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Silver Price News: Silver Holds Above $24 as Markets Digest US Credit Downgrade
Silver is just about holding above $24 an ounce as markets digest Fitch Ratings’ cut to the US credit rating.
As ever with silver, investors have to weigh up the metal’s haven appeal against its industrial demand outlook in contrast to its precious metal peer gold, which is more of a pure-play haven asset. While this downgrade of the US credit rating isn’t going to materially impact the global reliance on the US economy, it has already delivered a jolt to market confidence.
Much of the case for silver climbing higher than its current $24 level is built around the metal’s outstanding fundamental case with silver’s excellent conductivity driving its healthy demand outlook for many years to come as the world requires huge amounts of electricity in the switch away from fossil fuel generated power. Therefore any suggestion that industrial output will be crimped, as the Fitch downgrade could imply, is potentially damaging for silver. Read More
Gold Price News: Surprise Downgrade of US Credit Rating Gives Boost to Gold
Just when it looked like gold might be entering a more challenging macroeconomic environment, Fitch Ratings’ surprise cut to the US credit rating has given the precious metal a fresh boost as investors seek out its safe haven qualities.
While there is no danger of the US defaulting on its obligations any time soon, the downgrade has knocked market confidence that was already in a fairly fragile state. As such investors are reluctant to pour all their money into equities and other risk assets and instead want to keep a portion of their portfolio retained within gold and other haven assets.
This latest boost to gold has kept the price trading around $1,950 an ounce, a level at which it has oscillated around since mid-July. Read More
Gold prices off their highs but still holding some gains as ADP says 324K private-sector jobs created in July
The U.S. labor market continues to fire on all cylinders as the U.S. economy sees robust gain in private-sector jobs in July, according to private payrolls processor ADP.
Wednesday, ADP said that 324,000 jobs were created last month. The data significantly beat expectations as economists were looking for job gains of around 191,000.
"The economy is doing better than expected and a healthy labor market continues to support household spending," said Nela Richardson, chief economist, ADP, in the report. "We continue to see a slowdown in pay growth without broad-based job loss."
The better-than-expected employment report appears to be weighing on gold prices only slightly as economic uncertainty remains elevated. December gold futures have come off their highs but remain in positive territory for the session, last trading at $1,982.80 an ounce, up 0.20% on the day. Read More
TD Securities sees gold prices driving to $2,100 by the end of 2023
The gold market faces strong headwinds as persistent inflation and robust economic activity support the Federal Reserve's aggressive monetary policies. However, one bank still sees a path for gold to hit record highs by the end of the year.
In his latest gold report, Bart Melek, head of commodity strategy at TD Securities, said that he looks for gold prices to push to $2,100 an ounce, representing a new all-time high, by year-end.
Melek noted that gold has struggled as economic data has surprised to the upside. However, he expects to see a mean reversion in the market as rising interest rates start to bite and activity slows.
"The cyclicity and mean reverting nature of economic data surprises, along with the Fed's restrictive rate policies, should work in tandem to precipitate a downdrift in US economic surprise indices," he said in the report. "If the Fed Fund futures reaction remains constant, dropping on negative data surprises as it rose in response to positive surprises, the resulting lower yield along the forward curve should see gold rally."
TDS' bullish outlook on gold comes as the Federal Reserve has said that it is keeping its options open and its monetary policy decision in September will depend on the incoming data. Markets expect that the central bank will leave interest rates unchanged in two months and see only a 60% chance of one more rate hike this year. Read More
Gold, silver down as USDX rallies, crude oil drops, bond yields up-tick
Gold and silver prices are lower near midday Wednesday. Early safe-haven buying of the precious metals following a surprise downgrade of U.S. government debt gave way to selling pressure from a rally in the U.S. dollar index to a three-week high, a rise in U.S. Treasury yields and a sell-off in the crude oil market. December gold was last down $6.80 at $1,972.00 and September silver was down $0.491 at $23.84.
There is some keener risk aversion in the marketplace at mid-week, following the surprise move by the Fitch credit rating agency to downgrade U.S. the government’s credit rating to AA+ from AAA. It was the first downgrade by a major credit rating agency in more than a decade. Fitch cited “expected fiscal deterioration” of the U.S. government in the coming years, amid a growing government debt burden. Traders and investors are not badly shaken over the surprise Fitch news, but it did somewhat deflate heretofore upbeat marketplace attitudes that had recently pushed U.S. stock indexes to new highs for the year. The early safe-haven demand for gold and silver was usurped by the aforementioned bearish outside markets on this day.
Technically, December gold futures prices hit a three-week low today. Bulls and bears are on a level overall near-term technical playing field but the bears have some downside momentum. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $2,028.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,939.20. First resistance is seen at today’s high of $1,992.20 and then at $2,000.00. First support is seen at $1,960.00 and then at $1,950.00. Wyckoff's Market Rating: 5.0.
Image Source: Kitco News
September silver futures prices hit a three-week low today. The silver bulls still have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Silver Bulls' next upside price objective is closing prices above solid technical resistance at the July high of $25.475. The next downside price objective for the bears is closing prices below solid support at the June low of $22.34. First resistance is seen at $24.00 and then at $24.50. Next support is seen at $23.50 and then at $23.25. Wyckoff's Market Rating: 5.5. Read More
Image Source: Kitco News
Gold prices test critical support following Fitch downgrade, will take time to regain safe-haven status
Rising risk aversion sentiment in the marketplace is not providing much support for gold as investors continue to react to Fitch Rating's announcement, downgrading the U.S. government's long-term debt to 'AA+' from 'AAA.
Analysts note that the U.S. dollar and bond yields have benefited from safe-haven flows, which has kept a solid lid on gold prices. The yield on 10-year bond yields has jumped back above 4%; meanwhile, the U.S. dollar index is trading at a four-week high back above 102 points.
With these headwinds, gold prices have dropped to a three-week low and are testing critical support. December gold futures last traded at $1,973.10 an ounce, down 0.29%. However, some analysts note that gold continues to outperform equity markets, with the S&P 500 down more than 1% Wednesday.
Michele Schneider, director of trading education and research at MarketGauge, said that she sees the price action in the marketplace as a liquidity event as spooked investors move into cash.
"The downgrade came as a surprise to many very invested traders as the market hit overvalued levels," she said. "If there is a liquidity crisis, then even gold can get hit harder." Read More
Silver prices will spike as record solar demand strains silver supply through 2026 - Metals Focus
Industrial demand for silver will continue to grow, putting pressure on supply and prices and forcing substitutions by manufacturers, according to analysts at Metals Focus.
“Over the past decade, industrial silver consumption has grown steadily, raising its share of total demand to around 50%, chiefly through help from the vigorous development of electronic and electrical related applications,” the analysts wrote in the latest Precious Metals Weekly report. “In 2021-22, silver industrial fabrication hit successive record highs, with volumes in 2022 16% higher than the 2010 total.”
These highs were driven by the rapid growth of green energy applications such as photovoltaics (PV) and electric vehicles (EV). “This growth in turn helps explain why, in the foreseeable future, the silver market is likely to face a persistent structural deficit,” they write.
Following record PV installations in 2022, Metals Focus projects another new high for installed capacity this year.
“After breaking the shipment record again in the first half of this year, we have seen that many institutes have raised their forecasts for the next few years,” they said. “For example, S&P Global raised its forecast for 2023 by 30 GW to 360 GW, and PV Infolink also expected newly-added capacity to reach 351 GW or more in its updated report. Bloomberg New Energy Finance revised its estimation of installed capacity to 346 GW, up from 316 GW at the start of this year.” Read More
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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.
