Today's Gold and Silver News: 08-12-2022

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Gold Price News: China Bank Buying Illustrates Gold’s Change of Fortune

Gold is treading water around $1,770 an ounce as markets take the chance of a quiet day from a macroeconomic data standpoint to assess the true health of the global economy. 

Traders and investors remain very jittery with the odd positive data point mixed in with increasing concerns of a sustained global recession, particularly in the light of China’s sustained lockdown bound to hit activity in the world’s second-largest economy. As a result, early confidence on the dovish trajectory that the Federal Reserve will set out at next week’s interest rate meeting is being replaced by gloomy outlooks from the likes of Goldman Sachs, JP Morgan and Morgan Stanley. 

Investors are therefore trying to assess where gold sits in the current environment. A global recession with a subsequent flight to haven assets should benefit gold, as should a Fed forced to be less aggressive with its rate hikes to avoid tipping the US economy into recession. Read More

Silver Price News: Silver Remains Well Set Despite Recent Dip

Silver’s recent good run has had a temporary setback as investors take stock of the global economic picture ahead of next week’s Federal Reserve interest rate meeting.

Although silver’s price has dropped back from $23 an ounce to nearer $22 an ounce, the metal remains well-supported now that its strong fundamental case is finally getting the chance to be heard.

Jitters over the likelihood of a global recession next year have hit market confidence but while silver is certainly exposed to an economic slowdown given its industrial appeal, it may be insulated from the worst of any downturn given its prominence in the key sector of our time, the energy transition. Read More

The Kinesis Bullion store is open for business

Kinesis is proud to announce the official opening of the Kinesis Bullion store, offering clients industry-leading pricing on independently-produced, investment-grade gold and silver bullion products. 

While our goal is to reintroduce gold and silver as money, at Kinesis, we understand the value of holding physical gold and silver in your possession, and the economic freedom a personal collection brings. 

The first bullion series showcases the bespoke artistry of the Kinesis in-house design team in a choice selection of rounds and bars that would make timeless additions to any bullion collection.

For the initial opening, the Kinesis Bullion store will be focused on offering silver bullion coins and bars – and shipping solely within the United States, with gold products and regional expansion to follow. We are currently seeking wholesalers across multiple regions to assist in the local distribution of Kinesis Bullion products, extending their availability to more clients worldwide. Read More

Another pullback opportunity for the bulls?

Is this it for the dip in metals? On Friday, we suggested that pullbacks may continue to be shallow. Since gold hit exactly $1810 on spot Sunday evening (making another higher high), the pullback has manifested. For traders who took profits over $1800, this may be your chance to swoop back in. If the sell down continues, however, bulls should hold the $1750 level, or better and more precisely, $1762ish on spot. The below is a 4-hour gold chart demonstrating oversold momentum in a newly established (continued assumption) upward trend. Momentum should begin to come out of the oversold condition while the price continues the pattern of higher highs. Read More

Image Source: Kitco News

Bank of Canada hikes rates by 50 bps but signals potential pivot, gold priced in CAD loses daily gains

The Bank of Canada raised rates by another 50 basis points Wednesday, which brought its key interest rate to 4.25%. The move was largely in line with market expectations.

In preparation for a potential pivot or a further slowdown in rate hikes, the Bank of Canada also said it "will be considering" whether more hikes are needed. 

"Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding," the Bank said Wednesday. "Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians."

The Bank of Canada has raised interest rates by 400 basis points since the first move in early March. In the latest statement, it cited a historically low unemployment rate and a resilient economy. Canada's Q3 GDP came in at 2.9%, nearly doubling market expectations, and the October employment report revealed an increase of 108,300.

"GDP growth in the third quarter was stronger than expected, and the economy continued to operate in excess demand. Canada's labour market remains tight, with unemployment near historic lows," the central bank said. "Overall, the data since the October MPR support the Bank's outlook that growth will essentially stall through the end of this year and the first half of next year." Read More

Gold, silver rally as USDX sells off, U.S. bond yield dip

Gold and silver prices are higher in midday U.S. trading Wednesday, boosted by declines in the U.S. dollar index and in U.S. Treasury yields on this today. The overall near-term technical postures for gold and silver remain bullish, which is also inviting the chart-based traders to the long sides of these markets. February gold was last up $12.70 at $1,795.20 and March silver was up $0.525 at $22.86.

