CNBC/Jeff Cox

GDP is now projected to fall nearly 53% in the second quarter, according to a Fed gauge

“Economic activity in the second quarter has been cut by more than half, according to a tracker employed by the Atlanta Federal Reserve.

The GDPNow outlook is now showing a 52.8% tumble, following data Monday that manufacturing in the U.S. remains firmly in decline and will weigh on investment and consumption. That data from the Institute for Supply Manufacturing showed just 43.1% of firms seeing expansion in May.

Extrapolating from that data, the Atlanta Fed anticipates personal consumption expenditures, which make up 68% of the nation’s gross domestic product to fall 58.1% in the April-to-June period. Gross private domestic investment, which accounts for 17% of GDP, is now projected to slide 62.6%.”

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KITCO/Jim Wyckoff

Gold prices pause Tuesday, while equities rally despite storm clouds

24 hours spot gold“Gold prices are near steady in early U.S. trading Tuesday. The safe-haven metal is being supported by safe-haven demand as the U.S. dollar sinks amid major civil unrest in America. However, limiting the upside for the precious metals is stock market traders that appear to be wearing blinders as they push equities prices north–despite keen turmoil in the world. August gold futures were last up $1.20 an ounce at $1,751.70. July Comex silver prices were last down $0.037 at $18.79 an ounce.

Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Stock markets are at present seemingly ignoring major storm clouds churning, including the Covid-19 pandemic that has severely crippled world economies, a looming “cold war” between the two largest economies in the world—the U.S. and China, and civil unrest in the U.S. that has exploded into violence not seen in over 50 years. Many market watchers are reckoning the strength of world stock markets is mainly due to the enormous injection of monetary stimulus by central banks into economies that sees much of that money flowing into equities. The juxtaposition of a rallying Wall Street and a struggling Main Street could have significant political implications down the road.”

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FXEMPIRE/Christopher Aaron

Gold Price Forecast: Pullback Ahead as Gold Approaches $1,800

gold bar and 100 dollar bill“Gold has been strong recently on the heels of Coronavirus fears, Federal Reserve stimulus packages, and continued geopolitical tensions, which are now being exacerbated by the George Floyd riots in the United States.

Gold is up by $57 for the month of May to close at $1,731 in the spot market as of Friday afternoon. The metal is higher by $155 for the quarter thus far and $228 for the year 2020, which is not yet half over.

That said, in the markets as in life, nothing moves in a straight line forever. We have reason to believe that following some further gains during the month of June, gold is due for a multi-hundred dollar pullback that could coincide with the next wave of Coronavirus-related debt defaults.

Let us study both the long-term and short-term price action for gold to arrive at the highest-probability trajectory for the remainder of 2020.”

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MARKETWATCH/Barbara Kollmeyer

Trump use of military to quell protest could stop rebounding markets and economy in their tracks, warns influential economist

military vehicles on street“After another night of protests and riots across the U.S., President Donald Trump has warned state governors to quell unrest or he will send in the military.

At least outwardly, investors look calm, with stock futures in the black. With the S&P 500 SPX, 0.54% and Nasdaq COMP, 0.20% up 36% and 39%, respectively, from Mar. 23 lows, the question is how long gains can continue against a backdrop of unrest?

Our call of the day, from Tim Duy, an economics professor at the University of Oregon, warns that stocks may run into trouble if we see troops on the streets of America.”

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