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Gold Price News: Gold Falls to Two-Week Low
Gold prices fell on Tuesday, coming under pressure from a recent strengthening of the US dollar and news that China’s central bank had bought no further gold in September.
Prices eased as low as $2,606 an ounce on Tuesday, down from around $2,645 an ounce in late trades on Monday. The market had looked fairly well supported through the morning session in Europe, but prices came under selling pressure by mid-afternoon.
The US dollar has rallied against other major currencies in the first few days of October, and continued to hold its ground this week. This creates a bearish element for dollar-denominated gold prices, as it makes the precious metal more expensive for buyers in other currencies, denting demand.
In addition, the gold market appeared to take a dim view of the latest update from China’s central bank, which again made no additions to its official gold holdings in September for the fifth month in a row, according to news reports on Tuesday. Since central bank buying has been a major support for gold prices earlier in 2024, a lack of buying by China is a negative factor for prices. This can also be taken as a sign that even the major central banks may have a degree of price sensitivity in their strategic purchasing – part of efforts to diversify reserves away from fiat currencies. Read More
Silver Price News: Silver Slumps to Three-Week Low
Silver prices fell on Tuesday, weighed down by weaker gold prices, a stronger dollar and rising US treasury yields.
Prices fell as low as $30.16 an ounce, compared with around $31.67 an ounce in late trades on Monday. That was the lowest price for silver since September 18 – a three-week low. Prices came up off the earlier lows to trade at around $30.70 an ounce later in the day Tuesday.
Overall, the grey metal came under downward pressure from a rising US dollar, which has strengthened against other major currencies in early October, as well as rising yields on US 10-year treasury bonds, which dent the appeal of non-interest-bearing assets like precious metals.
On the technical charts, the recent action shows that silver has pulled back from horizontal resistance linked to the May highs of around $32.50 an ounce. However, silver prices are also in a shorter-term bullish trend channel that started at the lows of around $26.50 an ounce in early August. Should prices deteriorate further, this trend channel indicates downside support at around $29.00 an ounce. Read More
Gold is due for a correction, but key supports should keep it shallow – StoneX Group’s Razaqzada
The case for a downward correction in gold is growing stronger by the day, but it still enjoys some key support factors, according to Fawad Razaqzada, market analyst at StoneX Group.
“[W]ith no obvious catalysts in sight for a dollar drop, with the Dollar Index having just had one of its strongest weeks in months, and this week’s inflation data unlikely to impact rate cut expectations much, not to mention the fact that the yellow metal remains severely overbought on all sorts of time frames, a correction of some kind is long overdue,” he wrote. “But while geopolitical tensions remain high, gold is likely to remain largely supported on the dips, counterbalancing the aforementioned bearish factors.”
Razaqzada noted that Friday’s blowout U.S. jobs report drove the precious metal lower before dip buyers stepped in, then took profit ahead of the weekend. “The flat close on Friday mirrored price action from the previous several days, which ensured gold would end its three-week winning run,” he said. “Friday’s release of a strong US nonfarm payrolls report threw a bit of a curveball at the Fed after the data easily beat expectations with a print of 254,000 jobs and an upward revision to the prior month’s numbers. The stronger employment data puts the Fed in a tough spot, as the narrative of a cooling economy got a lot more complicated. With the labor market still running strong, it’s no wonder Fed Chair Powell had already dismissed the idea of another 50-basis-point rate cut even days before the data came out. Now, it’s all but certain: don’t expect any further aggressive rate cuts this year.” Read More
Bitcoin and gold decline, stocks volatile as investors await Fed minutes and CPI data
Financial markets traded mixed on Wednesday morning, with Bitcoin (BTC) and gold seeing slight declines while stocks opened underwater but have since climbed higher. The early weakness in stocks was prompted by news that the DOJ is considering asking a judge to force Google to sell off key businesses to end its monopoly on the market.
Asset prices are also struggling due to a rising dollar, with the DXY resuming its uptrend to hit 102.875 in early trading.
DXY Chart by TradingView
“We suspect the market overreacted to the U.S. jobs data, which was tainted by the lowest ‘establishment’ response in over two decades, and seasonal adjustments were likely thrown off by Hurricane Helene and the 33k strike at Boeing,” said Marc Chandler, Chief Market Strategist at Bannockburn Global Forex. “We think Fed officials, and more speak today, have confirmed that it was not the game changer than many market participants think, which was likely influenced by positioning. It did help facilitate the dollar's upside correction we had been looking for. The greenback is firm today.”
