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Gold price trades near $2,000 as inflation rises 7.9% in February, remaining at 40-year highs
Gold traded near the $2,000 an ounce level after inflation in the U.S. hit a new four-decade high in February, accelerating to 7.9% from a year earlier.
The U.S. Consumer Price Index (CPI) print of 7.9% matched market expectations that projected intensified price pressures after Russia's invasion of Ukraine at the end of last month. The most recent data follows January’s 7.5% annual gain.
On a monthly basis, the headline number was up at 0.8% in February after an advance of 0.6% in January, the U.S. Labor Department said on Thursday.
Core inflation, which strips out volatile food and energy costs, accelerated to 6.4% from a year ago, surprising on the upside. Meanwhile, the monthly increase met market expectations with an advance of 0.5%. Read More
Stagflation risks grow: ECB lowers growth and raises inflation forecasts as Russia wages war on Ukraine
Gold prices are holding above $2,000 an ounce, but the price action remains volatile as the European Central Bank acknowledged the growing risk of stagflation as it significantly lowers its growth forecasts and increases its inflation outlook.
Christine Lagarde, President of the ECB, said that Russia's war with Ukraine is having a material impact on Europe's economy as energy and commodity prices continue to rise.
"The risks to the economic outlook have increased substantially with the Russian invasion of Ukraine and are tilted to the downside. While risks relating to the pandemic have declined, the war in Ukraine may have a stronger effect on economic sentiment and could worsen supply-side constraints again. Persistently high energy costs, together with a loss of confidence, could drag down demand more than expected and constrain consumption and investment," said Lagarde in her opening remarks. Read More
Gold prices could hold around $2,000 for the next two years - ABN AMRO
Gold prices are expected to maintain the $2,000 an ounce level for the next two years even as the market remains volatile, according to one market strategist.
In a report published Thursday, Georgette Boele, senior precious metals strategist, said that Russia's assault on Ukraine had created an uncertain environment, and while gold has been an attractive, safe haven, there are also other factors supporting the precious metal.
"Since 8 February, the relationship between gold prices and the VIX has turned positive (higher equity market volatility, higher gold prices) and the relationship between gold and real yields have remained negative (lower real yields higher gold prices). Next to that the positions in ETF have increased but not enough to justify the large rise in gold prices," Boele said in her latest report. "This points into the direction that investors have bought gold as a store of value and probably also as a transaction unit. They fear inflation and the war and the currency debasement and favor physical gold." Read More
'That's a fundamental mistake' - Lundin Gold's Hochstein on tax holidays, concessions for miners
Mining developers demanding tax holidays is a "fundamental mistake" says Ron Hochstein, president, and CEO of Lundin Gold (TSE: LUG), as a lack of early revenue generation makes it difficult for government, especially in developing nations, to defend a project.
Hochstein spoke to Kitco correspondent Paul Harris at BMO's Global Metals & Mining Conference held in Florida last week. Read More
Everything you need to know about gold price at $2,000 and what to expect next
The gold market has woken up after a disappointing year. And even though geopolitics were the initial trigger that kicked off the price surge, analysts say it is now about so much more than that. Here's everything you need to know.
The precious metal is already up 9.4% year-to-date. A very strong return for gold, especially after closing 2021 down 3.6% — its worst performance since 2015.
The geopolitical uncertainty concerning Ukraine and new sanctions against Russia have created strong demand for gold. Investors view the precious metal as a hedge against risk, inflation, and economic shock.
"The price of gold is rocketing at the moment predominantly because of the geopolitical circumstances. With the increased economic instability caused by the war in Ukraine and Russia, investors are feeling nervous and pulling out of stocks and equities where the returns are dwindling and instead, putting their money into the traditional safe haven of gold," said MarketOrders co-founder and COO Sukhi Jutla. Read More
Gold, silver up on safe-haven buying as U.S. equities sell-off
Gold and silver prices are higher in midday U.S. trading Thursday, on more safe-haven demand amid risk aversion that is still keen in the marketplace. Global stock markets and the U.S. stock indexes are still on shaky ground amid the biggest geopolitical crisis in decades that appears to be worsening. Some hot U.S. inflation data today was also bullish for the metals markets. April gold futures were last up $21.50 at $2,009.70 and May Comex silver was last up $0.554 at $26.385 an ounce.
