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Gold Price News: Gold Runs Out of Steam
While gold has largely been in consolidation mode since 19 August, price action this week is starting to suggest a retracement with the metal now trading at c. $2486/toz. This has come against a fundamental backdrop that has little changed over recent days with a slight easing of US rates and some firming of the US dollar, creating very little net impact for non-yielding dollar-denominated assets such as gold and silver.
Consequently, it seems more likely that gold’s current weakness is a function of both recent performance – up 2.3% in August amid broader market turmoil – and an absence of further clear catalysts prompting profit-taking. Certainly, multiple geopolitical flashpoints remain, but timing remains a known unknown. So, are we seeing ‘stale bulls’ remove support?
The question is pertinent. We noted on Monday that the most recent CFTC Commitments of Traders (CoT) report saw speculative gold futures net longs at a 52-month high. It certainly remains to be seen how resilient this elevated level of speculative interest remains during this period of neutral fundamental support and recent depressed price momentum. Read More
Silver Price News: Silver Slips on Soft Data
This morning, silver is trading down below $28/toz on recent economic data that reaffirms a weak growth outlook. August Manufacturing PMIs for China, Japan, Australia and the Eurozone released on Monday, were all somewhat better than expected. However, with readings of 50.4, 49.8, 48.5 and 45.8 respectively the overall picture remained one of weak manufacturing activity. A subsequent, disappointing US ISM Manufacturing PMI print for August (47.2) was barely improved from July’s seven-month low.
We would also note that copper – arguably a more economically sensitive metal than silver – has also performed poorly in recent days and is now trading close to the ‘growth scare’ levels of a month ago and c. 20% down from its May peak. In response, markets have edged up their bets for a 0.5% in the Fed Fund Rate on 18 September.
Accordingly, silver’s immediate technical position appears challenging. The metal is currently testing support at the 50% retracement of the 7 August-26 August low/high at $28.32/toz and there is only tentative oblique descending support at $27.86/toz. With the standard MACD line now descended below the signal line, momentum is not supportive, increasing the probability that ascending major oblique support at $27.07/toz and major horizontal support at $26.20 will come into play. Read More
Gold price pushes to neutral territory as JOLTS sees drop in job openings
Gold bulls are attempting to combat the market’s ennui, as disappointing employment data showed a drop in available jobs in the U.S. in July, sparking renewed interest in the precious metal.
Job openings, a measure of labor demand, fell to 7.67 million by the end of July, down from June’s downwardly revised figure of 7.91 million, according to the Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS) report.
Economists had expected job openings to exceed 8 million, according to consensus estimates.
“On the last business day of July, the number of job openings was little changed at 7.7 million and was down by 1.1 million over the year. The job openings rate, at 4.6 percent, changed little in July,” the report stated.
Job openings have dropped to their lowest level since April 2021, which some economists say is further evidence of a slowing labor market. Read More
Gold price dips against the Canadian dollar as BoC cuts rates by 25 basis points
The gold market saw a sharp dip in both USD and CAD before rebounding after the Bank of Canada (BoC) cut its key interest rate by 25 basis points for the third consecutive meeting.
In a much-anticipated move, the BoC lowered its target for the overnight rate to 4.25% on Wednesday, with the Bank Rate at 4.50% and the deposit rate at 4.25%.
“Our decision reflects two main considerations,” said BoC Governor Tiff Macklem in the monetary policy statement. “First, headline and core inflation have continued to ease as expected. Second, as inflation gets closer to target, we want to see economic growth pick up to absorb the slack in the economy so inflation returns sustainably to the 2% target.”
“If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy rate,” he said. “We will continue to assess the opposing forces on inflation, and take our monetary policy decisions one at a time.”
The expected rate cut coincided with a sharp selloff in gold in the minutes following the rate announcement on Wednesday morning, though the yellow metal has since rebounded against both the Canadian dollar and the greenback. Read More
Can gold prices beat the ‘September Curse”
Although gold continues to trade in rarefied air, its upward momentum is starting to weaken as September kicks off.
Gold has managed to hold support above $2,500 an ounce, despite some technical selling pressure. Looking ahead, some analysts have said that the precious metal could face a challenging environment, as September has been one of the worst months for gold in recent history.
So far, gold has managed to hold its ground. December gold futures last traded at $2,528.40 an ounce, up 0.21% on the day.
In a recent note, Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, mentioned that since 2009, gold has seen a decline of 2.4% in September. Meanwhile, analysts at Bloomberg note that since 2017, gold prices have declined by 3.2% during the so-called “September Curse.”
It’s not just gold; September is also a terrible month for silver. Over the past 15 years, silver has experienced a decline of 3.7% in the final month of the third quarter. Read More
Gold between $2,700 to $3,000 - World Gold Council's Joe Cavatoni says a lot of the market expects metal to rise
Gold is well supported with a number of factors favoring the metal, said Joe Cavatoni, senior market strategist for the Americas, World Gold Council.
Last week Cavatoni recorded an episode of Green Rush with Matt Watson, founder of Precious Metals Commodity Management.
Geopolitical concerns and strong central bank buying are some of the factors supporting gold.
