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Markets Take the Chance to Pause for Breath and Assess Macroeconomic Outlook
Kinesis Macroeconomic Analysis:
A new trading week has started without a clear direction with global indices showing both small gains and small losses. After large losses in January were followed by a more positive week to kick off February, today feels like an opportunity for traders and investors to pause for breath and fully assess the macroeconomic picture, with no significant data releases expected today.
The likely drivers to shake markets out of their brief rest are the same factors that have driven the direction of trading so far this year: Ukraine and the hawkish pivot by central banks that will see a series of interest rate rises over the course of the year.
Kinesis Gold Price Analysis: Gold has started the week on the front foot by making fresh gains after climbing above and successfully holding above the psychologically important threshold of $1,800 an ounce.
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While today is set to be a quieter day of trading, gold’s medium-term direction will be governed by how quickly the Federal Reserve decides to implement the more hawkish strategy officials spoke more explicitly about last week.
Any hikes will likely strengthen the dollar and place gold under pressure due to its inverse correlation with the dollar, while with a March interest rate hike expected, any delay to that would be supportive for gold. Read More
Will 1800 Gold hold?
Gold has broken through the $1,800 level again; will it hold and reverse to the long side? At this point, there is no real answer except the trend is lower and until that changes, it is highly unlikely. $1,800 has been like a magnet, whether long or short.
Friday’s jobs number was an upside surprise; however, it was a BS number and will be revised next month. The facts are simple: gold, silver, and platinum look awful but have managed to hold key levels of support. We should be mindful that it can change in the blink of an eye.
In the short term, it is hard to get excited about the precious metal space; the price action is lousy, as is the trade. They must prove that they can sustain a rally well past $1,800 in gold, $23.00 in silver, and $1,080 in platinum. Until those events occur, the short side is the right side.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions. Read More
Gold, silver gain as equities waver on inflation worries
Gold and silver futures prices are higher in midday U.S. trading Monday. The precious metals are catching a bit as the U.S. stock indexes are trading a bit lower amid heightened inflation worries. April gold futures were last up $12.50 at $1,820.40 and March Comex silver was last up $0.565 at $23.04 an ounce.
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Technically, April gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the January high of $1,856.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,780.60. First resistance is seen at $1,825.00 and then at $1,835.40. First support is seen at today’s low of $1,807.50 and then at $1,800.00. Wyckoff's Market Rating: 6.0. Read More
Hedge funds dump bullish gold bets after Fed sets stage for March rate hike
A hawkish tilt to the Federal Reserve's latest monetary policy decision backed by comments from its Chair Jerome Powell encouraged hedge funds to increase their short bets in gold and ditch their bullish calls, according to the latest data from the Commodity Futures Trading Commission.
The CFTC disaggregated Commitments of Traders report for the week ending Feb. 1 showed money managers dropped their speculative gross long positions in Comex gold futures by 32,331 contracts to 108,309. At the same time, short positions increased by 19,130 contracts to 58,395.
Gold's net length now stands at 49,914 contracts, down nearly 51% survey period. Although gold has been anchored around $1,800, the increase in bearish speculative positioning briefly pushed prices to a one-month low at $1.780.60 an ounce during the survey period.
Gold's net length dropped to its lowest level since September. Matt Simpson, market analyst at City Index, noted that gold's net length dropped at its fast pace in nearly three years. Read More
CRU's top five commodities for 2022 - spoiler gold, silver didn't make the list
While gold and silver are trapped in a range, one market analyst said investors should look at other commodities with a lot more potential in 2022.
Monday, in the latest Kitco News commodity podcast with Neils Christensen, editor of Kitco News, and Phillip Streible, chief market strategist at Blue Line Futures, Paul Robinson, managing director of CRU, presented his top five commodity picks for the year.
Robinson said that his U.K.-based research firm sees fertilizer as the top-performing commodity this year. This comes after prices rallied more than 50% last year. He added that rising food prices are driving crop demand, which is driving the need for fertilizers. He noted that in this space, Canadian potash companies should do well in this environment.
Second on Robinson's list is nickel, a top-performing base metal in 2021. Robinson said that while the Electric Vehicle market is driving sentiment in the nickel market, stainless steel demand is driving the growth. Read More
Gold price advances as inflation fears grow even with hawkish Fed
Gold futures had respectable gains in New York trading today. The most active April 2022 contract gained $14.20 and as of 4:47 PM, EST is currently fixed at $1822. Considering the Federal Reserve’s updated monetary policy, which is more hawkish, and the most recent statement from last month’s FOMC meeting and last week’s strong jobs report, gold has been extremely resilient and continuing to gain in value.
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Gold was trading at approximately $1830 before the release of last month’s Federal Reserve monetary policy statement and traded to a low of $1814 during Chairman Powell’s press conference. During the week beginning on January, 24 gold opened at approximately $1835 and closed on Friday, January 28 at $1784. However, over the last two weeks, gold has had significant gains closing at $1808 last week and gaining over $14 today, taking it to $1822. At current pricing gold has almost fully recovered from the declines of the week beginning January 24.
Gold’s resilience is apparent in light of last Friday’s jobs report which came in well above the forecast from economists polled by the Wall Street Journal which was expecting 150,000 new jobs. The actual number of new jobs added according to the U.S. Labor Department was an additional 467,000. Gold continues to rise against strong headwinds resulting from the current demeanor of the Federal Reserve and a strong jobs report.
The strength in gold pricing is based upon two primary factors. First, gold has been buoyed by real concerns and fears about inflation levels. Second is the uncertainty of the current geopolitical risks between Ukraine and Russia. Read More
U.S. Mint sells 5 million ounces of silver in January, best start since 2017
The silver market has started 2022 on a reasonably volatile note as prices swung in a $3 range in January; however, despite the volatility, the precious metal is seeing strong physical demand, according to January sales data from the U.S. Mint.
The U.S. Mint's sales numbers show that it sold $5 million ounces of silver last month, its best start to the year in five years. According to the data, silver coin sales are up 4.6% from 4.78 million ounces sold in January 2021.
January is traditionally the busiest month for the U.S. Mint; however, analysts have said that it's not surprising to see investors jump back into the physical market as consumer price pressures continue to rise along with growing geopolitical uncertainty around the world.
"Overall, we continue to see strong demand for all retail precious metal products, so long as inflation remains a concern, and as we move closer to a contentious U.S. midterm election," said Nicky Shiels, precious metals strategist at MKS PAMP. Read More
Gold and silver head lower leading into the European open
Both gold (-0.16%) and silver (-0.75%) have moved lower leading into the European session. In the rest of the commodities complex, copper is down nearly 1% and spot WTI dropped 0.88% overnight.
Risk sentiment was positive overnight as the Nikkei 225 (0.13%), ASX (1.07%), and Shanghai Composite (0.67%) all moved higher. Futures in Europe are pointing to a marginally positive cash open.
In FX markets, the dollar index soared 0.35% higher overnight. USD/JPY was the biggest mover jumping 0.38%. In the crypto space, bitcoin has started to recover as it also moved 2.25% higher. 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.
