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Gold Price News: Gold Rises 0.9% Ahead of US Fed Decision
Gold prices posted moderate gains on Tuesday, recapturing some of Monday’s losses, as the markets braced for the US Fed’s expected interest rate decision on Wednesday.
Prices rose as high as $2,765 an ounce on Tuesday, up from around $2,742 an ounce in late trades on Monday.
US Fed tipped to hold fire on rates:
The big-ticket item this week is the US Federal Reserve’s expected interest rate decision on Wednesday, with the markets widely anticipating no change from the current level. However, much of the focus will be on how the central bank responds to recent calls from US President Donald Trump to lower interest rates. Any inflationary policies in the US are likely to curb the Fed’s scope to cut rates further this year – creating a potentially challenging environment for US monetary policy.
Nevertheless, current economic and geopolitical uncertainties continue to offer a supportive factor for gold as a safe haven asset. Friday saw prices rise as high as $2,785 an ounce — within a stone’s throw of their all-time highs of over $2,792 an ounce on October 30th, 2024. Read More
Silver Price News: Silver Ticks Higher As Gold Posts Gain
Silver prices nudged higher on Tuesday, taking some direction from moderate gains for gold, as the markets braced for expected interest rate decisions by central banks in the US, Canada and EU.
Prices rose to an intraday high of $30.58 an ounce on Tuesday, compared with around $30.29 an ounce in late deals on Monday.
Eyes on central banks:
Much of the focus in financial markets will be on central banks this week, with the US Fed expected to keep interest rates on hold on Wednesday, while the bank of Canada is expected to cut rates by 25 basis points. Then on Thursday it will be the ECB’s turn, with the market anticipating a similar cut of 25 basis points. Lower interest rates tend to support precious metals prices as they reduce the opportunity cost of holding non-yield-bearing assets.
Technical analysis:
On the technical charts, silver faces downward-sloping oblique minor resistance at $30.65 an ounce. Should the price breach this area on the upside, the next indicative target level would be $31.98 an ounce. However, silver’s failure to punch through this near-term barrier suggests some appetite to move lower, and further tests of rising oblique major support at $29.95 an ounce look likely. The 10-day Relative Strength Index for silver remains in neutral territory at around 52 as of Tuesday. Read More
Asian ‘mystery buyer’ and trend-magnifying algos are driving gold’s recent gains – TD Securities’ Ghali
Gold’s gains last week were driven by the return of the ‘mystery buyer’ in Asia, and the moves were magnified by the algorithmic traders who have become the dominant force in commodities markets, according to TD Securities’ senior commodity strategist Daniel Ghali.
In a Jan. 27 interview, Ghali said that gold had a unique setup into the beginning of this year, but the environment had shifted once again.
“We headed into U.S. elections with a completely different setup for flows in gold markets,” he said. “We had, at the time, macro funds and discretionary traders who showed some signs that their positions were extreme – what we're talking about when we say extreme is the highest levels since the Brexit referendum or the stealth QE narrative in 2019, or even more so than during the depths of the covid crisis – so there were really a lot of signs out there of some euphoria within this cohort of gold investors.”
But the drawdown in precious metals markets over the weeks that followed the U.S. election forced this community to liquidate a large portion of their extreme position sizes, Ghali said.
“Really what we are left with here is a setup where a continued weakening in the U.S. dollar and U.S. rates is going to lead this cohort to continue to buy,” he said. “But conversely, the opposite scenario, in which the U.S. dollar continues to rise, has now reached levels that are sufficiently strong to catalyze what we've called the return of the ‘mystery buyer,’ this community of buyers out of Asia, which really were one of the big reasons why gold prices performed so well last year.” Read More
Gold and silver price action will drive the market narrative in 2025 - MarketGauge’s Michele Schneider
Gold’s ability to outperform equities during a massive financial market sell-off highlights the potential of this “sleeping giant,” according to one market analyst.
North American equity markets suffered a significant blow on Monday as global investors offloaded tech and AI-related stocks following China’s announcement of a cheaper artificial intelligence model, challenging the dominance of U.S. technology.
Reacting to the broad market price action, Michele Schneider, Chief Strategist at MarketGauge, told Kitco News that it’s not surprising gold is holding its ground.
“Gold never seemed to believe that AI would change the economic conditions, including the current deglobalization trend,” she said.
However, Schneider cautioned that investors need to pay attention to ongoing market conditions. If there is a larger rotation into defensive stocks like staples and healthcare, it could signal a recessionary warning, which might weigh on gold due to broader market liquidity risks. Read More
CME to give Robinhood traders access to futures including gold and silver
The CME continues to expand its influence in financial markets, particularly among retail investors.
On Wednesday, the CME announced that, in the coming weeks, all eligible Robinhood customers in the U.S. will gain access to futures products across five major asset classes. These include the four leading U.S. equity indices—S&P 500, Nasdaq-100, Russell 2000, and Dow Jones Industrial Average—as well as bitcoin and ether, major FX currency pairs, key metals such as gold, silver, and copper, and additional commodities like crude oil and natural gas.
