year-over-year core rate represented a slight acceleration from the 3.0% pace both notched in December and projected by economists for January.

Although this latest round of PCE data was reflective of January’s…rather than last month’s…price activity, the data, coming as it did on the heels of the uninspiring February CPI numbers, seemed to reiterate analysts’ lack of confidence in the idea that inflation is nearly at an end.

Citing headline PCE’s monthly 0.3% increase, Jeffrey Roach, chief economist at LPL Financial, said investors “need to see monthly prints stay consistently in the range of 0.1% and 0.2% before they can realistically believe inflation risks are mostly contained,” but suggested such numbers are likely to remain elusive through at least the near term, noting:

“Underlying inflation pressures will continue to boil under the surface and next month’s print will also be impacted by the war in the Middle East.”

Business Owner Sentiment Dropped in February…but So Did Uncertainty

Also this week, the nation’s leading advocacy group for small and independent businesses said its most recent survey of members found that while overall sentiment declined modestly last month, key component data suggests they may feel more confident about what lies ahead.

On Tuesday, the National Federation of Independent Business reported that its headline Small Business Optimism Index landed at 98.8 in February…a 0.5 percentage point drop from January’s number but still above the metric’s historical average of 98.

Survey data revealed the broader index was weighed down by concerns about future sales expectations as well as hiring in the months ahead. The share of firms expecting to increase payrolls fell to its lowest level since last May.

But the report was not without its silver linings. For one thing, despite the diminished expectations for sales going forward, sales volumes actually rose in February. So did positive profit trends, up seven points from January. And while labor quality was again cited by small business owners as their single most important problem in February, the percentage saying so – 15% – is the lowest it’s been since April 2020.

Notable, too, is that the Uncertainty Index, a collateral measure of the headline Optimism Index, decreased three points last month to 88. The drop in uncertainty among business owners is something that NFIB chief economist Bill Dunkelberg made sure to mention in his official statement on the February survey results:

“Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months. High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”

Consumer Sentiment Loses Expected March Gains to Outbreak of Iran War

Finally this week, the preliminary March reading of the highly regarded University of Michigan Consumer Sentiment Index saw that metric decline modestly from January amid fast-growing concerns about the Iran war.

According to the data, the index ticked down to 55.5 this month from February’s measure of 56.6. One consensus estimate projected the index would improve slightly this month to 56.8.

Indeed, the index was poised to climb this month before the outbreak of hostilities in the Middle East, survey director Joanne Hsu confirmed. But that changed as survey feedback quickly began to reflect a surge of war-generated uncertainty. 

“Interviews completed prior to the military action in Iran showed an improvement in sentiment from last month, but lower readings seen during the nine days thereafter completely erased those initial gains,” Hsu said.

Despite the dip in sentiment, consumers’ one- and five-year inflation expectations remained largely unchanged from February. The 12-month outlook held steady at 3.4%, while the longer-run projection actually fell 0.1 percentage point to 3.2%. However, both outlooks remain well above the 2.3%-3.0% range that characterized the years leading up to the pandemic.

That’s it for now; have a terrific weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

When it came to this week’s economic data releases, jobs numbers took center stage, led by the surprisingly disappointing government nonfarm payrolls report for February.

On Friday, the Bureau of Labor Statistics announced the economy lost 92,000 jobs last month, far below January’s downwardly revised gain of 126,000 jobs and also well off the consensus estimate of an increase by 60,000. February’s total marks the third time in the previous five months the economy has lost jobs, according to the Labor Department’s official numbers.

Unsurprisingly, the headline unemployment rate ticked up last month, climbing back to 4.4% after dropping to 4.3% in January.

Among the sectors that saw the biggest declines was manufacturing, which lost 12,000 jobs, as well as information services, which shed 11,000 jobs due in part to the ever-expanding footprint of artificial intelligence. Federal payrolls tanked by another 10,000 in February as the White House effort to reduce government bloat continues.

Analysts say a wave of particularly harsh winter weather contributed to the especially poor report as did a strike at health care giant Kaiser Permanente, which took more than 30,000 workers off the job in Hawaii and California last month. That work stoppage has since been resolved, but for the purposes of the report, it was largely responsible for a loss of 28,000 jobs in the health care sector.

However, while observers readily agree that both the strike and the weather challenges made their mark on the data, some say there remains good reason to be concerned about the underlying strength of the economy.

