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Gold Price News: Gold Falls Back Below $1,950 Ahead of Crucial Fed Decision
It’s all eyes on the Federal Reserve with the bank’s committee having to decide on one of the trickiest interest rate decisions of recent times.
Stop raising rates and the markets will assume there is more to come in the banking crisis as well as risk failing to curb inflation; stick with the original plan of another 25 basis point hike and increase the pressure on already stretched balance sheets.
Gold has come down markedly from its above $2,000 an ounce peak reached at the height of this current banking crisis and is now trading below $1,950. So far, the measures put in place by banks and regulators, both in the US and Europe, have given the market confidence that another bank failure will be avoided and there is sufficient liquidity to avoid the sudden shock from the collapse of three US banks and the close shaves with Republic and Credit Suisse escalating into a 2008 scenario. Read More
Silver Price News: Silver Steady Near $22.50 Hoping For Interest Rate Relief
Silver is holding steady at around $22.50 an ounce as markets brace for today’s crucial Federal Reserve interest rate decision.
The US central bank finds itself in an unpleasant balancing act between avoiding sparking further concern about the health of the banking sector while also not adding pressure to an already stressed system as well as ensuring inflation is kept under control. Whereas a 25 basis point increase seemed almost certain a week or so ago, the collapse of three US banks and the near misses with Republic and Credit Suisse have dramatically changed the outlook.
For silver investors, a pause on interest rate hikes would be welcomed as the physical metal’s lack of dividend makes it less attractive at times of rising interest rates. It was the Fed’s signalling and implementation of a series of large hikes last year that saw silver’s price collapse from $26 to $18 an ounce from April to September and the precious metal has yet to recover to the level it was trading about before the Fed adopted its aggressive stance. Read More
Consumers cash in on unwanted gold as its price soars amid a spreading bank crisis
The U.S. banking crisis and rising gold prices are prompting consumers to cash in on their unwanted and broken gold jewelry, and this trend will only continue to grow, according to one gemologist.
In an interview with Kitco News, Tobina Kahn, president of House of Kahn Estate Jewelers based in Chicago, said that her firm saw unprecedented traffic Thursday and Friday from customers looking to sell their gold jewelry, taking advantage of a 12-month high in prices.
Kahn added that along with unprecedented selling demand, they are busy navigating a volatile market as prices pushed to within striking distance of $2,000 an ounce ahead of the weekend.
"This was phenomenal," she said. "I've been doing this for 50 years and haven't seen anything like this. If you had stayed in our store for an extra 20 minutes, you would have gotten a higher price for your gold. From the time I put the gold on the scale to pressing the reset button, the price was jumping $20."
Khan said that it is understandable why consumers are now cashing in on their unwanted gold jewelry as everyone is becoming more worried about the health of the economy and the banking sector. Gold prices have pushed solidly above $1,900 as investors continue to digest the ongoing banking crisis following the collapse of Silicon Valley Bank, Signature Bank and Swiss-based Credit Suisse, one of Europe's largest banks.
While consumers are eager to turn their gold into U.S. dollars, Khan said the sentiment is positive and not one of desperation or fear. Read More
Gold prices pushing higher as Federal Reserve raises interest rates by 25 basis points, says banking sector is 'sound'
The gold market continues to hold well above $1,900 an ounce, seeing some new bullish momentum as the Federal Reserve raises interest rates by 25 basis points and signals that it has not finished its tightening cycle.
"The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the central bank said in its monetary policy statement.
The central bank's move to increase the federal funds rate to between 4.75% and 5.00% caps a highly unstable period for bond markets and interest rates. Fixed income markets have been extremely volatile in the last few weeks, with a sharp drop in bond yields as investors reacted to the collapse of Silicon Valley Bank in California, New York-based Signature Bank and one of Europe's largest banks, Swiss-based Credit Suisse.
The Federal Reserve downplayed the recent turmoil in the banking sector. While the banking crisis has added a new element to the Federal Reserve's monetary policy stance, it remains focused on bringing inflation down to its 2% target.
"The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks. Read More
Gold, silver rally after 0.25% Fed rate hike
Gold and silver prices are solidly higher in early-afternoon U.S. trading Wednesday, in the immediate aftermath of a 0.25% interest rate increase from the Federal Reserve, which was mostly in line with market expectations. April gold was last up $19.30 at $1,959.30 and May silver was up $0.455 at $22.86.
The Federal Reserve's FOMC meeting concluded Wednesday afternoon with the 25-basis-point rate hike. The FOMC statement said one more rate hike this year is probable and that the current banking crisis will likely have a negative impact on the U.S. economy. The FOMC statement dropped its wording referring to ongoing increases in interest rates, which the marketplace is initially deeming as leaning less hawkish on U.S. monetary policy. As of this writing, traders were awaiting Fed Chairman Powell's press conference. The Bank of England holds its regular monetary policy meeting Thursday.
Technically, April gold futures bulls have the firm overall near-term technical advantage. Prices are in a fledgling uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at this week's high of $2,014.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,975.20 and then at Tuesday's high of $1,988.70. First support is seen at today's low of $1,936.50 and then at $1,922.70. Wyckoff's Market Rating: 7.5.
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May silver futures prices hit a seven-week high today. The silver 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 $24.00. 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 $23.025 and then at $23.25. Next support is seen at this week's low of $22.29 and then at $22.00. Wyckoff's Market Rating: 6.5. Read More
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Gold price jumps as Fed's Powell explains latest change in Fed speak
With the banking crisis hitting the markets, the Federal Reserve's monetary policy might have less work to do, according to U.S. central bank Chair Jerome, who leaned dovish during his press conference, sending gold prices higher.
The biggest change in the Fed's language after the Silicon Valley Bank fallout was a shift from expectations of "ongoing rate increases" to "some additional policy firming."
"We no longer state that ongoing rate increases will be needed to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate," Powell told reporters Wednesday.
Since the February FOMC meeting, economic indicators have been stronger than expected. But the events in the banking system are likely to lead to tighter credit conditions and act as an additional tightening mechanism, Powell explained.
"Events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would, in turn, affect economic outcomes. It is too soon to determine the extent of these effects and, therefore, too soon to tell how monetary policy should respond," he elaborated. "We will closely monitor incoming data and carefully assess the actual and expected effects of tighter credit conditions on economic activity, the labor market and inflation."
When asked to clarify, Powell noted that "firming" refers to the policy rate and told markets to focus on the words "may" and "some" as opposed to "ongoing." Read More
Gold futures surge $32 higher after the Fed signals a pause in hikes is imminent
The rally in gold spot and futures returns after a small two-day correction. On Monday of this week, gold hit a new high value at $2015 per ounce. It was approximately one year ago to the day that gold futures traded above $2000 per ounce. Gold traded to a high of $2077 in March 2022. What followed was a multi-month correction that began a conclusion in September through November of last year. On November 3 a triple bottom was identified, the multi-month correction concluded, and a multi-month rally began.
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As of 6 o’clock EST p.m. gold futures basis, the most active April contract has just opened up overseas in Australia. It is currently fixed at $1972.10 which is an increase of $22.50 based on the closing price in New York.
Market participants United States are now followed by overseas traders digesting what the Federal Reserve said and did after today’s FOMC meeting. As expected, they did raise their fed funds rate by ¼%. However, for the first time since they began their rate hikes they announced a pivot. That pivot is not rate cuts but rather that rate hikes will be paused with possibly one more rate hike of ¼% in May. They also confirmed that they would continue to keep this terminal rate elevated throughout 2023, a position they have maintained for quite some time. 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.
