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Gold Price News: Gold Slips Closer to $1,900 on Pressure From High Rates
Gold is slipping ever closer to $1,900 an ounce in the face of a strong US dollar and the prospect of interest rates rising again in September and staying at a high level for the foreseeable future.
The fact that gold has been able to hold above the $1,900 threshold for so long is indicative of the fragility of investor confidence and retaining appeal for gold’s haven qualities. Yet as economic data continues to show employment remaining healthy and inflation tracking downward, particularly in the US, the hope remains that a global recession can yet be avoided and the central banks’ juggling act of raising rates sufficiently to curb inflation without triggering an economic downturn will prove successful.
In this environment of high-interest rates and market confidence slowly flowing back to encourage a riskier approach among traders and investors, it is hard to see gold making any gains and instead, the controlled slide downward looks set to continue. Read More
Silver Price News: Silver Out of Favour in Face of High-Interest Rates
Silver’s fall out of favour among investors has seen the price continue to fall with the metal trading below $23 an ounce and heading down towards $22 and the lowest levels since March.
A macroeconomic setting in which global interest rates are high and set to climb higher still is presenting a challenging environment for silver in spite of the metal’s strong fundamental outlook.
While investors are starting to look ahead to when the Federal Reserve may start cutting interest rates, with Goldman Sachs pencilling cuts to start in June next year, the present-day realities are of rates at around 5%. This is reducing the appeal of physical silver with the asset not providing investors with a yield and seeing other interest-bearing assets, such as bonds, favoured instead. Read More
Silver will outperform gold as industrial demand picks up - BMO
Precious metals prices will see headwinds in the medium term, but a recovery in industrial demand and a burgeoning solar sector should see the gold:silver ratio move closer to its historical average in the coming years, according to Colin Hamilton, commodities analyst at BMO Capital Markets.
Speaking in the latest Metal Matters podcast, Hamilton said that the near-term prospects for silver are being driven by “macro asset allocator positioning, the FED and the USD.” He noted that “silver has had a pretty tumultuous time over the past month,” with the price hitting highs above $25 per ounce before pulling back.
Silver prices broke decisively below $23 per ounce on Aug. 8, and the precious metal has been trading in a range between $22.90 and $22.63 since.
“A softer-than-expected CPI print in the U.S., combined with a relatively weak industrial production reading, has served to temper expectations for future Fed rate hikes,” he said. “Many market participants, including BMO Economics, are now of the belief that economic headwinds will outweigh tailwinds in the coming months, turning a skip in rate hikes at the September meeting into a more prolonged pause.” Read More
Gold, silver weaker amid firmer USDX, weaker crude oil, bearish charts
Gold and silver prices are modestly down in quieter midday U.S. trading Monday. December gold hit a five-month low today and silver a six-week low. Gold and silver bulls remain very timid to start the trading week as the U.S. dollar index is higher, crude oil prices lower and as the near-term technical postures for both metals are bearish. December gold was last down $3.90 at $1,942.70 and September silver was down $0.073 at $22.675.
Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are firmer at midday.
There was more dour economic news coming out of China. The Country Garden Holdings property firm is reportedly in financial trouble. The firm is the largest privately held property developer in China. The Chinese offshore yuan has weakened and is near its low for the year against the U.S. dollar, at 7.28. China’s stock market sold off Monday on the Country Garden news.
Technically, December gold futures were down $4.50 at $1,942.40 in midday trading and near mid-range. Prices hit a five-month low today. Bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,950.00 and then at $1,963.50. First support is seen at today’s low of $1,934.20 and then at $1,925.00. Wyckoff's Market Rating: 3.5.
Image Source: Kitco News
September silver futures were down $0.098 at $22.655 at midday and near mid-range. Prices hit a six-week low today. The silver bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver Bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at the June low of $22.34. First resistance is seen at $23.00 and then at $23.255. Next support is seen at today’s low of $22.41 and then at $22.34. Wyckoff's Market Rating: 3.5. Read More
Image Source: Kitco News
Gold decline continues after last week’s strong weekly price drop
Prices of both spot and futures gold declined between 0.30% and 0.40% today, a direct correlation to dollar strength and higher U.S. Treasury yields. The dollar gained 0.35% in trading today taking the index to 103.05. After last week’s dramatic decline in gold, the first trading day of the week is indicating a continuation of the down-trend based on the most recent economic data.
Economic strength and continued inflation will result in a “No Landing” scenario
Last week, data showed that the U.S. CPI (Consumer Price Index) rose moderately in July. But because producer prices increased slightly more than expected, members of the Federal Reserve are expressing concerns that their fight against inflation is not over and as a result could keep rates higher for longer.
The most recent economic data shows that the economy in the United States is strong and resilient and for the most part has led the Federal Reserve and economists to believe that a recession is not likely. The new acronym for the end game from the aggressive monetary policy of the Fed is no longer a “hard landing” or a “soft landing” but a “no landing”.
The meaning behind this acronym is that economic growth is too strong to allow inflation to fall to the Fed’s target of 2% easily, suggesting that the Fed will need an additional rate hike to secure the proper path to their 2% target. Read More
Global de-dollarization - Are factions within the U.S. pushing for it? Is this a lead-up to a CBDC and a monetary reset?
There are factions within the U.S. supporting a global move to dump the dollar and dethrone it as king of reserve currencies, according to Andy Schectman, President and Owner of Miles Franklin. One of the primary reasons why there is an intentional effort to weaken the dollar is to create an environment that facilitates the introduction of a central bank digital currency (CBDC) and a new monetary system, explains Schectman.
The trend to move away from the U.S. dollar is accelerating and goes far beyond the attempts by the BRICS nations to settle trade in local currencies and stop using the greenback, Schectman told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.
The U.S. is facing unsustainable debt levels, and there are only a few ways to fix this — "you can inflate, you can default, or you can find a villain," Schectman said.
And by weaponizing the U.S. dollar, the U.S. is creating a global movement of countries choosing to turn away from the greenback, including Saudi Arabia. Read More
In this week’s episode of Live from the Vault, Andrew Maguire breaks down the structure behind the new “sanction-proof” BRICS gold-backed world settlement currency and provides a teaser ahead of the upcoming BRICS Plus summit.
The whistleblower digs deeper into gold’s potential as a first-tier asset class alternative to high counterparty-risk US treasuries and shares his thoughts on how the Federal Reserve has been so wrong-footed by gold in recent months.
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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.
