x
Image Source: Unsplash
Gold Consolidates As Middle East Conflict Boosts Haven Appeal
Once again, gold has confirmed its key role as a safe haven amid market uncertainty.
Growing geopolitical concerns from escalating tensions in Israel and Gaza increased investors’ demand for bullion and pushed the price higher. In the last few days, gold has been supported by doveish remarks from Federal Reserve key speakers, after months of hawkish rhetoric and rate hikes.
The temporary weakness of the greenback and the decline of yields are also supportive factors for gold. As a result, yesterday we saw the precious metal extending its gains and consolidating above the support zone of $1,850.
For the time being, the next key resistance zone, at $1,890, remains relatively far away, with the gold price currently steady around $1,860. Although from a technical perspective, the scenario has improved. Read More
Silver Price News: Dollar Wavers As Silver Holds onto Prior Gains
The declining volatility in the silver markets yesterday brings positive news. The silver price remained flat in the range of $21.65-21.9, confirming the recovery posted earlier this week when silver jumped from the 7-month low of $20.7 to the current levels.
Although the tensions in the Middle East are adding uncertainty to the geopolitical and economic scenario, silver has managed to rebound and hold on to the gains. From a technical point of view, a clear break above $22 would represent another positive signal, opening the way to the next resistance zone of $22.2 and $22.5.
In the last few days, the dollar dip – after the recent rally – and a modest decline in yields have been supportive of the grey metal. Add to this, investors believe a peak in US interest rates is now closer than ever.
That said, silver still has plenty of obstacles. An economic slowdown could increase fears of declining industrial demand, which accounts for around 50% of the total silver global demand. Read More
Silver eyes breakout, buoyed by safe-haven bid and dovish Fed speak - FX Empire's Hyerczyck
The safe-haven bid driven by the Israel-Hamas conflict and dovish comments from Federal Reserve officials are combining to support silver prices, which could soon breach key levels and spark a breakout, according to James Hyerczyck, Senior Market Strategist at FX Empire.
“On Wednesday, spot silver (XAG/USD) is holding its ground at $21.88 per ounce,” noted Hyerczyck. “This balance is influenced by contrasting winds: dovish undertones from Federal Reserve officials have weakened the dollar, while geopolitical tensions involving Israel and Hamas are driving investors toward safe-haven assets like silver.”
Hyerczyck said that expectations for further rate hikes from the U.S. central bank have waned, driven in part by dovish commentary from the Fed itself. “[R]ecent comments from Fed officials are sparking a debate on the necessity and timing of further hikes,” he wrote. “Minneapolis Fed President Neel Kashkari and Atlanta Fed President Raphael Bostic have cast doubts on the urgency for additional hikes.”
This dovish outlook appears to be a “growing sentiment” among top Fed officials, Hyerczyck said, and the statements “have resulted in a weaker dollar, indirectly boosting the appeal of silver for investors.” Read More
Paul Tudor Jones says he 'likes gold and Bitcoin' as the U.S. heads towards a recession
Amid the rise in geopolitical conflicts, economic uncertainty, and persistently high inflation, hedge fund billionaire Paul Tudor Jones says that Bitcoin (BTC) and gold are becoming more attractive as safe havens for wealth in troubling times.
Jones made the comments during an interview on CNBC’s “Squawk Box” on Tuesday, saying he “would love gold and Bitcoin together” as a hedge against geopolitical uncertainty.
“I think they probably take on a larger percentage of your portfolio than historically they would because we’re going to go through both a challenging political time here in the United States, and we’re going to go through – we’ve obviously got a geopolitical situation,” he said.
Host Andrew Ross Sorkin questioned this premise, saying it was his understanding that high interest rates “were supposed to be the thing that was actually going to be unhelpful to Bitcoin.”
“I think, on a relative basis, look what’s happened to gold. Clearly, it’s suppressed,” Jones said. “So, you know that more likely than not, we’re going to go into a recession. There’s some pretty clear-cut recession trades.” Read More
Gold, silver up as modest safe-haven buying continues
Gold and silver prices are firmer in midday U.S. trading Wednesday, on more safe-haven demand amid the Israel-Hamas war that could escalate in the near term. Notions of continued pause in Federal Reserve interest rate increases are also a bullish element for the metals markets. December gold was last up $8.00 at $1,883.50 and December silver was up $0.182 at $22.125.
Risk appetite is not robust in the marketplace at mid-week, amid the Israeli-Hamas war that may well escalate in the coming weeks. However, the stock markets have not been seriously roiled, at least not yet. An explanation for this from one veteran market analyst: The Middle East has been turbulent for generations. While the weekend violence in Israel ranks among the worst in the region and is a terrible human tragedy, it is not something new. Traders and investors have had to deal with Middle East instability and violence for decades. Also, as I reported Tuesday, at present the marketplace is apparently not factoring in a serious escalation in the Israel-Hamas war—namely other countries becoming significantly involved.
