Today's Gold and Silver News - 1st November

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Gold Hovers Around $1,640 as Markets Consolidate Ahead of Fed Decision

Gold is starting a new week hovering around $1,640 an ounce as the price goes through a consolidation phase while waiting for fresh drivers.

This week is likely to see both the Federal Reserve and the Bank of England raise their benchmark interest rates by 75 basis points, increasing the pressure on the non-yield-bearing asset of gold.

However, with these increases largely priced in, it will take an unexpectedly smaller or larger move to impact markets when the central banks announce their decisions on Wednesday and Thursday respectively. The greater focus will instead be on the press conferences following the announcements as investors try and work out the future trajectory of the interest rate curve, particularly of the Fed. Read More

Silver Holds Above $19 at Start of Week Filled with Likely Rate Hikes

Silver is just about holding above $19 an ounce at the start of a trading week in which the Federal Reserve is likely to implement another 75 basis point hike to its benchmark interest rate.

The US central bank’s switch to implementing a series of large interest rate hikes from April onwards was the catalyst for a multi-month slump in the price of silver that it is still recovering from. So while this week’s expected increase is well-trailed, it serves as another reminder of the difficult macroeconomic environment a non-yield-bearing asset such as silver finds itself in. Read More

Gold in euro is bouncing off three month lows as EU inflation rises 10.7% in October

Gold against the euro is bouncing off last week’s three-month lows as inflation continues to surge higher in the eurozone.

Monday, Eurostat, the EU’s official statistics agency, said that preliminary data shows its Consumer Price Index hitting a new record high of 10.7% for the year in October. The data was significantly hotter than expected as economists were looking for a rise of 9.9%.

The gold market in U.S. dollar terms is seeing solid selling pressure Monday as prices remains below $1,650 an ounce. However, spot gold against the euro is seeing a better performance following the inflation data, last trading at $1650.43 an ounce, relatively unchanged on the day.

An unprecedented rise in energy prices pushed European inflation above the 10% threshold. The energy index rose by 41.9% in October, up from 40.7% reported in September.

At the same time, food prices rose 13.1%, up from the previous increase of 11.8%. Read More

Modi government continues pushing Gold Monetization Scheme as consumers buy physical gold at record pace during Diwali

Solid gold and silver demand during India's Dhanteras and Diwali is putting new pressure on the nation's economy and prompting the government to put renewed focus on its Gold Monetization Scheme.

Among some economists, there are growing expectations that gold and silver imports into India have pushed the country's trade deficit to record highs above $30 billion set in July. Last month the trade deficit came in at $22.47 billion, according to government records.

The bleak expectations come as the nation saw record demand for gold and silver bullion last week during five days of celebrations. According to anecdotal reports, some bullion shops saw sales during Diwali increase between 15% and 20% as consumers took advantage of lower gold prices.

Commodity analysts at Heraeus noted that India's festival and wedding season means that the fourth quarter sees the most robust gold demand in India. The analysts also said that adding to robust demand this year is an increase in income following a strong monsoon season; however, The European precious metals firm added that despite solid sales, demand is unlikely to surpass the record hit last year. Read More

Gold a bit weaker just ahead of FOMC meeting

Gold prices are modestly lower in midday U.S. trading Monday. Silver is trading near steady. A sharply higher U.S. dollar index and lower crude oil prices to start the trading week are bearish outside market forces for the metals markets. December gold was last down $3.80 at $1,641.20 and December silver was up $0.018 at $19.165.

Trading action in gold and silver may be more subdued until mid-week, as traders are looking ahead to the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. Most expect the FOMC to raise the Fed funds rate by another 0.75%. Traders and investors also want to see what comments the FOMC and Powell make regarding the future path of U.S. monetary policy—specifically when the Fed will back off the accelerator on aggressively raising interest rates.

