Today's Gold and Silver News - 18th October

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Silver’s Testing Buying Support After Latest Dip Below $19

Silver’s recent fall has seen it dip back below $19 an ounce towards the lower end of its recent range. How the precious metal responds to its latest dip, prompted by the need for further aggressive interest rate hikes by the Federal Reserve, will be crucial in determining the amount of buying support that remains for silver. 

In recent weeks, silver has shown price resilience with any dips leading to buying interest from investors noting the strong fundamental case that can be made for the metal given its role as a key component in the energy transition. This was certainly the case throughout September with the price of silver trending steadily higher over the course of the month. Read More

Gold Struggles to Make Gains on Fresh Demand for Large Fed Hikes

Gold starts a new trading week trading around $1,650 with the ongoing prospect of more large interest rates by the Federal Reserve before the end of the year continuing to weigh on the price.

Another high inflation print last week has increased the likelihood of the Fed hiking rates in both November and December by 75 basis points with the Bank of St Louis President James Bullard mentioning his preference for “front-loading” rate increases when speaking at the weekend. Read More

Solid physical demand for gold and silver tells you where prices are going in the long term - LBMA

Persistent inflation will force the Federal Reserve to aggressively raise interest rates through the rest of the year, maintaining solid headwinds on gold and silver prices, according to a group of fund managers.

In a panel discussion during the London Bullion Market Association's annual precious metals conference, participants generally agreed that gold and silver prices could struggle through the rest of the year as rising interest rates and solid momentum in the U.S. dollar keep investment capital on the sidelines of the precious metals market.

However, sentiment on the stage was still relatively bullish for gold and silver's long-term potential, despite the short-term headwinds.

The panellists agreed that inflation remains a global problem and the Federal Reserve has to maintain its aggressive monetary policy stance to cool down and reset the global economy. John Reade, chief market strategist at the World Gold Council and moderator of the discussion, said that in the current environment, he doesn't see a scenario where the U.S. dollar weakens anytime soon. Read More

Despite downtrend, there is still plenty of value in gold market - Franklin Templeton

The gold market continues to struggle to hold consistent gains above $1,700 an ounce, and while prices have room to move lower through the rest of the year, one market strategist said that the current price represents long-term value for investors.

In an interview with Kitco News, Stephen Land, vice president and portfolio manager of Franklin Templeton's Franklin Gold and Precious Metals Fund, said that gold's current downtrend makes sense as the Federal Reserve continues to aggressively raise interest rates; however, he added looking past the short-term volatility, he remains optimistic on the precious metal.

"I would be cautious on gold heading into the end of the year, but for anyone with a 12-month timeframe, this is a pretty interesting time to be looking at gold as a value play." Read More

Gold, silver see solid gains as USDX suffers sharp losses

Gold and silver prices are solidly higher at midday Monday, supported by a strong daily pullback in the U.S. dollar index and by U.S. Treasury yields falling a bit. The main focus on gold and silver traders remains on the daily price direction of the U.S. dollar index. December gold was last up $19.60 at $1,668.50 and December silver was up $0.614 at $18.685.

Markets are somewhat calmer to start the trading week as the new U.K. Treasury chief, Chancellor of the Exchequer Jeremy Hunt, affirmed Britain will roll back nearly all of its previously announced tax-cut plans that had been roiling financial markets for three weeks and said some spending will have to be cut.

Technically, the gold futures bears still have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the October high of $1,738.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,622.20. First resistance is seen at $1,688.90 and then at $1,700.00. First support is seen at last week’s low of $1,645.60 and then at $1,622.20. Wyckoff's Market Rating: 2.5

Image Source: Kitco News

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at the September low of $17.40. First resistance is seen at $19.00 and then at $19.29. Next support is seen at today’s low of $18.155 and then at $18.00. Wyckoff's Market Rating: 2.5. Read More

Image Source: Kitco News

Decade of stagflationary debt crisis like 'never seen before,' investors need assets like gold: Nouriel Roubini

The world could be facing a decade of stagflationary debt crisis like never before, warned Nouriel Roubini, CEO of Roubini Macro Associate and professor at the NYU Stern School of Business.

"The decade ahead may well be a Stagflationary Debt Crisis the likes of which we've never seen before," Roubini wrote in his latest Time essay.

The next crisis won't be like the previous ones due to the stagflationary aspect mixed in with massive public debt, Roubini explained as he gave examples from the 1970s and 2008.

"In the 1970s, we had stagflation but no massive debt crises, because debt levels were low. After 2008, we had a debt crisis followed by low inflation or deflation, because the credit crunch had generated a negative demand shock. Today, we face supply shocks in a context of much higher debt levels, implying that we are heading for a combination of 1970s-style stagflation and 2008-style debt crises—that is, a stagflationary debt crisis," he wrote.

Stagflation is an environment defined by high inflation and slower growth.

After 300-basis-points worth of rate hikes this year, it is now widely recognized that the possibility of a "soft landing" by the Federal Reserve will be a challenge. But how severe and persistent that economic slowdown will be is still much debated. Read More

Gold struggles in light of weak dollar as rate hikes loom

Gold continues to struggle even in light of a strong decline in the U.S. dollar. Gold had respectable gains in New York trading today, but gave up those gains in Globex trading. By the close of trading in New York today gold had added $15.10 of value and was fixed at $1664. As of 4:30 PM, EDT gold futures basis most active December contract is up only $5.80 or 0.35% and fixed at $1654.70. The December contract traded to a high of $1674.30 and a low of $1649.10 after opening just $0.80 above today’s low.

Image Source: Kitco News

Dollar weakness was a major contributor in supporting gold prices from moving lower. Currently, the dollar is down 1.182 points or -1.04% and fixed at 112.025. As seen through the KGX (Kitco Gold Index) market participants were predominantly sellers with spot gold currently fixed at $1649. That is a net gain of $4.60 today. However, on closer inspection market participants were aggressive sellers taking physical gold lower by $12.80. If not for dollar weakness which added $17.40 gold’s gains would have been nonexistent. 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.