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Gold/Silver: precious metals surge back to contract highs! Could gold's rally stall? - Metals Minute w/ Phil Streible
Phil Streible, The Chief Market Strategist with Blue Line Futures, discusses Gold, Silver, Copper, Platinum, and other commodity topics. Tune into today's Metals Minute for key levels and actionable trade ideas covering your favorite Precious Metals, overnight developments, and what to watch for every trading day. Watch the podcast
Gold's record-setting rally faces threat from soaring bond yields – Mike McGlone
Gold has been on a tear in 2024, with the latest record high coming in the early hours on Monday, and while the yellow metal has looked near-unstoppable recently, one analyst suggests there is one thing that could spoil the party: a surge in bond yields.
“New highs in the ratio of gold to US Treasury bonds could be vulnerable to some reversion, especially if Vice President Kamala Harris wins the presidency and the House or Senate is controlled by Republicans – a check on rising budget deficits,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. “The record-setting metal and rising bond yields, on the back of Federal Reserve easing, may be pricing in inflation and volatility if former President Donald Trump gains a second term.”
McGlone questioned, “Is Gold Overheating Compared to T-Bonds?”
“Gold's parabolic run vs. US Treasury-bond prices appears unsustainable, especially if Harris wins the presidency,” he reiterated. “Our graphic shows the rare crocodile-jaw pattern of the metal's hot price vs. the cold Bloomberg US Treasury 20+ total return gauge and vs. the S&P 500.” Read More
Gold rally reflects growth of dollar alternatives, West must wake up – El-Erian
Western countries should pay more attention to the skyrocketing gold price, as the precious metal’s persistent rally reflects increasing interest in alternatives to the dollar-based financial system, according to Mohamed El-Erian, Former CEO of PIMCO and current president of Queens’ College, Cambridge.
“Something strange has happened to the price of gold over the past year,” El-Erian wrote in the Financial Times on Monday. “In setting one record level after the other, it seems to have decoupled from its traditional historical influencers, such as interest rates, inflation and the dollar. Moreover, the consistency of its rise stands in contrast to fluctuations in pivotal geopolitical situations.”
He said that gold’s ‘all-weather’ price increase indicates the presence of something that goes beyond short-term economic, electoral, and geopolitical developments. “It captures an increasingly persistent behavioural trend among China and ‘middle power’ countries, as well as others,” he said. “And it is a trend that the west should be paying greater attention to.”
El-Erian noted that the price of an ounce of gold has increased from $1,947 per ounce to over $2,700, a gain of almost 40 per cent in the past 12 months. “Interestingly, this march up in price has been relatively linear, with any pullback attracting more buyers,” he said. “It has occurred despite some wild swings in expected policy rates, a wide fluctuation band for benchmark US yields, falling inflation and currency volatility.” Read More
Rising bond yields weigh on stocks and Bitcoin; gold continues trek higher
Stocks and cryptos faced early pressure on Tuesday, while gold continued its trek higher as Monday’s spike in bond yields has given investors reason to pause their bullish enthusiasm amid increasingly volatile markets.
The major indices all opened lower “following a mixed, but overall negative session on Monday,” noted David Morrison, Senior Market Analyst at Trade Nation. “Yesterday, the NASDAQ was the only major index to close in positive territory, helped by a 4.3% rally in NVIDIA. On the other side, the small cap Russell 2000 lost 1.6%, the Dow ended 0.8% lower, while the S&P lost a more modest 0.2%. There was little in the way of data releases or corporate earnings to offer direction.”
“Investors looked askew at the bond market, where yields jumped sharply, sending Treasuries and other debt instruments lower,” he added. “The yield on the 10-year Treasury note jumped 12 basis points, taking it to 4.19%, its highest level since the end of July. Yields are a touch firmer again this morning, and this is weighing on equities to some extent.”
