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Gold Above $1,930 But Medium-Term Prospects Bleak
Gold is perking back up towards $1,930 an ounce as a slightly weaker US dollar has enabled gold to recover some of its recent losses.
Economic fears are receding, with the odds of a recession on the S&P 500 Index now only at 22% compared with a 98% chance back in October 2022, according to JP Morgan. Given that one of gold’s primary roles is as a safe haven asset to protect investors at times of economic downturns, the medium-term prospects for gold if the US economy does manage to avoid a recession look more challenging.
For the short-term at least gold is managing to hold up with brief upsurges like today mixed in among a broader downward trend that will likely see gold ultimately fall below $1,900 an ounce in the coming weeks. Read More
Weaker Dollar Stems Silver’s Slide to Hold Price Above $23
Silver is starting a new trading week just above $23 an ounce as a slight weakening in the US dollar has enabled the metal to recover a fraction of the ground it has lost so far in September.
In contrast to its precious metal peer, gold, the medium-term prospects for silver look promising as the likelihood of a recession, particularly in the US, continues to fade with each economic data point defying investor pessimism.
While silver does have safe haven appeal, the industrial element to its demand profile means that a healthy US economy is going to have a more significant bearing on the metal’s long-term prospects. Read More
Gold-backed BRICS currency prospects weaken ahead of G20 summit as China-India rift widens
The deteriorating relationship between the world’s two most populous countries is threatening to set back the BRICS currency project and undermine the bloc’s de-dollarization goals.
As Indian Prime Minister Narendra Modi prepares to host world leaders at the G20 summit in New Delhi this weekend, relations with China, which have been tense for some time, appear to have deteriorated further. Earlier this week, China announced that President Xi Jinping would not be attending the G20 and would instead send Premier Li Qiang in his place. This is the first G20 that Xi has skipped since he came to power in 2013, and no explanation for his absence was given.
The rift between the two Asian giants was also evident at the recent BRICS summit in Johannesburg, South Africa. Xi and Modi did their best to project a unified front, but after Chinese and Indian diplomats held discussions about their disputed border region, which saw an outbreak of conflict in 2020, each country gave conflicting statements about who called for the meetings, and what was agreed. The result was a diplomatic snafu at the highest levels. Read More
Gold, silver need to see new bullish interest from hedge funds
Hedge funds continue to reduce their bearish bets in gold; however, analysts note that bullish sentiment needs to improve if gold prices have a chance to break initial resistance above $1,980 an ounce, according to the latest data from the Commodity Futures Trading Commission.
The CFTC's disaggregated Commitments of Traders report for the week ending Aug. 29 showed money managers decreased their speculative gross long positions in Comex gold futures by 387 contracts to 120,222. At the same time, short positions fell by 11,510 contracts to 69,857.
Many analysts have noted that gold and silver are caught in a neutral trading range as the sector continues to be dominated by rising bond yields and solid strength in the U.S. dollar.
“Investors are net long ~$30bn worth of Precious Metals, but this is slap bang within the recent $20-$40bn range, essentially very neutral and mimicking the aggregate consolidation of price action in the space,” said Nickey Shiels head of metals strategy at MKS PAMP, in a note.
According to updated positioning, the gold market is now net long 50,365 contracts, up only slightly from the previous week’s increase, which was driven by a sizeable short squeeze. Despite the continued short covering, gold prices were unable to break resistance at $1,980 an ounce, with prices falling to support around $1,950 an ounce within the survey period. Read More
Gold, silver firmer ahead of key U.S. inflation report
Gold and silver prices are modestly up in quieter midday U.S. trading Monday. A solidly lower U.S. dollar index is a supportive outside market element for the metals on this day. Short covering in the gold and silver futures markets is also featured ahead of a key U.S. inflation report on Wednesday. December gold was last up $5.10 at $1,947.80 and December silver was up $0.206 at $23.38.
Traders and investors are waiting for the next major U.S. data point, which is the consumer price index report for August out Wednesday morning. The CPI is expected to be up 4.3%, year-on-year, versus a 4.7% rise in the July report.
The European Central Bank also holds its regular monetary policy meeting this week and is expected to slightly raise its main interest rate by 0.25 percent.
Technically, December gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the September high of $1,980.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at today’s high of $1,954.60 and then at $1,965.00. First support is seen at $1,939.00 and then at $1,925.00. Wyckoff's Market Rating: 3.5.
Image Source: Kitco News
December silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $24.655. The next downside price objective for the bears is closing prices below solid support at the August low of $22.585. First resistance is seen at today’s high of $23.515 and then at $24.00. Next support is seen at the September low of $23.13 and then at $23.00 Wyckoff's Market Rating: 3.5. Read More
Image Source: Kitco News
Gold price to hit $5,000 in 3 years, watch the default wave kick off a U.S. recession in Q4 - Michael Lee
Even though the gold market lacks direction ahead of the Federal Reserve's September monetary policy meeting, prices will make a move and hit $5,000 an ounce within three years, according to Michael Lee, Founder of Michael Lee Strategy.
The stagnation in the price action is partly because of the strength of the U.S. dollar and the market's interest rate expectations. But the macro data the market is basing its estimates on looks manipulated or flawed by design, according to Lee.
"For a lot of the United States, they're already in recession," he told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "You've already seen some massive deterioration in the labor market, although it's not certainly not being reported that way."
Lee broke down the U.S. jobs data releases from this year, pointing to a 12 standard deviation event, which is known as an extreme statistical outlier. Read More
Live From The Vault - Episode: 139
Russia Driving the Multi-Trillion Gold Runaway Train
In this week’s episode of Live from the Vault, Andrew Maguire uncovers just how close the Federal Reserve - the only central bank short on gold - has come to completely losing control over its ability to manipulate gold.
The precious metals expert then shifts gears to reveal Russia’s behind the scenes action ahead of chairing BRICS, explaining how gold barter is a potential multi-trillion dollar trade that could see price-setting change hands from West to East.
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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.
