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Silver Price News: Silver Suffers Growth Jitters
Silver ended last week on a sour note, closing at a three-week low below $28/toz. While the most recent US Non-Farm Payroll print is somewhat problematic for gold, it is far more of a headache for silver. Not only does it exacerbate growth and inflation concerns, it also, as explained in today’s Gold Forecast, is also thought to increase the chance of a Fed policy error and by extension the risk of an economic ‘hard landing’. It is not coincidental that the S&P 500 has just seen its steepest weekly decline since March 2023. Silver starts this week trading around $27.8/toz.
While much market attention will inevitably focus on what the Fed delivers on 18 September – CME FedWatch suggests that futures markets are now pricing in just a 29% chance of a 0.5% cut and a 71% chance of a 0.25% cut – longer-term growth prospects are more important for silver. Thus, we would argue that the Fed’s new Summary of Economic Projections also published that day are more consequential than the rate moves alone.
The most recent CFTC Commitments of Traders (CoT) report published late on Friday indicates that silver speculators cut back their net long futures positions over the previous week. Read More
Gold Price News: Gold on Hold
Gold traded down at the end of last week faced with a somewhat firmer dollar and a US August Non-Farm Payroll print that combined both weaker than expected hiring and firmer wages. Rates markets have concluded that this might not only give the Fed pause for thought, but that this would also be a policy error. While expectations of total Fed easing until the end of the year have fallen from c. 125bp to c. 115bp, they have also increased from c 240bps to c. 280bps by June 2025. This is ultimately bullish for gold but weakens short-term fundamental support. Gold starts this week trading at $2491/toz.
The CFTC Commitments of Traders (CoT) report published late on Friday saw gold speculators only slightly trim their net long gold futures positions over the week from the 52-month high seen at the end of August. However, data from physical gold ETFs/ETCs suggests that the first week of September saw net outflows, with European funds leading withdrawals. Friday also saw the People’s Bank of China (PBoC) reporting unchanged reserves at the end of August, implying a fourth straight month of zero net purchases. Overall, the gold flow and positioning picture seems rather less bullish – perhaps inevitable given elevated prices.
Technically, gold’s inability last week to successfully challenge descending minor oblique and major horizontal resistance confirms the overall picture of consolidation seen since 19 August and foreshadowed by unfavorable MACD and RSI indicators. Today, these resistance levels appear at $2520/toz (descending minor oblique) and $2525/toz (major horizontal). Read More
China's central bank gold reserves unchanged for fourth straight month in August
China’s central bank refrained from adding to their gold reserves for the fourth consecutive month in August, according to official data released on Saturday.
China's gold holdings held steady at 72.8 million troy ounces at the end of last month, the same level as the prior month. The value of the country’s gold reserves rose to $182.98 billion compared with $176.64 billion at the end of July, however, as gold prices broke above $2,500 per ounce last month. Gold prices have gained over 21% this year.
The People's Bank of China (PBOC) broke its 18-month streak of net gold purchases in May, sending shockwaves through the gold market and causing a sharp selloff when traders realized that one of the yellow metal’s steadiest supports was now on hold.
“What it says to me is they're not just going to keep paying up forever and ever,” Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, told Kitco News at the time. “They've got a limit of how much they're willing to pay, and we've probably gotten to it.”
“Does it mean they're done, or did they have to take a break for any number of reasons? And if so, for how long? That's a big unknown,” he added. Read More
Gold, silver firmer on ideas of more dovish central banks
Gold and silver prices are posting gains in midday U.S. trading Monday, with silver solidly up. The precious metals bulls are getting support from ideas of dovish central banks following last Friday’s downbeat U.S. jobs report and ahead of this week’s monetary policy meeting of the European Central Bank. Gains in gold are being limited today by a higher U.S. dollar index. December gold was last up $5.40 at $2,529.80 and December silver was up $0.457 at $28.265.
U.S. stock indexes are solidly higher at midday. The U.S. stock index bulls are working to recover last Friday’s losses following weaker-than-expected U.S. jobs growth in last Friday’s monthly employment report that once again raised fears of a U.S. economic recession. The Fed’s FOMC meets next week and the European Central Bank meets this Thursday.