Image Source: Kitco News
Technically, April gold futures bulls have the firm overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the record high of $2,178.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at today’s high of $2,015.10 and then at $2,025.00. First support is seen at $2,000.00 and then at today’s low of $1,975.00. Wyckoff's Market Rating: 8.5. Read More
'I've never seen this kind of volatility' in gold; Gary Wagner calls for bigger moves ahead
Gold's trek to $2,000 an ounce this week had a certain degree of geopolitical uncertainty baked into the price, and the move upward would likely not have been as strong had there not been a war in Ukraine, according to Gary Wagner, editor of TheGoldForecast.com.
Speaking to David Lin, anchor for Kitco News, Wagner said that while the uncertainties brought by war in Eastern Europe contributed to an increase in safe-haven demand, the underlying inflationary pressures are still the dominant driver of gold, as the price has been trending upwards throughout 2022 even before Russian forces invaded Ukraine.
Evidence of strong safe-haven demand is evidenced by gold and the U.S. dollar moving up in tandem all throughout February, Wagner noted. Read More
Renewed concerns about Ukraine and higher inflation support gold prices
Yesterday traders experienced wild gyrations and volatility when president Zielinski said he was willing to compromise to resolve the escalating military action by Russia. Gold futures opened at $2060 and closed at approximately $1986 based upon the possibility that a diplomatic solution could emerge resulting in Russia removing its troops from Ukraine. That optimism was short-lived as negotiations held in Turkey yesterday resulted once again in a stalemate. Russia was steadfast in its demands and the negotiations yielded no real progress.
Image Source: Kitco News
On a technical basis, we need to see $2000 become a level of support rather than resistance. Although gold traded to a lower low and a lower high than yesterday the fact that the gold quickly recovered and once again traded above $2000 suggests continued bullish sentiment and the high likelihood that the price of gold will continue to rise. Gold could likely trade in a defined range around $2000 per ounce and build a base of price support at this level before surging higher. However, recent gains in gold prices have been news and headline-driven which means that technical indicators are less likely to give us valuable insight as market participants quickly react to changes in the geopolitical environment between Russia and Ukraine. Read More
Gold dips below $2000/oz ahead of the European open
Gold (-0.61%) has moved marginally lower this morning after recovering from its lows to close 0.28% higher on Thursday. The yellow metal is trading at $1985/oz ahead of the European open. Silver is half a percent lower trading at $25.75/oz. In the rest of the commodities complex. copper is 0.58% higher and spot WTI has moved 1.50% in the black.
Risk markets were mixed overnight. The Nikkei 225 (-2.05%) and ASX (-0.94%) traded lower while the Shanghai Composite rose 0.41% due to comments from Chinese leaders. Futures in Europe are indicating there could be a positive cash open.
In FX markets, there was not too much movement overnight. The biggest mover was USD/JPY which rose 0.53%. extending above the previous daily wave high. In the crypto space, BTC/USD fell half a percent to trade at $39,221. Read More
Property versus Gold - Time to Rethink your Investment?
Property, as well as the housing market more broadly, has long been a stable, yet lucrative investment strategy. In much the same way, gold is another traditional investment asset that allows for wealth protection, creation, and security within high inflationary environments.
However, these two investment avenues have undergone some readjustment, with the dream of homeownership seeming increasingly less attainable for younger generations. In the US, a report by Urban Institute found that those aged 18-24 were spending almost a third of their income on rent, while median house prices soared in 2021.
This is not just an example, but a signifier of a much broader shift currently playing out in the property market. In the first part of 2021, 15% of US homes were purchased by corporate investors - rather than families or individuals - leaving the average American citizen with less than a fractional chance of winning a home over an investment firm, like BlackRock.
This article will compare the path of gold and property investment respectively, to uncover which asset will sustain your portfolio through the best and the worst of (economic) times. Here, we’ll ask the question: is it time to rethink your investment? 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.