“Looking through the weather-impacted sectors and the strike, which ended on February 23, this is still a poor jobs number,” Jefferies economist Thomas Simons said. “We do not think that this is a harbinger of progressively worse jobs prints coming down the road, but the risk of a downturn has certainly increased.”

ADP Says Private Payrolls Increased by 63,000 Last Month

Earlier in the week, another widely followed jobs release, the National Employment Report from payroll processor ADP, had a somewhat more upbeat take on the condition of the labor market, detailing on Wednesday that the private sector added 63,000 jobs in February. That number is much improved from the downwardly revised total of 11,000 jobs picked up last month and also solidly higher than the estimate of 42,000 new jobs that observers had expected to see.

Still, enthusiasm about the numbers was tempered somewhat by the fact that most of the job gains came from just two sectors, suggesting it may be premature to declare that the worst of this cycle’s labor market softness is squarely behind us (especially in light of the government’s dour report).

Leading the surge upward was the education and health services industry, which added 58,000 jobs this month. Also seeing gains was construction (+19,000) as well as information services (+11,000).

On the downside, the professional and business services sector tanked by 30,000 jobs, while manufacturing gave up 5,000 positions. Trade, transportation and utilities shed another 1,000.

Most of the rest of the nation’s industrial sectors saw little in the way of job-growth changes last month.

Referencing the relative lack of industry breadth in job gains, ADP chief economist Nela Richardson said:

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers. But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”

Retail Sales Data for January Decidedly Mixed

Also this week, the Census Bureau announced that retail sales declined 0.2% in January to a seasonally adjusted total of $733.5 billion. That’s slightly better than the 0.3% decline projected by economists…but also the third time in the last four data months headline sales have either been flat or lost ground.

To be clear, the complete picture is a bit more nuanced, with sales ex. automobiles and related sectors (stripped out because of their tendency toward volatility) actually rising 0.3% in January. Another more comprehensive core measure of retail sales known as the “control group” – which excludes not only auto-related industries but volatility-prone building materials and food services, as well – also climbed 0.3%.

At this point, the jury’s still out as far as how sales may fare, going forward. Those analysts fixated more on the headline numbers warn that the economy could ill afford persistent signs of weakness in consumer spending, which accounts for roughly 70% of gross domestic product (GDP).

Still others, like Nationwide senior economist Ben Ayers, believe consumer spending remains foundationally secure right now. Commenting shortly after the release of the latest numbers, Ayers said any signs of spending fragility likely are an “aberration” and added that an expected uptick in the size of federal tax refunds this season “should help to fuel renewed purchase behavior this spring.”

Fed’s Latest Beige Book Suggests U.S. Economy Is Stable – but Far From Solid

Finally this week, the Federal Reserve on Wednesday published the second of its eight Beige Books for 2026, which revealed that the nation’s business community, overall, believes the economy to be on stable, if not particularly solid, ground.

Fed Beige Books, named for the color of their covers, contain more qualitative – even anecdotal – information about the condition of the economy across the central bank’s 12 districts. The feedback is gathered from interviews with business contacts and other key observers in each district and published two weeks prior to the Federal Open Market Committee’s policy meetings.

It’s worth noting that because the information-gathering cutoff date for this edition was February 23, little of what’s contained is reflective of more recent and momentous developments, such as the Supreme Court’s overturning of some White House tariffs or the latest round of Middle East turmoil. But up to that point, at least, a majority of Fed districts reported a mild uptick in economic activity.

According to the summary, seven of the 12 Fed districts experienced modest increases in growth, while five reported growth levels that landed somewhere between “flat” and “declining.”

Among the areas of particular concern noted by the businesses surveyed include labor-market strength. The Dallas Fed, for example, found that the majorities of manufacturing and services businesses in its district aren’t looking to hire right now, while the San Francisco Fed said some businesses there are even looking for ways to shed payrolls.

Inflation clearly remains another antagonist to growth, with all 12 districts reporting price increases. Some businesses said that while they had done what they could up to this point to keep consumers from bearing the brunt of tariff-induced price increases, they were going to have little choice but to pass along more of the burden in 2026.

That’s it for now; have a phenomenal weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

In what was a relatively light week for economic data, the most notable numbers that emerged were those which revealed inflation remains a significant problem despite the progress made over the last three years.

Just when it seemed safe to venture back into stores and restaurants, the Labor Department announced on Friday that wholesale price pressures accelerated sharply last month.

