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Mitsui releases a new gold-backed cryptocurrency
Japanese trading firm Mitsui & Co. plans to issue a digital currency called ZipangCoin (ZPG) and it could be released as early as this month according to reports by Nikkei. ZPG will allow people to purchase items at affiliated retailers with a smartphone app like other digital payment systems, which are becoming increasingly popular in the country.
Unlike most other cryptocurrencies that are not backed by tangible assets, the value of ZPG will be less volatile. Mitsui has set up a cryptocurrency exchange with Seven Bank and others and has registered it with the Kanto Local Finance Bureau, with permission granted by the central government's Financial Services Agency (FSA).
ZPG will be linked to gold procured at yen-denominated prices by Mitsui from the London Metal Exchange. The value of one ZPG will be equal to one gram of gold and guaranteed by Sumitomo Mitsui Banking. The new currency will be sold first through Mitsui's exchange and later made available on other exchanges. Those registered exchanges will be required to verify the identity of users. Read More
Gold price stuck in neutral around $1,800 and going nowhere fast
The gold market is well anchored around $1,800 an ounce and might not go anywhere anytime soon as market sentiment among Wall Street analysts remains neutral to bearish, according to the latest results of the Kitco News Weekly Gold Survey.
The results also showed that retail investors remain bullish on gold; however, participation in the survey remains low.
Analysts note that gold prices are caught smack in the middle of opposing forces as the global economy faces rising inflation; however, those threats are being met with growing hawkish sentiment from central banks. Added to the mix is rising volatility in financial markets as central banks remove liquidity, according to analysts.
This week 17 Wall Street analysts participated in Kitco News' gold survey. Among the participants, five, or 29%, called for gold prices to rise. In the same survey bearish and neutral votes each garnered six votes or 35%. Read More
The battle for gold
The gold market is treading water, but at least the precious metal is keeping its head above $1,800 an ounce. The question is, will this last.
Two equal opposing forces are pulling the gold market. Inflation continues to rise unabated; however, rising consumers prices are being met with the expectations that the Federal Reserve will take aggressive steps to cool down the overheating economy.
Friday's nonfarm payrolls report was the perfect example of these two forces in the marketplace, which is keeping gold prices stuck in neutral. In its report, the Bureau of Labor Statistics said 467,000 jobs were created in January. This was a solid report considering that some economists expected job losses.
At the same time, wages increased 0.7% last month and increased 5.7% annually.
The latest labor market data is helping to strengthen market expectations for a 50 basis-point hike in March. The good news is that these expectations are not having a significant impact on gold, with prices holding the $1,800 level.
Investors might want to get used to the $1,800 an ounce level as it could be stuck here for a while. This week the London Bullion Market Association released the results of its annual precious metal survey.
Among the 34 analysts who participated in this year's survey, expectations are for gold prices to remain relatively stable, averaging 2022 around $1,801.90 an ounce, essentially unchanged from last year's average price of $1,798.60 an ounce. Read More
Gold shows resilience gaining value in light of an extremely strong jobs report
Volatility continues to be a prominent factor in gold pricing today. The volatility revolved around the release of the Labor Department’s jobs report for January. Earlier this week ADP released its private-sector jobs report. Economists polled by the Wall Street Journal were expecting an additional 200,000 jobs to be added in January. The ADP report came in well below forecasts indicating that over 300,000 jobs were lost in January, the largest single-month drop since 2020.
Image Source: Kitco News
The ADP report brought into question the projection for the Labor Department’s jobs report released today. Estimates for today’s report predicted that 150,000 jobs were added last month. Because of the ADP report, economists stated that we could see a negative number in today’s report. In the case of the last two reports economists polled by various new sources were way off the actual numbers. Today’s jobs report revealed that there were 467,000 new jobs created in January, with the unemployment rate remaining unchanged at 4%. Read More
Gold price holds $1,800, but can Fed's 50-point hike trigger selloff?
The gold market is stuck at its all too familiar $1,800 an ounce level as markets start to price in the potential of a 50 basis points rate hike in March. The focus next week is on the latest U.S. inflation numbers.
The most anticipated data point of the week shocked the markets on Friday as investors digested the U.S. economy reporting strong hiring and higher wages, with 467,000 jobs created in January.
"Many on Wall Street were expecting a negative number. Instead, we saw robust hiring, higher wages, and more Americans returned to the workforce. Treasury yields skyrocketed alongside the dollar," OANDA senior market analyst Edward Moya told Kitco News.
In response, gold tumbled, but strong buying interest below the $1,800 an ounce level has helped gold recover. The April Comex gold futures were last trading at $1,806.20, up 0.12% on the day. Read More
'Clash' coming: expectations vs. reality
The gold market will remain stuck in a choppy trading pattern until the FOMC March meeting, with markets starting to price in a 50-basis-point rate hike. Here's a look at Kitco's top three stories of the week: Read More
The Metals, Money, and Markets Weekly by Mickey Fulp - February 5, 2022
Gold and silver edge higher leading into the European open
Gold (0.21%) and silver (1.13%) are starting the week on the front foot heading into the European open. In the rest of the commodities complex, copper has fallen 1.25% while spot WTI is 0.33% lower.
Indices in the Asia Pac area were mixed as China came back after a public holiday. The Nikkei 225 (-0.70%) and ASX (-0.13%) both fell but the Shanghai Composite rose just over 2%. Futures in Europe are indicating a positive open.
In FX markets, commodities currencies performed well. The biggest mover was AHD/USD which rose 0.33%. In the crypto space, BTC/USD rose 0.71% overnight. 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.
