Today's Gold and Silver News: 01-12-2022

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Gold Price News – Bullion remains around $1,750 waiting for Jerome Powell’s speech

The bullion price is consolidating and remained trading at $1,750 as markets are in a wait-and-see mode. Investors are now waiting for key EU inflation data and for the speech of the Federal Reserve chairman, which are both due later today.

Overall, we could say that after recent rebounds, gold is confirming its positive momentum. Indeed, in the last few weeks, bullion jumped by around $100 and recovered the $1,750 threshold.

The main driver behind this came from the US, where inflation data indicates that price pressure is starting to slow down. Consequently, the greenback lost ground, with the EUR/USD pair returning to well above parity in the region of 1.03.

Considering this, it is clear that the markets are awaiting the speech of The Fed’s Jerome Powell, which is scheduled this evening (18:30 GMT). Investors will be hoping for any further indication about the next steps of the Federal Reserve monetary policy, including when the peak of the Fed fund’s rate will be reached. Read More

Silver Price News – Silver jumped by 10% in November

The silver price jumped by around 10% during November having reached a bottom below $18 in September and is now traded at $21.3-21.4, consolidating recent gains. The performance of silver in November saw the grey metal halving the decline posted in the first ten months of 2022. 

The overall economic scenario has changed in the last few weeks, with a slowdown of the greenback and investors forecasting a less hawkish Fed in the next few meetings. We should also point out that silver in November finally outperformed gold.

It almost seems that investors suddenly realised the precious metal was undervalued, particularly considering the strength of demand and growth expectations for the metal in 2023. Read More

'US dollar over-pricing is now spilling into other asset classes' - Anarcho Capitalist's Jayant Bhandari

Gold's time is coming as the U.S. dollar and crypto weaken and as debt and economic stagflation impacts increase, said Jayant Bhandari, publisher of the Anarcho Capitalist newsletter.

This week Bhandari spoke to Kitco Mining correspondent Paul Harris at Mines and Money London.

Bhandari noted that the U.S. dollar is finally falling, giving a chance for rotation into other assets.

"The U.S. dollar has done much better than most other asset classes, but I think U.S dollar has clearly become expensive," said Bhandari. "You can see that the U.S. dollar is overpriced. [Funds] are now spilling over into other asset classes. Gold has gone up reasonably well, in my view, and I think mining companies are consolidating and preparing to go up." Read More

Gold price sees modest up-tick on Fed Chair Powell's speech

Gold prices are modestly higher in midday U.S. trading Wednesday and saw the gains come following the release of prepared text of a highly anticipated speech from Federal Reserve Chairman Jerome Powell. Markets are deeming his remarks as leaning slightly more dovish than expected. February gold was last up $8.50 at $1,772.10 and March silver was up $0.644 at $22.08.

It was a very busy day for U.S. economic data, with the highlight being the speech by Powell this afternoon at the Brookings Institution. In his prepared remarks, Powell said the U.S. central bank could slow the pace of tightening as soon as the December meeting. However, he said the Fed will need to hold policy at restrictive levels “for some time.” Powell added that inflation remains far too high and that future rate hikes are warranted. The gold market up-ticked on the news. Traders and investors were watching to see if Powell made a more significant pivot from a hawkish to a bit more dovish U.S. monetary policy stance, given recent U.S. economic data that hints inflation may have peaked.

Other U.S. data released today were a mixed bag. The third-quarter GDP report came in a bit stronger than expected, while the ADP national employment report was a bit weaker than expected.

Technically, February 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 November high of $1,806.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today's high of $1,779.00 and then at $1,790.00. First support is seen at this week's low of $1,752.90 and then at $1,740.00. Wyckoff's Market Rating: 6.0

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March silver futures bulls have the overall near-term technical advantage. Prices are in a choppy three-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the November high of $22.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at today's high of $22.14 and then at the November high of $22.50. Next support is seen at today's low of $21.355 and then at $21.00. Wyckoff's Market Rating: 6.5. Read More

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Gold has a path to $2,000 and silver to $25 in the second half of 2023 - Bank of America

Precious metals investors will need to be a little patient as gold and silver could see challenging headwinds in the first half of the new year, according to Bank of America's 2023 outlook.

However, gold still has a solid path to $2,000 by the end of the year, according to the bank's official forecasts.

In a webinar presentation Wednesday, Michael Widmer, commodity strategist for Bank of America, said that while he is bullish on gold next year, he is not expecting to see higher prices until at least the second quarter of the year.

