US news primed and ready for volatility

13 September, 2023
As at 9am, AEST

Gold Price AUD $AU2981

Silver Price AUD $AU36.04

Platinum Price AUD $AU1432

Early tomorrow morning, the US will be releasing its latest CPI, PPI, and Retail sales figures for August. Markets are already bracing for impact, with the NASDAQ losing 1% yesterday, and other markets following suit. Economists and consumers alike are concerned that inflation may not be as under control as previously thought.

Currently, markets are more than 90% sure that the FED will leave interest rates unchanged in the next period, hopefully helping stimulate consumers to ‘push through to Christmas’ - one of the year’s biggest period of consumer spend.

While we patiently wait for this information to come through tomorrow (we’ll talk to it on Friday), it is an opportune moment to briefly discuss another topic close to many bullion lovers hearts - cash.

As more and more businesses continue to remove cash as an option to pay, so too are we losing purchasing power and anonymity at the point of purchase. In an age where every single thing we do is measured through some kind of analytics, it feels the last iota of confidentiality in spending is about to be lost forever, especially in Australia. 

No one can argue the efficiency of ‘tap to pay’. In the digital space, the efficiency of using credit to make purchases surpasses credit companies fear of fraud. In the real world, ‘tap to pay’ also reigns supreme for consumer purchasing. As more and more consumers integrate this method of pay into their use of technology, cash becomes less and less likely to be used. And as less cash is used, the labour ratio to revenue collected required to process cash (take it to the bank) also increases - making cash unviable to many businesses.

Generationally, where credit companies like VISA and Mastercard made money from holding debt for consumers - now the majority of their revenue would come from simply processing transactions. For 2022, VISA themselves processed $11.6 Trillion in total transactions, up 12% from the previous year. This was processed through 192 Billion transactions. 

But - while we can use it, cash is still king. With no transaction fees, a $50 note manages to keep its value of $50 while being passed from merchant to merchant, while credit companies will progressively eat the worth away from  that same $50 through transaction fees.

Likewise, Bullion manages to retain and over time grow its worth against currencies. Keeping pace with inflation and at times hedging against risk, Gold and Silver continue to be a an invaluable tool to protect your wealth.

Here’s today’s charts.

Gold daily, with 200MDA

Silver daily, with 200MDA