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Silver Price News: Silver awaits China’s Pivot
Like Gold, Silver also seems to be rangebound this week, largely moving between $29.0/toz to $29.6/toz, suggesting a consolidation awaiting further catalysts. However, a longer-term stance might view silver as being in a falling channel since late May, currently bound by $28.3/toz-$30.8. Today’s early trading sees silver trending back down towards $29.4/toz.
We have already noted in our gold report that interest rate indicators such as 2-Year and 10-Year US Treasuries, US Fed Funds Futures and the US Dollar have all been mildly supportive thus far this week following a big Friday move. However, with reference to recent incoming data, weak China Industrial data, weak German Economic Sentiment and weak Japan manufacturing continues to suggest slowing momentum. The significant deficit in the silver market does provide a buffer, however.
Against this backdrop, it is interesting to note the current high premia that silver is attracting in China, which is generally indicative of particularly high physical demand. Read More
Gold Price News: Gold Treads Water as Central Banks Signal Support
After an initial early surge in Monday trading, gold has become somewhat rangebound in more recent trading, largely confined to $2310-$2330/toz. The 50-day simple moving average is now in decline, moving below $2344/toz. Today’s early trading sees gold at $2330/toz.
Incoming economic data pertinent to gold has been mixed; while US Retail Sales for May disappointed, US Industrial Production for the same month was stronger. Meanwhile, the Euro Zone’s ZEW Economic Sentiment Index for June significantly exceeded expectations, despite weakness in Germany. However, this was largely driven by future expectations, with the current conditions component stalling at recessionary levels.
After Friday’s big move, US interest rate indicators have been relatively stable thus far this week. Both 2-Year and 10-Year US Treasuries Yields are trading marginally lower around 11-week lows, while the US Dollar is flat, despite political risk arising from upcoming French parliamentary elections. Fed fund futures also remain stable, pricing in a high probability of two rate cuts in 2024 vs. one in the Fed’s ‘dot plot’. This is both gold and silver supportive. Read More
Why central banks are increasing their gold reserves: 29% plan to buy more in 2024 - World Gold Council report
Central bank gold purchases continue to dominate and transform the gold market, and this trend is only getting stronger, according to the latest report from the World Gold Council.
On Tuesday, the WGC published the results of its annual Central Bank Gold Reserves survey. Of the 70 responses, 29% said they expect to increase their gold reserves in the next 12 months. Read More
Gold meets digital dollars: Tether launches aUSD₮ – a stablecoin with gold backing
Tether, the company responsible for issuing USDT, the top stablecoin by market cap, continues to expand beyond fiat-backed stablecoins with the launch of Alloy by Tether, a new asset-backed token that uses Tether Gold (XAU₮) as collateral.
“Developed by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., both of whom are members of the Tether Group, Alloy by Tether aims to redefine stability in the digital economy by combining the strengths of a stable unit of account with the security and reliability of gold,” the company said in a press release.
“We are thrilled to announce the launch of Alloy by Tether, introducing a class of digital assets backed by gold and tethered to a reference fiat currency,” said Paolo Ardoino, CEO of Tether. “While the stabilization mechanism is different compared to traditional options like USD₮, this innovative solution marks an exciting milestone, and we eagerly anticipate how it will interact with the rest of the market. Moreover, we plan to make this innovative technology available in our upcoming digital asset tokenization platform as well.” Read More
Supply constraints, demand growth are bullish for both sides of the gold:silver ratio – CME Group’s Norland
While there are several key factors that impact gold and silver prices differently, new demand growth for both precious metals and the paucity of new supply means both are likely to continue increasing in value, according to Erik Norland, Executive Director and Senior Economist at CME Group.
The first gold and silver coins were minted 2600 years ago in the Anatolian Kingdom of Lydia, and this resulted in the earliest known instance of the gold:silver ratio.
“Like any cross rate, the amount of silver that can be purchased with an ounce of gold is driven by both demand and supply-side factors, and the cross rate is anything other than stable,” Norland said. “Sadly, we don’t have the time series of the gold-silver ratio dating back to ancient times, but we do have data going back to the launch of gold futures on December 31, 1974. Since the mid-1970s, one ounce of gold bought anywhere from 17 ounces to as many as 123 ounces of silver.” Read More
Gold price to churn for the next six months and then rally back to record highs - Wells Fargo
Investors need to be patient when it comes to gold. According to one U.S. bank, the precious metal could continue to consolidate through the summer as markets come to terms with the Federal Reserve’s holding pattern.
In an interview with Kitco News, John LaForge, Head of Real Asset Strategy at the bank, said that he does not expect the Federal Reserve to cut rates until the final months of the year. He added that the market is seeing solid signs that the Federal Reserve’s aggressive monetary policies have reached their limit.
Until then, LaForge said that the market will be at the mercy of its natural ebbs and flows in retail markets. He pointed out that consumers in Asia, led by Chinese and Indian buyers, have been significant drivers for the physical bullion market, supporting prices near-record levels. Read More
Can silver prices sustain slowing momentum in the green energy transition?
Industrial demand increases from the global green energy transition propelled silver prices to a 12-year high last month as demand has outstripped supply. However, this trend appears to be at risk after the World Economic Forum noted that momentum in the green energy transition is slowing.
In a report published Tuesday, the WEF said that while the global energy transition is still progressing, growing geopolitical uncertainty has caused it to lose momentum.
The report used the Energy Transition Index (ETI) to benchmark 120 countries on the performance of their current energy systems. In the current hierarchy, European countries dominated the top 10 rankings for 2024, with Sweden and Denmark coming in first and second, respectively. At the same time, the report also noted that global average ETI scores reached a record high this year, but growth has slowed. Read More
Gold and silver caught in prolonged consolidation but prices will head higher - Saxo Bank
Although gold and silver are stuck in neutral at elevated levels, one market analyst remains a long-term bull on precious metals.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, published a report Tuesday saying investors and traders are just catching their breath after the market’s nearly $250 rally from its February lows to its peak above $2450 an ounce last month.
Hansen added that although gold has lost some momentum, there is very little bearish sentiment in the marketplace as investors and money managers see no urgency to take profits.
He explained that many hedge funds jumped into gold when prices were still below $2,200 an ounce. This sentiment is helping gold hold sticky support at around $2,300 an ounce.
“It is clear that the bulk of the run-up in prices back in February and March was supported by strong demand from managed money traders, such as hedge funds. Having joined the rally at an early stage, they have subsequently not been forced to adjust (sell) positions as the current correction phase has kept prices above levels that otherwise would have forced them to reduce their exposure,” he said in the report. 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.
