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Gold market finally realizes Fed is completely wrong; $2,000 now on the way
“With all indicators pointing to inflation continuing to be problematic, the U.S. dollar index leveling off, and crude oil prices remaining high, gold prices could hit $2,000 an ounce this year,” emphasized Jim Wyckoff, Senior Market Analyst at Kitco News.
David Lin, Anchor at Kitco News discussed gold and inflation with Wyckoff.
Wyckoff explained that the reason there was a decoupling between gold and the Consumer Price Index last year was because it was perceived by the marketplace as an occurrence that was not going to be permanent. “The Fed called it transitory, and that’s just not the case. It’s proving not to be transitory. It is proving to stick around for a while longer,” Wyckoff said. “Future inflation reports are going to be watched by gold traders. And if they continue to be hot, that’s going to support upside gold price moves.” Read More
Bullish sentiment building in gold with $1,850 a near-term target
Gold's breakout rally to a two-month high is generating significant bullish sentiment among Wall Street analysts and retail investors, with some expecting prices to hit $1,850 an ounce in the near term, according to the latest Kitco News Weekly Gold Survey.
The survey shows that sentiment among retail investors is at its highest level since mid-November, which was also the last time gold prices were at current levels. Meanwhile, bullish sentiment among market analysts is at its highest level since May 2018.
Analysts have said that gold is catching a strong big as investors start to pay more attention to the growing inflation threat, rising volatility in equity markets and geopolitical uncertainty as tensions between Russia and the U.S. continue to heat up.
This week 18 Wall Street analysts participated in Kitco News' gold survey. Among the participants, 16 analysts, or 89%, called for gold prices to rise next week. At the same time, two analysts, or 11%, were bearish on gold in the near term. There were no neutral votes this week. Read More
The gold market is not afraid of higher bond yields
As difficult as this environment is for investors, it is positive for gold that can be an inflation hedge and protect against market volatility. These conditions will only worsen as inflation pressures have not yet peaked and the Fed has to step in to deal with the looming threat. However, in another positive for gold, many analysts don't expect that the Fed will be able to meet current market expectations.
The Federal Reserve is looking to end its monthly bond purchase by March. There are growing expectations that not only will the U.S. central bank start its new tightening cycle in March but that it will raise interest rates by 50 basis points. In total, markets are pricing in four rate hikes. Finally, to cap off monetary policy, there are expectations that the Federal Reserve will start to reduce its balance sheet before the end of the year.
Analysts have noted that the risk of a policy mistake has risen sharply as it is unlikely the U.S. central bank will achieve all of these goals.
"The odds are very low that they're going to pull that off without some sort of market correction," said Peter Grosskopf, CEO of Sprott Inc., in a recent interview with Kitco News. "The odds are quite high that we're going to have all the right conditions for gold. And let's not forget inflation is still running very hot." Read More
The Metals, Money, and Markets Weekly by Mickey Fulp - January 21, 2022
Have market participants completely factored in next week’s FOMC meeting?
With the tremendous decline in U.S. equities, it seems quite likely that market participants have been factoring in next week’s FOMC meeting and a more hawkish Federal Reserve. Can the same be said for market participants actively investing or trading in gold or silver?
Throughout the shortened trading week, the precious metals complex has seen significant gains beginning on Tuesday which lasted until yesterday. During three days (from Tuesday to Thursday) palladium gained 9.783% in value, platinum gained 7.84%, silver gained 6.65% and gold gained 1.31%.
Image Source: Kitco News
Concurrently U.S. equities tumbled from Tuesday until today. Leading the way in terms of percentage declines the NASDAQ composite gave up approximately 6.4%. The Standard & Poor’s 500 lost just over 5%, and the Dow Jones industrial average gave up approximately 3.9%. Read More
Gold price next week: a breakout or a sideways trap? All eyes on hawkish Fed and stocks volatility - analysts
The gold market surprised with a breakout above $1,830 an ounce this week. And analysts say next week will be pivotal in whether gold breaks out or gets stuck in the sideways price action again.
In an unexpected move, the precious metal surged to two-month highs this week, with investors flocking to safe havens as volatility rocked the equity markets ahead of the Federal Reserve meeting next week.
With stocks and the crypto space selling off, money has to go somewhere, RJO Futures senior market strategist Frank Cholly told Kitco News.
"Gold rallied this week due to all the weakness in the equity market. Bitcoin is down pretty good too," Cholly said. "We have a bottom in gold. The question is, are we going to go lower and stay sideways or climb towards $1,900. The precious metal needs another close above $1,830. It's critical to hold that level before a move above $1,850." Read More
Markets are about to go 'biblical'; this key indicator is signaling major moves - Michael Gayed
The lumber to gold ratio is a good leading indicator for market volatility, and right now, the data is pointing to a repeat of last summer when cryptocurrencies corrected and troughed around July, said Michael Gayed, portfolio manager and publisher of the Lead/Lag Report.
“It tends to be a precursor to higher volatility and risk-off and a potential Black Swan event,” Gayed told David Lin, anchor for Kitco News. Read More
Is Fed about to make a mistake? Here's what gold is saying
Gold and silver hit two-month highs this week, while the crypto market suffered major losses, with bitcoin plunging below $35,000.
To explain all of this, analysts pointed to rising U.S. treasury yields triggered by an aggressive Federal Reserve. Markets are now pricing in four rate hikes and a balance sheet runoff this year. Here's a look at Kitco's top three stories of the week: Read More
Gold moves higher heading into the European open
Gold is trading 0.20% higher leading into the European session at $1838.oz. Silver on the other hand is slightly worse off having fallen -0.63%. Looking at the rest of the commodities complex, copper is -1.17% lower and spot WTI is 1.16% higher.
Risk sentiment was mixed overnight as the Nikkei 225 (0.24%) and Shangai Composite (0.04%) pushed higher but the ASX dropped -0.51%. Futures in Europe are pointing towards a positive open.
In FX markets, the biggest mover was AUD/USD which fell -0.33% to move back in line with its underlying trend. The dollar index moved 0.13% higher. In the crypto space, BTC/USD fell nearly -3% to trade near $35K. Read More
Gold & Silver Market Analysis for Monday 24th January
Kinesis Gold Price Analysis:
Image Source: Kinesis
After briefly smarting into action in the middle of last week, gold has returned to its preferred, more ambulatory mode and is drifting along in its new elevated range of $1,835-$1,845 an ounce. The negative start to the trading week on equities has seen gold find support and the metal is pushing up towards the upper end of that range.
It will be interesting to see whether the sell-off on bitcoin and other cryptocurrencies proves beneficial to gold. The exit from risk-related assets typically benefits gold, but so far it seems the crypto investors haven’t flooded to gold with this more traditional of assets lacking appeal for this new wave of investors.
Kinesis Silver Price Analysis: 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.
