x
Image Source: Unsplash
Silver Price News: Haven Seekers Boost Silver Amid Banking Sector Crisis
The safe haven qualities of silver and its lack of counterparty risk have seen the precious metal climb well above $22 an ounce to its highest level since early February.
While silver hasn’t enjoyed the same rally as its precious metal peer, gold, it has nonetheless been a beneficiary of the fallout in the banking sector with the collapse of three US banks, urgent help to avoid the failure of a fourth one followed by this weekend’s rushed deal with UBS buying Credit Suisse.
Silver’s failure to make more significant gains so far illustrates how out of favour the precious metal had become in February even with its healthy industrial demand outlook. Concerns over rising interest rates have weighed heavily on the case for silver so this week’s Federal Reserve interest rate decision is certain to have a significant impact on the metal’s ability to make further gains. Read More
Gold Price News: Gold Surges Near $2,000 as Investors Seek Out Haven
Gold is closing in on $2,000 an ounce as the continued fallout from the banking sector has seen a flood of money to gold with its safe haven qualities having endured through centuries of previous stock market collapses.
UBS’ hastily agreed a deal to buy Credit Suisse over the weekend should have a calming effect on markets but after the collapse of three US banks and deposit help with a fourth one, gold will remain the asset of choice until investors have more confidence that no other financial institutions are at risk.
Gold has come into its own amid the chaos in the banking sector with its lack of counterparty risk making it very attractive at a time when large depositors in the banks that have failed have been left concerned with how much of their money they will be able to get back. The tangible nature of physical gold suddenly becomes highly desired compared with money held on account. Read More
Bitcoin and gold spike as central banks coordinate efforts to halt the banking contagion
Five of the world's top central banks, including the Federal Reserve, the European Central Bank, the Swiss National Bank, the Bank of Canada and the Bank of England, have announced a coordinated effort to keep U.S. dollars flowing through the global financial system amid the biggest banking crisis since 2008.
The action by the central banks was announced via a press release on Sunday, which said that they would be enhancing “the provision of liquidity via the standing U.S. dollar liquidity swap laine arrangements.” Swap lines are an agreement between two central banks to exchange currencies.
“To improve the swap lines' effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of 7-day maturity operations from weekly to daily,” the release said. “These daily operations will commence on Monday, March 20, 2023, and will continue at least through the end of April.”
The swap line system was established to serve as a liquidity backstop that can help ease the strains in global funding markets, which helps to mitigate the effects the strains have on the supply of credit to households and businesses. Read More
$2500 gold will be a reality in 2023 as strong inflation and weak equities push investors into precious metals - Deven Soni, CEO of Matador
Retail investors will move into gold once the reality of high inflation and weak equities sets in, while the absence of regulatory clarity limits gold’s gains on the blockchain, according to Deven Soni, CEO of Matador Gold Technologies, a company that enables physical gold purchases using blockchain technology.
“Most people that pay attention think that 2023 is going to be a pretty good year for gold and precious metals,” he said. “Retail investors have a bit of a lag, and I think there's a lot of wishful thinking still in the stock market and a lot of hiding under the pillow and just holding cash. When you start realizing that inflation's eating away your actual savings under your mattress, I think there's going to be a retail push into gold.”
Soni spoke with Kitco News journalist Ernest Hoffman at the recent PDAC 2023 mining convention in Toronto, where he said that he sees the crypto and gold communities coming at the same problems with fiat currencies and central bank policies from different directions.
“I think there's certainly a parallel here,” he said. “I think people that buy physical metals do so because they want a backup plan in case things go wrong, and I think Bitcoin and other holders often feel the same way, they feel that the current regulatory and financial system hasn't performed the way they want. The difference is, one is really saying we're going to change everything, whereas the gold vision is, we want things back the way they were, with the gold-backed dollar. So it's a little bit of a rewind versus fast-forward.”
Soni said that for their part, the gold investment community is waiting for clear regulation that protects them before they fully embrace gold on the blockchain. Read More
Once $2,000 breaks, gold is off to the races - Willem Middelkoop
The gold market is again looking for a sustained push above $2,000 an ounce as investors look for safe-haven assets to shield themselves from the biggest global banking crisis since the 2008 Great Financial Crisis.
In a recent interview with Kitco News, Willem Middelkoop, chief investment officer and founder of Commodity Discovery Fund, said that he expects it's only a matter of time before gold pushes to new all-time this year. However, he added that in the bigger picture, whatever prices are now, in three years, they will be a lot higher.
"Three years from now, we are going to look back at these gold prices as a bargain. We will see this as the start of when prices really exploded," he said. "We are very close to pivot in the global monetary system."
Middelkoop's comments come as gold prices pushed to a 12-month high of $2,014.90 an ounce overnight. Although prices have backed off their highs, they remain within striking distance of the $2,000 level. April gold futures last traded at $1,987.89 an ounce, up 0.73% on the day.