Traders and investors have also been somewhat assuaged this week by comments from some Federal Reserve officials that sounded less hawkish. Reads a Wall Street Journal headline today: “High bond yields likely to extend Fed's pause.”
Technically, December gold futures see very early clues that a market bottom is in place. However, the bears still have the firm overall near-term technical advantage. A five-month-old price downtrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. 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 $1,888.60 and then at $1,900.00. First support is seen at today's low of $1,871.70 and then at this week's low of $1,857.50. Wyckoff's Market Rating: 3.0.
Image Source: Kitco News
December silver futures bears have the overall near-term technical advantage. A 2.5-month-old downtrend is still in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at the March low of $20.615. First resistance is seen at today's high of $22.275 and then at $22.50. Next support is seen at this week's low of $21.705 and then at $21.50. Wyckoff's Market Rating: 3.0. Read More
Image Source: Kitco News
The next 'challenge': Who will be buying U.S. debt? - Lyn Alden
With the bond market rout witnessing a surge in the U.S. Treasury yields to 16-year highs, is there enough demand for U.S. government debt? Lyn Alden, Founder of Lyn Alden Investment Strategy, breaks down a number of critical risks connected to the turbulence in the bond market.
The yield on the 10-year Treasury note hit a 16-year high last week, climbing to 4.884%. In the meantime, the 30-year Treasury bond yield crossed above 5% – something also not seen since 2007.
The combination of the U.S. dollar, U.S. Treasury yields, and oil rising at the same time is concerning, Alden told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, on the sidelines of Pacific Bitcoin Festival in Santa Monica, California.
This trifecta of events puts a lot of pressure on developing countries and lowers global demand for U.S. Treasuries and U.S. government debt instruments.
"Developing countries have dollar-dominated debt. And that debt is hardening relative to their cash flows," Alden said. "Their own currencies are weakening versus the dollar while oil is strong. And ironically, there's an inverse relationship between the dollar and Treasury yields." Read More
Gold prices holding near one-week high as FOMC minutes support 'higher for longer' interest rates
The gold market is holding solid gains even as the minutes of the Federal Reserve's September monetary policy meeting show that the central bank is committed to maintaining a "higher for longer" monetary policy stance.
Although the Federal Reserve is nearing the end of its tightening cycle, the minutes showed that the committee continues to support elevated interest rates until it is confident that inflation is falling back to the 2% target.
"All participants agreed that policy should remain restrictive for some time until the Committee is confident that inflation is moving down sustainably toward its objective," the minutes said. "Several participants commented that, with the policy rate likely at or near its peak, the focus of monetary policy decisions and communications should shift from how high to raise the policy rate to how long to hold the policy rate at restrictive levels."
The gold market is not seeing much reaction to the latest minutes. December gold futures last traded at $1,885.50 an ounce, up 0.54% on the day.
The gold market continues to be well-supported due to renewed safe-haven demand as investors remained focused on the growing chaos in the Middle East - Read More
Early September data show central bank gold demand remains strong - WGC's Gopaul
While the definitive IMF data has yet to be released, the early returns on gold purchases by central banks show that buying was as strong as ever in September, according to Krishan Gopaul, senior analyst at the World Gold Council.
Gopaul shared the latest data in a series of posts on Twitter, which were gleaned from reports and media statements by the central banks themselves. The largest single purchaser last month remained China, which maintained its record-setting pace of precious metals buying.
“Data from the People's Bank of China shows they bought gold again in September,” Gopaul wrote. “Gold reserves rose by 26t, lifting their reported 2023 buying to 181t.” Read More
Gold posts solid gains on geopolitical unrest, lower dollar, and dovish Fed minutes
As of 4:20 PM EDT gold futures basis the most active December contract is up $12.20 and is fixed at $1887.50. Gold opened at $1873.70 and traded to a high of $1890.90, and a low of $1871.70. The result of gold opening near the low and closing near its high while posting a solid gain created a large green candlestick.
Gold was supported by multiple factors. The release of last month’s FOMC minutes today indicated that many Federal Reserve members share a cautious stance regarding rate hikes and continued tightening because of the uncertainty about the economic outlook. Analysts and economists are projecting that the release of the latest inflation data, the CPI which will be released tomorrow will indicate that inflationary pressures will continue to decline. This would lessen the pressure on the Federal Reserve to initiate any more interest rate hikes this year. 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.
