Today's Gold and Silver News - 12th August

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U.S. producer price acceleration slows in July, gold price off its daily highs

Gold ticked down but was largely unchanged after the U.S. Producer Price Index (PPI) rose more slowly in July, coming in at 9.8% on an annual basis versus the expected 10.4%.

On a monthly basis, the PPI fell 0.5% in July after June’s 1% advance. Core PPI, which strips out volatile food and energy prices, rose 0.2% month-on-month after June’s gain of 0.3%. And the annual core PPI advanced 9.8% after June’s acceleration to 11.3%. 

Market participants pay close attention to the PPI as a gauge for inflation at the wholesale level. It is seen as a leading indicator because, traditionally, producers pass on higher prices to their customers.

The Federal Reserve is also keeping a very close eye on all the latest inflation metrics at the moment as it weighs the aggressiveness of its upcoming September rate hike.

So far, the Fed has responded that slightly cooler inflation numbers are not enough for the Fed to pivot from its tightening cycle. Minneapolis Fed President Neel Kashkari said Wednesday that he sees the U.S. central bank’s benchmark rate at 3.9% at the end of this year and 4.4% by the end of next year. “I haven’t seen anything that changes that,” Kashkari said.

Chicago Fed President Charles Evans also spoke Wednesday, stating that inflation was still “unacceptably” high, and the Fed will go on tightening for the rest of this year and into next, reaching 3.75%-4% by the end of 2023.

Gold edged down following the data release, with December Comex gold futures last trading at $1,810.30, down 0.19% on the day. Prior to the PPI’s publication, December futures were at a daily high of $1,814 an ounce. Read More

U.S. weekly jobless claims rise to 262,000, gold price flat on the day

The initial weekly jobless claims rose by 14,000 to 262,000 in the week to Saturday, slightly more than markets were expecting.

Economists’ consensus calls projected initial claims to come in at 263,000 following the revised level of 248,000 reported in the previous week.

The four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – increased to 252,000. Last week’s four-week moving average was revised down to 247,500, the U.S. Labor Department said on Thursday.

Continuing jobless claims, which represent the number of people already receiving benefits, were at 1,428,000 during the week ending July 30, an increase of 8,000 from the previous week’s revised level of 1,420,000.

The four-week moving average rose to 1,399,250, an increase of 23,750. And the previous week’s four-week moving average was revised up by 250 to 1,375,500.

Traders watch the jobless claims data very closely to gauge its impact on the Federal Reserve’s employment side of the monetary policy mandate.

Gold ticked down but was largely unchanged following the data release. December Comex gold futures were last trading at $1,810.50, down 0.18% on the day. Read More

A Worse Financial Crisis than 2008? Peter Schiff forecasts sustained and higher inflation, followed by an implosion of the U.S. dollar

Despite a month-long streak of rallies for U.S. stocks, a financial crisis worse than 2008 is looming, said Peter Schiff, Chief Market Strategist at Euro Pacific Asset Management.

Schiff spoke with David Lin, Anchor and Producer at Kitco News. Read More

Gold, silver lower amid better risk appetite, rising bond yields

Gold and silver prices are moderately down in midday U.S. trading Thursday, on some pressure from an uptick in trader and investors risk appetite late this week following some U.S. inflation data that was a bit tamer than expected. Rising U.S. Treasury bond yields today are also a negative for the metals. October gold futures were last down $9.10 at $1,794.10. September Comex silver futures were last down $0.437 at $20.30 an ounce.

Today’s U.S. producer price index report for July came in down 0.5%, compared to forecasts of up 0.2% from June and compares to the June PPI report’s rise of 1.1% from May. Year-on-year the July PPI was up 9.8%, which is still hot. On Wednesday the U.S. consumer price index report for July that came in unchanged from June and up 8.5% year-on-year. This week’s U.S. inflation data is prompting some early speculation in the marketplace that inflationary pressures may have peaked and will trend down in the coming months. That has likely somewhat boosted U.S. consumer confidence and boosted the U.S. stock market. Global stock markets were mostly flat overnight. U.S. stock indexes are firmer at midday.