According to the report, the headline producer price index (PPI) rose 0.5% on a monthly basis, faster than the 0.3% rate projected by economists and 0.1 percentage point faster than the pace set in December.

Year over year, the index actually slowed slightly, declining to 2.9% from 3.0% in December. However, that’s substantially higher than the 2.6% rate economists had projected and still a long way from the Federal Reserve’s long-established 2% target.

Core PPI, which strips out the volatile food and energy sectors to provide a clearer look at underlying price pressures, proved to be an even bigger disappointment. Month over month, core PPI increased 0.8%, faster than December’s 0.6% pace and MUCH faster than the 0.3% that economists were expecting. Annually, wholesale inflation surged 3.6% in January, sharply higher than both the 3.3% pace set the month prior and the 3.0% consensus estimate.

Analysts placed responsibility for the reinvigorated inflation squarely at the feet of tariffs, with Michael Reid, U.S. economist at RBS Capital Markets, telling CNN:

“Tariffs are being passed through along the supply chain. And so, our worry is that this is not the end of the pass through. We have not yet seen the full impact on consumer prices in the goods space.”

Key Metric Sends Mixed Messages on Housing Market Health

Also this week, a popular gauge of U.S. real estate prices proved to be the bearer of both good and bad news for the housing market.

Tuesday saw the release of the S&P Cotality Case-Shiller National Home Price Index for December, which revealed that while the benchmark metric rose for the fifth straight month, climbing 0.4%, it increased for calendar year 2025 at its weakest annual pace since 2011.

According to the data, the index increased at a rate of 1.3% for the year, a tenth of a percentage point slower than the 12-month growth rate through November but in line with the projections of economists.

Despite finishing 2025 with a positive year-over-year rate of growth, the meager 1.3% gain speaks directly to key challenges that have been faced by homebuyers for some time.

“Two structural forces have reshaped the market over recent years: mortgage rates and inflation,” Nicholas Godec of S&P Dow Jones Indices said in a statement. “The 30-year mortgage rate closed 2025 at 6.2%, well above the 4.8% 10-year average and a sharp contrast to the 3.9% average that prevailed from 2016 through 2020. Meanwhile, annual inflation for 2025 came in at 2.7% — modestly below the 3.1% 10-year average — but still outpaced home price appreciation by 1.4 percentage points, effectively eroding real home values for most owners.”

Indeed, when adjusted for inflation, the annual change for 2025 saw the index post a net decline, dropping 1.9%.

Chicago Manufacturing Index Reaches Highest Level in Nearly Four Years

On Friday, the Institute for Supply Management revealed that the Chicago Business Barometer…a closely watched regional gauge of U.S.manufacturing activity…rose 3.7 points this month to land at 57.7, the highest level reached by the metric in nearly four years.

The result is well above the 52.5 projected by economists and marks the second straight month that business activity in the Chicago area has expanded (values above 50 imply expansion). Prior to January, the index had come in below 50, which is contraction territory, for 25 consecutive months.

Of the five component measures that make up the overall number, four – the Production, Employment, New Orders and Supplier Deliveries Indexes – increased this month. The Production Index put in a particularly good showing, rising 9.0 points to reach its highest level in more than two years and come in above 50 for the second month in a row.

Only the Order Backlogs Index moved in the wrong direction, dropping 4.5 points to slip back into contraction territory after landing above 50 in January.

Consumer Sentiment Improves This Month Thanks to Greater Optimism About Jobs Market

Finally this week, a widely followed gauge of consumer sentiment rose more than expected this month, fueled largely by Americans’ more upbeat view of the nation’s labor market.

On Tuesday, The Conference Board reported that its proprietary Consumer Confidence Index (CCI) increased by 2.2 points in February to land at a reading of 91.2, significantly above the 87.5 projected by economists.

Notably, a larger percentage of survey respondents said this month that jobs are “plentiful” rather than “hard to get.” Unsurprisingly, this more favorable view of the job market comes on the heels of the government’s January employment report, which saw the economy add a more-than-expected 130,000 jobs and the official unemployment rate decline to 4.3% from 4.4% in December.

Also notable from this round of data is that the Expectations Index, a component measure of the headline metric that evaluates consumers’ six-month outlook for the economy, rose nearly five points to come in at 72.0. Still, despite the improvement, that key sub-index landed below the critical level of 80 for the 13^th consecutive month. According to the board, Expectations Index values less than 80 imply that recession could lie ahead.

