x
Image Source: Unsplash
Gold Price News: Gold Drifts Lower In Subdued Trading
Gold prices edged lower on Tuesday, adding to Monday’s losses, which came after a volatile day in the wider global stock markets. Prices fell as low as $2,382 an ounce on Tuesday, compared with around $2,410 an ounce in late trades on Monday.
There were few apparent drivers to significantly affect gold markets on Tuesday, leaving prices to drift slightly lower in largely lacklustre trading. The subdued trading activity contrasted sharply with Friday last week, when prices hit a fresh all-time high of $2,486 an ounce.
Tuesday’s market seemed like the ‘calm after the storm,’ which followed Monday’s stock market panic, which may have prompted some precious metals traders to liquidate gold positions amid margin calls on equity positions, according to some observers.
On the monetary policy side, the interest rate markets are now fully bracing for a start to interest rate cuts by the US Fed at its next meeting on 18th September, and data from traders indicates a more than 65% probability of a 50-basis point cut, and a 34% chance of a smaller cut of 25 basis points. Read More
Silver Price News: Silver Tests Levels Below $27.00 An Ounce
Silver prices ticked lower on Tuesday, although the market showed tentative signs of stabilising after falling to a three-month low on Monday. Prices nudged lower to $26.66 an ounce on Tuesday before pulling back up to just under $27.00 an ounce later in the session. That compared with around $27.30 an ounce in late trades on Monday.
The precious metals got caught up in the wider financial market meltdown seen on Monday, which added to losses of around $6.4 trillion for share prices around the world over the last three weeks, according to news reports.
This appeared to weigh on gold prices, as traders may have been forced to cover margin calls by selling out of positions in precious metals. This may have neutralised any support that would have emerged for safe haven assets amid the stock market turmoil. Read More
A warning to the Federal Reserve: Is an inter-meeting cut coming? U.S. to print money to avoid 'total reset of our economy' – James Lavish
Global assets are facing a big problem, and this trade "unwinding" is the one to watch, according to James Lavish, co-managing partner of Bitcoin Opportunity Fund and author of the Informationist Newsletter.
The widespread market selloff is in part being driven by the yen's recent turnaround after the Bank of Japan (BOJ) raised interest rates for the first time in decades, with the latest hike just last week. The BOJ decided to hike short-term rates to 0.25% from 0-0.1% at the July 30-31 meeting.
"You've had extraordinarily low borrowing costs in Japan for over a decade. As we were coming out of the pandemic, all central banks were raising their rates, while Japan was actively holding their rates down to induce inflation," Lavish told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "This matters because if you are an investor. What you can do is sell short Japanese bonds. For that, you're going to receive yen, and you can take those yen and sell them and buy dollars. Then, you can take those dollars and buy the higher-yielding U.S. Treasuries." Watch the podcast
Gold faces near-term pressure but bullish outlook, silver has more suffering in store – StoneX’s O’Connell
Gold is fulfilling its traditional role amid equity market instability, while the gold:silver ratio has risen to its highest level in six months, and markets are now pricing in 125 basis points of rate cuts by December, according to Rhona O'Connell, Head of Market Analysis at StoneX Bullion.
In a Monday blog post, O'Connell noted that the Fed narrative has shifted dramatically in a very short time, but the overall picture for gold remains positive.
“Roughly a year ago the markets were talking about how the Federal Reserve Board and the Federal Open Market Committee (FOMC) had done too much too late in terms of rate hikes, and there were fears of recession, as well as pressures on small-to-medium-sized industries and the medium-sized banking sector. All of which was supportive for gold,” she wrote. Read More
China's central bank adds no gold to reserves for third straight month in July
China’s central bank refrained from adding to their gold reserves for the third consecutive month in July, according to official data released on Wednesday.
“The People's Bank of China has reported no change to its #gold reserves for the third consecutive month,” wrote Krishan Gopaul, Senior Analyst, EMEA, at the World Gold Council. “Its gold holdings remain at 2,264 tonnes, and still account for around 5% of total reserves.”
While China's gold holdings were unchanged from the end of May and June, the value of the country’s gold reserves rose to $176.64 billion at the end of July from US$169.7 billion at the end of June as the price of gold continued to appreciate.
"It is not surprising that the central bank has paused purchases,” Metals Daily CEO Ross Norman told Reuters. “It gives us a clear indication about their mentality to prices, which is that it is way ahead of itself.” Read More
Slight gains for gold as market pauses
Gold prices are up just a bit and silver prices are modestly weaker in midday U.S. trading Wednesday. The marketplace has calmed down at mid-week, which has allowed the two precious metals markets to pause, awaiting fresh fundamental developments to drive daily price action. December gold was last up $3.00 at $2,435.00. September silver was down $0.186 at $27.035.
U.S. stock indexes are solidly higher but down from daily highs at midday. Risk aversion has significantly receded at mid-week, after the recent rout in the U.S. and global stock indexes. The rally in global stock markets the past couple days has limited the upside in safe-haven gold and silver, from a competing asset class perspective.