Technically, October gold futures bears have the overall near-term technical advantage. However, a fledgling price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,804.30 and then at this week’s high of 1,814.40. First support is seen at today’s low of $1,788.50 and then at this week’s low of $1,776.20. Wyckoff's Market Rating: 4.0.

Image Source: Kitco News

September silver futures bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at this week’s high of $20.83 and then at $21.00. Next support is seen at today’s low of $20.19 and then at $20.00. Wyckoff's Market Rating: 4.0. Read More

Image Source: Kitco News

Ex-JPMorgan gold traders convicted after 1-month long spoofing trial

Two out of three former JPMorgan Chase & Co employees were convicted by a federal jury in Chicago after being charged with manipulating gold prices for years. The jury found the traders used spoofing to rig prices.

After a three-week trial and an eight-day deliberation, the jury came out with a guilty verdict for JPMorgan's former top gold trader Gregg Smith and the bank's former head of the precious-metals desk Michael Nowak. The conviction included charges of price manipulation, spoofing, and wire fraud. Smith was convicted on 11 charges, and Nowak was convicted on 13 charges.

Jeffrey Ruffo, the bank's former executive director specializing in hedge fund sales, was acquitted. All three defendants pleaded not guilty.

Prosecutors on the case accused the three of manipulating and rigging gold prices for eight years between 2008 and 2016.

"They had the power to move the market, the power to manipulate the worldwide price of gold," Bloomberg quoted prosecutor Avi Perry as saying during closing arguments.

Spoofing is a tactic of manipulating the gold market by making bids and cancelling them before execution while also placing orders on the opposite side. The misleading orders confuse the market's supply and demand dynamics, which leads to gold price changes. Spoofing has been outlawed since 2010 following Congress passing the Dodd-Frank Act after the financial crisis. Read More

Silver Shows Strength of Support at $20 as Markets Assess True State of Global Economy

Silver is still trading above $20 an ounce with the volatility that the precious metal can be prone to experiencing has calmed for the time being as investors assess what the dominant factor is.

Figures out earlier in the week increased optimism that inflation may have peaked in the US, giving broader markets a boost as well as reining in expectations of how aggressive the Federal Reserve will need to be on future interest rate moves to bring inflation back to its 2% target.

Silver’s complex mix of potential roles as a haven asset, an industrial metal and a store of value over time has left it largely standing still. If the global economy is headed for recession then that will crimp industrial demand, a potential negative for silver, yet equally a recession may see investors return to the traditional haven assets such as silver.

For now, silver investors will be grateful to see the strength of support that there clearly now is for the precious metal with $20 an ounce an important support level. How much higher it can climb will be largely dependent on how aggressive the Fed’s future rate hikes prove to be as there remains a lot of upward potential for silver if you consider where it was trading just a few months ago. Read More

Gold Holds Onto Week’s Gains on Hopes That Future Fed Hikes Will Be Less Aggressive

Gold is ending the week by holding onto much of its recent gains as the recent US inflation data that pointed to the pace of rising consumer prices having peaked, raising the prospect of the Federal Reserve needing to be less aggressive with future interest rate hikes.

This potential for a less hawkish rate trajectory has also weakened the US dollar and given more breathing space for gold to climb with the two assets having a typically inverse relationship. Add in rising geopolitical tensions between the US and China as well as concerns that the global economy is heading for recession, particularly following figures released by the UK today, and it points to a bullish outlook for gold.

However, while gold undoubtedly has a fair wind pushing it along currently, the precious metal’s upside potential will still be capped by the Federal Reserve’s next moves. While expectations on the next rate hike have softened from a 75 basis point increase to a 50 basis point one, the reality is that more interest rate hikes are likely.

As such the release next week of the Federal Open Market Committee’s minutes will be closely pored over by investors keen to gain a march on where the next interest rate move will land. It is important for gold to make gains while momentum is with it and regain the $1,800 an ounce threshold as the medium-term outlook still remains cloudy. Read More

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.