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Gold Price News: Gold Seeking Support Near $1,820 After Week’s Drop
The gold price witnessed a decline for the seventh consecutive day yesterday.
Following the breach of the support level at $1,890, bearish momentum intensified, propelling the gold price to plummet swiftly from $1,930 to $1,820 within a few days.
Low volatility in early September has created the potential for larger price movements. Overall, the technical analysis continues to indicate a bearish trend, although the support zone at $1,820 and oversold conditions could prompt a rebound.
On the macroeconomic front, the August US JOLTS Job Openings data, released yesterday, came in at 9.61 million, beating forecasts of 8.80 million and underlining economic strength. The data bolstered the US dollar and pushed bond yields higher, challenging gold further. The bearish pressure on gold will likely persist until market clarity emerges regarding the peak of US interest rates. Read More
Silver Price News: Silver Eyes $21 After Rapid Sell-off Amid Rate Fears
The perfect storm hit the silver price in the last few days, and the precious metal is now attempting to find footing near $21 following a sharp sell-off that dragged prices to a 7-month low amid concerns over a prolonged high-rate environment.
The descent in silver prices can be attributed to several factors. Investors are growing increasingly apprehensive about the potential of a long-term high rates environment. Compounding this, the US dollar has continued to strengthen while interest rates remain high.
The spectre of enduring high rates poses a threat of ushering in a recession, or at the very least, an economic slowdown, a scenario that could dent demand for silver, given its substantial industrial application. Read More
The Fed to hike rates again in November, rate cuts coming only in 2025, here's why - Pat LaVecchia
Against most market odds, the Federal Reserve can still surprise investors with an additional rate hike in November, with a higher-for-longer narrative yet to filter through the macro environment, said Pat LaVecchia, CEO of Oasis Pro.
At the September meeting, the Fed followed through on a hawkish pause, promising higher for longer interest rates as economic growth continued to be stronger than expected. This is why the tightening cycle might not be over, LaVecchia told Kitco News.
"The next rate hike will occur, even though the statistics suggest it won't. I do think it'll be November," LaVecchia said on the sidelines of the Mainnet Conference, which took place in New York City between September 20-22. "And then 2024 will be a steady state."
Rate cuts won't come until 2025, LaVecchia added, noting that he is not ruling out a soft landing in the future. Read More
Gold near session lows as ISM Services PMI meets expectations in September
Gold prices are hovering around session lows after activity in the U.S. service sector saw a moderate pullback in September, according to the latest data from the Institute for Supply Management (ISM).
On Wednesday, the ISM said its Services Purchasing Managers Index declined slightly to a reading of 53.6% last month, down from August's reading of 54.5%. The data was right in line with consensus estimates.
“The composite index indicated growth in September for the ninth consecutive month after a reading of 49.2 percent in December 2022, which was the first contraction since June 2020,” said ISM Services Business Survey Committee chair Anthony Nieves in the report. “The Business Activity Index registered 58.8 percent, a 1.5-percentage point increase compared to the reading of 57.3 percent in August. The New Orders Index expanded in September for the ninth consecutive month after contracting in December for the first time since May 2020; the figure of 51.8 percent is 5.7 percentage points lower than the August reading of 57.5 percent.”
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. Read More
Gold, silver down even as USDX, bond yields see corrective pullbacks
Gold and silver prices are modestly lower in midday U.S. trading Wednesday and not far above this week's multi-month lows. Technical selling is featured amid fully bearish near-term charts. Downside corrections in the U.S. dollar index and in U.S. Treasury yields today did not help out the precious metals bulls. December gold was last down $3.00 at $1,838.30 and December silver was down $0.242 at $21.14.
Today's big downside miss for the ADP National Employment Report—at up 89,000 jobs versus the consensus forecast of up 160,000—gave the bond market bulls some hope Friday morning's more important U.S. jobs report shows a cooling U.S. economy. Traders are indeed starting to look ahead to Friday's September employment situation report from the Labor Department. The key non-farm payrolls number is expected to come in at up 170,000 compared to a rise of 187,000 in the September report.
Technically, December gold futures prices were poised to close at a 10-month low close today. Bears have the solid overall near-term technical advantage. An accelerating five-month-old downtrend is in place on the daily bar chart. However, the market is well short-term oversold and due for a decent corrective bounce very soon. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,850.00 and then at this week's high of $1,864.70. First support is seen at this week's low of $1,830.90 and then at $1,825.00. Wyckoff's Market Rating: 1.0.
