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Gold Price News: Gold Back Below $2,000 But Remains Well-Supported
Gold has slipped back below $2,000 an ounce following hawkish comments by Federal Reserve officials about the need for more interest rate hikes.
The dip below the psychologically important threshold reflects a macroeconomic environment in which interest rates are still rising with the European Central Bank, as well as the Fed, set to raise their benchmark rates in May. Still even with the recent pullback, gold remains at very elevated levels considering the price was languishing close to $1,800 an ounce as recently as early March.
Confidence in the banking sector will take a while to return after the collapse of three US banks and the rushed sale of Credit Suisse and gold was the biggest beneficiary of that crisis thanks to its time-honoured safe haven appeal and lack of counterparty risk. So while the very short-term movement is currently down, gold is likely to quickly find support and continue to trade close to $2,000 an ounce. Read More
Silver Price News: Silver Dips Below $25 on Hawkish Rhetoric From Fed Officials
Silver has, like gold, dipped from its recent highs and is now trading below $25 an ounce following a slight reappraisal of prices following comments from Federal Reserve officials that reiterated the need for more interest hikes to fully tame inflation.
After silver’s impressive surge that saw it gain more than $5 an ounce from early March, a slight pullback was to be expected yet the fundamental outlook suggests fresh gains are still possible. The metal remains in strong demand from the solar sector as well as electric vehicles and these are likely to form a bedrock of support for many years yet.
The main headwind for silver in the last year has been the prospect and implementation of interest rate hikes by the Fed, with interest-bearing assets being favoured at times of rising interest rates. Read More
Gold to remain a valuable safe-haven asset through 2023 - VanEck
Gold's initial rally to $2,000 an ounce after last month's banking crisis was a textbook reason why investors need to own some gold in their portfolio, and according to one investment firm, the precious metal will remain a valuable safe-haven asset through the rest of 2023.
In their latest report published last week, Imaru Casanova, deputy portfolio manager and Joe Foster, portfolio manager and strategist for VanEck's Gold Fund, said they still see plenty of value for gold even as prices hold solid support above $2,000 an ounce.
"Last month's developments should act as a wakeup call to those lacking exposure to the gold sector. And the entry point isn't terrible, either. Think about it: despite the heightened level of risk in March, gold didn't even hit its all-time highs," the analysts said. "We don't believe the market is fully reflecting the risks ahead."
The bullish comments come as gold prices recover from a sharp selloff late last week as investors took profits as the market rallied to a 13-month high above $2,050 an ounce. June gold futures last traded at $2,018.50 an ounce, up 0.5% on the day. Read More
Investors flock to gold, silver bullion to protect wealth in Q1
Despite the robust volatility in the first quarter of 2023, the U.S. Mint saw historical demand for its gold bullion, seeing its best March and quarterly sales in more than two decades.
According to data from the U.S. Mint, it sold 215,000 ounces of gold in various denominations of its America Eagle gold coins, its best March performance since 2018. At the same time, the mint sold 435,500 ounces in the first three months of the year, its best first-quarter performance since 1999.
March gold sales are up more than 38% from last year; at the same time, quarterly sales are up 2% compared to the first quarter of 2022.
Analysts have said that it’s not surprising to see the strong sales data in March as investors fled to the precious metal to protect their wealth as global financial markets saw the most extensive banking crisis since the 2008 Great Financial Crisis.
Analysts note that broad-based investment demand for gold helped to drive the price back above $2,000 an ounce. Read More
Gold down but well up from daily low as USDX fades
Gold prices are lower near midday Wednesday but have posted a significant rebound from the early-session low. Silver prices are modestly up after also seeing solid losses in early dealings. The U.S. dollar index has lost most of its earlier good daily gains, which has given the metals market bulls some confidence to step in to buy today’s price dips. However, rising U.S. Treasury and European bond yields, as well as lower crude oil prices, are keeping the precious metals depressed today. June gold was last down $14.20 at $2,005.30 and May silver was up $0.117 at $25.38.
Some hawkish Fed-speak Tuesday has dampened trader and investor spirits at mid-week, including metals traders. Non-voting members of the FOMC argued in favor of higher U.S. interest rates for longer. Fed Bank of Atlanta President Raphael Bostic told CNBC he would like to see one more rate hike and then hold rates above 5% for a period of time to cool down inflation
Technically, June gold futures bulls still have the firm overall near-term technical advantage but have faded. Prices are in a five-week-old uptrend on the daily bar chart, but the bulls need to show fresh power soon to keep it alive. Bulls’ next upside price objective is to produce a close above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at today’s high of $2,020.30 and then at this week’s high of $2,028.00. First support is seen at $1,993.00 and then at today’s low of $1,980.90. Wyckoff's Market Rating: 7.5.