“A final look at August wholesale inventories is unlikely to move anyone's needle, while the FOMC minutes due late in the session will provide color to what we already know: The median dot now sees another 50 bps of cuts in Q4 and 100 bp in 2025,” he added. “We suspect the market is more impressed with the jobs data than most Fed officials, and in part, this is because the market has strayed from the Fed's guidance." Read More
Gold price will pull back to $2,500/oz by January, but resilient demand will see it rally once again – Oxford Economics
The recent gold rally is set to lose momentum, but strong fundamentals will keep prices in an elevated range in 2025 and beyond, according to economist Diego Cacciapuoti at Oxford Economics.
In a recent report, Cacciapuoti noted that gold’s price rally has surpassed their already bullish expectations.
“After anticipating the price consolidation in December 2023, we have been consistently vocal about gold's upside potential due to its strong fundamentals, and in early July we re-opened our long on gold prices,” he said. “Strong structural demand – from emerging market central banks and the PBoC in particular – have laid the ground for a very supportive environment.”
Cacciapuoti cautioned, however, that they believe gold prices are vulnerable to consolidation in the near term.
“This is because the rally has been supported by the fall in real yields, which have reduced the opportunity-cost of holding non-yielding assets such as gold,” he wrote. “Yields continue to offer guidance on the direction at the margins for gold prices, even if the negative relationship between gold prices and US yields has recently softened on increased safe-haven demand. Since April – when real rates peaked – lower yields have consistently supported gold again.” Read More
Gold dips on bearish outside mkts as key U.S. data on deck
Gold prices are a bit weaker in midday U.S. trading Wednesday and seeing mild pressure from bearish outside-market forces. Silver prices are slightly up. Precious metals traders are in a pause mode, awaiting some important U.S. economic data that includes the FOMC minutes this afternoon and inflation reports Thursday and Friday. December gold was last down $3.90 at $2,631.50 and December silver was up $0.14 at $30.74.
The key outside markets today see the U.S. dollar index higher and hitting a seven-week high. Nymex crude oil prices are weaker and trading around $73.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching around 4.015%.
Traders are awaiting this week’s latest U.S. inflation data, in the form of the consumer price index on Thursday and the producer price index on Friday. September CPI is seen coming in at up 2.3% annually, compared to a 2.5% rise in the August report. Friday’s PPI is seen coming in up 0.1 percent, month-on-month, compared to up 0.2% in the August report.
Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,708.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,572.50. First resistance is seen at today’s high of $2,642.90 and then at $2,650.00. First support is seen at today’s low of $2,622.80 and then at $2,610.00. Wyckoff's Market Rating: 7.5.
Image Source: Kitco News
December silver futures bulls have the overall near-term technical advantage. Prices are still in a two-month-old uptrend on the daily bar chart, but bulls need to show fresh power soon to keep it alive. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $33.50. The next downside price objective for the bears is closing prices below solid support at $29.00. First resistance is seen at $31.00 and then at $31.50. Next support is seen at this week’s low of $30.345 and then at $30.00. Wyckoff's Market Rating: 6.5. Read More
Image Source: Kitco News
Fed in no hurry to aggressively cut interest rates, Fed Minutes
The gold market could struggle to attract new bullish momentum as the Federal Reserve might not maintain its aggressive easing measures, according to the minutes of last month’s monetary policy meeting.
Last month, the Federal Reserve began a new easing cycle by cutting interest rates by 50 basis points. The central bank also signaled that it expects interest rates to fall to 3% by 2026. However, the minutes highlight a more nuanced discussion around the shift in monetary policy.
According to the minutes, some committee members preferred a smaller cut of only 25 basis points.
“Several participants noted that a 25-basis-point reduction would align with a gradual path of policy normalization, allowing policymakers time to assess the degree of policy restrictiveness as the economy evolved. A few participants also added that a 25-basis-point move could signal a more predictable path of policy normalization,” the minutes stated. “A few participants remarked that the overall path of policy normalization, rather than the specific amount of initial easing at this meeting, would be more important in determining the degree of policy restriction.”
