Today's Gold and Silver News - 15th July

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Battle of the safe havens - Gold vs the U.S. 2-year yields

The move lower in gold has perplexed many at a time when inflation is very high. Wednesday's U.S. inflation figure was just another reminder that the cost of living is spiraling. Traditionally the yellow metal was used as a hedge for inflation but at the moment the gold price is falling.

The chart below is gold vs the U.S. 2-year yield. The comparison chart is moving towards a significant low. Not only is the chart in a serious downtrend the constant lower highs and lower lows show no signs of stopping.

Historically speaking when gold was used as an inflation hedge there was no QE unwind or rate normalization. That means the differential is in unchartered territory. Read More

Image Source: Kitco News

Gold and silver test support; there must be manipulation

Gold, silver, and platinum remain under pressure despite Wednesday’s rally attempt. Once again, this morning the metals are testing the key support levels. Those levels remain the same $1,700 gold, $18.50 silver, and $800 platinum. It will be no surprise to see those levels violated and new support levels develop.

The recent action has brought out the cries of manipulation, add in the JPMorgan trial on silver spoofing and you have the back story for manipulation. Obviously, we disagree with any claim of long-term manipulation, knowing that the markets are too big to manipulate for any significant period.

Image Source: Kitco News

What we know for sure, is you don’t have to buy gold or silver, although we will continue to accumulate physical. If you believe that the asset class is manipulated, why are you buying? The gold and silver bulls are looking for an excuse for why the metals go lower. The simple answer is don’t buy if you don’t think the market is real. Read More

Gold price holding support above $1,700 but remains down as U.S. PPI rises 11.3% in June

Gold prices are holding support above $1,700 an ounce but continue to struggle as producer inflation pressures continue to rise, pointing to further pain for consumers.

Thursday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1.1% in June, following May’s 0.9% rise. Inflation was hotter than expected as economists were looking for another 0.8% rise.

For the year, headline inflation rose 11.3%, “the largest increase since a record 11.6-percent jump in March 2022,” the report said.

Meanwhile, the report said that core inflation, which strips out food and energy costs rose 0.4%, slightly missing expectations. Markets were looking for a 0.5% rise.

The gold market is not seeing much reaction to the latest inflation data. August gold futures last traded at $1,710 an ounce, more than 1.5% on the day. Read More

British Royal Mint sees gold bullion sales increase 8% in Q2, silver sales jump 47%

The paper gold market has struggled to find consistent bullish momentum as prices dropped nearly 7% between April and June. However, the physical market saw solid growth, according to the latest report from the Royal Mint.

Thursday, the British mint said that sales of its gold bullion coins increased by 8% quarter-over-quarter. At the same time, silver bullion sales increased 47% compared to the sales in the first three months of 2022.

The mint added that it continues to see strong international sales, with specific demand growing among American consumers.

"Internationally, growth has also been seen in all three metals, with a 52% increase in the amount of gold ounces being sold, a 58% increase in silver ounces sold, and a 67% increase in platinum," the Royal Mint said in a statement.

"We are famous in the U.K. for making coins and bars from precious metals and have developed a strong international base of investors. It's encouraging to see such strong international sales, particularly from the U.S. and we look forward to expanding globally, providing a range of products to appeal to investors," added Andrew Dickey, director of precious metals at The Royal Mint. Read More

Gold, silver pounded by strong USDX, rising bond yields, lower oil

Gold and silver prices are solidly down in midday U.S. trading Thursday. Gold scored an 11-month low and silver a two-year low. Rising U.S. Treasury bond yields, a strong U.S. dollar index, and falling crude oil prices are all bearish elements working against the metals market bulls. Recession fears and the resulting reduced consumer and commercial demand for metals are also squelching the bulls. August gold futures were last down $28.10 at $1,707.50. September Comex silver futures were last down $0.954 at $18.235 an ounce.

Technically, August gold futures prices hit an 11-month low early on today. Bears have the solid overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at $1,725.00 and then at today's high of $1,734.80. First support is seen at today's low of $1,695.00 and then at $1,673.30. Wyckoff's Market Rating: 1.0.

Image Source: Kitco News

September silver futures prices hit another two-year low today. The silver bears have the strong overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $19.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $18.63 and then at $19.00. Next support is seen at today's low of $18.01 and then at $17.75. Wyckoff's Market Rating: 1.0. Read More

Image Source: Kitco News

Gold hammered, analysts warn of capitulation event if price drops below pre-pandemic levels

The gold market tumbled $40 Thursday and briefly fell below the $1,700 an ounce level as markets began to price in an oversized 100-basis-point rate hike from the Federal Reserve at the July meeting.

Rate hike expectations were quickly re-priced after the latest U.S. inflation numbers shocked the markets, with the annual CPI number coming in at 9.1% and the yearly PPI rising 11.3% in June.

Before inflation data, markets were looking for a nearly 100% chance of a 75-basis-point hike at the Fed's July 27 meeting, according to the CME FedWatch Tool. However, within 24 hours after the numbers were released, the expectations shifted to an 80.9% chance of a 100-basis-point hike. This would take the fed funds rate to a range of 2.50%-2.75%.

"Only yesterday morning, the market had just finally priced in a full 75bp rate hike in July for the first time. In a few hours, an above-consensus U.S. CPI reading and a surprise 100bp rate hike by the Bank of Canada changed the whole picture again. After these two events, markets have moved to seriously consider a 1.0% rate increase by the Fed in two weeks," said Francesco Pesole, FX strategist at ING. Read More

Precious metals hammered as investors digest new aggressive rate hikes

Market participants are still digesting the financial shockwaves resulting from yesterday’s CPI report. The inflation report revealed that inflationary pressures for goods and services said that inflation is running at a scorching level of 9.1% year on year. Many have never lived through a time in which inflation was this elevated because this is the highest level of inflation since November 1981.

Another ominous sign that the cost of living will remain elevated is today’s release of the PPI (Producer Price Index). Today the US Bureau of Labor Statistics released its producer price index data. The report revealed that the PPI increased 1.1% when compared to last month and increased 11.3% year on year. This is the largest increase recorded since March 2022 when the PPI came in at 11.6% year on year.

The PPI measures the average change over time in the prices domestic producers receive for their output. Simply put, it is a measure of inflation at the wholesale level. Therefore, it means that there is a small-time lag between when the end product reaches the consumer market and therefore impacts purchases in the future.

This level of elevated inflation will most certainly force to hand of the Federal Reserve and take its already aggressive stance to reduce inflation to an ultra-aggressive stance. This changes where interest rates will be by the end of the year considerably. In the last 24 hours, members of the Federal Reserve have made statements suggesting that they will most likely raise rates by a full percentage point during the July FOMC meeting. More so, it is also likely that they will continue this new exceedingly aggressive monetary policy when they convene for the next FOMC meeting in September. It is widely believed that the Fed will follow this month’s 1% rate hike with another rate hike of three-quarters of a percent in September. Read More

Gold and silver have moved lower ahead of the European open

Gold (-0.40%) and silver (-0.80%) are both trading lower ahead of the European open. In the rest of the commodities complex, copper (-2.34%) and spot WTI (-0.41%) are trading in the red as sentiment is still weak. 

Equities in the Asia Pac area were mixed as the Nikkei 225 closed 0.54% higher but the Shanghai Composite (-1.20%) and ASX (-0.68%) both struggled. Index futures in Europe are pointing towards a soft cash open.

FX markets were flat overnight with the exception of AUD/USD which fell 0.35%. In the crypto space, bitcoin is trading at $20,624.

News from overnight: 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.