In her summary of the February results, Conference Board chief economist Dana Peterson said:

“Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhat. Four of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8).”

That’s it for now; have a marvelous weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

We are nearly four years into the current gold bull market. Yet despite that impressive lifespan…one during which gold has risen 200% and eclipsed the once-mythic $5,000-per-ounce mark…numerous credible strategists remain exceptionally enthusiastic about gold’s near-term prospects.

Among the metal’s biggest believers are analysts at the World Gold Council (WGC), who recently published a report detailing why, in their assessment, gold should continue to shine brightly through at least the end of 2026.

To be sure, one reason gold remains in very high regard is that the profound geopolitical tension which has generated a substantial risk premium on behalf of the metal is expected to remain intact. But in the opinion of WGC observers, there’s no shortage of other factors poised to support gold-price strength in the months ahead.

Apparent Strength of Global Markets Masks “Very Real Risks” to Equities

One of the more prominent potential drivers, they say, pertains to the lofty heights at which equity valuations now are sitting amid an especially precarious global environment:

“Risk assets are sitting at uneasy highs against a backdrop of a world in turmoil. Yes, there are a host of tailwinds that should support a revival in growth throughout the year, including easier monetary policy and the global fiscal boost. But the consensus narrative of a global economy that has proved ‘robust’ in the face of tariffs and turmoil underestimates the very real risks that remain.”

Helping to both underscore and exacerbate that risk is the mountain of margin debt to which investors have turned amid the climate of euphoria that has come to broadly characterize market activity.

“The likelihood of reaching breaking points in equity markets during 2026 is difficult to ascertain with any level of confidence,” the WGC report noted, “but for a hint as to the bumpy road ahead look no further than the surging US margin debt.”

FINRA Margin Debt Now at Record $1.3 Trillion

Look no further, indeed. FINRA (Financial Industry Regulatory Authority) margin debt currently sits at a record ≈$1.3 trillion and has grown 37% over the past year, significantly outpacing the 20% gain achieved by the S&P 500.

“While growth in margin debt does not necessarily signal an impending peak in the stock market, it is an indication of increasing financial speculation and growing risks to market stability,” the WGC warned.

Connecting the dots further, WGC analysts noted “it would only take a couple of missed earnings targets to puncture confidence. This, in turn, could result in an unwinding of investor leverage positions (potentially magnifying the downside risks to stock prices) and lead to greater safe-haven demand, notably gold.”

“In fact,” the council added, “with few exceptions, gold has been especially effective during such periods of systemic risk, generating positive returns and reducing overall portfolio losses.”

Continued Need to Blunt Inflation “Should Support Gold in the Medium Term”

Another compelling reason to believe gold’s impressive strength may persist, the WGC said, is the ongoing uncertainty about where inflation is headed and how continued price pressures might be handled by the Federal Reserve. Although down significantly from the highs (of this cycle) reached nearly four years ago, inflation remains remarkably sticky, as evidenced by the acceleration of both monthly and annual core wholesale inflation in January.

“If core inflation rises meaningfully the Fed will have to raise short-term rates again. In other words, the bond market is not out of the woods, and another cyclical upleg in developed market yields could be in the offing,” the WGC said. “And while a clear turn towards policy hawkishness could curb gold demand in the near term due to a higher opportunity cost, gold should be supported in the medium term via stronger inflation-hedging demand and a higher stock-bond correlation.”

Additionally supporting the WGC’s idea that inflation-energized gold buying could trump the negative impact on metals of tighter monetary policy is the way in which gold performed during 2022 and 2023…a period which saw the central bank raise interest rates at the fastest pace in 40 years. While financial markets were basically flat during those years, the supposedly higher-rate-averse gold climbed nearly 14%.

To be sure, it wasn’t just a greater belief in the potential damage that could be wrought by inflation which pushed gold higher amid an aggressive tightening campaign; it also was the persistent and energetic purchasing of gold by central banks as well as the multitude of risks posed by a big jump in geopolitical uncertainty.

WGC Analysts: “Need for Portfolio Resilience Has Rarely Been More Pressing”

But that’s the point, as well as the foundational basis for the WGC’s belief in gold’s continued viability; namely, that there continue to be various ongoing risks to the stability of the global order…and that as long as there are – and especially as long as gold remains significantly under-owned as a “long” strategic portfolio asset – the case for the metal remains nothing short of compelling.

