Gold and Silver Hit Lowest Levels in 2024
In a surprising turn of events, gold and silver prices have plummeted to their lowest levels since 2023. On Wednesday, gold reached a low of 1998.2, the lowest it has been since December 13, 2023, when it traded at 1,987.9. Similarly, silver fell to 21.975, a price last seen on November 13, 2023, when it traded at 21.925. This significant drop in prices has left investors and analysts puzzled.
The decline in gold and silver prices comes amidst a flurry of other market movements. Ride-hailing company Lyft saw its shares surge by 21% after posting stronger-than-expected fourth-quarter results and issuing better-than-expected guidance. Lyft’s adjusted earnings of 18 cents per share exceeded the consensus estimate of 8 cents per share, and its revenue of $1.22 billion met analysts’ expectations. However, Lyft’s shares experienced a slight correction after an overstatement of its margin forecast was discovered in its initial press release.
Another company making headlines is Robinhood Markets, whose shares soared approximately 16.5% after beating earnings and revenue expectations for the fourth quarter. Robinhood reported a profit of 3 cents per share on $471 million in revenue, surpassing analysts’ forecasts of a loss of 1 cent per share on $457 million in revenue. Similarly, home services platform Angi saw a 7% jump in its shares after reporting a narrower-than-expected quarterly loss.
Barclays analyst Joseph Abate predicts that between $400 billion to $600 billion worth of cash that has accumulated on household and corporate balance sheets will flow back into risk assets in the near future. Abate highlights that cash holdings are currently sitting at three standard deviations higher than their long-term average and believes that lower cash returns and a decline in risk aversion will prompt this movement. Retail fund flow patterns post-global financial crisis suggest that the cash coming in from the sidelines is likely to favor credit over equities.
In other news, Jeff Bezos, the founder and executive chairman of Amazon, has sold approximately $2.08 billion worth of shares in the e-commerce company. These sales were executed under a prearranged trading plan that Bezos adopted in November, and he plans to sell a total of 50 million Amazon shares before January 31, 2025.
Lyft experienced a rollercoaster ride in the stock market after an error was discovered in its earnings release. The company initially saw its shares soar after reporting strong fourth-quarter earnings but later corrected an overstatement of its margin expansion. Despite the correction, Lyft’s shares remained up more than 20% in premarket trading.
Bitcoin has regained its $1 trillion market cap as the cryptocurrency reached its highest level in two years. The success of U.S. spot bitcoin ETFs has turned investor sentiment more positive, leading to a surge in Bitcoin’s price. This surge also pulled up crypto-related equities such as Coinbase, Microstrategy, Iris Energy, CleanSpark, Marathon Digital, and Riot Platforms.
Markets are currently reassessing their post-consumer price index (CPI) panic following Tuesday’s sell-off. Investors are taking a breather and reevaluating inflation expectations after downside price readings were reported in the UK and India. While the U.S. CPI was disappointing, it is not considered a market-killing number. However, some sectors of the market, especially tech, were overbought and may require a consolidation period.
European shares had a muted start to Wednesday’s trade, with the pan-European Stoxx 600 index inching 0.1% higher. Retail stocks saw a slight increase of 0.5%, while mining stocks slipped 0.7% lower. The FTSE 100 in the UK was the top performer, adding 0.6%, while most major European bourses remained around the flatline.
UK inflation held steady at 4% year-on-year in January, with a month-on-month decrease of -0.6%. This decrease follows a surprise increase in December. The largest upward contribution to the change in consumer price index came from housing and household services, while the largest downward contribution came from furniture and household goods, as well as food and non-alcoholic beverages.
Investors are showing great enthusiasm for artificial intelligence (AI), but GMO co-founder Jeremy Grantham warns that now may not be the best time to invest in AI stocks. Grantham believes that while AI is an important development, it will require a digestive phase before reaching its full potential. He compares the current enthusiasm for AI to past speculative booms such as the tech bubble in 2000 and the railroad stock bubble over a century ago.
Despite concerns about earnings returning to their long-run trend, European earnings have seen a robust season, and Bernstein predicts that this strength will continue. European forward