Today's Gold and Silver News: 19-01-2023

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Gold Price News: Weaker US Dollar Helps Keep Gold Above $1,900

Gold is holding above $1,900 an ounce as a weakening in the US dollar helped keep the price at these elevated levels. 

The big question on all investors' and traders’ minds is how soon the Federal Reserve will stop its series of interest rate hikes. As such, the words of three senior Fed officials speaking later today will be closely scrutinised for any hints on when that pause might come.

Signs that inflation has peaked in the UK as well as the US help ease the pressure on central banks to keep on raising rates, which will be supportive for gold given that the precious metal typically struggles during periods of high-interest rates as its lack of yield makes other interest-bearing assets more favourable instead. Read More

Silver Price News: Silver Holds Above $24 Awaiting a Fresh Catalyst

The much-anticipated 2023 rally for silver is yet to emerge with the price holding comfortably above $24 an ounce but still not showing any clear movement higher. 

The conditions still seem ripe for silver to carry on where it left off in the final quarter of 2022 and keep on climbing towards last year’s high above $26 an ounce. Yet despite gold, with which silver enjoys a close correlation, making significant gains already this year, silver has yet to join the party.

The demand picture remains as robust as ever with the fact that silver is a key component in two of the major investment themes, the energy transition and the technology revolution, which should mean it stands in good stead irrespective of the global economic outlook. Read More

Gold price is going to record highs in 2023 as investors protect themselves against a severe recession - David Rosenberg

Investment demand for gold should push prices to all time-highs above $2,000 in 2023 as the U.S. economy falls into a recession, according to David Rosenberg, founder and chief economist at Rosenberg Research.

In an exclusive interview with Kitco News, Rosenberg said that when it comes to the health of the economy, the only questions investors should be asking themselves this year are: how bad will the impending recession be and how should they be protecting their wealth?

In his 2023 outlook report, Rosenberg said he is using a barbell investment strategy and is bullish on gold and bonds as he sees a peak in the U.S. dollar and the Federal Reserve's monetary policy.

Rosenberg's pessimistic outlook comes as the S&P 500 has rallied nearly 4% since the start of the new year. Sentiment on Wall Street has improved as positive employment data and falling inflation are reviving hopes that the U.S. economy will see a soft landing.

"I see this outlook as a hope and a prayer," he said. "A recession is as close to a sure thing as anything can ever be." Read More

Zimbabwe's gold coins now cost more than $2,000 each

Zimbabwe's special release of gold coins to fight inflation is seeing strong demand, with coins selling for over $2,000 an ounce each for the first time since their release back in July.

The country's central bank began selling gold coins in the summer to try and tame inflation by providing a store of value to the country's plunging currency and giving the population an alternative to the U.S. dollar.

Since the release, demand has been substantial. And as of this week, the price in U.S. dollars rose above $2,000 an ounce. On Wednesday, the one-troy ounce 22-carat gold coin was going for $2,009.49, according to data on the Reserve Bank of Zimbabwe's website. Spot gold price in USD was at $1,908.80 an ounce at the time of writing. Read More

More profit-taking, corrective pullback action in gold, silver

Gold and silver prices are weaker midday U.S. trading Wednesday, pressured by profit-taking from the shorter-term futures traders and by a rebound in the U.S. dollar index today, as well as crude oil backing well down from its early-session high. February gold was last down $4.00 at $1,905.90 and March silver was down $0.458 at $23.615.

It was a very active day for U.S. economic data Wednesday, with highlights being a producer price index for January that came in tamer than expected, at up 6.2%, year-on-year. That was down from the revised 7.3% rise in the November report and well below the 11.7% rise in the March 2022 PPI report. Meantime, U.S. retail sales cooled in December, at down 1.1%, year-on-year. Gold and silver got a brief boost from those two reports, but then backed down from daily highs on the profit-taking pressure.

Technically, February gold futures bulls still have the solid overall near-term technical advantage. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,870.00. First resistance is seen at $1,925.00 and then at this week’s high of $1,931.80. First support is seen at today’s low of $1,898.60 and then at $1,885.00. Wyckoff's Market Rating: 8.0

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March silver futures bulls have the overall near-term technical advantage. However, a four-month-old uptrend on the daily bar chart has turned into sideways trading. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at $24.00 and then at today’s high of $24.50. Next support is seen at the January low of $23.26 and then at $23.00. Wyckoff's Market Rating: 6.5. Read More

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Gold is a 'mainstay' asset for the next 3 years - BofA

Gold investors have been doing a lot of "soul-searching" for the last two and a half years. But gold as an asset will take an important place in portfolios in the next three years, according to Bank of America.