Global stock markets were mostly lower overnight. U.S. stock indexes are weaker at midday. The U.S. stock index bulls are fading fast this week and near-term price uptrends on the daily bar charts have been negated.

Technically, February gold futures bulls have the overall near-term technical advantage. 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 this week’s high of $1,822.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at the November high of $1,806.00 and then at $1,822.90. First support is seen at this week’s low of $1,778.10 and then at $1,770.00. Wyckoff's Market Rating: 6.0

Image Source: Kitco News

March silver futures bulls have the overall near-term technical advantage. 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 today’s high of $23.01 and then at $23.50. Next support is seen at this week’s low of $22.19 and then at $22.00. Wyckoff's Market Rating: 6.5. Read More

Image Source: Kitco News

China buys 32 tonnes of gold in November, first increase in reserves since 2019

China has confirmed what many commodity analysts have long suspected was happening for most of this year: it is loading up on gold again.

Early Wednesday, the People's Bank of China reported that it bought 32 tonnes of gold in November. According to reports, the central bank bought gold when prices were around $1,650 an ounce.

In a Twitter comment, Krishan Gopaul, senior European, Middle East and Asian market analyst at the World Gold Council, noted that this is the first time the central bank has announced a change in its gold reserves since September 2019.

Gopaul added that China's gold reserves now stand at 1,980 tonnes.

While the announcement from China's central bank has come out of the blue, it is not a surprise as many analysts speculated that the nation has been building its gold reserves through most of the year.

Last month the World Gold Council said that central banks bought 400 tonnes of gold in the third quarter. The WGC noted that this is the largest single quarter of demand from this sector, according to their records. Read More

Perth Mint dominates global bullion market: sells 114K ounces of gold in November as U.S. Mint sells 6K

November's rally in gold and silver took a modest toll on physical demand; however, the Perth Mint continues to dominate the market as it saw solid bullion demand last month.

In its latest sales report, the Perth Mint said it sold 114,304 ounces of various gold products last month. The mint added that gold bullion sales were down 38% from October's record levels. At the same time, demand dropped 1% from November 2021.

General manager of minted products at the mint, Neil Vance, said that some drop in demand was the result of the mint holding back some production.

"Despite this, ounces of gold sold as minted products were at their second highest monthly level this financial year," he said in a statement.

According to some analysts, Perth Mint continues to see healthy international demand for its bullion with growing markets in Asia, the Middle East, particularly India and Europe. Read More

If Russia accepts gold for oil, gold price doubles to $3,600, says Credit Suisse's Zoltan Pozsar

In a year of "unthinkable macro scenarios," Credit Suisse's Zoltan Pozsar said it is not improbable for gold to double to $3,600 an ounce if Russia responds to G7's oil price cap by accepting gold for crude.

In a note to clients, Pozsar said that a year-end money-market liquidity crunch is unlikely unless Russia decides to accept gold for oil in light of sanctions.

While this outcome might sound out of this world, it is not that far-fetched given some of the geopolitical and macroeconomic surprises from this year, Pozsar said in a note titled 'Oil, Gold, and LCLo(SP)R.' "Crazy? Yes. Improbable? No. This was a year of the unthinkable macro scenarios and the return of the statecraft as the dominant force driving monetary & fiscal decisions," Pozsar wrote Monday.

In this scenario, Russia's President Vladimir Putin responds to the recently introduced $60-a-barrel oil price cap by asking for a gram of gold for two barrels of crude. Read More

Gold breaks above its 200-day moving average then moves back below it

Gold futures basis the most active February 2023 contract opened in New York at $1783.30 and traded to a high of $1803.20 just above its 200-day moving average which is currently fixed at $1800.70. The price point of this long-term moving average at least for the short term became a technical level of resistance moving gold back below it. As of 4:19 PM EST, the February contract of gold futures is currently fixed at $1798.90 after factoring in today’s net gain of $16.50 or 0.93%.

Image Source: Kitco News

Today’s double-digit gains came out of a combination of dollar weakness and traders bidding the precious yellow metal higher. Currently, the dollar is down 0.41% with the dollar index fixed at 105.105. Gold’s gain of 0.92% indicates that market participants were not only active buyers but provided just over 50% of the gains realized in gold futures. 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.