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Gold Price News: Investors are betting on gold despite rising rates
The gold price remains above $1,900, around $62 per gram, while markets await the US inflation data that will be released on Wednesday. So far, bullion has been resilient to rising rates and the recent hawkish rhetoric of central banks. Investors continue to buy gold, and there is now a solid support zone at $1,890 – 1,900 per ounce.
Focusing our attention on the recent macroeconomic data, the US Bureau of Labor Statistics last Friday released the non-farm payrolls for June and – for the first time since April 2022 – the data missed expectations. Analysts had forecast growth of between 225k and 230k job places, while the official data were lower by almost 10% (precisely at 209k). Moreover, previous months’ figures were revised: May numbers were cut from 339k to 306k, while April data was down from 294k to 217k (-77k).
Despite this, expectations for the Federal Reserve’s decision on rates in its next meeting have remained unchanged. Read More
Silver Price News: Silver holds above $23 as markets await US inflation data
Silver gained around 2% last week, returning above $23 per ounce. Analysing the charts, we can see that the price declined on Thursday, but the fall was recovered entirely on Friday, confirming investors’ interest in the precious metal.
From a technical perspective, silver has found a solid support zone at $22, rebounding by around 6% in the last two weeks, after the bearish mode seen in May and partially also in June. A clear recovery and surpass of the resistance zones at $24 and $24.3 could reverse the trend, opening space for further recovery.
After the US non-farm payrolls were released below expectations on Friday, investors will focus on the US CPI. The figures will be published on Wednesday and are expected to decline further to 3.1% (from the previous 4.0%). After this, we will have the next Federal Reserve board meeting in two weeks, with the FOMC expected to put in place a final rate hike from the current 5.25% to 5.50%. Read More
This catapults gold to $2,500 and then $5,000 by 2026 - Midas Touch Consulting's Florian Grummes
Gold has been gearing up for its breakout to $2,500 for the past 12 years, and it must now break the final resistance level to open up its "phenomenal" upside, according to Florian Grummes, Managing Director at Midas Touch Consulting.
"Since 2011, gold has been in some form of consolidation pattern," Grummes said. "All it takes for gold is to break through this $2,070 level ... From $1,920, gold can rally $600 in the next six to eight months easily."
The key question for the market is when gold will breach the $2,070 an ounce, Grummes told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.
This could take anywhere between a few months to a year. "But it will catapult gold much higher over the next two to three years," Grummes noted.
From a technical perspective, gold can reach $2,500 an ounce quickly and then advance to $3,500 and $5,000. "This formation has been 12 years in the making … The upside is phenomenal," Grummes said.
On the downside, Grummes does not see gold falling much below $1,800 an ounce, adding that a move to the downside would not be larger than $50 is the most likely outcome. Read More
Gold, silver weaker in lazy summertime trading
Gold and silver prices are slightly lower in midday U.S. trading Monday. It’s quieter and uneventful action in the marketplace to start the trading week. That’s allowing the chart-based traders to dictate price action, and the gold and silver technicals remain overall near-term bearish. However, it’s an active week for U.S. economic reports, including key U.S. inflation data later this week. August gold was last down $3.60 at $1,928.90 and September silver was down $0.034 at $23.245.
Technically, August gold futures bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today’s high of $1,933.70 and then at last week’s high of $1,942.90. First support is seen at today’s low of $1,918.00 and then at last week’s low of $1,908.50. Wyckoff's Market Rating: 4.0.
Image Source: Kitco News
September silver futures bears have the overall near-term technical advantage. A choppy, nine-week-old price downtrend is in place 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 the March low of $20.425. First resistance is seen at last week’s high of $23.535 and then at $23.75. Next support is seen at $23.00 and then at last week’s low of $22.72. Wyckoff's Market Rating: 4.0. Read More
Image Source: Kitco News
BRICS' next move: A return to a gold standard?
The influence of the BRICS countries – Brazil, Russia, India, China, and South Arica – should not be underestimated, especially when it comes to the threat it poses to the U.S. dollar as the world's reserve currency, according to Simon Hunt, founder of Simon Hunt Strategic Services.
"The involvement of BRICS has been a deliberate, slow movement … now I think they are in a position to make the next step upwards," Hunt told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "It's a very serious attack on the dollar world that has existed since World War II."
The next step for the BRICS countries could be the introduction of a new gold-backed currency, Hunt pointed out.
The BRICS' upcoming August summit in South Africa is being closely watched for any clues as to what this new currency will look like and how soon it can be introduced.
And that announcement and launch could be just around the corner, Hunt said. "In the mid-2020s, which is only a few years away, it will be convertible into gold," he noted. "I think we will eventually see [a full-on return to the gold standard]. That will probably happen before 2030 by countries who are now and will be members of BRICS+." Read More
Gold prices can still push to record highs at $2,100 an ounce by the end of the year - MKS' Shiels
Gold prices have room to move lower and retest support below $1,900 an ounce in the early part of the second half of the year; however, that doesn't mean investors should give up on gold, according to one market analyst.
In her mid-year outlook, published last week, Nicky Shiels, metals strategist at MKS PAMP, said that she is maintaining her 2023 year-end price average of $1,930 an ounce, even as prices could remain in a downtrend in the near term.
In what could be a volatile market, MKS sees gold prices trading in a range between $1,850 and $2,100 an ounce through the second half of the year.
"Stay core long Gold but remain tactically nimble, which hinges on the interplay between a relatively restrictive Fed & stronger US data," Shiels said in her latest report.
Shiels warned investors that gold could continue to struggle during the rest of the summer as the Federal Reserve looks to raise interest rates later this month. However, she added that there is a chance gold can still see record all-time highs by the end of the year.
"We do expect a bumpy 2H'23 as monetary policy starts to bite; Gold prices are then expected to print a new all-time-high in 2H'23 and pierce $2100/oz," said Shiels. "Our conviction lies in higher floors versus runaway upside repricing unless the Fed loses the inflation fight (not our base case) or breaks something more substantial in the economy." Read More
Live From The Vault - Episode:130
Is it time to start hedging against black swan events? Feat. Danielle DiMartino Booth
In this week’s episode of Live from the Vault, Andrew Maguire is joined by Danielle DiMartino Booth, financial author and founder of QI Research, to address UK and US policy-making, before turning their attention to the wider geopolitical arena.
The two industry experts contrast the Federal Reserve’s stance on gold as an asset class with that of global central banks and investigate who benefits from the conflict in Ukraine and escalating tensions between Taiwan and China.
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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.
