Today's Gold and Silver News - 17th November

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Silver Takes Stock as Investors Weigh Fundamental Case Against Rising Rates

Silver is taking stock of the macroeconomic and geopolitical picture with the price stabilising just shy of $22 an ounce.

While the price continues to trade near levels last seen in June, its failure to continue its recent run of gains points to investors reassessing where silver’s fair value now lies.

Certainly, the lows touched in September were way below the fundamental price of a metal in high demand from industries such as solar, 5G and electric vehicles should be and this drove silver’s impressive rally since that nadir. However, now that silver has recovered significant ground, the question is: how far can silver climb in an environment where interest rates are likely to continue rising for a while yet? Read More

Gold Advances on $1,800 as Missile Crosses Polish Border

Gold is tracking up towards $1,800 an ounce after reports of a missile crossing over the Ukrainian border causing two deaths in Poland, increasing demand for gold as the safe haven asset that has endured through centuries of human conflict.

The war in Ukraine has been a supporting factor for the price of gold since the conflict started in February, however, after an initial spike, investors soon priced this into their models resulting in the actions of the Federal Reserve and the hawkish macroeconomic climate that has been in place for much of the year becoming the dominant factors driving markets and the price of gold.

Now as the early signs are that the Fed may be nearing the point at which it tones down its aggressive interest rate hikes, gold is coming under less pressure from a macroeconomic perspective, enabling the geopolitical elements to take centre stage. Read More

It's going to be a 'lively December' for gold price - Pepperstone

Gold is looking at potentially taking out $1,800 and having a great 2023, according to Australian Pepperstone.

Gold finally found momentum after seeing seven months of consecutive losses and registering a bottom near $1,620 an ounce.

On Tuesday, December gold futures reacted positively to the slower U.S. Producer Price Index and renewed geopolitical tensions after reports that a Russian missile crossed over to Poland and killed two people.

"We're seeing signs of consolidation before a potential test of $1,800/04 and beyond. Happy to hold a positive bias but would reconsider through $1739 and $1710," said Pepperstone's head of research Chris Weston. "It's been a frustrating year for gold investors, and there has been an opportunity cost with holding longs, especially as cash has emerged as a risk-free investment class."

In the short term, the conditions for gold are favourable, and the month of December is expected to be "very lively," according to Weston. Read More

Gold, silver near steady amid conflicting outside markets

Gold and silver prices are near steady in midday U.S. trading Wednesday. The precious metals are seeing selling interest limited by a slight dip in the U.S. dollar index and also in U.S. Treasury yields. However, buyers in gold and silver are being squelched by solidly lower crude oil prices on this day. December gold was last up $0.80 at $1,777.60 and December silver was down $0.028 at $21.49.

Traders and investors remain upbeat after Tuesday’s U.S. producer price index report that came in cooler than expected and drove the major U.S. stock indexes to new for-the-move highs. Loosening of Covid restrictions in China and moves by the Chinese central bank to stimulate the world’s second-largest economy is also keeping an upbeat tone in the marketplace at mid-week. Gold and silver bulls are also looking at the aforementioned elements as being positive for better consumer and commercial demand for metals.

Technically, December gold futures prices hit a three-month high Tuesday. The gold futures bulls have the slight overall near-term technical advantage. Bulls still have some momentum and are working on a fledgling price uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,618.30. First resistance is seen at this week’s high of $1,791.80 and then at $1,800.00. First support is seen at this week’s low of $1,755.80 and then at $1,750.00. Wyckoff's Market Rating: 5.5.

Image Source: Kitco News

December silver futures prices hit a 4.5-month high Tuesday. The silver bulls have the overall near-term technical advantage. Prices are in a choppy 2.5-month-old uptrend on the daily bar chart. 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 $20.00. First resistance is seen at $22.00 and then at this week’s high of $22.38. Next support is seen at this week’s low of $21.37 and then at $21.00. Wyckoff's Market Rating: 6.0. Read More

Image Source: Kitco News

Silver prices have room to move higher but the market needs to stabilize to attract new capital - Silver Hammer CEO

Silver's dramatic rally this past month was inevitable; however, according to one silver mining executive, if the market is going to attract long-term value investors, prices need to stabilize at these higher levels.

In a recent interview with Kitco News, Morgan Lekstrom, president and CEO of Silver Hammer Mining, said that he sees silver prices moving higher, but he added that ultimately the best scenario would be for prices to stabilize in a range between $23 and $25 an ounce.

The bullish outlook comes as silver prices stabilize around $21.50 an ounce. Silver prices are up more than 19% from the lows seen last month.

"I don't think we necessarily need to see higher prices before investors start to jump in," he said. "What the market needs is stability. The last thing we need is for prices to shoot to $25 and then, three weeks later, fall back to $20. It's this price action that makes investors nervous."

