Gaby, great to have you back on.
All eyes are counting down on tomorrow's labor market report.
We get no farm payroll, unemployment at 8:30 a.m.
Eastern time.
So what are the factors behind some of the anticipated September rate cut expectations and what impact do you think this will have on the economy?
Yes, of course.
Good morning, Demi.
Well, this is a much anticipated moment that we've been waiting for actually for years.
This is supposed to stimulate the economy.
That's the goal, right?
We're going to lower rates so that we can stimulate investments, stimulate the economy, so it's going to be cheaper.
To borrow money, um, this is very good for the markets, right?
Um, the sentiment, it's positive for real estate, for crypto, for the stock market, and all of the financial markets basically like um interest rate cuts.
The problem is that it's inflationary, so we cannot ignore the risks.
Not everything is good news and it's not going to happen immediately.
So 25 basis points is what we're waiting for September 17th.
We will need to see a couple of more.
Of cuts to really feel it, but I think the sentiment has already been positive um the last few weeks in anticipation of this day.
The question is how much of it has it already been accounted for and are we really going to have that rally that we expect when the monetary policy is changed.
Yeah, and Gabby, you bring up an important point because despite some of the recent pullbacks, when we look at the major US stock averages, year to date we are up and we've been seeing a considerable rally when it comes to precious metals.
So I do want to ask you about what we're seeing in gold as well as silver.
Now gold may be pulling back slightly in New York morning trade, but it is still holding above 3600.
So tell us about the rally we're seeing in Precious Metals.
Yeah, I think this is something that is getting everyone's attention that normally when the stock market will be down, gold will be up or precious metals will be up, right?
They will have kind of like an inverse reaction, but what we're seeing now is that even when the stock market goes up, precious metals are going up, and that has to be a red flag for me.
I think the massive amounts of money that we're Seeing not just from investors but from central banks across the world that's pouring into precious metals.
I actually think that represents a loss of confidence in the US dollar because interest rate cuts are coming and again there's risks to that.
Not everything is good news about them.
So since we know that inflationary, then the US dollar is going to be worth less.
Right, if everything goes up, that would affect our purchasing power.
So naturally investors and central banks are going to go to what's known as the inflation hedge of all times, which in this case it's gold.
So I think everything that's happening right now it's good for the markets in general and it's also good for precious metals because now we don't have that inverse.
A reaction we see both benefiting from the current context.
OK, Gabby, so one quick question for you.
We have less than 60 seconds, but it's interesting to look at the price action in crypto, particularly the rotation we're seeing between Bitcoin and E.
So what do you make of this price action?
Of Bitcoin and Ethereum, look similar to precious metals, OK, how How are people looking at the cryptocurrency?
They're looking at it as um as an inflation hedge.
We know it is technically not because something that's so volatile and that fluctuates so much cannot be considered an inflation hedge.
It also hasn't been around for that long to be to say, oh this is a safe asset.
It's actually a very risky asset, right?
So I would say it's opposite to gold.
We are seeing people pouring their money there.
We've seen record highs recently because there is a belief that the US dollar will start losing more of its value, and people want to invest.
They don't want to sit in cash.
They don't want to sit in bonds.
They want to see a better return and They see that the massive rally we had in gold, that looks great.
The stock market looks great.
Well, crypto looks great as well.
So I think we'll continue seeing an upward trend.
OK, Gabby, we will have to leave it there, but we look forward to having you here on set next week.
So thank you so much for joining us.
Thank you.
