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Gold Price News: Gold Strongly Above $2,000 Before US Inflation Data
Bullion remains traded above the key mark of $2,000 and is consolidating recent gains. After starting the week in the red, gold recovered strength, jumping to $2,030. The price of the yellow metal is just 2% below its historical record reached in early 2020 at $2,075.
With just three weeks to go to the next FOMC meeting, investors are waiting for US inflation data, which will be released later today (12:30 CET). Analysts forecast the annual data to be announced at +5.2%, 0.8% lower compared to the +6.0% of last month. The monthly inflation figure could be +0.2% (vs +0.4% last month). If this declining trend is confirmed, there could be space for further recoveries of gold.
Moreover, a few hours later (at 20.00 CET), the minutes of the last FOMC meeting will be released. Traders and investors hope to get more indication from the report about what the next move of the US central bank will be. Read More
Silver Price News: Silver Confirms its Strength as it Hits 12-month High
Silver remains in a strong position as it reaches a 12-month record above $25.5. In other words, investors are continuing to accumulate the precious metal, increasing their long position.
The recent rebound of silver is proving to have a solid basis, being supported by both technical and fundamental reasons. Indeed, from the technical side, we have recently seen a dovish re-price of Federal Reserve rate expectations for the next 12-18 months.
This is setting a favourable environment for the whole precious metal sector, including silver. Moreover, analysing the fundamentals, the demand for physical silver from the photovoltaic industry and electric car batteries remains significant, and the trend is not expected to curb any soon. Read More
Gold price hits session highs as U.S. CPI sees annual inflation rising 5%, down sharply from 2020 highs
The gold market has pushed back to session highs as inflation cool more than expected in March, which according to some analysts, will give the Federal Reserve room to end its aggressive monetary policy tightening, even if there is one more hike still in play.
Wednesday, the U.S. Labor Department said its much-anticipated Consumer Price Index rose 0.1% last month after a revised 0.4% increase in February. The data was weaker than expected, with consensus forecasts looking for a 0.2% increase.
The report said that in the last 12 months, consumer prices rose 5.0% last month, continuing the moderating trend. Economists were expecting to see a rise of 5.1%.
"This was the smallest 12-month increase since the period ending May 2021," the report said.
Core CPI, which strips out volatile food and energy prices, rose by 0.4% last month. The core numbers were in line with expectations.
For the year, core inflation rose 5.6%, unchanged from February, the report said. Although headline inflation has dropped, some analysts note that persistently high core inflation continues to highlight an economy entrenched with elevated consumer prices. Read More
Gold, silver up, but down from daily highs on some profit taking
Gold and silver prices are modestly higher but nearer the daily lows in midday U.S. trading Wednesday. Some profit-taking pressure from the shorter-term futures traders kicked in after both metals touched 13-month highs in the immediate aftermath of a tamer U.S. inflation report this morning. June gold was last up $4.20 at $2,023.20 and May silver is up $0.114 at $25.30.
The U.S. data point of the week saw Wednesday morning’s consumer price index report for March come in at up 5.0%, year-on-year, compared to market expectations for a rise of 5.1%. The CPI rose 6.0% in the February report. Today’s CPI report continues a downward trajectory on consumer inflation and falls into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve back off on its policy tightening.
Technically, June gold futures bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80, scored in March of 2022. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at the March high of $2,031.70 and then at the April high of $2,049.20. First support is seen at today’s low of $2,015.70 and then at $2,000.00. Wyckoff's Market Rating: 8.5.
Image Source: Kitco News
May silver futures bulls have the solid overall near-term technical advantage. Prices are in a steep four-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $25.825 and then at $26.00. Next support is seen at $25.00 and then at this week’s low of $24.775. Wyckoff's Market Rating: 8.5. Read More
Image Source: Kitco News
Gold price at risk of falling to $1,700 unless Fed cuts rates - Metals Focus
Gold is unlikely to hold the $2,000 an ounce level in the long term unless the Federal Reserve communicates a clear pivot in its messaging, said Philip Newman, managing director at Metals Focus.
The gold space surged after the banking turmoil, and prices continue to trade well above $2,000 an ounce. But that trend will not last into the second half of the year, Newman told Kitco News.