The Bank of Japan further assuaged the marketplace Wednesday when a BOJ official said the BOJ likely won’t raise interest rates more for quite some time.
Technically, December gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. First resistance is seen at Tuesday’s high of 2,459.50 and then at $2,475.00. First support is seen at the overnight low of $2,318.80 and then at this week’s low of $2,403.80. Wyckoff's Market Rating: 6.5.
Image Source: Kitco News
September silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $39.355. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at Tuesday’s high of $27.67 and then at $28.00. Next support is seen at this week’s low of $26.595 and then at $26.00. Wyckoff's Market Rating: 3.5. Read More
Image Source: Kitco News
Family offices lean into gold amid economic uncertainty
After years of being shunned by investors in search of alpha, gold has seen a resurgence in interest from both retail investors and institutional outfits since 2022, and a new survey of family offices shows that allocating towards gold is increasingly a long-term and strategic play.
2024 has been a banner year for the precious metal as it has been one of the best-performing assets, rising over 16% year to date and outpacing most major asset classes, according to the mid-year outlook of the World Gold Council (WGC).
“If you look at gold over the long term, it’s grown at around 8% a year in US dollar terms, and if you look over the last 25 years, it has outperformed the MSCI World total return index,” said Louise Street, Senior Markets Analyst at the WGC. Read More
India’s gold demand projected at 750 tonnes in 2024 after H1 increase of 1.5% – World Gold Council’s Jain
India's gold demand will top out above 750 tonnes in 2024, not far behind 2023’s 761 tonnes, according to Sachin Jain, regional CEO for India at the World Gold Council (WGC).
“Gold is already selling at a premium, and it is a clear reflection of the increase in demand for gold,” Jain told Times of India on Tuesday. “We think Q4, which is the festive season, will be one of strongest quarters for gold demand in the country ever.”
“We think it will be close to about the upwards side of 750 tonnes,” he added.
Gold demand in Q2 2024 fell 5% over the same period in 2023, declining from 158.1 tonnes to 149.7 tonnes this year, according to the WGC. However, demand during the first half of 2024 increased by 1.5% to 288.7 tonnes compared to the 284.4 tonnes is H1 2023. Read More
Recession fears grip markets: Analysts weigh gold and Bitcoin as safe-havens
Recession fears have surged following the ‘Black Monday’ of 2024 that saw the end of the yen carry trade spark sell-offs in financial markets around the world, with assets from stocks to cryptos and precious metals experiencing sharp declines.
"I believe there is a 40% probability for a recession in H2 2024 (30% shallow, 10% hard landing),” said Aurelie Barthere, Principal Research Analyst at Nansen, in a note shared with Kitco Crypto. “It is above the historical average of 17%."
“Eurozone growth has been weak since 2022 (energy shock from the Ukraine war ) and could potentially be impacted further by hypothetical tariff hikes from the US,” she added. “Chinese growth is weakening as the country is going through the real estate bubble deflating, while the economic war with the U.S. is not helping.”
“In the U.S., growth is slowing but there is no clear area of vulnerability (household and corporate balance sheets are healthy) except for elevated equity market valuations (20.5x for the S&P 500 forward PE),” Barthere said. “I can see a scenario where equity and risk assets correct enough to tighten financial conditions and trigger an economic contraction.” Read More
75% of wealth managers have little to no gold exposure despite its strong performance – Asset Risk Consultants survey
Even as equities stumble, macroeconomic fears mount, and gold outperforms all commodities and most other assets with 16% gains in 2024, the overwhelming majority of portfolio managers still have small to non-existent exposure to the precious metal, the latest data from Asset Risk Consultants (ARC) shows.
According to the latest quarterly ARC Market Sentiment survey, 75% of the 83 managers who responded had either no gold exposure or a weighting less than 2.5% within their typical ‘steady growth’ investment solution. Not one manager had gold exposure above 10%.
Graham Harrison, chairman of ARC, said this lack of gold exposure cannot be explained by managers being negative on forecast returns, with net sentiment towards the yellow metal reading strongly positive at 35% in its latest survey. Read More
Gold Struggles to Break Losing Streak Amid Economic Uncertainty and Global Tensions
Image Source: Kitco News
Gold prices continued their downward trend on Thursday, unable to sustain early gains despite a brief rally in overseas trading. The precious metal's most active December contract settled at $2,423, marking a daily decline of $8.60 or 0.35%. This performance extends gold's losing streak to five consecutive days, during which it has shed $70 in value.
The recent volatility in the gold market comes on the heels of a concerning U.S. employment report that revealed an unexpected jump in the unemployment rate to 4.3%, its highest level since October 2021. This surge triggered the "Sahm Rule," a recession indicator developed by former Federal Reserve economist Claudia Sahm. The rule suggests a potential recession when the three-month moving average of unemployment rises by half a percentage point from its lowest point in the past year.
Despite the current downward pressure, many analysts including myself maintain a bullish long-term outlook for gold. National Bank Financial cited growing concerns about U.S. economic weakness and a favorable U.S. Real Rate outlook as factors that could support gold and gold equities in the future. Read More
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.