“As investors navigate a landscape marked by stretched valuations, persistent macro risks, and rising pockets of financial excess, the need for resilience in portfolios has rarely been more pressing,” the WGC said in delivering its punchline, adding:

“In this environment, gold’s strategic role remains as relevant as ever. Its historical ability to provide diversification, mitigate drawdowns during periods of market stress, and perform even after strong run-ups, reinforces its value as a core, long-term portfolio component.”

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

This week’s economic data releases were dominated by fresh numbers on the health of the labor market, including those cultivated by the latest Job Openings and Labor Turnover Survey…known more commonly as the JOLTS report…as well as by the widely followed Challenger Job Cuts report published by outplacement firm Challenger, Gray & Christmas.

Conspicuously absent from this week’s employment updates was the government’s headline nonfarm payrolls report, which fell victim to the partial shutdown and now is scheduled for release next Wednesday.

As for the jobs updates we did get, the aforementioned JOLTS report for December was among the biggest. On Tuesday, the Labor Department announced job openings fell that month to their lowest level in five years, tumbling to 6.54 million from a downwardly revised 6.93 million in November. The number was well below the projections of economists, who expected to see 7.25 million openings in December.

As of this latest report, job openings in the U.S. now are down a whopping 45% from the peak of nearly 12 million reached in March 2022.

Also sinking like a stone over the last four years is the number of vacancies per unemployed worker. In 2022, the ratio stood at 2 to 1. As of this latest JOLTS report, there was less than one vacancy…0.9, to be exact…for every out-of-work American.

ADP Says Private Sector Payrolls Increased by Just 22,000 Last Month

On Wednesday, payroll processor ADP offered up additional concerning news about the strength of the labor market with the release of its National Employment Report for January, which revealed the private sector added just 22,000 jobs in the first month of 2026. That total is considerably less than the 37,000 jobs picked up in December and well below the consensus estimate of 45,000 jobs.

In fact, the January ADP report would have reflected a net loss of jobs if not for the outsized contribution of the education and health services sector, which alone contributed 74,000 jobs to the cause. The professional and business services sector saw the biggest drop, losing 57,000 jobs last month. Also heading in the wrong direction was manufacturing, which gave up 8,000 jobs. According to ADP data, the manufacturing sector has shed jobs every month since March 2024.

Referencing the ongoing softness in the jobs market, ADP chief economist Nela Richardson told CNBC:

“Hiring is softening. It continues a pattern that we’ve noticed for the past three years. Employers are very reticent to hire in the current economy.”

Outplacement Firm Challenger Says Job Cuts Last Month Were the Highest of Any January in Last 17 Years

Still more worrisome data about the health of the job market emerged this week when outplacement firm Challenger, Gray & Christmas reported on Thursday that U.S. employers announced a total of 108,345 layoffs in January. That’s a 205% increase from December 2025, a 118% year-over-year increase, and the highest total for any January going back to 2009, when the impacts of the global financial crisis were continuing to sweep across the economic landscape.

Also, companies announced just 5,306 new hires last month…which is the lowest for any January since 2009. Beyond its statistical significance, that data is notable because it raises the possibility that the stasis which has characterized the so-called “no hire/no fire” labor market may be headed for an unpleasant end.     

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” said Andy Challenger, chief revenue officer at his namesake firm. “It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.”

Factory Activity Saw Big Improvement in January    

Last but certainly not least this week, the Institute for Supply Management announced Monday that its January Manufacturing Purchasing Managers’ Index reentered expansion territory for the first time in a year, climbing to 52.6 from 47.9 in December. Measures above the neutral level of 50 imply growth of the economy while those below 50 suggest economic contraction.

The January index number was well above the 48.5 projected by economists, as well as the highest reading in nearly 3½ years.

Notably, the New Orders Index – a key component measure of the overall index – played a large part in the broader metric’s improvement, surging last month to 57.1 from 47.4 in December.

Still, it remains unclear where the index goes from here. Referring to survey feedback from business owners, Susan Spence, chair of the ISM Manufacturing Business Survey Committee, suggested January’s upbeat numbers “are tempered by commentary citing that January is a reorder month after the holidays, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues.”

That’s it for now; have a fantastic weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Strategists at CIBC (Canadian Imperial Bank of Commerce) now say there’s really no reason to question gold’s continued viability as long as dollar weakness remains in the cards.

In fact, say the analysts, the impact of that predicted, ongoing weakness is likely to be so profound that they see the price of gold continuing to venture much further into record territory over the next two years, at least.

