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Silver Price News: Silver Drifts as Bearish Factors Balance Out Bullish Ones
Silver is struggling for a clear direction with the price moving sideways a bit below $23 an ounce.
Investors are awaiting a fresh catalyst to drive the silver price with the bearish factors, such as the prospect of more interest rate hikes by central banks, offsetting the bullish ones, notably the strong fundamental case for the metal with demand outstripping supply.
Recent history has shown that the macroeconomic factors have tended to have an outsized impact on the silver price so the words and actions of the Federal Reserve and its officials will be closely scrutinised in the run-up to the interest rate committee’s meeting later this month. Read More
Gold Price News: $1,900 Proving Significant Support for Gold For Time Being
Gold is still just about holding above $1,900 an ounce despite the bearish pressure the precious metal finds itself under with central banks set to implement further interest rate rises in the coming weeks.
The fact that gold has been able to continue trading at such elevated levels highlights the lack of confidence investors have on the true health of the global economy and equities markets. Today’s positive start to the third quarter on stock markets still has a conditional fear to it that data may well turn negative later on in the period and this is keeping gold well supported despite hawkish rhetoric from central banks.
This support however is only able to slow gold’s decline rather than keep it up indefinitely as the reality of another interest rate hike by the Federal Reserve is expected later this month with the prospect of at least one more after it does reduce gold’s appeal. Read More
Here's why gold price is above $1,900 despite two looming rate hikes
After testing $1,900 an ounce, gold has come out on top, saving itself from a more significant selloff if prices dropped below this psychologically important level.
Gold is wrapping up the second quarter down more than $80, the worst performance since the third quarter of last year. At the time of writing, August Comex gold futures were trading at $1,925.80 an ounce, up 0.41% on the day.
But there have been some positive signs. Gold's downtrend has been slow and steady and not sudden and steep. Also, it held the $1,900 an ounce level.
"I'm surprised by the resilience in gold given the moves in the U.S. bond market – still, for now, I question if growth equity (such as the NAS100) continues to march higher if U.S. bond yields are trending higher, and how this offers the USD tailwinds," said Pepperstone's head of research Chris Weston.
Federal Reserve Chair Jerome Powell's message of at least two more rate hikes this year filtered through the market, weighing gold down and pushing the U.S. dollar higher.
But the fact that prices have not fallen below $1,900 an ounce shows resilience in the gold market, with increasing sentiment that the equity rally won't last. Read More
Gold faces 10 months of headwinds from hawkish Fed while silver gets strong support from Europe - Heraeus
A hawkish Federal Reserve could keep pressure on gold prices for longer, according to commodity analysts at Heraeus Precious Metals.
Monday’s latest report from the precious metals research firm said that Federal Reserve Chair Jerome Powell’s renewed hawkish outlook following the July meeting, combined with encouraging data for the US economy over the past month, has raised expectations for more interest rate hikes.
“Interest rate traders now see the first cut to interest rates coming in May 2024, with a peak in late 2023, which could be a headwind for gold over the next 10 months as the dollar is likely to remain strong, and attractiveness of non-yielding assets falls,” the analysts wrote. “The risk is, of course, that extra-tight monetary policy tips the US economy into a recession, an outcome pointed to by numerous leading indicators. The economic uncertainty that comes with a recession could provide a catalyst for gold if it does arrive.”
They note that the yellow metal has weakened as market uncertainty from the U.S. regional bank collapses in May has dissipated. “The gold price is down 7.8% from its peak during that time and closed last week’s trading at $1,919/oz after successfully defending $1,900/oz – a technical support level,” they wrote. Read More
Gold price climbs as U.S. manufacturing sector disappoints in June
The gold market jumped to new daily highs after the U.S. manufacturing sector contracted for the eighth consecutive month in June.
The Institute for Supply Management (ISM) manufacturing index was at 46% last month. Market consensus calls were expecting the index to come in at 47.2%.
Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change. April marked the sixth consecutive monthly contraction.
Following the release, gold prices climbed to new daily highs of $1,939.90 an ounce. August Comex gold futures were last trading at $1,935.50, up 0.32% on the day.
The employment index fell into contraction territory, down 3.3 percentage points to 48.1% in June, which is what gold reacted to. This comes ahead of the highly anticipated June nonfarm employment report to be released Friday. Read More
Gold, silver see mild rebounds on short covering
Gold and silver prices are modestly higher in midday U.S. trading Monday. Short covering from the futures traders is featured following the recent selling pressure in both markets. Activity was muted to start the U.S. holiday-shortened trading week. August gold was last up $4.20 at $1,933.50 and September silver was up $0.11 at $23.13.
Technically, August gold futures bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today’s high of $1,939.90 and then at $1,950.00. First support is seen at today’s low of $1,917.70 and then at $1,900.00. Wyckoff's Market Rating: 3.5.
Image Source: Kitco News
September silver bears have the overall near-term technical advantage. A choppy, two-month-old price downtrend is in place on the daily bar chart. Silver Bulls' next upside price objective is closing prices above solid technical resistance at the June high of $24.835. The next downside price objective for the bears is closing prices below solid support at the March low of $20.425. First resistance is seen at last week’s high of $23.335 and then at $23.50. Next support is seen at today’s low of $22.91 and then at last week’s low of $22.485. Wyckoff's Market Rating: 4.0. Read More
Image Source: Kitco News
Silver faces a perfect solar storm as real demand could far exceed projections
Silver’s inelastic supply may be overwhelmed by skyrocketing demand from solar panel manufacturers as early as this year, according to Peter Krauth, editor of SilverStockInvestor and author of The Great Silver Bull.
Krauth sat down with Kitco in June to go over the current projections for silver supply and demand in light of the latest numbers coming from the solar industry. He said forecasts like those issued by the Silver Institute just months ago may already be out of date as solar continues to drive demand for the precious metal.
“Solar alone is 12 percent of all silver demand every year, that was 140 million ounces last year,” Krauth said. “The forecasts are about 160 million ounces this year, which I believe are going to be dramatically outpaced when we see the final numbers about a year from now.”
Krauth pointed to two major factors which he believes have not been fully reflected in the silver demand scenario. First, he said the current projections underestimate the volume and pace of new solar installations. “You have all sorts of tax credits worldwide going into solar,” he said. “Solar is, in many many cases, in many places, the cheapest form of additional electricity output. So solar’s become very cheap, and it's quick and easy to install.” 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.