“The move suggests that investors are reassessing the timing and size of future rate cuts from the Fed’s FOMC,” Morrison said. “While the probability of a 25 basis point cut at next month’s meeting is still around the 90% mark, it has drifted lower over the past week. Perhaps more significantly, the probability of a repeat cut at the December meeting has fallen from 85% last week to 67% today. Unfortunately, the CME’s FedWatch Tool is less clear over the expected path of cuts for 2025.” Read More
Gold prices holding near session highs as IMF lowers global growth forecasts
Global economic uncertainty appears to be contributing to a safe-haven bid in gold, as prices trade near session highs after the International Monetary Fund (IMF) warned the world that downside economic risks are increasing.
In its latest updated economic projections, the IMF stated that it expects the global economy to expand by 3.2% in 2025, unchanged from 2024. Analysts described global economic activity next year as stable but underwhelming.
They also noted that while a soft landing for the economy is within reach as central banks bring inflation under control, the world still faces a growing number of threats.
“The balance of risks is tilted to the downside: geopolitical tensions could flare up; sudden eruptions in financial market volatility could tighten financial conditions; problems in China’s property sector could generate global spillovers via their effect on global trade, as could rising protectionism and continued geoeconomic fragmentation; and disruptions to the disinflation process could prevent central banks from easing monetary policy, adding challenges to fiscal policy and financial stability. Amid numerous threats, it is time for a policy pivot,” the IMF said in its report on Tuesday.
Analysts note that while gold prices have come off their session highs, the market remains well-supported. The IMF’s warnings have added another factor driving investment demand. Read More
Gold prices benefit from US election uncertainty, disputed result will prevent selling – TD Securities’ Ghali
Even as central bank buying appears to be easing, uncertainty surrounding the upcoming U.S. election will likely keep investors from selling their gold, and a disputed outcome could extend and magnify the yellow metal’s safe-haven bid, according to TD Securities’ Senior Commodity Strategist Daniel Ghali.
In an interview on Monday, Ghali said even as some of the drivers in the gold market are shifting, there’s still plenty of room for allocations to grow, and geopolitical uncertainty in the United States and abroad will put a firm floor beneath record-high prices.
“In a medium-term outlook, what's interesting about the ongoing rally in gold is that really anywhere you look, you can't find much evidence of substantial inflows heading into gold,” Ghali said. “Some of the largest gold investors, according to our analytics, are holding on to an extreme amount of gold relative to history. Elsewhere, physical markets have actually come to a standstill. I think what the gold market is actually telling us is that there is a lot of anxiety surrounding the upcoming U.S. election season.”
“Perhaps it's not a story of a substantial amount heading into gold,” he added, “but rather a story that it takes a brave soul to sell gold into this specific election.”
Ghali agreed that market participants are reluctant to sell in an environment with such strong upward momentum, and pointed to various factors supporting the yellow metal at record highs. Read More
Global monetary reset coming, gold to get revalued to $150k, is BRICS summit the trigger? Andy Schectman
A global financial reset is coming, and under a new system, gold could get revalued to up to $150,000 an ounce, said Andy Schectman, President and Owner of Miles Franklin Precious Metals, adding that this week's BRICS annual summit could be a potential trigger.
Schectman told Michelle Makori, lead anchor and editor-in-chief at Kitco News, that one inevitable outcome of the accelerating de-dollarization trend is a new one-world system in which a hard asset like gold will get revalued.
"The system, as we know, is going to change, and the people pulling the strings are the most powerful in the world," he said. "A one-world system. Maybe everything is transacted over a CBDC [central bank digital currency] network."
Schectman pointed to reports that the BRICS nations are considering introducing a new global currency system, tentatively called the 'Unit'.
According to a whitepaper, the 'Unit' would be pegged 40% to the value of gold and 60% to a basket of BRICS national currencies. It is designed as an "apolitical currency," addressing the concerns of countries weary of the politicization of the U.S. dollar. Watch the podcast
Gold, silver power higher on safe-haven demand, bullish charts
Gold and silver futures prices are solidly up in midday U.S. trading Monday, with gold hitting another record high of $2,758.70, basis December Comex futures, while silver futures hit another 12-year high. Safe-haven bidding and bullish technical charts continue to invite traders and investors to the long sides of those markets. December gold was last up $16.10 at $2,755.00 and December silver was up $0.862 at $34.935.