Image Source: Kitco News
December silver futures prices hit another 6.5-month low today. The silver bears have the solid overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. However, the market is short-term oversold and due for a corrective bounce very soon. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at the March low of $20.615. First resistance is seen at today's high of $21.57 and then at $22.00. Next support is seen at today's low of $20.85 and then at $20.50. Wyckoff's Market Rating: 2.0. Read More
Image Source: Kitco News
China's grip on gold prices means a higher floor, but this week's weakness may be the flipside
Precious metals prices remained on their lower trajectory this week, continuing the steady slide lower that began after the last FOMC meeting on Sept 20. Gold and silver have both fallen to their lowest levels since early March, with spot gold briefly dropping below $1,817 earlier on Wednesday and silver futures trading below $21 per ounce at the time of writing.
While the Fed’s higher-for-longer interest rate projections are the most cited driver for gold’s recent weakness, as they’ve helped drive the benchmark 10-year treasury yield close to 5% against the non-yielding metal, analysts’ historical models suggest gold should actually be far lower at this point in the cycle. What’s different this time around? China.
Chinese demand for the yellow metal has been propping up gold, keeping prices not far off their all-time highs despite massive headwinds. Read More
This could be the last gasp of the bond market selloff, which will be bullish for gold prices
The U.S. economy could be close to a tipping point as bond yields see a bear steepening across the curve, with the long end rising sharply this week.
Although gold continues to see some strong selling pressure, analysts note that the precious metal remains relatively resilient as long-term U.S. bonds continue to rise. Wednesday, 30-year yields rose to a high of 5%, its highest level since August 2007; at the same time, 10-year yields are trading around 4.8%, a fresh 16-year high.
Meanwhile, gold is managing to hold initial support above $1,830 an ounce. December gold futures last traded at $1840.10 an ounce, roughly neutral on the day.
Analysts have noted that the rise in bond yields is creating a market environment similar to that of previous recessionary periods.
"I feel things in 4Q 2023 are shaping up like some combination of 1987, with the bond price collapse before the stock market crash, and 2008, when crude oil peaked," said Mike McGlone, senior strategist at Bloomberg Intelligence. "In 2008, gold went from about $1,000 an ounce down to $700, before embarking on the rally to the 2011 high around $1,900. I see parallels. Gold ETF outflows, I think, are partially due to the overwhelming force of the US government 2yr note above 5% and most inflation measures declining below 5%. The sell-off in treasuries, I think, is a last gasp aligned with the spike in crude oil." Read More
Seized gold auction is Japan's largest ever as prices approach ¥10K and demand soars
Tokyo Customs is currently holding its largest-ever auction of smuggled gold, with approximately 180 kilograms (6349 ounces) of the yellow metal up for online bidding starting Tuesday, Japanese broadcaster NHK reported.
The stockpile of seized gold is worth about JPY1.75 billion, or about $11.7 million at current market value, making it both the largest quantity and the highest value of the precious metal ever auctioned by the country’s customs service.
Most of it entered the country in the form of accessories such as jewelry, but the government processed the gold into bars weighing one kilogram each. The gold was seized at various ports of entry into the country, including Haneda and Narita airports and the Tokyo port, between 2015 and 2017.
A senior customs official told NHK that gold smuggling was rampant during the period when the seizures were made. Japan increased its consumption tax in 2014, and much of the illegal gold imports were apparently done with the intention of evading consumption tax payments. Read More
How to regain confidence in the gold sector - Alamos Gold CEO John McCluskey
John McCluskey, president and CEO of Alamos Gold (TSE:AGI), says that despite inflationary pressures, the producer is growing.
McCluskey spoke to Kitco mid-September at the Gold Forum Americas 2023 held in Colorado Springs, CO.
He forecasts about 500,000 ounces in 2023, with production at the Island Gold asset doubling from 150,000 to 300,000 oz in 2026 following an expansion. Alamos has three producing mines — Island Gold and Young-Davidson in Canada, and Mulatos in Mexico.
The Lynn Lake development project is expected to come online in 2027, bumping total annual production to around 800,000 oz. A new discovery at Mulatos could also boost ounces.
McCluskey noted the company has been able to keep costs under control due to synergies at its two Canadian operations.
He said a higher gold price would inspire more confidence in the gold producers, and he observed there is less tolerance of political risk. 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.
