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Gold Benefitting From Prospect of No More Fed Hikes
Gold continues to trade near its highest level in a month after Friday’s US unemployment data showed an unexpected increase, increasing the likelihood of the Federal Reserve holding off on further interest rate hikes.
On a trading day that is likely to be much more subdued with the US celebrating Labor Day, gold looks set to rise alongside equities. While more often gold and equities have an inverse correlation, both are benefiting from the prospect of the Fed’s aggressive policy to curb stubbornly high inflation is finally drawing to a close.
Gold’s scope for considerably higher gains will ultimately be limited by the amount of confidence that flows into markets over the coming weeks and months and investors’ risk appetite. Read More
Silver Hovers Near $24 After Failing to Match Gold’s Gains
Silver has dipped back towards $24 an ounce, reflecting traders and investors lack of uncertainty on where the precious metal sits within the current market dynamic.
On the one hand, the latest US employment figures released on Friday showed that the Federal Reserve’s series of interest rate hikes is starting to bite, with unemployment unexpectedly increasing.
This has given a boost to most asset classes, including equities and gold, silver’s precious metal peer, as it has increased the likelihood of the Fed deciding to hold off on any further hikes now that inflation is nearing its 2% target and the first signs are visible of the world’s largest economy feeling the pinch from fast-rising interest rates.
Silver however has failed to receive the same boost as doubts linger over the true health of the global economy, particularly with the US now showing signs of strain. Read More
Silver prices will continue to suffer in 2023 but shine brightly next year - Capital Economics
After hitting a five-week-high, the silver market has been unable to hold gains above $25 an ounce and one research firm, while maintaining its long-term bullish outlook, said that it sees further weakness in the grey metal heading into year-end.
In his latest price forecast, Kieran Tompkins, commodities economist at Capital Economics, warned investors that with silver prices trading roughly neutral for the year, there is potential for prices to fall back to support at $22.50 an ounce. The outlook comes as silver prices currently trade at $24.845 an ounce, down 1% on the day. The precious metal has given up most of its gains so far this week.
Tompkins said that the most significant factor impacting silver prices remains the U.S. dollar, and the British-based research firm expects the value of the USD to continue to rise.
"In short, we think there is further scope for interest rate differentials to extend the US dollar's recent rally over the rest of this year, weighing on the silver price," he wrote in the report. Read More
‘We are buyers of gold on weakness or declines in rates' - Morgan Stanley WM CIO
Gold’s resilience in the face of the run-up in real interest rates means the yellow metal is presenting investors with a buying opportunity, according to Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management.
“Like equities, which have continued to shrug off the negative implications of rising real rates, gold, which moves inversely to real rates and in turn to the U.S. dollar DXY, has remained extremely resilient,” Shalett wrote in a recent note to clients. “Regarding the intermediate outlook, we are buyers of gold on weakness or declines in rates.”
Shalett noted that inflation-adjusted ‘real rates’ have seen a spike recently, with the 10-year Treasury’s real rate rising above 2.0% last week.
“The surge in real rates has been a multifactor move likely to force investors to contemplate valuation risks of a 'higher-for-longer' rate regime,” she said, noting that the 10-year note’s real rate has jumped almost half a percentage point in the past six weeks and is now at “its highest since the Great Financial Crisis” of 2007-2008. Read More
'It's white gold, it's the next rush' - Piedmont Lithium's Keith Phillips on Canada's critical mineral sector
Being a cash-generating miner makes you popular, noted Piedmont Lithium CEO Keith Phillips.
On Thursday, Phillips spoke to Kitco Mining.
This week, Piedmont Lithium (Nasdaq: PLL) announced partial prepayment of $31.6 million for September shipment of 15,000 dry metric tons (dmt) of lithium concentrate to a major international trading company.
North American Lithium (NAL) commenced commercial production in March 2023. The operation is a joint venture between Piedmont and Sayona Mining.
Piedmont said that vessel loading is scheduled for mid-September, adding that the prepayment increased the company's cash position to approximately $100 million.
Phillips said becoming a producer is significant.
"We think these cash flows from the shipments will fund really all of our development needs other than building our big projects in Tennessee and Carolina," noted Phillips. Read More
Gold is stuck in neutral and remains at the mercy of the US dollar and bond yields next week
The gold market appears to have hit solid resistance heading into the weekend, and Friday's price action could set the tone for what is expected to be a relatively quiet shortened trading week, according to analysts.
Gold prices saw a solid recovery from August's multi-month lows this week, but some analysts note that the precious metal didn't have enough momentum to break into bullish territory. With North American markets closed Monday for the Labor Day long weekend, analysts have said that a breakout is unlikely in the short term.
This past week saw December gold futures push to a three-week-high, briefly hitting $1.980.20 an ounce Friday following a lukewarm nonfarm payrolls report. Although the economy created more jobs than economists expected, wage gains were weaker than expected and the unemployment rate rose sharply.
However, the rally has cooled slightly, with December gold futures last trading at $1.967.30 an ounce, up 1.4% from Friday's close. Read More
Both analysts and retail investors see higher gold prices next week
Gold climbed higher this week, with prices rising over 1.25% as Friday's nonfarm payrolls report showed an increase in the unemployment rate and the ISM Manufacturing Index indicated continued weakness in U.S. industry.
The latest Kitco News Weekly Gold Survey shows that over two-thirds of retail investors expect gold prices to post gains during the shortened week ending September 8. And after weeks of caution and divided opinions, market analysts are just as bullish as Main Street heading into the Labor Day long weekend.
Adrian Day, President of Adrian Day Asset Management, sees gold prices increasing in the near term. "The tide seems to be turning for gold," he said. "Economic news in the U.S. and elsewhere is mixed, but the preponderance is suggesting a weakening global economy. The market is already pricing in the end of rate hikes in the U.S., though "tighter for longer' is still tightening." Read More
How gold price gets to $10k: BRICS expansion, gold-backed currency, monetary reset - Willem Middelkoop
The BRICS formal invitation of Argentina, Egypt, Ethiopia, Iran, the United Arab Emirates, and Saudi Arabia to join the bloc moves the world a step closer to a "very dangerous phase" for the U.S. and the next major conflict, according to Willem Middelkoop, Founder and CIO of the Commodity Discovery Fund.
"I don't feel comfortable by all these developments, and we shouldn't call it World War III right away, but we're moving towards a very dangerous phase," Middelkoop told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "This BRICS conference is the next step in a financial economic war. And I'm afraid it's all connected, and I'm not the only one who has warned of a possible World War III scenario."
The new BRICS memberships will take effect from January 1, 2024. However, out of the six new members, Saudi Arabia is yet to officially confirm, with the country’s Foreign Minister Prince Faisal bin Farhan stating, “We await further details” and “based on this information and in accordance with our internal procedures, we will make the appropriate decision.” Read More
Live From The Vault - Episode: 138
Turning paper into gold is the answer to the broken fiat system - Feat: Adam Trexler.
In this week’s episode of Live from the Vault, Andrew Maguire is joined by Adam Trexler, founder of Valaurum - the manufacturer of Aurum gold-backed banknotes - to discuss money's natural evolution beyond fiat and into tangible assets.
The precious metals experts debate the value of currencies and their ability to create action, while revealing how gold can help overcome the challenges faced by fiat in an economic climate where individuals are being “debanked” for using cash.
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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.