"Gold above $2,000 is driven by how the market views the Federal Reserve's interest rate policy. Also, with the Silicon Valley Bank and then the uncertainty in Europe, with Credit Swiss, we saw a jump in safe-haven buying by retail and institutional investors," Newman said.
With the market pricing in rate cuts later this year, gold benefits from the dollar-negative connotations and the reduced opportunity cost of holding the precious metal. "Right now, we see more investors going long in gold and some short covering. Those together pushed gold above $2,000," Newman described.
The gold market remains very sensitive to data releases out of the U.S. And the next few readings are likely to counter market expectations that the Fed is ready to start lowering rates. In this scenario, gold can quickly drop.
"We are skeptical that gold holds at this level for some time. The Fed hasn't said it was ready to start cutting rates. Right now, we've got a disparity between what the market is expecting and what the Fed is actually saying," Newman said. "Going into the second half of the year, the market will move more towards the Fed's position." Read More
Gold price holding above $2,000, sees little movement following FOMC Minutes
The gold market continues to hold its ground above $2,000 an ounce as the minutes from the Federal Reserve's March monetary policy meeting provide little insight into next month's decision, according to some analysts.
The Federal Reserve committee members noted that because of the banking crisis, risks to the economy remain tilted to the downside.
"Participants generally observed that the recent developments in the banking sector had further increased the already-high level of uncertainty associated with their outlooks for economic activity, the labor market, and inflation. Participants saw risks to economic activity as weighted to the downside," the minutes said.
Although the committee sees below-trend growth for the U.S. economy, the central bank's staff provided more substance, saying in their updated forecasts that they see the potential for a mild recession this year.
Despite the growing economic risks, the central bank also noted that inflation remains persistently higher.
"With inflation remaining unacceptably high, participants expected that a period of below-trend growth in real GDP would be needed to bring aggregate demand into better balance with aggregate supply and thereby reduce inflationary pressures," the minutes said. Read More
Gold's run to record highs depends on Fed's May messaging after mixed inflation report
Markets are recalibrating after the latest inflation report, with the most likely outcome being another rate hike in May and a possible rate cut in July.
Inflation data from March showed the consumer price index (CPI) up 0.1% on a monthly basis after advancing 0.4% in February. On an annual basis, the CPI was at 5% — the smallest gain since May 2021. Housing costs were the main inflationary driver last month.
Meanwhile, Federal Reserve Chair Jerome Powell's favorite inflation measure — core services excluding housing — climbed 0.4% after February's 0.5% increase.
"This inflation report had a lot of mixed signals. The food index at home was lower for the first time since September 2020. The energy index plunged 3.6% in March," said OANDA senior market analyst Edward Moya. "Housing costs edged lower but are still high and contributing the most to inflation (70% to the net monthly change in the headline CPI)."
Many economists agree that the Fed will likely proceed with another 25-basis-point rate increase in May. Read More
Five reasons why you should be overweight gold in today's uncertain markets - abrdn's Minter
Investors need to be overweight gold as the precious metal still has room to run in a world full of uncertainty and as the U.S. dollar's reserve currency status is chipped away, according to one market strategist.
In a recent interview with Kitco News, Robert Minter, director of ETF Investment Strategy at abrdn, said he sees five reasons why investors should like gold this year.
"Gold should never be a zero weight in a portfolio, but investors could be wise to increase their allocation," he said. "People learned kind of the hard that they're under-allocated to gold."
He noted that with gold's current momentum, it's only a matter of time before prices hit record highs again. Creating this bullish uptrend for the precious metal are market expectations that the Federal Reserve will end its aggressive monetary policy stance before the second half of this year.
Currently, markets see the Federal Reserve implementing one last 25 basis point hike in May and a possible rate cut by the summer. Minter noted that these transition periods have historically been extremely bullish for gold. Read More
Gold army emerges from the Trojan Horse - COMEX caught sleeping
In this week’s Live from the Vault, Andrew Maguire follows the avalanche of sanctioned de-dollarisation moves triggered by the pivotal meeting between Xi Jinping and Putin, accelerating the implementation of a gold-based currency.
The London wholesaler comments on the global uprising of numerous countries joining forces to establish a more equitable, multipolar monetary system - all of which is increasingly leaving the US economy in the rear-view mirror.
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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.