In a recently published update to earlier price forecasts, the commodities team at CIBC said they now see the price of gold averaging $6,000 per ounce in 2026, a marked increase from their projection of $4,500 per ounce made in October.

CIBC Strategists: Relentless Pressure on the Dollar Should Usher in $6,500 Gold Next Year

What’s more, they believe the price of gold will keep rising into 2027, rising to $6,500 per ounce that year. That would be a 30% increase from present levels.

Explaining why they believe that dollar distress will play such a prominent role in supporting gold prices through the foreseeable future, the analysts said:

“Dollar debasement is likely to persist as the central banks and investors react to heightened uncertainty by quietly allocating away from U.S. Treasuries. We believe further pressure on the dollar will come from rate cuts and continued tension between the Fed and the White House, and we believe Kevin Warsh will look to tighten the Fed balance sheet in order to lower interest rates for Main Street.”

Indeed, while Fed chair nominee Warsh historically has been a fan of tighter monetary policy and a critic of quantitative easing, he has, more recently, seemed to take a decidedly dovish tilt, as the strategists at CIBC noted.

“He has argued for tighter Fed balance sheets, which he asserts would tamp inflation and allow for lower rates for Main Street,” they said. “More recently, he has indicated support for Trump’s government efficiency drive, noting it could temper inflation and allow for lowering of rates.”

That said, CIBC analysts ultimately believe that the matter of gold-favorable currency debasement has become a structural feature of the global economy and something that transcends monetary policy in the U.S.

“With the decades-long de facto safe-haven asset, U.S. Treasuries, no longer considered ‘risk-free,’ investors and central banks are looking for alternatives,” the analysts noted. “The pickings are slim. Most Western economies are facing near-record debt-to-GDP ratios, and most are looking to inflate rather than constrain their way out of the dilemma. Investor confidence in fiat currencies has eroded, and gold has seen much of this flight to safety.”

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

Perhaps the biggest economic story of this week was the widely anticipated decision by the Federal Reserve to leave interest rates untouched at the conclusion of its first two-day policy meeting in 2026.

On Wednesday, the Federal Open Market Committee (FOMC)…the central bank’s policymaking arm…voted by a margin of 10-2 to keep the benchmark federal funds rate at the target range of 3.5% to 3.75%. Governors Stephen Miran and Christopher Waller – both Trump appointees – were the dissenters, with each advocating for another quarter-point cut.

Most of the committee members felt that a pause was in order this month, however, believing that concerns about persistent inflation now outweigh worries about possible weakness in the labor market. It was the first time in four meetings the FOMC decided to stand fast on rates.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the post-meeting statement explained. “Inflation remains somewhat elevated.”

Notably, neither the statement nor any comments made by Fed Chair Jerome Powell at his summary press conference seemed to shed any light on what the committee has in mind for monetary policy going forward. For their part, traders don’t expect to see another rate reduction before June and currently project just two rate cuts, in total, between now and the end of 2026.

Aircraft Orders Spark Big Rebound in November Durable Goods Number

Elsewhere this week, the Census Bureau reported on Monday that orders for durable goods made a sharp turnaround in November, jumping 5.3% after sinking 2.1% in October. The November number is considerably better than the 3% rise projected by economists and the best result of the past six months.

The big improvement was sparked by a whopping 98% increase for the month in civilian aircraft orders, with transportation orders, overall, rising by nearly 15%.

Notably, durable goods orders climbed in November even without the tailwind provided by the general transportation and aircraft sectors. Core durable goods, which strip out the often-volatile transportation sector to get a clearer look at underlying business activity, rose 0.5% after increasing 0.1% in October. And as for non-defense capital goods ex-aircraft, those increased 0.7%.  

Some observers attribute the robust numbers to diminishing concern about tariff impacts, with Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, suggesting:

“While uncertainty is far from eliminated, executives appear to have reached the point where they have enough information to move forward.”

Business Activity in Texas Sees Improvement This Month

Also on Monday, the Federal Reserve Bank of Dallas announced that the index derived from its Texas Manufacturing Outlook Survey jumped 10 points in January, suggesting business activity is on the upswing in the Lone Star state.

According to the Dallas Fed, the survey’s index for general business activity soared to -1.2 this month from -11.3 in December. And while readings even slightly below zero still technically imply contraction in the manufacturing sector, several key component measures surged into expansion territory in January, raising the possibility that a move there by the overall index may be just around the corner.

