Today's Gold and Silver News: 22-12-2022

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Gold Price News: Gold Close to 6-Month High on Expectations of Dovish Fed

Gold is trading above $1,800 an ounce, close to its highest level for six months, as the precious metal’s strong recovery from early November onwards remains on track.

Gold’s turnaround in fortunes was sparked by a change in viewpoint on how quickly the Federal Reserve will revert to a more dovish monetary policy approach after a year filled with large interest rate hikes.

The fact that gold has been able to keep up its upward momentum following last week’s hikes by the Fed, the Bank of England and the European Central Bank illustrates the strength of support that has built up for gold.

Gold has also been the beneficiary of investors remaining highly cautious towards equities amid mounting fears that 2023 will be marked by a global recession. Read More

Silver Price News: Silver Approaches 8-Month High With Bullish Momentum

Silver continues to march ever higher with the price briefly climbing above $24 an ounce to reach its highest level for eight months. 

While the World Cup may be over, the football cliche of “it’s a game of two halves” certainly seems apt to describe silver’s year, or perhaps more accurately a year of four quarters.

After a buoyant start to the year in which silver climbed above $26 an ounce, the second and third quarters saw the metal endure a sustained slump before reaching its low at the start of September. From here, silver has staged a remarkable recovery as finally the strong fundamental case in which the metal is in hot demand across a range of sectors managed to be heard. Read More

Gold moves higher as the dollar falls on the news of a BOJ policy revision

The Bank of Japan's surprise decision that they would raise their benchmark interest rate cap from 0.25% to 0.50% sent ripples through the global financial markets. Since 2016 the Japanese Central Bank has set its target range for the yield of 10-year Japanese government bonds near zero, with a cap of 0.25%. As other major central banks began to enact interest rate hikes this year the BOJ maintained their cap on its benchmark rate near zero.

According to Reuters News, "The Bank of Japan shocked markets on Tuesday with a surprise tweak to its bond yield control that allows long-term interest rates to rise more, a move aimed at easing some of the costs of prolonged monetary stimulus…But the central bank kept its yield target unchanged and said it will sharply increase bond buying, a sign the move was a fine-tuning of existing ultra-loose monetary policy rather than a withdrawal of stimulus."

As of 4:15 PM EST gold futures basis, the most active February 2023 contract is fixed at $1828.20 after factoring in a net gain of $30.50. Spot gold gained $31 and is currently fixed at $1818.40. Silver had the largest percentage gain of over 5% with the most active March 2023 futures contract gaining $1.20 and is fixed at $24.39.

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Gains in the precious metals were partially driven by dollar weakness but the vast majority of today's moves were the result of strong buying in the markets. Read More

Gold, silver up a bit on mild safe-haven demand, technical buying

Gold and silver prices are slightly higher in midday U.S. trading Wednesday, with silver scoring an eight-month high. Both markets are pausing after posting solid gains Tuesday, amid wobbly global stock and financial markets that prompted some safe-haven demand for the metals, especially on Tuesday. Chart-based buying was also featured in the two precious metals market today. Rising bond yields this week are a bearish element for gold and silver. February gold was last up $2.40 at $1,827.80 and March silver was up $0.014 at $24.285.

The marketplace Wednesday has mostly digested the Bank of Japan's move Tuesday to tighten its monetary policy by raising the cap for the interest rate on its 10-year bond by 0.25 percent. The Japanese yen surged against the U.S. dollar. Global bond and stock markets were rattled by the news because Japan is a big player in global bond markets. Japanese citizens are big savers and put much of their money into global stocks and bonds. With the higher domestic bond yield cap, Japanese citizens and companies may opt to keep more of their money at home. Speculators worldwide had for years been putting on a yen-based "carry trade" that has suddenly become very shaky. With world financial markets so highly intertwined, all of the above at least temporarily spooked the global marketplace. Some Fed watchers are saying the BOJ move underscores the notion that global inflation remains problematic and that the Fed won't be able to do any pivot on its hawkish monetary policy in 2023.

