The United States Census Bureau has shared a report showing that total retail sales for 2023 were 3.2% higher than in 2022. This increase was supported by a rise in purchases of clothing and accessories, as well as online shopping. Despite earlier expectations of a slowdown in the US economy in 2024, these figures suggest that consumer spending could remain resilient, which may influence the Federal Reserve's decisions on future interest rate cuts. This is combined with data on the Consumer Price Index (CPI), which showed an inflation increase of 0.3% in December, a year-on-year increase of 3.4%. The Federal Reserve, which has not implemented any interest rate cuts since March 2022, is expected to begin cutting rates around the end of the second quarter of this year.
The Likelihood of an Interest Rate Cut in March
Interest rates in the United States are currently between 5.25 - 5.50%. According to the CME FedWatch Tool, the likelihood of a rate cut on March 20th is 59.5%, and 93.2% on May 1st. However, it's important to remember that this percentage can change at any time. Inflation figures, unemployment figures, and retail sales all influence potential changes in interest rate policy. In short, lowering the interest rate is beneficial for your position in precious metals.
Geopolitical Tensions in the Red Sea
Since November, there have been attacks on ships in the Red Sea by Houthi rebels from Yemen, targeting vessels that may have a connection with Israel. These actions are carried out in support of the Palestinians in Gaza. While Iran openly supports the Houthis, they deny involvement in these specific attacks. However, the US Navy has indicated that they have seized Iranian weapons intended for the Houthis during a routine inspection. Tensions between the United States and Iran seem to be increasing as a result…
If you had bought gold on January 1, 2023, you would have made a profit of 9.8% by December 31, 2023! If you had started a gold savings plan on January 1, 2023, you would have made a profit of 5.5% by the end of the year. For silver, these percentages are -3.6% and -2.7%, respectively. For gold, a large investment on January 1st would have yielded a higher return than the savings plan. For silver, the savings plan actually helped to limit the loss in 2023. We have been receiving increasingly positive feedback on the GoldRepublic savings plan lately. One can save from €50 per month, it is automatically deducted and purchased, and in this way, customers of GoldRepublic thus passively build up wealth. The savings plan is also cancellable monthly, so you are not tied down to anything.
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