The U.S. data point of the week is Wednesday’s consumer price index for August, which is seen coming in at up 2.6%, year-on-year, following the 2.9% rise seen in the July report. The “core” CPI (excluding food and energy) for August is seen up 3.2% annually, compared to a rise of 3.2% in the July report. The U.S. producer price index report is out Thursday.
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 the record high of $2,570.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,475.00. First resistance is seen at $2,540.00 and then at $2,550.00. First support is seen at the overnight low of $2,514.20 and then at the September low of $2,502.70. Wyckoff's Market Rating: 8.0.
Image Source: Kitco News
December silver futures bulls and bears are on a level overall near-term technical playing field. 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 $29.55. Next support is seen at $28.00 and then at $27.50. Wyckoff's Market Rating: 5.0. Read More
Image Source: Kitco News
Yellen sees 'no red warning lights' for U.S economy, but Fed’s rate cuts could backfire - Peter Boockvar
Recent economic data has raised questions about Treasury Secretary Janet Yellen’s optimistic view of the U.S. economy. While Yellen recently stated at the Texas Tribune Festival that she doesn’t see any “red lights flashing,” revisions to the August jobs report showed just 142,000 new jobs, and underemployment has climbed to 7.9%. The retail and manufacturing sectors are also shedding jobs, contributing to a more mixed economic picture than Yellen's words suggest.
In a conversation with Jeremy Szafron, Anchor at Kitco News, Peter Boockvar, Chief Investment Officer at Bleakley Financial Group, offered a more cautious perspective. “You can be in a full-blown hurricane, and the Treasury secretary will say, 'The weather looks great,’” Boockvar said, underscoring his concern that the government may not be acknowledging all the risks. He also questioned the upcoming Federal Reserve rate cuts, saying, “The market assumes the Fed can just cut rates and everything will be fine, but I don't think it's going to be that easy.” Watch the podcast
Silver’s biggest gains and losses happen during the same months each year, but the post-Covid period has bucked some trends – Analysis
Silver’s performance is remarkably seasonal over time, with certain months consistently outperforming while others nearly always underperform, but the last few years have disrupted several long-term trends, according to a new historical analysis of silver’s price action.
In a blog post published by InvestingHaven on Sept. 7, the author analyzes multiple historical silver seasonality charts in an effort to determine silver’s seasonal patterns, and whether longer-term trends are still valid today.
“Silver, like many other commodities, exhibits seasonal patterns that investors can use to inform their investment strategies,” they wrote. “By analyzing historical data, we can identify recurring trends that help predict silver market movements.”
The analysis covers long-term historical patterns as well as more recent trends from the past four years. “The comparison between these periods reveals shifts in market dynamics and potential opportunities for silver investors,” they said. Read More
Gold continues to be supported by upcoming rate cuts by the Fed
Gold pricing remains supported above $2500 per ounce. Propped up by central banks continuing to add the precious yellow metal to their balance sheets. In addition, there has been a surge of safe-haven demand the result of concern over geopolitical hot spots, and a steady retail demand. Combined, these factors have created strong price support near gold's highest value in history.
As of 6:00 PM EDT, gold futures basis the most active December contract is fixed at $2535.50 after factoring in today’s net gain of $8.70, or 0.34%.
Image Source: Kitco News
Today’s moderate gains have occurred despite dollar strength. The dollar is currently up 0.44% fixing the index at 101.651.
Today’s gains followed Friday’s $20 decline after the US Labor Department’s jobs report came in under expectations. While economists had predicted an addition of 160,000 new jobs in August, the actual figure came in at 142,000. This coupled with downward revisions to both the June and July jobs report suggests that labor force has been weakening for some time. This may have significant implications for monetary policy decisions.
According to the CME’s FedWatch tool, the probability that the Federal Reserve will cut rates by 50 basis points at its September 18 FOMC meeting has remained at 30% over the last week. Regardless of the size of the rate cut by the Federal Reserve next week, the monetary path of the central bank preparing to pivot from its former restrictive monetary policy to an accommodating one. Read More
Live From The Vault - Episode: 189. China to ignite a $1 trillion golden avalanche
In this week’s episode of Live from the Vault, Andrew Maguire dives into the unreported short-term market moves driving the price action for gold and silver.
The precious metals expert answers the community's burning questions and delivers chart-driven analysis to highlight how close gold came to triggering breakout buy stops.
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.
Featured Image - Source: Unsplash