The Production Index, for example, jumped to 11.2 this month from -3.0 while the New Orders Index climbed to 11.8 from its December reading of -6.6. Also, the Capacity Utilization Index rose to 7.1 after coming in at -4.6 last month. The Shipments Index rebounded especially sharply, leaping to 12.0 after measuring -10.5 in December.

As for the comments from survey respondents, some of the most upbeat came from machinery manufacturers, with one gushing:

“Business is booming and for that we are pleased. We are buying new equipment to increase production, since we are falling behind on our inventory requirements, and sales have increased significantly.”

Key Consumer Sentiment Metric Falls for Sixth Month in a Row

Finally, The Conference Board reported on Tuesday that its widely followed Consumer Confidence Index declined for the sixth straight month in January, tumbling an eye-opening 9.7 points to land at 84.5. Heading into the week, economists expected to see the index come in at a more buoyant reading of 90.

Of particular note – and concern, perhaps – is that January’s number is the lowest in more than 11 years…which means, of course, it’s now lower than any of the levels seen at any time during the pandemic.

Unsurprisingly, the overall index’s two principal component metrics, the Present Situation Index and Expectations Index, each fell precipitously this month. The Present Situations Index tanked 9.9 points to land at 113.7 and the Expectations Index, which gauges consumers’ outlook for the economy six months down the road, fell 9.5 points to 65.1. Notably, January marks the 12^th consecutive month the Expectations Index has come in below 80, territory the board says signals forthcoming recession.

That’s all for now; have a wonderful weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Commodity analysts at multinational financial giant BMO are among those who believe the climate of uncertainty responsible for so much of gold’s recent success will remain solidly intact through the foreseeable future…and help drive both gold and silver even higher through the near term.

“The world has changed. A call on gold and precious metals is a call on the future state of the world and the nature of the transition that gets us there,” the analysts said in a recent note. “This calls us to consider bull case scenario for prices over the years in which a new world order is established, with potentially two more dominant spheres of influence, where nations in between are pushed to choose sides.”

Questions keep mounting about the continued stability of prevailing geopolitical and economic structures in an era of deglobalization and a greater-than-ever reliance on debt-based monetary systems. Accordingly, more strategists are coming to view the persistent embrace of precious metals during this already-historic bull run as reflective of a structural…even permanent…change in the ideal composition of model portfolios.

Strategists: Look for $8,650 Gold and $220 Silver by the End of Next Year

In their recent bit of analysis, BMO strategists posited that we currently may live in “a world where investors of all forms continue to add gold at a rate similar to, or even above, the rate seen over the first year of Trump’s second term.”

“If we assume average quarterly central bank purchases of ~8Moz (million ounces), quarterly ETF flows of ~4–5Moz, and ongoing erosion in real yields and the US dollar,” they added, “this brings us to a bull case scenario for gold prices of ~$6,350/oz by Q4 2026 and ~$8,650/oz by Q4 2027.”

The team at BMO additionally suggested that the profound uncertainty which has helped to propel gold ever higher is likely to provide a significant tailwind to other precious metals, such as silver, which have come to rely more on their industrial demand for upward momentum.

As the analysts put it:

“This would capture a scenario where this new global risk environment further ignites safe haven status in the non-gold precious metals too, amplified by retail participation, even though these metals have traditionally been more governed by their industrial metal characteristics.”

In this context, silver would be poised to exhibit much greater upside through the near to intermediate term, says BMO, which believes the white metal could reach $160 by the end of this year and $220 by the conclusion of 2027.

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

In what surely is a surprise to no one, it was President Trump’s rather controversial appearance at the annual World Economic Forum in Davos, Switzerland that proved to be the most notable bit of economic…or economic-related, at least…news to emerge this week.

Although much of this year’s gathering was devoted to the future of artificial intelligence (AI) on the global stage, Trump’s special address on Wednesday was focused largely on geopolitics. Among the president’s most prominent talking points included crowing about the U.S.’s perceived importance in ensuring global geopolitical and economic security as well as – relatedly – his bid to acquire Greenland.

“I think there were two Davoses,” said former Democratic Congresswoman Jane Harman. “One of them was very senior industrial leaders talking about AI. … The second was foreign policy, or geopolitics, and that was dominated by one person.”