Image Source: Kitco News
May silver futures bulls have the solid overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week’s high of $25.71 and then at $26.00. Next support is seen at $25.00 and then at today’s low of $24.715. Wyckoff's Market Rating: 7.5. Read More
Image Source: Kitco News
Sticky UK inflation raises fear that the Fed is not done yet, keeps gold down
Inflation may have peaked in the U.S., giving the Federal Reserve room to end its aggressive monetary policy; however, the global threat has not abated, which will continue to support gold even as price volatility picks up.
Early Wednesday, gold prices tested support around $1,980 an ounce, falling to a two-week low after inflation in the United Kingdom came in hotter than expected, holding above 10% for the year in March. This is the seventh consecutive month that inflation has been above 10%.
According to some analysts, gold reacted to the British inflation data because it sparked fears that the inflation threat will reignite in the U.S., forcing the Federal Reserve to maintain its aggressive monetary policy stance and pushing the economy closer to a recession.
The latest data from the CME FedWatch Tool markets see a more than 80% chance of a 25-basis point hike next month. However, looking past May, expectations of a potential rate cut in the second half of the year are being replaced by more rate hikes.
"No one really knows where the Fed will be going from here, and if next month's 25bp hike – which is given more than 80% chance – will be the last one. The truth is, it will depend on inflation, really," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in her daily research note. Read More
Silver supply deficit reaches record high, could fuel price growth - Silver Institute report
With silver prices holding above $25 an ounce, investors could finally be waking up to a massive imbalance in the precious metals supply and demand fundamentals as demand continues to outstrip supply, according to the latest report from the Silver Institute.
Wednesday, the Institute published its 2023 Annual World Silver Survey, and according to the research, silver saw its most significant market deficit on record, hitting 237.7 million ounces. Metals Focus, the firm behind the research, noted that the deficits in 2021 and 2022 have more than offset the cumulative surpluses of the previous 11 years.
In an interview with Kitco News, Philip Newman said that the market imbalance is driven by record demand and stagnant supply growth.
According to the report, global demand rose to a new record high of 1.242 million ounces, up 18% from the record levels seen in 2021. At the same time, the global silver supply totaled 1.004 billion ounces, roughly unchanged from the previous year. For 2023, supply is expected to grow by 2% to 1.024 billion ounces.
"Silver demand was unprecedented in 2022, and we don't say that to try and be sensational that is the only way to describe the market," Neman said. "The silver market has entered a new paradigm of deficits that kicked off in 2021." Read More
Fed narrative alarms traders who believe that a rate pause is imminent after the May rate hike
Recent volatility led to diminished bullish market sentiment for gold causing a price break and taking gold futures to $1980.90 before recovering. This morning in New York traders witnessed a quick and powerful price decline in gold breaking $20 below $2000 and recovering just as quickly as it sold off.
This was in response to Federal Reserve officials who continue to reiterate the need for taking interest rates higher. Federal Reserve officials will go silent one week before the May FOMC meeting beginning on Saturday, April 22.
Two Fed officials have been extremely vocal both suggesting the need to continue to raise interest rates even after the anticipated ¼% rate hike occurs in May.
Last week Fed Governor Christopher Waller said that the Federal Reserve needs to continue raising interest rates because of the high level of inflation. "Economic output and employment are continuing to grow at a solid pace while inflation remains much too high," Waller said, noting that investors should not expect rates to fall any time soon. "Monetary policy will need to remain tight for a substantial period of time, and longer than markets anticipate,".
Fed Governor Waller was resolute when he spoke on Friday saying, “Despite a year of aggressive rate increases U.S. central bankers "haven't made much progress" in returning inflation to their 2% target and need to move interest rates higher still.” Read More
USD is suffering 'stunning collapse' as world's reserve currency, warns Eurizon SLJ Capital's Jen
Markets need to pay closer attention to the de-dollarization trend since the greenback is losing its power as a reserve currency faster than many analysts are noticing, according to Stephen Jen, CEO and co-CIO of Eurizon SLJ Capital.
The dollar's loss of its reserve currency status accelerated last year when the greenback was used against Moscow as part of the sanction package after Russia invaded Ukraine. In 2022, the USD's share as a global reserve currency fell at ten times the average pace of the past 20 years, Jen said in a report.
"The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions," Jen wrote. "Exceptional actions taken by the U.S. and its allies against Russia have startled large reserve-holding countries, most of which are from the Global South."
According to Jen's calculations, the greenback's share of official global reserve currencies dropped from 73% in 2001 to about 55% in 2021. And in 2022, it tumbled to 47% of total global reserves. Read More
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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.