The gold market is not reacting significantly to the minutes, as prices remain under pressure. December gold futures last traded at $2,627.10 an ounce, down 0.31% for the day. Read More
Has Saudi Arabia secretly been buying gold? It wouldn’t be the first time, says analyst Jan Nieuwenhuijs
Central bank gold demand has been a key factor behind the precious metal's unprecedented rally this year, reaching consecutive record highs; however, a significant question remains: who has been buying all that gold?
While much of the gold buying is reported to the International Monetary Fund, a significant portion remains undeclared. In the second quarter, the World Gold Council stated that 67% of estimated central bank purchases were unreported. In the first half of this year, central banks bought a record 483 tonnes of gold.
According to one analyst, Saudi Arabia could be a major buyer of undeclared gold.
In a recent report, Jan Nieuwenhuijs, Precious Metals Analyst at Money Metals, speculated that Saudi Arabia has accumulated around 160 tonnes of gold since 2022.
He noted that traditionally, Saudi Arabia's gold imports have been sensitive to higher prices. In previous rallies, the nation would see a sharp drop in gold imports or even increases in gold exports. Read More
Stocks climb, Bitcoin and gold slip as Fed minutes reveal division on rate cuts
Stocks climbed higher on Wednesday, while the ‘store of value’ assets – Bitcoin (BTC) and gold – trended lower as the minutes from the Fed’s September meeting showed that central bank representatives were mixed on the size of the recent interest rate cut.
The minutes showed that a “substantial majority” of officials supported the larger interest rate cut, but a handful called for a 25 bps cut, seeing the 50 bps cut that was ultimately approved as excessive.
“Some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision,” the minutes read.
As a result of the revelation of disagreement, market watchers decreased their expectations for a rate cut in November. The CME FedWatch Tool now puts the odds of no rate cut at 19%, up from 15% yesterday and 0% last week.
“On the volatility front, the MOVE index, which tracks anticipated volatility in U.S. Treasuries, hit a peak on Monday—the highest since early January,” said analysts at Secure Digital Markets. “This surge could signal a tightening in financial conditions and increased risk aversion, possibly impacting riskier assets, including stocks and Bitcoin.” Read More
Global uncertainty is enough to push gold and silver to new all-time highs in 2025 – CPM Group’s Christian
There are enough economic, political, and security uncertainties in the world to drive gold and silver to new heights in the next six months regardless of inflation, interest rates, or any other specific metric, according to Jeffrey Christian, Managing Partner of CPM Group.
“I want to talk about the longer-term economic view and uncertainties,” Christian said in a video report published Tuesday. “Some people say that gold prices only respond to the dollar, and if you understand the dollar and you have a strong view about the dollar's outlook, therefore you'll know what to think about gold. Other people will tell you gold only responds to inflation, and [if] inflation's rising, gold prices will rise. That's wrong, too. Other people will tell you that it's this, that, or the other thing. They're all right, and they're all wrong.”
“The reality is that gold responds to inflation, to currency market unrest, to strengths or weakness in the dollar, to economic activity in general, to political uncertainties, to national, international, and regional problems, financial market concerns,” he said. “There's a gigantic panoply […] of issues that are very important in determining whether or not investors want to buy more gold or less gold, and whether the prices rise or don't rise or decline as a result of that.” Read More
Image Source: Kitco News
The precious metals market witnessed a historic moment on September 26, 2024, as gold futures surpassed the $2700 per ounce mark for the first time. This milestone capped off a remarkable rally that began in August, with gold surging from approximately $2400 to over $2700 in just two months—an impressive 12.70% gain.
This recent price surge is part of a broader upward trend that has seen gold futures appreciate by nearly 42% since October 2022. At that time, gold was trading just below $1900 per ounce, highlighting the magnitude of its ascent to the recent all-time high above $2700.
Several factors have contributed to gold's extraordinary performance. Foremost among these is the Federal Reserve's monetary policy, implemented to combat inflationary pressures that peaked at over 9%. The central bank's interest rate decisions have significantly influenced gold prices, as investors often turn to the precious metal as a hedge against inflation and currency devaluation.
Geopolitical tensions have also played a crucial role in driving gold prices to new heights. The ongoing conflict following Russia's invasion of Ukraine has created global economic uncertainty, prompting investors to seek safe-haven assets like gold. More recently, the outbreak of war in the Middle East has further fueled this trend, underscoring gold's status as a store of value during times of international crisis. 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.
Featured Image - Source: Unsplash