One focal point for traders and investors this week is the BRICS meeting (Brazil, Russia, India, China, South Africa). The Associated Press today said the meeting of the BRICS bloc of developing economies “aims to counterbalance the Western-led world order. And its bloc of members is expanding rapidly. Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia joined in January; Turkey, Azerbaijan and Malaysia formally applied, and a number of others expressed a desire to be members.” A main goal of the group is to move away from U.S.-dollar-dominating global commerce, so called “de-dollarization.” This concept is bullish for the safe-haven gold and silver markets.
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 $2,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,650.00. First resistance is seen at the contract high of $2,758.70 and then at $2,775.00. First support is seen at this week’s low of $2,728.50 and then at $2,708.70. Wyckoff's Market Rating: 9.5.
Image Source: Kitco News
December silver futures bulls have the strong overall near-term technical advantage. Prices are in an accelerating 2.5-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $37.50. The next downside price objective for the bears is closing prices below solid support at $32.00. First resistance is seen at $35.00 and then at $35.50. Next support is seen at $34.50 and then at $34.00. Wyckoff's Market Rating: 9.5. Read More
Image Source: Kitco News
Gold outshines Bitcoin and stocks as U.S. election uncertainty weighs on markets
Gold extended its non-stop rally higher on Tuesday, while stocks and Bitcoin (BTC) traded sideways as the bond market sell-off continued to ripple through financial markets. The rapidly approaching elections in the U.S. also influenced market sentiment, as the rising odds of a Trump victory have analysts rushing to predict what his economic policies could mean for asset prices.
“Bianco Research highlights a correlation between the rise in the 10-year yield and the improving odds of Donald Trump clinching an election victory,” noted analysts at Secure Digital Markets. “Trump's commitment to imposing tariffs could exacerbate domestic inflation, complicating the Fed's ability to slash rates. This scenario is nudging U.S. Treasury yields higher, which in turn diminishes the attractiveness of more volatile assets.” Read More
Silver’s secret military demand: The hidden force driving price growth
Silver is finally coming to life after months of sideways trading and being overshadowed by gold’s record run of new highs, but with the gray metal now trading above $34, one hidden source of demand could propel silver to a new all-time high in the not-too-distant future.
As reported by The Jerusalem Post, silver’s uses in consumer electronics and renewable energy have been extensively covered, but its applications within the secretive realms of military and aerospace technology are less discussed.
“Recent analysis suggests that military usage of silver may be substantially greater than any other industry category, including electronics, solar panels, and investment demand combined,” the report said. “This information, brought to light by silver market experts, raises significant questions about the transparency of silver demand data and the potential impact on future silver prices.” Read More
Central bank purchases, light investor allocations, and geopolitical risks mean gold prices can fly higher still – UBS’ Joni Teves
Despite gold prices cresting close to year-end targets months ahead of schedule, the yellow metal is still supported by strong tailwinds and investor allocations remain relatively light, so the risks remain skewed to the upside, according to Joni Teves, Precious Metals Strategist at UBS.
In a Monday interview, Teves was asked what the banking giant sees in gold’s future after breaking above $2,700 per ounce last week and continuing to set new all-time highs in this week’s trading.
“We remain bullish on gold here,” she said. “We think the outlook is quite positive heading into next year. Easing by the Fed continues to be supportive for gold, and fundamentals continue to be positive as well. We expect central bank buying to continue, and physical demand we think will remain resilient even as prices continue to rally.”
UBS also believes investors still have plenty of room to build gold positions. “Generally, we think the market is still under-invested in gold, and therefore there's room for more allocations to be built up,” she added. 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
