Today's Gold and Silver News: 06-12-2022

Image Source: Unsplash

Silver Price News: Weakening Dollar Sees Silver Surge Continue

Silver is enjoying the opportunity for the metal’s strong fundamental case to be heard with a weaker US dollar and the prospect of a more dovish Federal Reserve helping push silver’s price above $23 an ounce to near its highest in more than seven months. 

After silver suffered a multi-month slump from April through to September, the precious metal is now on a multi-month surge and has recovered over half of its losses after this positive reversal of fortunes. Read More

Gold Price News: Gold Back in Favour on Prospect of Dovish Fed

Gold is trading near $1,800 an ounce as the precious metal benefited from the US dollar sinking to multi-month lows and mounting expectations that the Federal Reserve will be less aggressive with its upcoming interest rate moves both this month and into the new year. 

Gold is back in favour in the final month of a year in which the asset has struggled in the face of a series of large interest rate hikes by the Fed and a strong dollar. Now with both those factors fading, allied to general market jitteriness about the global economic impact of China’s sustained lockdowns as well as the fallout in crypto markets following FTX’s collapse. Read More

Gold prices drop solidly below $1,800 as ISM services PMI rise to 56.5 in November

The gold market is losing ground, pushing further below $1,800 an ounce as the U.S. service sector sees stronger-than-expected activity in November, according to the Institute for Supply Management (ISM).

Monday, the ISM said its Manufacturing Purchasing Managers Index, rose to 56.5 last month, up from November’s reading of 54.4%. According to consensus estimates, economists were looking for a drop to 53.5.

"Growth continues at a faster rate for the services sector, which has expanded for all but two of the last 154 months. The sector had an uptick in growth after pulling back in the previous two months. The rate of growth increased in November due to increases in business activity and employment," said Anthony Nieves, chair of the ISM Services Business Survey Committee.

The gold market was seeing some technical selling pressure ahead of the report after the price rose to a five-month high overnight. However, the precious metal has lost further ground in its initial reaction to the latest economic data. Read More

Gold's utility as a global currency will support prices in 2023 - MarketVector's Yang

The gold market has struggled to attract investment capital through most of 2022, but growing uncertainty into 2023 should make the precious metal an attractive safe-haven asset and store of value, according to one market analyst.

In an interview with Kitco News, Joy Yang, global head of index product management at MarketVector Indexes, said there has been a lot of push and pull in the marketplace as rising inflation has forced the Federal Reserve to raise interest rates at its fastest pace in 50 years. At the same time, slowing growth in China and Europe has increased the threat that the global economy will fall into a major recession.

Yang said that in this environment, it's not surprising that investors have shied away from the precious metal this year. She added that she doesn't see it as investor apathy but more as hesitancy.

"There are a lot of things happening in global financial markets and investors want to be careful because in these conditions getting something wrong can be quite painful," she said.

However, Yang added that investors are starting to recognize gold's value as a safe-haven asset. One major factor that is shining new light on gold is central bank demand. During the third quarter, central banks bought nearly 400 tonnes of gold. Read More

Hedge funds aren't bearish on gold, but are they bullish?

The gold market continues to struggle to attract solid bullish sentiment as hedge funds liquidated their bullish bets just ahead of its breakout move last week, according to the latest data from the Commodity Futures Trading Commission (CFTC).

According to some analysts, the latest data remains in line with sentiment in the gold market. Although the Federal Reserve has signalled that it is preparing to slow the pace of its interest rate hikes, the terminal rate is expected to remain elevated above 5% for the foreseeable future.

Many analysts have noted that gold is benefiting from hedge funds covering their short positions, but there is still a lack of bullish interest in the precious metal.

"People are not saying let's get long gold; they are saying let's not be short," said Kevin Grady, president of Phoenix Futures and Options,

Grady said that although gold has seen a decent pop as prices pushed above $1,800, there is a lack of follow-through buying for a sustainable rally.

Ole Hansen, head of commodity strategy at Saxo Bank, said sentiment is slowly starting to shift, but there is still more work that needs to be done.

