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Silver Price News: Silver Stabilises Ready for Next Upward Move as Obstacles Clear
After the sharp price gains of recent weeks, silver is currently trading sideways around $25.50 an ounce as the markets await today’s release of the latest US inflation data.
Silver has enjoyed a strong couple of months first on the precious metal’s haven appeal during the US banking crisis and then further supported by the expectation that the Federal Reserve’s hiking cycle has come to an end. Having briefly topped $26 an ounce earlier this month, the question investors are asking is whether silver has sufficient bullish factors to drive it upwards once again and first challenge last year’s high and even push on up towards $30 an ounce.
Assuming today’s CPI release confirms that inflation is starting to return to more comfortable levels, this should help to start rebuilding confidence in an equities market that has endured a difficult 2023 so far. Read More
Gold price should be at $2,200 right now, U.S. dollar is overvalued by 20%, says BCA Research
Models suggest that gold should be trading at $2,200 an ounce right now, with the U.S. dollar overvalued by around 20%, according to BCA Research.
Gold is one of the best perming assets in 2023 for a reason. The macro outlook and investor demand support higher prices, BCA Research's chief FX strategist Chester Ntonifor told Kitco News.
Gold is up nearly 12% year-to-day, with spot prices last trading at $2,044.10 an ounce.
BCA Research sees gold climbing to the $2,200 level within the next nine to 16 months. This is already where gold should be based on the strategist's models.
Gold's primary driver is the U.S. dollar, which has been weak. And even though Ntonifor sees the global de-dollarization trend as somewhat exaggerated, he views the greenback as overvalued by around 20%.
"The U.S. dollar used to be about 70% of global reserves in early 2000. Right now, it moved down to 60%. Gold's share increased from 6% in 2015 to 10%," Ntonifor said. "The de-dollarization is not something imminent. The IMF data show transactions in U.S. dollars increasing around the world."
However, looking further down the road, the U.S. dollar will be heading lower due to fundamental factors. Read More
Gold to outperform silver this year as recession risks build, says Bloomberg Intelligence
Gold is looking to outperform other commodities, including silver, platinum and palladium this year as U.S. recession risks rise, said Bloomberg Intelligence in its May outlook.
The yellow metal will accelerate its rally in the second half of this year, taking the gold-silver ratio higher. Currently, the gold-silver ratio is around 80, which means it takes 80 ounces of silver to buy one ounce of gold. At its peak in March 2020, the gold-silver ratio was around 124. The higher the ratio, the more expensive gold is compared to silver.
"The price of gold has had a propensity to outpace silver since Isaac Newton adopted the gold standard in 1717 as master of Great Britain's Royal Mint, and may accelerate in 2H. At about 80 ounces of silver per gold, the cross rate is roughly the same as the financial crisis high and well below the 124-ounce peak from March 2020," said Bloomberg Intelligence senior macro strategist Mike McGlone.
As the U.S. enters into a recession, that ratio is heading to its all-time highs, with the 80-range acting as the floor, McGlone noted.
"As the U.S. leans into a recession, the ratio is more likely to head toward the all-time high and may be forming a foundation around 80. If consensus for a soft landing turns out to be more of a bust worthy of the liquidity-fueled boom to the 2022 stock market peak, gold appears more inclined to extend to new highs vs. silver," he wrote. Read More
Gold, silver sell off on profit taking; US PPI now in focus
Gold and silver prices are lower at midday Wednesday and have erased the modest gains seen in the immediate aftermath of a U.S. inflation report that was close to market expectations. Profit taking from the speculative futures traders is featured in both markets. June gold was last down $11.00 at $2,031.90 and July silver was down $0.343 at $25.555.
The U.S. data point of the week saw the April consumer price index come in at up 0.4% from March and up 4.9%, year-on-year. The CPI was expected to come in at up 0.4% from March and up 5.0%, year-on-year. CPI in March was up 5.0%, year-on-year. The April core CPI (excluding food and energy) was up 0.4% from March and up 5.5%, year-on-year, versus the forecast of up 5.5% and compares to up 5.6% in the March report. In the immediate aftermath of the CPI report the marketplace breathed a sigh of relief the inflation numbers did not come in hotter than expected. However, after digesting the data, overall, traders and investors reckoned the CPI data is a wash and probably does not alter the Federal Reserve's trajectory of its monetary policy. The marketplace is now focused on Thursday morning's U.S. producer price index report.
Technically, June gold futures bulls still have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the record high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at today's high of $2,056.00 and then at $2,063.40. First support is seen at this week's low of $2,022.00 and then at $2,007.00. Wyckoff's Market Rating: 7.5.
Image Source: Kitco News
July silver futures prices were scoring a bearish "outside day" down. The silver bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $26.00 and then at the April high of $26.435. Next support is seen at today's low of $25.455 and then at $25.25. Wyckoff's Market Rating: 7.5. Read More
Image Source: Kitco News
Wall Street tells Washington: Consequences of U.S. default or prolonged debt debate are 'unquantifiable'
Wall Street leaders addressed the debt ceiling issue, urging Washington to resolve the crisis as soon as possible, adding that the consequences of a U.S. default or a prolonged negotiation would be "unquantifiable."
"The short-term impacts of a protracted negotiation are costly; the long-term implications of a default are unthinkable," current and former leaders of the Treasury Borrowing Advisory Committee said in a letter addressed to U.S. Treasury Secretary Janet Yellen. "The magnitude of adverse consequences from a prolonged negotiation, or a default, is unquantifiable."
The group includes Goldman Sachs executives Beth Hammack and Ashok Varadhan, former JPMorgan COO Matt Zames, and Citigroup co-head of Global Rates Deirdre Dunn.
The current stalemate could also undermine the foundation of the U.S. Treasury bond market, they said in the letter.
"A protracted standoff over the debt limit will dramatically increase taxpayer costs and exacerbate market stress. Further, any delay in making an interest or principal payment by Treasury would be an event of seismic proportions, not only for financial markets but also the real economy," they said. Read More
Kamikaze Fed - Silver ejector seat - Time to bail out!
In this week’s Live from the Vault, Andrew Maguire reveals the truth about sanctioned “too big to fail” bank bailouts and the effects of Basel III, explaining how they are connected to the global de-dollarisation and silver outperforming gold.
From new reports to the possible expansion of BRICS, the precious metals expert lists some of the biggest catalysts driving a bullish quarter for silver, identifying key obstacles to overcome - and the possible counteroffensive from the Elites.
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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.