Technically, February gold futures bulls have the firm overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the December high of $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at today's high of $1,833.80 and then at the December high of $1,836.90. First support is seen at $1,820.00 and then at $1,800.00. Wyckoff's Market Rating: 7.0

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March silver futures prices hit an eight-month-high today. The silver bulls have the solid overall near-term technical advantage. Prices are in a choppy 3.5-month-old uptrend on the daily bar chart. 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 the December low of $22.19. First resistance is seen at today's high of $24.525 and then at $25.00. Next support is seen at $24.00 and then at $23.50. Wyckoff's Market Rating: 7.5. Read More

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Will recession be good for gold price? ANZ weighs in

After a historic tightening cycle by the Federal Reserve, a recession or a significant economic slowdown is looking very likely. But will that be good for gold?

For most of 2022, an aggressive Fed coupled with a strong U.S. dollar had weighed on gold, putting a price cap on any potential rally.

"The stronger USD also weighed on the precious metal sector. Gold fell amid the decline in investor demand," Australia and New Zealand Banking Group's (ANZ) senior commodity strategist Daniel Hynes. "Synchronised rate hikes have weighed on gold in 2022."

Year-to-date, spot gold is nearly flat, down 0.3%. This is after a December rally that took prices from a low of $1,750 an ounce at the beginning of the month to Tuesday's high of $1,830 an ounce.

The year-end gold price rally is coming when the global economy is at an inflection point.

"Tighter monetary policies amid high inflation are likely to slow economic growth in 2023," said Hynes. "This backdrop is typically positive for gold." Read More

'We've been through hell' - Claude Bejet on the coming gold boom after a two-year bear market

There will be less M&A in 2022 and 2023, said Claude Bejet, a writer for the Swiss Gold Letter.

Kitco Mining correspondent Paul Harris spoke to Bejet at Mines and Money London held from November 29 to December 1.

Bejet is also a private investor specializing in mining stocks and emerging markets. He is bullish on gold, especially after the big drop in 2022. Gold is also helped by cryptocurrencies, which are no longer crowding out precious metals as an investment alternative.

"We've been through hell. We've had a two-year bear market of huge proportions. What's most important is sentiment," said Bejet, who added that gold is "...climbing the wall of worry."

Asked about M&A, Bejet expects activity to be muted while gold runs, which he expects to occur over the next two years.

"The M&A market really booms at the end of a cycle," said Bejet. Read More

U.S. economy on thin ice: These are top recession bets for 2023

More and more banks and economists are leaning towards a hard landing in 2023 as high-interest rates start to bite. But a recession is not a done deal yet, even though the U.S. economy is on thin ice going into next year.

After a rapid interest rate hiking cycle by the Federal Reserve, macroeconomic data is finally showing signs of cooling, with the biggest hit to the economy yet to come.

Fed Chair Jerome Powell has reiterated a few times already that the full effects of this year's total 425-basis-point rate increase are yet to be worked through the economy.

On the possibility of a soft landing, Powell also noted that the longer the Fed needs to keep rates higher, the narrower the runway becomes. "I don't think anyone knows whether we're going to have a recession or not. And if we do, whether it's going to be a deep one or not, it's just not knowable," he said in December.

Despite the Fed Chair not being able to forecast a recession, the Fed is looking for real GDP to come in at 0.5% in 2023, the PCE inflation to slow to 3.1%, and the federal funds rate to peak at 5.1%. Read More

Live From The Vault: Episode 104

LMBA dealt Christmas silver wild card

In this week’s Live from the Vault, Andrew Maguire takes a glimpse into the smoke and mirrors world of the ‘LBMA cartel’, after allegations of global silver price fixing played right into the hands of member banks.

The London wholesaler provides an update on the 27th December BIS Options expiry position, revealing the wayward speculators staring at severe losses and gives an insight into the major market catalysts in 2023.

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.