"Conviction is starting to grow in the marketplace. At least investors don't want to be short anymore," he said. Read More

Gold, silver hit hard by profit taking, bearish outside markets

Gold and silver prices are sharply lower in midday U.S. trading Monday after hitting multi-month highs overnight. The metals are being hit by heavy profit-taking from the shorter-term futures traders and by bearish outside markets. The U.S. dollar index is solidly higher and crude oil prices are lower and lost good early gains. Rising U.S. Treasury yields are also a bearish element for the precious metals markets today. February gold was last down $24.10 at $1,785.20 and March silver was down $0.88 at $22.375.

Today's report on the U.S. ISM services index unexpectedly improved in November, and with only a slight decrease in prices paid. The data may suggest wage pressures will remain stronger. The headline index for November came in at 56.6, which was higher than the expected reading of 53.3. The employment component also moved back to expansion territory. The report falls into the hawkish camp on Federal Reserve monetary policy and helped pressure the stock market, and in turn, supported the U.S. dollar index while lifting U.S. bond yields.

Technically, February gold futures prices hit a 3.5-month high early on today and then reversed course to score a bearish "outside day" down on the daily bar chart. The gold futures bulls still have the overall near-term technical advantage but faded today. Prices are in a four-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at today's high of $1,822.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,733.50. First resistance is seen at $1,800.00 and then at the November high of $1,806.00. First support is seen at $1,770.00 and then at $1,750.00. Wyckoff's Market Rating: 6.0

Image Source: Kitco News

March silver futures prices hit a seven-month high early on today but then reversed course to score a bearish "outside day" down on the daily bar chart. The silver bulls still have the overall near-term technical advantage but faded today. 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 $24.00. The next downside price objective for the bears is closing prices below solid support at $20.79. First resistance is seen at $23.00 and then at today's high of $23.69. Next support is seen at $22.00 and then at $21.435. Wyckoff's Market Rating: 6.0. Read More

Image Source: Kitco News

Top commodity performer of 2023? Bloomberg Intelligence points to gold

Gold could be the top commodity performer in 2023 as central banks shift to easing after their aggressive tightening cycles that defined this year and limited gold's price action, said Bloomberg Intelligence in its outlook.

"Our base case is toward a global deflationary reset that will shift central-bank tightening to easing, underpinning gold," said Bloomberg Intelligence senior macro strategist Mike McGlone. "Gold appears poised to be a top commodity performer in 2023 if the world enters a recession."

Gold has formed a good foundation between $1,600 and $1,700 an ounce as the Federal Reserve proceeded to hike rates in its most aggressive tightening cycle in about 40 years. But that is likely ending soon, leading to a softer U.S. dollar in the future, noted McGlone.

There is also a growing disparity in gold priced in U.S. dollars versus gold priced in euro and yen, which could be taken as a positive sign for the precious metal, McGlone said.

"The disparity between gold priced in dollars and euros is nearing levels that formed a lasting foundation for the prices in 1999. Down about 5% in 2022 to Nov. 28, dollar gold compares with respective gains of 5% and 15% for the metal priced in euros and yen," he said. "Aggressive Fed tightening to address inflation and elevated asset prices as the rest of the world tries to catch up -- which is supporting the greenback -- echoes trends about two decades ago. Underpinnings are firming for the price of gold to resume the rally that started with that base." Read More

Gold trades to a double top at $1825

Chairman Powell’s speech on Wednesday, November 30 caused extreme volatility leading to a dynamic price spike that took gold futures to an intraday high of $1817 on Thursday, December 1. On Friday, December 2 gold futures traded to the same intraday high but closed lower on the day at approximately $1809.

Market participants immediately reacted to Powell's speech by focusing on the fact the Federal Reserve was planning to slow the pace of interest-rate hikes. However, today they seemed to disregard Powell’s remarks about how the Federal Reserve would slow the pace of rate hikes. They changed their focus to the fact that the Federal Reserve is maintaining an extremely hawkish demeanour with more rate hikes at a slower pace. In other words, market participants focused on the time it would take the Federal Reserve to lower inflation to its target rate rather than the fact that the Fed intends to slow down the size of individual rate hikes.

Image Source: Kitco News

Gold futures opened today at $1810.50 and traded to a high of $1822.90 before sellers combined with dollar strength took prices dramatically lower. Technical selling moved gold prices lower as traders recognized today’s high as a double top which occurs from the high created during the first week of August at $1825 and today’s intraday high of $1823. 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.