President Trump’s speech was loaded with the usual hip shots, including swipes at various U.S. and world leaders, but by the time he left Switzerland, the global stage looked largely as it did when he arrived 24 hours earlier. No harm, no foul, as the saying goes.

To the extent there were any notable developments during his appearance in Davos, the president backed down from earlier threats to impose tariffs on nations opposed to U.S. acquisition of Greenland and also reassured attendees that he would not use force to obtain the Danish territory…revised positions that inspired confidence in financial markets and push major indexes back toward record levels. On his Truth Social platform, Trump implied that his acquiescence on Greenland was a result of reaching the “framework of a future deal” on Arctic security with Nato Secretary General Mark Rutte, but details on that agreement were not forthcoming.  

Highly Regarded Inflation Metric Indicates Price Pressures Intensified in November

As for the week’s most notable data release, the Commerce Department reported on Thursday that the November personal consumption expenditures price index (PCE)…known to be the Fed’s preferred inflation measure…increased at a monthly rate of 0.2% and at a year-over-year pace of 2.8%.

Core PCE, which excludes more volatile food and energy prices, also rose in November at monthly and annual rates of 0.2% and 2.8%, respectively.

Along with the data for November, the government’s report included the PCE figures for the prior month, which had been delayed by the government shutdown. Those numbers showed the October PCE index – both headline and core – rose 0.2% on the month and 2.7% year over year.

Notably, annual core PCE has remained stuck between 2.5% and 3.0% for about the last two years. And for its part, annual headline PCE has steadily accelerated since slowing to 2.2% last April. Both trends highlight the profound “stickiness” of price pressures as official inflation rates struggle to return to the Federal Reserve’s 2% price target.

They also highlight the uncertainty hovering over monetary policy right now. Although the labor market unquestionably has cooled some over the last several months, consumer spending has remained exceptionally resilient. Now with inflation continuing to dig in its heels near 3%, it’s difficult to know when we’ll see another rate cut. As things stand, traders overwhelmingly say it’s unlikely the central bank will cut interest rates again before June.

Key Metric Suggests U.S. Business Growth May Be Slowing

Also this week, S&P Global reported on Friday that its Flash U.S. Composite Purchasing Managers’ Index (PMI) ticked up slightly in January, rising to 52.8 from December’s 52.7. Index measures above 50 imply expansion of the economy.

Although a net improvement, the January number is a bit underwhelming considering that the reading for December represented an eight-month low for the index.

“Flash” PMIs are advance estimates of the final numbers that come out at the end of each month and are calculated using roughly 85% to 90% of the survey responses.

Unsurprisingly, there also was little-to-no change in the broader index’s principal component measures. Flash U.S. Manufacturing PMI rose 0.1 percentage point to 51.9, while the Flash U.S. Services PMI needle didn’t budge from December, again landing at 52.5.

President Trump’s aggressive tariff policies were again cited as a principal source of the ongoing challenges to the overall business environment, with higher rates of input cost and selling price inflation directly attributed to the duties.

In a statement, Chris Williamson, chief business economist at S&P Global Market Intelligence, said, “The flash PMI brought news of sustained economic growth at the start of the year, but there are further signs that the rate of expansion has cooled over the turn of the new year compared to the hotter pace indicated back in the fall.”

Williamson added that “the survey is signaling annualized GDP growth of 1.5% for both December and January, and a worryingly subdued rate of new business growth across both manufacturing and services adds further to signs that first quarter growth could disappoint.”

Pending Home Sales Sank More than 9% in December

Finally, the National Association of Realtors announced on Wednesday that pending home sales tumbled 9.3% month over month in December, a stark reminder that the housing market remains fraught with challenges.

“The housing sector is not out of the woods yet,” said Lawrence Yun, chief economist for the Realtors. “After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook.”

Sales were down on an annual basis, as well, dropping 3% from December 2024.

Along with monthly sales, inventory also was down 9%. Just 1.18 million homes were on the market last month, matching the lowest level of inventory of 2025. Yun suggests that the relative lack of choices in December may have played a hand in the sales decline.

“Consumers prefer seeing abundant inventory before making the major decision of purchasing a home,” Yun said. “So, the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale.”

Still, a drop in inventory is just one of the obstacles currently facing homebuyers. Mortgage rates remain roughly double where they were four years ago, home prices are about 50% higher from where they were five years ago, and recent measures of consumer sentiment have revealed little confidence in the near-term strength of the economy.

That’s all for now; have a wonderful weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.