x
Image Source: Unsplash
Gold Price News: Powell’s Hawkish Comments Send Gold Down Near $1,800
Federal Reserve Chair Jerome Powell’s surprisingly hawkish comments have sent gold down towards $1,800 an ounce, close to its lowest level this year.
Powell’s testimony has seen markets up where they see US interest rates reaching by another 50 basis points to 5.6% with gold an obvious casualty of this repricing with its lack of yield making it less attractive at times of rising rates. With the Fed Chair speaking again today, gold investors will be hoping that today’s message doesn’t cause any further shocks.
While the short to medium-term outlook looks challenging for gold, with the prospect of a series of interest rate hikes still to factor in over the coming months, including later this month, the fact that the markets are now pricing in these elevated levels should ensure that gold’s punishment when the rate decisions are announced is more muted. Read More
Silver Price News: Silver Sinks to $20 After Powell’s Surprisingly Hawkish Tone
Silver has sunk to $20 an ounce after Federal Reserve Chair Jerome Powell surprised markets with his hawkish rhetoric in his testimony to US lawmakers yesterday.
With the prospect of interest rates in the US being raised as high as 6%, silver’s attractiveness has dwindled further with the precious metal’s lack of yield seeing other interest-bearing assets favoured instead.
Yet again, silver has seen its price hit harder than its precious metal peer gold on the same news. While gold is still just about holding above $1,800 an ounce, silver has lost $1 an ounce to be trading at its lowest level in 4 months. The size of the move demonstrates silver’s greater volatility risk compared with gold and continues the narrative from last year in which once the tide turns against silver, traders hit its price very hard.
As such the short-term risk for silver is more losses, even though its fundamental outlook remains positive. Read More
Bank of Canada presses the pause button, gold priced in CAD ticks up
The Bank of Canada paused its tightening cycle Wednesday, keeping its key overnight rate unchanged at 4.5%. Markets largely expected the hold in rates, and gold priced in Canadian dollars continued to edge up after some early-morning losses.
Justifying its decision, Canada's central bank said that economic developments are evolving broadly in line with its outlook.
"In Canada, economic growth came in flat in the fourth quarter of 2022, lower than the Bank projected," the Bank said in the statement. "Restrictive monetary policy continues to weigh on household spending, and business investment has weakened alongside slowing domestic and foreign demand."
Even though the labor market remains tight and wages are continuing to grow, inflation is easing, reflecting lower price increases for energy, durable goods and some services.
"With weak economic growth for the next couple of quarters, pressures in product and labour markets are expected to ease. This should moderate wage growth and also increase competitive pressures, making it more difficult for businesses to pass on higher costs to consumers," the Bank of Canada said. Read More
Gold, silver bulls work to stabilize their markets
Gold prices are near steady and silver just slightly lower in midday U.S. trading Wednesday, after solid losses posted Tuesday following hawkish comments from the U.S. central bank chairman. The precious metals market bulls were forced to be satisfied today with both markets just pausing. April gold was last up $0.50 at $1,820.30 and May silver was down $0.084 at $20.115, after hitting a four-month low earlier.
Today’s U.S. ADP national employment report for February came in slightly hotter than expected, at up 242,000 jobs compared to a consensus forecast rise of 205,000. Traders and investors are looking forward to the February U.S. employment situation report from the Labor Department on Friday morning. The key non-farm payrolls component of the report is expected to show a rise of 225,000 jobs, following a mammoth rise of 517,000 in the January report.
Technically, April gold futures bears have gained the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the March high of $1,864.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,828.70 and then at $1,835.00. First support is seen at the February low of $1,810.80 and then at $1,800.00. Wyckoff's Market Rating: 4.5.
Image Source: Kitco News
May silver futures prices hit a four-month low today. The silver bears have the firm overall near-term technical advantage. Prices are in a steep five-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.50 and then at $21.00. Next support is seen at today’s low of $19.955 and then at $19.00. Wyckoff's Market Rating: 3.0. Read More
Image Source: Kitco News
DoubleLine's Gundlach: Gold at $1,800 is a buy even though the Fed is "very likely" to hike by 50bps in March
Gold at $1,800 an ounce has a role to play in a portfolio despite the Federal Reserve still pursuing its aggressive tightening cycle, said DoubleLine Capital CEO Jeffrey Gundlach.
"I've been somewhat favorable on gold. Once it got to $1,800, it went quite a bit higher than that, but it's now come back down to almost $1,800. And gold probably deserves a role in portfolios at $1,800 type dollar price, even though the Fed is raising interest rates," Gundlach said during a Tuesday webinar titled 'Survivor.'
Gundlach noted that gold had been stuck in sideways trading action for the past two and a half years. "Not much going on here. Some volatility, but we're right in the middle of the range at $1,800," he said.
At the time of writing, April Comex gold futures were trading at $1,818.80, down 0.07% on the day.
Gold makes sense even though at the March meeting, which is scheduled to happen in just two weeks, the Fed is "very likely" to go with a 50-basis point increase, Gundlach pointed out. "After Powell's testimony, the chances of a 50 basis point increase have gone up a lot in the betting markets and in the yield curve shape," he said. Read More
Silver price to rise 1,000% as gold hits $5k by 2027, governments to "debase" their currencies - Rob McEwen
Gold is set to hit $5,000 per ounce by 2027, taking silver to $250 per ounce, according to Rob McEwen, Executive Chairman of McEwen Mining.
McEwen, who has almost four decades of experience in the mining industry and sold his company GoldCorp to Newmont in 2019 for $10 billion, claimed that as governments engage in loose fiscal and monetary policy, the weakening of fiat currencies will benefit hard assets like precious metals.
"Hard assets will increase in value as the dollar drops in relative value to other currencies, because governments are irresponsible," he said. "They steal from their citizens by printing excess money and borrowing in ways they shouldn't… Look at the amount of the debt most of the Western world has right now, it's enormous."
Speaking at the 2023 BMO Metals, Mining, & Critical Minerals Conference with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, McEwen said that as a "student of economic history," he sees gold and silver rising as Western governments "debase" their currencies due to excess fiscal spending.
"Governments try to get out of their debt by debasing their currency, and we're going to see a huge wave of that," he forecast. "We're in an unprecedented period."
McEwen said that he is positioning his portfolio to benefit from the anticipated rise in gold prices through his investments in mining companies, including juniors. Read More
Powell addresses House stressing data dependency before making decisions
Today Chairman Jerome Powell finished his semiannual congressional testimony. The chairman warned that the Fed could be more aggressive because "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated."
In yesterday's testimony, he opened the door for a 50-BPS rate hike at the upcoming March FOMC meeting (March 21 – 22).
"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."
According to the CME's FedWatch, the probability of a more aggressive rate hike of 50-BPS has increased since yesterday from 70.5% to 79.4% today, diminishing the probability of a 25-BPS hike from 29.5% to 20.6%.
However, Powell stressed the fact that the Federal Reserve will not make any final decision about the size of a potential interest rate hike until data from Friday's jobs report and next Tuesday's CPI report have been released.
"We have not made any decision about the March meeting. We're not going to do that until we see the additional data." Adding that, "We will be guided by the incoming data and the evolving outlook." Read More
.png)
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.
