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Silver Price News: Silver Slides Below $23 as Investors Fear Further Fed Hike
Silver’s slide has seen the price of the metal drop below $23 an ounce, which is quite a sharp reversal given it was trading close to $25 at the end of July.
Silver’s short-term grace is the result of a stronger US dollar, which hits the relative value of the dollar price for the metal, as well as lingering fears that the Federal Reserve hasn’t yet finished its series of interest rate hikes.
Tomorrow’s publication of the latest US inflation figures, therefore, marks a key data point for traders and investors to assess the likelihood of the Fed implementing another hike in September or whether inflation is sufficiently cool for the US central bank to be able to leave rates unchanged. Read More
Gold Price News: Gold Continues Gentle Slide as Markets Await US Inflation Data
Gold is holding near to $1,930 an ounce with the precious metal lacking a clear direction as traders and investors try and assess the true health of the global economy.
Tomorrow brings the latest US inflation data, which will be an important reference point for the Federal Reserve when the committee meets next month to decide whether to keep raising interest rates or if inflation is now sufficiently on the downward trajectory for the US central bank to be able to leave rates unchanged.
As a result, the inflation data will also be significant for gold as so much of its recent price action has been based on the prospect of the Fed soon coming to an end of its series of rate hikes. If tomorrow’s data leaves traders believing that the Fed will implement another hike in September then that could send gold crashing down to $1,900 an ounce. Read More
Gold prices end July with gains despite ETF outflows, August forecast looks muted
The gold market continues to hold its own as bond yields and the U.S. dollar remain elevated; however, the market continues to struggle, seeing further liquidations in gold-backed exchange-traded products.
In its latest market report published Tuesday, the analysts at the World Gold Council said that the global ETF market saw its holding drop by 34 tonnes, valued at $2.3 billion. This is the fourth straight month of liquidation in the gold market.
"Overall, global gold y-t-d flows were -US$4.9bn at end of July, a cumulative reduction of 84t in holdings," the analysts said in the report.
However, due to resilient prices, assets under management actually increased by 2% to $215 billion.
Looking at a regional breakdown in outflows, European listed funds were slightly weaker compared to North American markets. The report said that 18.5 tonnes of gold valued at $1.31 million flowed out of Europe; meanwhile, North American listed products saw their holding decline by 16.3 tonnes or nearly $986 million.
The analysts said that central bank monetary policies from the Federal Reserve and European Central Banks continue to dominate investment demand in the gold market. However, they noted that the Federal Reserve is expected to be nearing the end of its tightening cycle, providing some support for gold. Read More
China buys 23 tonnes of gold in July, analysts say PBOC is just getting started
China continues to put the world on notice that it intends to challenge the U.S. dollar's role as a reserve currency after the nation's central bank bought more gold in July, pushing its current shopping spree to nine consecutive months.
Krishan Gopaul, senior analyst at the World Gold Council, reported on social media that the People's Bank of China bought 23 tonnes of gold last month. Gopaul noted that so far this year, China has purchased 126 tonnes of gold, increasing its official reserves to 2,136 tonnes.
China's ongoing gold purchases have put renewed focus on the growing de-dollarization trend as nations around the world reduce their exposure to the U.S. dollar. Although China has become a leading buyer in the precious metal market, some analysts say that the central bank is just getting started.
"When you buy gold, it's a direct vote against the U.S. dollar," said Willem Middelkoop, creator of the Commodity Discovery Fund. "China is sending a message to the White House that they don't support the global financial system backed by the U.S. dollar."
Thorsten Polleit, chief economist at Degussa, said he also sees China's sustained gold purchases as a vote of no-confidence in the greenback. Read More
Russia restarts gold and currency purchases with $19 million per day starting this week
Russia’s finance ministry announced late last week that it would start buying currencies and gold again in August after 18 months of selling or sitting on the sidelines as Moscow looks to profit from recent high oil prices, according to a report from Reuters.
Russia ended a nearly one-year-long pause in their foreign exchange interventions in January when they began selling their yuan reserves under a budgetary mechanism designed to insulate the country’s economy from the volatility of commodity markets. FX purchases were halted in late January 2022, and the program was suspended after the invasion of Ukraine the following month.
As the bulk of Russia’s currency reserves were frozen by U.S. and European sanctions, the yuan is the main asset Russia still has available for these operations. Approximately one-third of Russia’s budget revenues come from its oil and gas industry.
The finance ministry said it planned to buy 1.8 billion roubles, or $19.27 million worth of foreign currency, each day from Aug. 7 to Sept. 6, with FX purchases totalling 40.5 billion roubles ($3.78 billion). It did not share a specific target for its gold purchases. Read More
Gold price to rise as investors lose faith in U.S. dollar - Commodity Discovery Fund's Willem Middelkoop
Gold prices continue to cling to support around $1,950 an ounce as it struggles to attract bullish investor attention; however, one market strategist said that the precious metal remains well positioned to take advantage of the U.S. dollar's waning reserve currency status.
In an interview with Kitco News, Willem Middelkoop, creator and chief investment officer of Commodity Discovery Fund, said that last week's announcement from Fitch Ratings downgrading U.S. debt could be the spark that ignites a bigger fire in global financial markets.
Middelkoop added that the recent volatility in the bond market as yields on 10-year notes hold around 4% is a strong sign that investors are losing faith in the U.S. dollar. Read More
U.S. Mint, Perth Mint see lackluster demand for gold, U.S. silver demand picks up
July was a difficult month for the gold market as both the U.S. Mint and the Perth Mint reported weak bullion sales.
According to data from the U.S. Mint, it sold 41,000 ounces in various denominations of American Eagle gold coins. Bullion demand was down 3.5% from June, and down 36% from July 2022.
U.S. Mint sales have dropped to their lowest levels since November and December, when the mint halted its sales to shift production to 2023 minted coins.
The demand picture wasn’t any better on the other side of the world. In its sales report, the Perth Mint said it sold 44,009 troy ounces of gold. Sales were down 39% from June and down 41% from last year.
“Our distributors reported softening demand in June and this trend continued into July,” said Neil Vance, general manager of minted products at the Perth Mint. “But they are reluctant to pin the reason on any particular factor at present.”
According to some analysts, the gold market continues to struggle as the Federal Reserve maintains its aggressive tightening cycle. At the same time, some analysts have said that rising gold prices are keeping some investors out of the marketplace until there is a more definitive answer on the direction of U.S. interest rates. Read More
Gold, silver weaker on more weak China data, technical selling
Gold and silver prices are down in midday U.S. trading Wednesday, with both metals dropping to four-week lows. The precious metals are pressured by another economic report out of China that suggests less consumer demand for goods and services, which includes metals. Chart-based selling is also featured at mid-week, as the near-term technical postures for gold and silver have turned more bearish. December gold was last down $7.80 at $1,952.10 and September silver was down $0.057 at $22.75.
Technically, December gold futures prices hit a four-week low today. Bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,939.20. First resistance is seen at today’s high of $1,966.10 and then at Tuesday’s high of $1,972.80. First support is seen at $1,950.00 and then at $1,939.20. Wyckoff's Market Rating: 4.0.
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September silver futures prices also hit a four-week low today. The silver bears have the overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Silver Bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the June low of $22.34. First resistance is seen at $23.00 and then at Tuesday’s high of $23.255. Next support is seen at $22.50 and then at $22.34. Wyckoff's Market Rating: 4.0. 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.