The precious metal ended the year flat and largely traded down and sideways since hitting those new record highs in 2020. But this is now finally changing.

"Interest in gold has been muted in recent quarters compared to other asset classes, partly because rising real rates and a stronger USD have offered no incentive to increase exposure to the yellow metal," said BofA commodity strategist Michael Widmer. "These factors, among others, have prompted some soul-searching among market participants. However, we think calling the death of gold is premature."

The macro outlook for gold is turning bullish in 2023, and that will last until at least 2026, Widmer pointed out, citing several drivers.

"First, it is true gold miners are increasingly discussing the merits of diversifying into copper, and data from our colleagues in equity research confirm that some senior gold miners have entered into the base metals. However, a look at the revenue breakdown suggests gold will remain the mainstay until at least 2026. Second, the macro backdrop is turning bullish gold; taking a longer-term perspective, our analysis also confirms that the yellow metal can be a potent portfolio diversifier," Widmer wrote. Read More

The world could run out of gold by 2050 as demand grows to keep up with evolving society, says researcher

As society becomes more complicated with the introduction of new technology, one researcher has issued a warning that the dwindling supply of resources in the face of growing demand means we need to improve how we use and recycle them.

In a research paper recently published in the journal Trends in Ecology and Evolution, Josep Peñuelas, a research professor at the Center for Ecological Research and Forestry Applications of the Autonomous University of Barcelona and at the Higher Council for Scientific Research (CREAF-CSIC), said that the world could run out of essential metals and minerals within the next 100 years. And even sooner than that for metals like gold.

"Based on the assumption of an annual growth in the consumption/extraction of mineral elements of around 3% until 2050, it is possible that the reserves of some of these elements may be exhausted by 2050 (gold and antimuonium) or in fewer than 100 years [molyddenum, zinc]," he wrote in his research paper. Read More

Gold to leave behind its $1,700-$2,000 range, eyes on gold-copper ratio as Fed pivots

Gold is gearing up to leave its $1,700-$2,000 an ounce range as the Federal Reserve sets the stage for a pivot at some point this year, according to Bloomberg Intelligence.

"It's the inevitable Fed pivot that we expect to launch gold out of its about $1,700-$2,000 an ounce range since 2019. Continuing the current trend in downward revisions of global economic growth and/or a drop in the copper price are prime candidates to curtail central-bank rate hikes," said the firm's senior macro strategist Mike McGlone.

In his latest analysis, McGlone looked at the copper-gold ratio and the U.S. treasury yields curve to get more insight into the precious metal.

"What's been consistent in the gold/copper ratio is buoyancy, when the inverted U.S. two-year/10-year curve recovered from similar extremes as now," he said in a recent note. "Copper's about 10% bounce in 2023 to Jan. 12 may be fleeting, facing diminishing global growth, central-bank restraint and repercussions from last year's rate hikes."

Gold is currently the top candidate to outperform copper, especially when the Fed pauses or starts cutting rates in 2023, McGlone pointed out. At the time of writing, February Comex gold futures traded at $1,906.40, down 0.18% on the day. Read More

Gold trades lower as Fed’s Bullard advocates front-loading rate hikes

“Front-loading” is a process of distributing unevenly, with a greater proportion at the beginning of the process, and James Bullard thinks this should apply to rate hikes.

In an interview with the Wall Street Journal James Bullard, President of the St. Louis Federal Reserve said that the “Federal Reserve should not stall” on raising its rates. He said that he likes the idea of “front-loading” rate hikes saying that “the Federal Reserve should move as rapidly as it can to get its policy rate over 5% and then it can react to the data”, adding “Why not go to where we’re supposed to go. Why stall? James Bullard is not a voting member of the Fed’s interest rate committee this year.

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His sentiment is also echoed by Loretta Mester, President of the Cleveland Federal Reserve who is advocating that the Fed needs to raise its interest rate a “little bit” higher than the Fed’s current target of 5% to 5 ¼%. In an interview with the Associated Press today she said, "I just think we need to keep going, and we'll discuss at the meeting how much to do”. 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.