"It's going to be a difficult environment for gold in the near term," he said in his presentation. "Current headwinds are unlikely to abate until the Fed turns less hawkish. Notwithstanding, a pivot away from the aggressive rate hikes through 2023 should bring new buyers back into the market."

Although the gold market continues to see healthy physical demand, Widmer noted that investment demand is the biggest factor impacting short-term price action. He added that the current macroeconomic environment has not incentivized investors to hold the precious metal.

"The data suggests that non-commercial interest has been running at around half the level seen in the 2020 bull market," he said.

As dismal as the price action is expected to be in the first half of the year, Bank of America expects a dramatic reversal of fortunes when the Federal Reserve stops raising interest rates. The bank sees gold prices averaging $2,000 an ounce in the third and fourth quarters of next year. Read More

Powell on slowing down: the Fed doesn't want 'to overtighten' and then cut rates too soon, so slower rate hike pace makes sense

Federal Reserve Chair Jerome Powell sent a very clear message to the marketplace during his speech Wednesday — he doesn’t want to overtighten and then be forced to cut rates too soon. And this is why slowing down the pace of rate hikes makes the most sense at this point in time.

“I don't want to overtighten. Cutting rates is not something we want to do soon. So that's why we're slowing down and we are going to try to find our way to what that right level is,” Powell said when answering questions after his speech at the Brookings Institution.

Powell listed several techniques for finding a new neutral rate without running the risk of tightening too much. “One risk management technique is to go slower and feel our way to what we think is the right level. Another is to hold on longer at a high level and not loosen policy too early,” he said Wednesday.

Powell made his comments when speaking on the topic of ‘Economic Outlook, Inflation, and the Labor Market’ at the Brookings Institution.

Following Powell’s dovish statements, gold surged back to daily highs, with February Comex gold futures last trading at $1,781, up 0.98% on the day. Read More

There is nothing that can pull the U.S. out of this multi-year 'real recession,' warns 'Big Short' Michael Burry

Despite the better-than-expected Q3 GDP data Wednesday morning, "The Big Short" investor Michael Burry is projecting an unavoidable, "real" multi-year recession for the U.S.

In a now-deleted tweet, Burry told his followers: "What strategy will pull us out of this real recession? What forces would pull us so? There are none. So we are really looking at an extended multi-year recession. Who is predicting this? There are none."

After two consecutive quarters of contraction, the U.S. economy picked up in Q3. The second estimate released Wednesday morning showed that the U.S. GDP rose 2.9% versus markets' expectations of a 2.7% increase. This comes after two negative readings of -1.6% and -0.6% in Q1 and Q2, respectively.

But with the Federal Reserve raising rates by 350 basis points year-to-date, the U.S. economy is bound to slow. And Burry's outlook is far from optimistic. Markets are also looking for another 50 basis-point increase at the December FOMC meeting.

In the short term, investors are focused on the U.S. jobs report from October, which will be released this Friday. The idea is to gauge how aggressive the Federal Reserve will have to be into the year-end.

Earlier this month, Burry highlighted gold in a rare comment, stating that this is the time for the precious metal to rally, citing the crypto contagion risk post-FTX collapse. Read More

Investors focus on Powell's comments which put gold back into rally mode

Today gold futures are trading solidly higher as market participants react to Chairman Jerome Powell's speech at the Hutchings Center on Fiscal and Monetary Policy, held at the Brookings Institution in Washington. Market participants focused intently on his remarks which alluded to a dynamic change in the Federal Reserve's monetary policy.

"Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down … The time for moderating the pace of rate increases may come as soon as the December meeting."

However, it must be noted that the reaction by investors at large seems to focus on what they had hoped to hear which is the Fed will begin to raise rates at a slower pace rather than his nuanced message that the time required for the Federal Reserve to achieve their goal will take much longer.

"It is likely that restoring price stability will require holding policy at a restrictive level for some time … History cautions strongly against prematurely loosening policy. We will stay the course until the job is done."

As of 6:16 PM EST gold futures basis of the most active February, 2023 Comex contract is fixed at $1784.60 After factoring in today's double-digit advance comprised of dollar weakness, buyers in the market along with the rollover from the December to February contract month.

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Chairman Powell's speech today diminished the concern of investors as they reacted to other members of the Federal Reserve who have been extremely vocal about upcoming interest rate hikes. 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.