"You've got all the key elements of what's making up a really, really amazing picture for the gold market," said Cavatoni. "Central bank buying is pretty amazing, and it's pretty fundamental." Watch the podcast
Gold, silver firmer after soft JOLTS report sinks USDX
Gold and silver prices are modestly higher in midday U.S. trading Wednesday, as both metals caught a bid following a weaker-than-expected reading on the U.S. jobs sector that tanked the U.S. dollar index. The recent downdraft in crude oil prices is somewhat squelching buying interest in the precious metals. December gold was last up $5.50 at $2,528.20 and December silver was up $0.299 at $28.235.
Today’s release of the U.S. jobs and labor turnover survey (JOLTS) showed July job openings decline to the lowest level since January of 2021. The report falls into the camp of the U.S. monetary policy doves, who want to see lower interest rates sooner from the Federal Reserve. The data point of the week, if not the month, is Friday morning’s monthly jobs report from the Labor Department.
Today, for the first time since 2022, the U.S. Treasury yield curve (twos and tens) “uninverted,” with the 10-year note moving slightly above the 2-year note. That’s an indication of the U.S. economy being healthier and avoiding a recession. The very latest readings this late morning, according to DowJones Newswires, is that the two yields were the same. Still, the trajectory of both seems to suggest a normalizing Treasury yield curve that would be good for the U.S. economy.
Technically, December gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,600.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,475.00. First resistance is seen at this week’s high of $2,539.50 and then at $2,550.00. First support is seen at the overnight low of $2,502.70 and then at $2,500.00. Wyckoff's Market Rating: 7.5.
Image Source: Kitco News
December silver futures bulls and bears are on a level overall near-term technical playing field. A price uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at the August low of $26.885. First resistance is seen at $29.00 and then at this week’s high of $29.35. Next support is seen at this week’s low of $28.055 and then at $28.00. Wyckoff's Market Rating: 5.0. Read More
Image Source: Kitco News
Gold will see sovereign, investor and physical demand, but Fed policy is a risk – UBS’ Joni Teves
Even with gold prices trading near record highs, the precious metal should continue to enjoy support from central banks, investors and the physical market, with Fed policy a source of both support and risk, according to Joni Teves, Precious Metals Strategist at UBS.
“We think gold’s uptrend has legs and see further gains over the next couple years,” Teves noted in a recent presentation. “Strong official sector buying and resilient physical demand imply structural support and have lifted gold’s trading range,” while “Elevated macro uncertainty and persistent geopolitical risks [are] likely to drive a rise in investor gold allocations, which are currently still low.”
Looking at sovereign demand, Teves said UBS believes there’s room for official gold purchases to rise further.
“Though the official sector has already bought a lot of gold in the past decade, we think the trend can continue,” she said, and shared three reasons why she believes this is likely. “There tends to be inertia when it comes to official sector flows. The rationale for diversification is still valid and there is room to continue. Strategic sales are unlikely, given the potential damage to confidence from ‘selling the family jewels.’” Read More
Gold/silver cross poised for upward breakout toward 100 – Mike McGlone
The gold/silver ratio is among the most important and closely watched numbers in the world of precious metals, and despite gold’s outperformance compared to its gray counterpart, one analyst says the ratio is unlikely to decrease anytime soon as the yellow metal looks to extend its strong uptrend.
“Gold and silver are featured in Adam Smith's ‘The Wealth of Nations’ and crude oil isn't, with implications for commodity transmogrification and tailwinds for the benchmark precious metal,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. “Gold has been demonetizing its cousin for centuries, and the gold/silver cross appears on track toward 100 as US unemployment rises and government bond yields decline in China and the US.”
According to McGlone, a predicted increase in volatility “may buoy gold over silver,” and the yellow metal is expected to see a strong upswing once the inversion in the yield curve normalizes.
“The last time US stock market volatility reached a similar low vs. high rates was 2006, about when the gold/silver cross bottomed around 45,” he noted. “We see parallels at about 86 on Aug. 30. The cross rate's upward path may gain speed from a bit of reversion – upward in volatility and downward in rates.” Read More
Gold’s candlestick is a “dragonfly doji” which could indicate a key reversal
In Wednesday's New York and Globex trading sessions, gold prices experienced a modest uptick as the U.S. dollar weakened. As of 5:50 PM EDT, December gold futures were trading at $2,526.50 per ounce, marking a slight increase of $1.70 or 0.07%. This movement comes on the heels of last Thursday's record-setting close at $2,560.30 per ounce.
The day's trading dynamics revealed an intriguing interplay between gold prices and the dollar's performance. Despite the U.S. dollar index tumbling by 0.47% to 101.287, gold's gains were relatively muted. This suggests that traders were primarily inclined to bid gold prices lower, counteracting some of the support typically provided by a weaker dollar.
Image Source: Kitco News
Wednesday's trading range for December gold futures presented several noteworthy characteristics. The contract reached an intraday low of $2,502.70, marginally below Tuesday's low of $2,504.40. Similarly, the day's high of $2,531.50 fell short of the previous session's peak of $2,539.50. These lower highs and lower lows indicate a continuation of the short-term downtrend. Read More
Image Source: Kitco News
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
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