Diamond News Archives

Gold on Thursday looked to stretch its gains to a third consecutive session, as recent remarks by Federal Reserve Chairman Jerome Powell were seen signaling a rate cut remains likely at the end of the month.

Gold for August delivery on Comex GCQ19, +0.08%^[1]  rose $3.40, or 0.2%, to $1,415.90 an ounce. Prices for the most-active contract are trading at their highest since July 3, when they settled at $1,420.90—their highest since May 2013. September silver SIU19, -0.11%^[2]  was up 1.4 cents, or about 0.1%, at $15.24 an ounce.

“Bullish forces have returned in force with the presence of a ‘Fed put’ providing the most significant buying impetus” for gold, analysts at Zaner Metals said in daily commentary. “In fact, the Fed was definitively more dovish than anticipated and the odds of additional cuts beyond the widely anticipated August 1st cut have been expanded.”

Also, “Given the wide-ranging comments from the U.S. Federal Reserve Chairman yesterday regarding the global economy, one could suggest gold will also see economic uncertainty buying ahead,” the analysts said.

Read: Fed minutes of June meeting bolster Powell’s signal of imminent interest-rate cut^[3]

In his prepared remarks Wednesday^[4], Powell said the economy hasn’t improved since June and the central bank is prepared to act as needed to support demand. Powell is testifying on Capitol Hill for a second day Thursday, appearing before the Senate Banking Committee.

Powell’s...

(Bloomberg) -- A growing chorus of Wall Street foreign-exchange analysts is writing about the risk that U.S. President Donald Trump may move beyond words in his quest for a weaker dollar.

From ING to Canadian Imperial Bank of Commerce, more analysts in recent weeks have been openly contemplating the wild-card notion that the administration could intervene to cheapen the dollar. The research comes as Trump has intensified criticism of both the Federal Reserve and other countries’ currency practices. The U.S. leader tweeted last week that Europe and China are playing a “big currency manipulation game,” and called on the U.S. to “MATCH, or continue being the dummies.”

The U.S. last intervened in FX markets in 2011, when it stepped in along with international peers after the yen soared in the wake of that year’s devastating earthquake in Japan. While that effort boosted the dollar, ING says the American administration may move to do the opposite -- and weaken the greenback should the European Central Bank pursue further monetary stimulus. The U.S. hasn’t taken that step since 2000.

Fed Link

“Could frustration with the Fed prompt the President to take matters in his own hands and weaken the dollar?” ING’s Chris Turner and Francesco Pesole wrote in a note Monday. Though the U.S. last month reaffirmed a Group-of-20 commitment to refrain from competitive devaluation, “the lure of a weaker dollar to support the U.S. economy into 2020 may be too great,” the strategists wrote.

The market has yet to put any stock in the notion of U.S. intervention: Global currency volatility is at a five-year low, and the Bloomberg dollar index is barely changed this year. But a Fed trade-weighted measure of the dollar is not far below the strongest since 2002, underscoring the...

To be clear, nobody knows the “right” level of short-term interest rates that balances the competing priorities of growth, price stability, and financial stability. Central bankers are trying to set policy on the basis of a “constantly changing number [that] is affected by the saving and spending decisions of people all over the world,” as I put it in my column^[3] this past weekend.

The inherent impossibility of the challenge has not prevented economists from coming up with “rules” to guide monetary policy makers. Without rules, the thinking goes, officials will succumb to political pressure and make mistakes.

Back in the 1960s, Milton Friedman argued^[4] the Fed should “be instructed to keep the stock of money growing at a fixed rate, ⅓ of 1% per month,” but this simple rule failed to account for changes in what counted as “money” and what that meant for spending and saving behavior. By the mid-1980s, Friedman’s prescription had become totally useless.

In 1993, Stanford University economist John Taylor devised a formula^[5] for setting short-term interest rates based on an estimate of the “neutral” interest rate^[6], the gap between actual inflation and the inflation target, and some measure of whether the economy is weak or strong, such as the distance between the level of gross domestic product...

Second-hand luxury retailer The RealReal went public earlier this month with an initial goal to raise $270 million. The company ultimately sold 15 million shares at $20 each for $300 million.

The RealReal was founded in 2011 by Julie Wainwright and the prospectus is valued at $1.6 billion for the largely online reseller, which also operates three brick-and-mortar stores. The company claims 1.4 million members who buy and/or consign with the company.

Though The RealReal has yet to make a profit, it boasts strong growth with year-over-year sales up 55 percent in 2018. Last year it generated $207 million in revenues but lost $76 million.

Luxury goods are uniquely positioned for the secondary market. Their original owners typically have closets filled with clothes that are worn infrequently. And these rich consumers keep buying more, causing them to move older items out to make room for new purchases.

In 2018, the luxury resale market generated $25 billion globally, which accounts for seven percent of the total $375 billion personal luxury market. By 2021 the luxury resale market to expected to reach $35 billion. This would constitute a 12 percent growth rate, while the total personal luxury market is projected to rise just three percent to $411 billion....