Middelkoop said that the most significant driver for gold is the growing shift in globalization. He explained that the world is quickly moving towards a multipolar system as the U.S. dollar sees its role as a reserve currency start to weaken. Read More
Gold Prices Remain Resilient Despite Banking Crisis Resolution: Invesco's Kristina Hooper
The gold market continues to see solid support within striking distance of $2,000 an ounce. While gold prices can continue to perform well through the rest of the year, a new all-time high depends on how the current global banking crisis continues to unfold, according to one market strategist.
In an interview with Kitco News, Kristina Hooper, chief global market strategist at Invesco, said that while she is bullish on gold for the year, its current price action will depend on whether or not policymakers will be able to contain the situation and instil confidence in financial markets and the global banking system.
She noted that the government's plan to guarantee consumer bank deposits has gone a long way to calm initial fears. Last week at the start of the crisis, the Federal Reserve launched its Bank Term Funding Program, where banks can use their bonds for collateral to borrow capital from the central bank.
At the same time, the Federal Reserve has unleashed a record amount of liquidity through its discount window. Last week, banks borrowed nearly $153 billion to shore up their capital requirements. The previous record of $111 billion was set during the Great Financial Crisis.
Hooper said it will take some time to determine whether the current measures are enough to instil confidence. Read More
Gold will gain from de-dollarization, and the critical shortages are not in the metals themselves - Randy Smallwood
The politicization of the U.S. dollar is forcing banks into gold, while the Fed is making capital more expensive at a time when mines need to invest in growth, according to Randy Smallwood, President and CEO of Wheaton Precious Metals and Chair of the World Gold Council.
“The need for gold, the original critical mineral, as a store of value, as a measure of value, but a constant store of value in times like this has never been more apparent,” Smallwood said. “As we continue to struggle through this challenge of high inflation rates, I just get the sense that it's a bit of a house of cards that wouldn't take much to fall over.”
Smallwood spoke with Kitco News journalist Ernest Hoffman at the recent PDAC 2023 mining convention in Toronto, where he discussed the state of the precious metals market. He also explained what’s driving the recent M&A activity in the mining sector.
“I think it's a problem with growth opportunities out there,” he said. “When people start looking at their production profile going out, they realize they've got some holes four, five, six years out, and shareholders don't want to see those production holes come to fruition, so everyone has to look at different ways to grow.” Read More
Gold hits 12-mo. high, falls back a bit on profit-taking
Gold and silver prices are slightly up in midday U.S. trading Monday, with gold notching a 12-month high of $2,014.90 overnight, basis April Comex futures, and silver at a six-week high. Some normal profit-taking pressure and chart consolidation are seen on the price pullbacks from the overnight highs. Still, safe-haven demand for the metals is present in a shaky general marketplace amid the U.S. and European banking crisis. The technical charts are also bullish for gold and silver, which continues to invite chart-based speculators to the long sides. April gold was last up $1.70 at $1,975.30 and May silver was up $0.108 at $22.565.
Global stock markets were mixed to lower overnight. U.S. stock indexes are higher near midday. Banking stocks across the globe dropped Monday. Risk aversion is again keener early this week. The Swiss banking firm UBS acquired Credit Suisse over the weekend to try to stabilize the European banking system, following the collapse of two big U.S. banks in early March. The move did little to boost trader and investor confidence. "There is a general sentiment that is trending increasingly negative," said one market analyst. Said noted investor Mark Grant on CNBC when asked about the banking crisis: "It's going to get worse. It's going to be messy."
Technically, April gold futures prices hit a 12-month high early on today. Bulls have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $2,000 and then at today's high of $2,014.90. First support is seen at today's low of $1,970.00 and then at $1,950.00. Wyckoff's Market Rating: 8.5.
Image Source: Kitco News
May silver futures bulls have the overall near-term technical advantage. Prices are in a fledgling uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at today's high of $22.855 and then at $23.00. Next support is seen at today's low of $22.35 and then at $22.00. Wyckoff's Market Rating: 6.5. Read More
Image Source: Kitco News
Gold futures surge to $2014.90 only to retreat below $2000, a clear indication of uncertainty
Gold futures prices continue to dominate the attention of market participants with continued strong solid gains. There is a consensus amongst analysts that the precious yellow metal will continue to track higher, but there is also a consensus that there is an extreme amount of uncertainty as to the short-term direction or price changes over the next couple of weeks.
This uncertainty is based upon the upcoming FOMC decision on its next rate hike; whether it will pause, or raise rates by ¼%. Secondly, and of equal importance is the current banking crisis that has now spread globally to include Credit Suisse of Switzerland.
On Sunday Credit Suisse had new ownership by rival UBS AG in an all-stock purchase priced at 3 billion francs ($3.25 billion) took ownership of Credit Suisse. Guarantees were made by the Swiss National Bank to either bank allowing them to borrow up to 100 billion francs, which is backed by a federal default guarantee. This agreement was the result of work between the Swiss National Bank and the U.S. Federal Reserve.
Last week's banking crisis in the United States and Switzerland intensified potential uncertainty and concern of contagion spreading. MarketWatch quoted a note by Otavio Marenzi, CEO of Opimas, a management consulting firm focused on global capital markets that said, "The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland's reputation as a financial center". Read More
.png)
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.
