Today's Gold and Silver News: 24-01-2023

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Gold Price News: Weaker Dollar Keeps Gold Supported Despite Equities Optimism

Gold is trading comfortably above $1,900 an ounce as a weaker dollar helps offset the slight unwinding of fear trading on a positive day for equity markets.

While the Federal Reserve is starting to turn more dovish with recent comments by its officials hinting at interest rates close to where they need to be to tame inflation, the European Central Bank has been much more hawkish. The ECB was slower than the Fed to start hiking rates and looks likely to continue increasing rates for longer as a result, with Klass Knot stating the need for 50 basis point hikes in February and March. 

The potentially divergent stances of the ECB and the Fed on their monetary policy this year highlights both how much more significant the words and the actions of the Fed is to the gold price than the ECB and also how early the prospect of the Fed easing up on rate hikes has been priced in to gold. Read More

Silver Price News: Silver Slumbers With Strong Bullish Case Priced In

Silver’s largely boring start to the year continues with the price continuing to oscillate within its narrow range either side of $24 an ounce. 

It is now clear that silver investors and traders are waiting for a fresh catalyst to drive the price as the underlying case for the precious metal remains solid. The prospect of a more dovish Federal Reserve has already been priced in, albeit with a much less marked price reaction than for silver’s precious metal peer gold. Equally, the fundamental picture in which strong industrial demand is likely to prompt a third year of deficit as mining and recycling fails to keep pace. Furthermore, while today’s weaker US dollar will undoubtedly be a boost for silver, given it is typically priced in the US currency, the greenback’s peak came some months ago so the day-to-day changes don’t seem to be having a material impact. Read More

Hedge funds add to their bullish gold bets, but rally appears to be losing some steam

For the seventh consecutive week, hedge funds continued to pile into gold, according to the latest trade data from the Commodity Futures Trading Commission.

According to some analysts, the gold market continues to benefit from shifting U.S. interest rate expectations, which is weakening the U.S. dollar. Markets currently expect the Federal Reserve to further slow down the pace of its rate hikes with a 25 basis point move next month.

An expected end to the Federal Reserve's aggressive tightening cycle has pushed the U.S. dollar index to a seven-month low. At the same time, gold prices are trading near a nine-month high, with prices holding initial support above $1,900 an ounce.

"Significant headwinds are building for the U.S. economy that could impact the Fed's monetary policies and that will continue to support gold prices," said Sean Lusk, co-director of commercial hedging at Walsh Trading, in a recent interview with Kitco News.

The CFTC's disaggregated Commitments of Traders report for the week ending Jan. 17 showed money managers increased their speculative gross long positions in Comex gold futures by 7,618 contracts to 124,222. At the same time, short positions rose by 50 contracts to 54,845.

The gold market is now net long by 69,377 contracts, reaching its highest level since mid-April last year. Read More

India looks to lower gold import duty to combat illegal smuggling

A surge in gold smuggling has pushed India to look into cutting its import duty on the precious metal as illegal activity is hurting official profits.

"The Indian government is set to unveil its annual budget for the upcoming 2023-24 fiscal year (April-23-March-24) on 1st February," said Metals Focus in its report Monday. "Under normal circumstances, any changes in the customs or import duty also tend to be revealed at this time."

A lower import duty would lower the price of gold in India and increase demand, said government and industry officials. "The government is aware of problems created by the higher duty structure and they will be fixed soon," Reuters quoted one government official.

Another official said a lower import duty is being considered, stating: "We will take a final call soon."

The Ministry of Commerce confirmed the correlation between the higher import duty and smuggling, adding that the duty could be lowered in the next budget due February 1. "Smuggling is going up," Reuters quoted the commerce ministry official as saying.

The new budget would be an appropriate time to announce these changes, Metals Focus added. "The budget is important from the policy and regulatory perspective as several tax changes tend to be announced. ... Given that gold has seen several import duty changes over the years, the industry keenly awaits this event," analysts said in the report. Read More

After a three-month rally, silver sees profit-taking; is this a signal for gold at resistance levels?

After outperforming gold in November and December, the rally in silver has slowed, with prices falling below $24 per ounce.