"We are extremely pleased to offer some of our most popular futures contracts to the broad network of retail traders on Robinhood," said Julie Winkler, Chief Commercial Officer at CME Group. "Demand for futures has skyrocketed as a new generation of self-directed traders seeks diversified investment opportunities. Expanding retail access to futures trading is an integral step in educating and empowering this new crop of investors, and we look forward to working with Robinhood to continue providing the products and resources needed to tap into today’s most important markets."
"Launching CME Group futures is a significant step forward in our mission to make Robinhood the best place for active traders," said JB Mackenzie, VP and GM of Futures and International at Robinhood. "We're rolling out an elegant new mobile trading ladder that we built from scratch, allowing customers to trade simply and efficiently at the speed of a tap. This reimagined experience, combined with some of the lowest fees in the industry, makes trading futures on Robinhood an easy decision." Read More
Gold price holding near record highs against Canadian dollar as BoC cuts rates, ends quantitative tightening
The gold market remains below its highs but continues to trade in record territory against the Canadian dollar, staying within striking distance of C$4,000 an ounce, as the Bank of Canada cuts interest rates and announces an end to its quantitative tightening measures.
In a widely anticipated move, Canada’s central bank lowered its overnight bank rate by 25 basis points to 3%. At the same time, the BoC announced that it will begin increasing its balance sheet again.
“The Bank will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy,” the central bank stated in its monetary policy statement.
The gold market has shown little reaction to the expected easing, last trading at C$3,986.10 an ounce, up 0.21% on the day. Gold is outperforming the loonie as the Canadian dollar weakens against the U.S. dollar. Spot gold last traded at $2,759.70 an ounce, down 0.12% on the day.
The latest interest rate cut comes as the Bank of Canada continues to take advantage of easing inflation pressures and resilient economic activity. However, it also acknowledged significant uncertainty ahead. Read More
Gold price drops as Federal Reserve leaves interest rates unchanged
The gold market is struggling near critical short-term support at around $2,750 an ounce as the Federal Reserve leaves interest rates unchanged and provides little guidance on its easing cycle.
As widely anticipated, the Federal Reserve left the Fed Funds rate unchanged within a range of 4.25% to 4.50%.
The central bank’s monetary policy statement remained virtually unchanged from December’s meeting when it signaled an adjustment to its easing cycle through 2025, with only two rate cuts expected.
Following the Federal Reserve’s monetary policy decision, the gold market has dropped below critical support and is trading near session lows. Spot gold last traded at $2,748.70 an ounce, down 0.48% on the day.
One notable change in the monetary policy statement is that the Federal Reserve appears slightly more concerned about inflation. “Inflation remains somewhat elevated,” January’s statement noted, a shift from December’s statement, in which the central bank acknowledged consumer price pressures were moving closer to its 2% target. Read More
Gold second top investment for Swiss federal pension fund in 2024
Gold is traditionally seen as a defensive asset, as insurance in a portfolio; however, the precious metal’s historic gains last year could begin to challenge what appears to be an outdated definition.
This week, The Swiss Federal Pension Fund PUBLICA reported a net investment return of 5.9% in 2024, consolidated across all pension plans.
The Fund said that its returns were driven by its equity investments and precious metal holdings. Publica said that its equity holdings had the biggest positive impact on PUBLICA’s consolidated total assets in 2024.
“With a net annual return of 14.5%, they contributed 4.7 percentage points to the overall return of 5.9%,” the company said in its statement.
North American-listed companies performed the best, while European stocks underperformed.
Meanwhile, the fund said precious metals were the second-biggest influence on PUBLICA’s consolidated total assets in 2024, delivering a 33% return. Read More
Gold down slightly; no big reaction to FOMC leaving rates unchanged
Gold prices are modestly down and silver solidly up in afternoon U.S. trading Wednesday, showing no significant price reactions in the immediate aftermath of the Federal Reserve leaving its monetary policy unchanged, as was widely expected. February gold was last down $2.50 at $2,765.50. March silver was up $0.483 at $31.35.
The FOMC statement said the U.S. unemployment rate has stabilized at a lower level and labor conditions remain “solid.” However, the statement said inflation remains “somewhat elevated.” Traders are now awaiting Fed Chairman Powell’s press conference. The marketplace will also closely scrutinize any comments from President Trump immediately following the Fed meeting.
Technically, February gold futures bulls have the firm overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,826.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,700.00. First resistance is seen at this week’s high of $2,778.10 and then at $2,800.00. First support is seen at $2,750.00 and then at this week’s low of $2,732.00. Wyckoff's Market Rating: 7.0.
Image Source: Kitco News
March silver futures bulls have regained the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at the December low of $29.145. First resistance is seen at today’s high of $31.765 and then at $32.00. Next support is seen at today’s low of $30.755 and then at $30.50. Wyckoff's Market Rating: 5.5. 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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