Although Lekstrom is fairly bullish on silver, he added that prices in the near term will remain sensitive to the U.S. dollar, which is being driven by the Federal Reserve's aggressive monetary policy stance. Read More

Fed's Waller says "more comfortable" with smaller hikes after recent data

U.S. Federal Reserve Governor Christopher Waller, an early and outspoken "hawk" in the central bank's efforts to confront inflation, said Wednesday he is now "more comfortable" with smaller rate increases going forward after recent data showed the pace of price increases slowing.

In remarks prepared for delivery at an Arizona economic conference, Waller said it remains unclear how high the Fed will need to raise interest rates, and that he will not make a final decision about what to do at the Fed's Dec. 13-14 policy meeting until reviewing the rest of the data between now and then.

"I will not be head-faked by one report," Waller said of consumer price data released last week that saw larger than expected declines in both headline inflation and a narrower but more closely watched index of "core" prices. "We've seen this movie before."

But he also said the most recent reports were a "positive development" that he hoped would be "the beginning of a meaningful and persistent decline in inflation" back to the Fed's 2% target. After raising rates in atypically large three-quarter point increments at its last four meetings, Waller said that as it stands "the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike," in December and possibly to smaller quarter-point increases after that. Read More

Unemployment to almost double, recession to end by 2024 - Alfonso Peccatiello

The U.S. unemployment rate rose to 3.7 percent in October, and industry data suggest that such job trends will continue, with companies like Twitter, Amazon, and FedEx laying off thousands of workers.

This will result in unemployment almost doubling to “six-and-a-half percent,” while the ensuing recession will last until 2024, said Alfonso Peccatiello, Author and CEO of the Macro Compass.

“I think six-and-a-half percent [unemployment] is totally doable in the U.S.,” he said. “That’s three full percentage points by 2023.”

Peccatiello suggested that as GDP hits a trough in “the third quarter of next year,” assets will become underpriced and there could be good investment opportunities.

“That’s the point where you want to load up,” he said. “The Fed at that point will have pivoted, but people won’t want to buy stuff because they’re losing their job.”

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

Gold’s recent short-term trend is in a defined cycle - Rally, Consolidate, Repeat

Gold has shifted gears from extended rallies followed by a multi-month correction to its current almost parabolic upside move. This move began during the first week of November and continues to this day. In fact, we are getting the first indications that the extended correction at least for now has concluded and a new stage has begun. The best way to describe the characteristics of this recent rally is using a short-term 60-minute chart which clearly shows that gold is in a defined cycle. That cycle has three components; rally, consolidate, and repeat. The chart below is a 60-minute candlestick chart of gold futures which visibly illustrates that characteristic.

Image Source: Kitco News

Gold has in all likelihood concluded the multi-month correction that began in March 2022. This extended correction began after gold completed a dynamic rally. This rally took gold futures from approximately $1780 during the first week of January to gold’s highest value in 2022 at approximately $2078, resulting in a $300 gain per ounce. After gold traded $10 below the record high of $2088 the precious yellow metal began an extended multi-month correction from March to November. Read More

'Big Short' Michael Burry says this is gold's time, cites crypto 'contagion'

In a rare comment, "The Big Short" investor Michael Burry has weighed in on gold, stating that this is the time for the precious metal to rally because of the crypto contagion risk post-FTX collapse.

Burry, who runs the hedge fund Scion Asset Management, is known for spotting the mortgage crisis early and making a fortune against the U.S. housing bubble. In 2019, the investor also made millions by purchasing shares of GameStop, which was well before the Reddit frenzy took over the stock.

Burry rarely comments on gold, making this call much more unique for traders. According to him, the crypto chaos caused by the FTX saga sets the stage nicely for gold.

"Long thought that the time for gold would be when crypto scandals merge into contagion," Burry said in a tweet that has since been deleted. Burry is known to delete his tweets shortly after posting them. Read More

TDS says Gold's selloff isn't over, sees prices falling to $1,575 in Q1 2023

The gold market has seen an impressive rally in the last two weeks, as prices hold near their highest levels in three months and look ready to test resistance at $1,800 an ounce. But one bank remains solid bearish on the precious metal through most of 2023.

In his 2023 outlook forecast, Bart Melek, head of commodity strategy at TD Securities, said that he sees gold prices falling below $1,600 an ounce in the first quarter of next year. He added that he doesn't expect prices to push back above $1,800 an ounce before the fourth quarter of 2023, and it will be another year before the precious metal sees $1,900.

Melek said that the Federal Reserve's aggressive monetary policy action, which has been the dominant factor for gold through 2022, will continue to keep a lid on prices next year. He added that the Federal Reserve is nowhere near ready to pivot its monetary policy.

"With inflation still raging, the Fed may have no choice but to stick to a hawkish policy stance over the next twelve months or so. We expect that the Fed funds rate will hit 5.50% by mid-2023 and there will be no easing until late 2023. As a result, we expect there to be a general lack of investor interest in gold, at least in the early months of 2023 when rates are still increasing," he said. 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.