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Gold Price News: Gold at Month Low as Dollar Strengthens on Prospect of Fed Hikes
Gold has fallen below $1,860 an ounce to its lowest level in over a month as markets brace themselves for the Federal Reserve keeping interest rates higher for longer.
This readjustment of the likely actions of the US central bank has also seen the US dollar strengthen, adding to the pressure on gold given its typically negative correlation with the greenback.
The significant gains that gold made in January, largely on the back of expectation that the end of the Fed’s cycle of interest rate hikes was fast approaching, have now fallen away as strong jobs data has given the Fed more bandwidth to keep up its policy of increasing rates without tipping the economy into recession.
This week brings two further key inflation data points and while both are expected to show consumer prices rising at a slower rate and producer prices falling, inflation remains way above the Fed’s 2% target meaning further action is still required. Read More
Silver Price News: Silver Below $22 on Prospect of Fed Hiking For Longer
Silver’s downward trend is continuing, albeit at a much shallower decline than seen last week, with the price now below $22 an ounce.
After spending January drifting sideways, the shock to markets delivered by surprisingly strong US jobs figures caused silver to drop almost $2 an ounce as investors now expect the Federal Reserve to raise interest rates for longer than previously anticipated. As physical silver doesn’t produce a yield, the precious metal finds itself out of favour during periods of rising interest rates, as seen for much of 2022, with other interest-paying assets favoured instead.
Inflation data out of the US will paint a fuller picture on the true state of the world’s largest economy which so far seems to be holding up well in the face of inflation that remains way above the Fed’s 2% target but does now seem to be on a downward trajectory. Read More
Gold price is going to $2,200 as central banks break the global economy - Degussa's Thorsten Polleit
The gold market continues to struggle below $1,900 an ounce; however, long-term, one analyst said that there is still plenty of value in the precious metals space, and it's only a matter of time before gold and silver go higher as investors underprice the risk of a recession this year.
In an interview with Kitco News, Thorsten Polleit, chief economist at Degussa, said that he expects gold to continue to shine through 2023 as investors look to protect their purchasing power and hedge against growing economic uncertainty.
In his official price forecast, Polleit said that he sees gold prices rising to a peak of $2,200 an ounce with a 2023 average price of $2,000 an ounce. At the same time, he looks for silver prices to peak at around $29 an ounce this year with an average price of $26.
Polleit said that he remains significantly bullish on gold as inflation remains a significant threat to consumers and the global economy. While consumer prices have fallen from their highs seen last summer, Polleit said central bank tightening has reduced the global real money supply and liquidity in the global economy. Read More
Robert Kiyosaki warns a 'Giant crash coming,' the time to buy gold, silver and bitcoin is now
Rich Dad Poor Dad author Robert Kiyosaki has issued a warning to investors following the recent wave of layoffs at tech giants like Google, Microsoft, Amazon and Facebook, telling his 2.3 million Twitter followers that a major market crash has arrived.
“CRASH is here,” Kiyosaki tweeted on Friday. “Silicon Valley first dominos fall laying off 144,000 in 2022. 66,000 more [in] 2023.” The author and entrepreneur added that Stansberry Research predicts a Valentine’s Day Massacre and warned that “Everything will crash including prices [of] gold, silver, [and] bitcoin.”
Kiyosaki went on to tell his readers to not panic, as this is actually “good news,” adding that he intends to buy more gold, silver, and bitcoin – which he refers to as real money – “with fake [money].”
After the impending drop, the Rich Dad Poor Dad author believes the Federal Reserve will be forced to print billions to prop up markets, further expanding the nation’s debt and eroding the value of the dollar.
Warnings from Kiyosaki have become more frequent in 2023, with the author asking his followers at the end of January, “What is worse than a great depression?”, to which he answered, “A global recession.” Read More
Gold, silver down on position evening ahead of U.S. CPI
Gold and silver prices are lower in midday U.S. trading Monday, with silver hitting a 2.5-month low and gold a five-week bottom. The near-term chart postures for both metals have deteriorated recently, which are prompting some technical selling pressure. Also, weak long liquidation in the gold and silver futures markets is likely featured today, ahead of a key U.S. inflation report Tuesday. April gold was last down $10.40 at $1,864.00 and March silver was down $0.175 at $21.90.
Traders and investors are awaiting the U.S. economic data point of the week on Tuesday morning--the consumer price index report for January. The CPI is seen up 6.2%, year-on-year, compared to the rise of 6.5% in the December report. On Thursday, the U.S. producer price index report is released. The expected CPI number is still hot—even if it is down from previous CPI reports--and a print that comes in close to it may still keep the Federal Reserve in a monetary-policy-tightening mode for the next few months. That’s likely in part why gold and silver bulls are mostly standing on the sidelines today.
Technically, April gold futures prices hit a five-week low today. Bulls still have the slight overall near-term technical advantage. However, they continue to fade. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $1,975.20. 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 $1,877.20 and then at $1,885.00. First support is seen at $1,850.00 and then at $1,835.00. Wyckoff's Market Rating: 5.5.
Image Source: Kitco News
March silver futures prices hit a 2.5-month low today. The silver bulls and bears are on a level overall near-term technical playing field but the bears have some momentum on their side. 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 $21.00. First resistance is seen at $22.25 and then at last week’s high of $22.635. Next support is seen at $21.50 and then at $21.00. Wyckoff's Market Rating: 5.0. Read More
Image Source: Kitco News
Investors wait for CPI
With less than 24 hours before the next inflation report is released market participants are waiting for the release of the CPI inflation report for January. On February 14 at 8:30 EST the BLS will release the US CPI data for last month.
Current projections from economists polled by the Wall Street Journal are expecting tomorrow’s CPI report to reveal that inflation increased by 0.4% month over month in January. However, Jeff Wright CIO at Wolfpack capital is projecting a 0.5% increase month over month and a 6.2% year-over-year reading. This is primarily due to the recent revision of the inflation report for December. The latest revision to the December CPI report revealed that inflation rose rather than diminished as reported. This revision has created doubt that inflation has peaked an indication that inflation remains much more persistent than the Federal Reserve’s current narrative.
On a technical basis, gold broke through potential support at the 38.2% Fibonacci retracement level which is considered an acceptable but shallow correction. If gold prices continue to drop the next strong potential support level is the 50% retracement which occurs at $1845. Currently, today’s intraday low in April gold futures matched the 50-day moving average which is currently fixed at $1861.20 making the first level of technical support come in at $1861.
Image Source: Kitco News
The elevated hawkish tone reflecting expected actions by the Federal Reserve has pressured gold and silver prices lower and supported treasury yields and the dollar. Tomorrow’s report will indicate whether or not that trend will continue. If it does, we can expect to see a further decline in gold prices. Read More
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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.