Technically, the gold futures bears have the solid overall near-term technical advantage. Prices are still in a longer-term downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,650.00 and then at last Friday’s high of $1,670.90. First support is seen at $1,630.00 and then at the October low of $1,641.20. Wyckoff's Market Rating: 2.0.

Image Source: Kitco News

The silver bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at $17.40. First resistance is seen at $19.50 and then at last week’s high of $19.765. Next support is seen at today’s low of $18.865 and then at $18.50. Wyckoff's Market Rating: 3.0. Read More

Image Source: Kitco News

Hedge funds will remain bearish on gold price until the Fed slows its pace of tightening

Until there is more clarity from the Federal Reserve regarding the pace of its tightening cycle, hedge funds will continue to sell gold rallies and maintain an overall bearish outlook on the precious metal, according to some analysts.

Analysts note that hedge funds currently have low expectations that the Federal Reserve is ready to slow its aggressive monetary policy stance as bearish sentiment in the gold market has pushed back to September's four-year low, according to the latest trade data from the Commodity Futures Trading Commission.

The CFTC disaggregated Commitments of Traders report for the week ending Oct. 25 showed money managers lowered their speculative gross long positions in Comex gold futures by 1,328 contracts to 72,016. At the same time, short positions rose by 11,762 contracts to 110,804.

Gold's net short positioning now stands at -38,788 contracts, up nearly 51% from the previous week. Read More

European inflation hits 10.7% and gold on the longest monthly decline since 1968

The last day of October is ripe with terrifying news, and it has nothing to do with Halloween.

In Europe, it was just reported that preliminary data from Europe’s statistics office revealed that headline inflation came in at an annual 10.7% this month. CNBC said, “This represents the highest ever monthly reading since the euro zone’s formation. The 19-member bloc has faced higher prices, particularly on energy and food, for the past 12 months.”

The article also said that Preliminary data on Monday from Europe’s statistics office showed headline inflation came in at an annual 10.7% this month. This represents the highest-ever monthly reading since the euro zone’s formation. The 19-member bloc has faced higher prices, particularly on energy and food, for the past 12 months. But the increases have been accentuated by Russia’s invasion of Ukraine in late February.” Read More

Gold's 7 months of losses put it on path to longest losing streak in 5 decades

Gold price is feeling the pain of seven months of consecutive losses — the longest string of declines in more than five decades. And this at a time when the Federal Reserve is about to announce its fourth consecutive 75-basis-point hike.

Spot gold is looking to wrap up October down 1.4% on the month, its seventh monthly decline in a row — something not seen since 1968. Year-to-date, gold is down around 10%. Since the end of March, gold has dropped more than 15%.

After peaking above $2,000 an ounce in March following Russia's invasion of Ukraine, gold has struggled to maintain any new gains. It has primarily traded in a downtrend, with a strong U.S. dollar and higher Treasury yields weighing on the precious metal.

While many continue to debate a Fed pivot or at least a possibility of a slowdown in the next few months, the U.S. central bank is still on track for another oversized rate hike this Wednesday. Read More

Gold demand hits pre-pandemic levels, increasing 28% in the third quarter despite dismal investor interest - World Gold Council

Despite persistent bearish sentiment in future markets and outflows in exchange-traded products, there was still solid demand for physical gold in the third quarter, according to the latest research from the World Gold Council.

Monday, in its latest quarterly demand trend report, the WGC said that physical gold demand totalled 1,181 tonnes in the third quarter, increasing 28% from the third quarter last year. At the same time, year-to-date gold demand is up 18% compared to the first nine months of 2021.

Juan Carlos Artigas, director of investment research at the World Gold Council, said in an interview with Kitco News that global gold consumption has returned to prep-pandemic levels, driven by an increase in jewellery, solid demand for bars and coins and consistent purchases from central banks.

The rise in physical demand comes as the investment market, driven by outflows in global gold-backed ETFs, dropped by 47% or 227 tonnes to 124 tonnes.

However, Artigas said that the latest report shows that the gold market is driven by more than just investment demand in paper futures and ETFs. 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.