March silver futures last traded at $23.57 an ounce, down 1.50% on the day. As selling pressure picks up, analysts have said they are watching initial support at $23.26.

Some analysts note that after silver's 40% rally from two-year lows in September, the precious metal saw some solid profit-taking at resistance at $24.50. The selling pressure comes as the U.S. dollar appears to have found renewed support after significant selling pressure. The U.S. dollar Index is seeing solid support around 102 points, a seven-month low.

The near-term peak in silver comes as many analysts expect prices to continue to push higher. Commodity analysts at Commerzbank said that they see the silver market pushing above $25 an ounce by the end of the year as investor and industrial demand support higher prices. Read More

Gold sees routine profit-taking, downside correction

Gold prices are modestly down in midday U.S. trading Monday, on a normal pause and mild profit-taking after hitting an eight-month high late last week. Silver bulls are fading, however, as prices hit a five-week low today and the near-term technical posture is deteriorating. February gold was last down $4.40 at $1,923.90 and March silver was down $0.57 at $23.365.

Global stock markets were mixed but mostly up overnight. U.S. stock indexes are higher at midday.

In overnight news, a Wall Street Journal headline reads, "Fed sets milder course on rate increases." Reporter Nick Timiraos said Fed officials are to slow interest rate increases at upcoming FOMC meetings and debate how much higher to raise them after gaining more confidence inflation will ease further this year. Timiraos is said to have an inside edge on getting high-level Fed officials to speak directly with him.

Technically, February gold futures prices hit a nine-month high last Friday. Bulls have the solid overall near-term technical advantage. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,870.00. First resistance is seen at last week's high of $1,939.00 and then at $1,950.00. First support is seen at today's low of $1,912.50 and then at $1,900.00. Wyckoff's Market Rating: 8.0.

Image Source: Kitco News

March silver futures prices hit a five-week low today. The silver bulls have the overall near-term technical advantage but are fading. A four-month-old uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $24.775. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at today's high of $24.295. Next support is seen at today's low of $22.845 and then at $22.00. Wyckoff's Market Rating: 6.0. Read More

Image Source: Kitco News

Gold futures remain steady as investors await the PCE report and FOMC meeting

Gold futures traded marginally higher as market participants focus on next week’s FOMC meeting. As of 4:00 PM EST, the most active February contract of gold futures is up $3.80 and fixed at $1932. Silver futures traded under pressure with the most active March contract currently down $0.37 and fixed at $23.565. The dollar had little influence on precious metals pricing today with the dollar index in essence unchanged, up 0.01%, and fixed at 101.795.

Image Source: Kitco News

Next week, the Federal Reserve will hold the first federal Open Market Committee meeting for the year where they will most likely implement the next interest rate hike. Last week, we received a series of mixed messages from different Federal Reserve officials. James Bullard, the president of the St. Louis Federal Reserve for example expressed the need for the Federal Reserve to rapidly move to their target rate of 5% or higher saying “why stall”. Read More

This year sets up 'bullish concoction' for commodities, gold on 'cusp of sustained upside,' says Goldman

Commodities are in store for a 'bullish concoction' in 2023, according to Goldman Sachs, which sees a combination of the macro environment and low inventories boosting prices.

The commodities sector is looking at "superior total returns" in 2023 and is expected to outperform other asset classes, analysts at Goldman Sachs said in a note.

After a surge in commodity prices in the first half of 2022, the sector saw a decline due to rising interest rates and lower demand. However, the outlook for 2023 is very positive as China reopens amid low inventories, said Jeff Currie, head of commodities research at Goldman.

"You cannot come up with a more bullish concoction for commodities," Currie said during a presentation last week. "Lack of supply is apparent in every single market you look at, whether it is inventories at critical operating levels or production capacity exhausted."

Gold is projected to benefit from a weaker U.S. dollar and a global de-dollarization trend, Goldman noted.

"Gold, in particular, is likely to be on a cusp of sustained upside as de-dollarisation is very bullish gold... at a time that the Fed is likely to increasingly shift towards growth concerns slowing its rate hike path allowing ETF holdings to stabilise," it added. "We believe a sustained inflection in the USD provides an ingredient for a fairly significant upside in commodities." 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.