x
Image Source: Unsplash
Gold Price News: Gold Falls From Historic Highs But Remains Supported
Gold continues to slip slightly lower to now trade around $1,980 an ounce having climbed as high as $2,040 an ounce earlier in the month.
After such a spectacular surge in which the price gained over $200 in just over a month, a slight pullback was to be expected. Even with the fallback below the psychologically important threshold of $2,000 an ounce, gold remains well supported and is still trading at a very high level historically.
Gold’s surge was sparked by the fallout in the US banking sector while the more recent downtrend is a result of the reality of the Federal Reserve and other central banks are still likely to implement further interest rate hikes.
However, with the Fed, in particular, looking like it is drawing close to the end of its cycle of hikes, the negative impact of an environment in which interest rates are rising, which reduces the appeal of the non-yield-bearing physical gold, may soon be removed too. Read More
Silver Price News: Silver Fails to Hold Above $25 on Prospect of More Hikes
Silver’s failure to hold above $25 an ounce highlights how hostage the precious metal has become to the words and actions of the Federal Reserve rather than the metal’s underlying physical supply and demand dynamics.
From an industrial outlook perspective, silver is well supported by metal a key component of the energy transition, used in both the solar and electric vehicle industries among others, with a demand outlook that looks very positive in both the short and medium term.
However, as was clearly shown during last year’s multi-month price slump, strong fundamentals are not enough for silver with this bullish physical outlook far outweighed by the Fed’s implementation of a series of large interest rate hikes, a cycle that may be drawing close to its end but is nonetheless still yet to finish.
Perhaps after such a spectacular rally in which silver surged over $5 an ounce in just over a month, a gain of more than 25%, a correction in the price was to be expected. Read More
Gold prices set to soar as U.S. deficit widens - Felder Report
The gold market, while supporting above $2,000 an ounce, is struggling to build enough momentum to break to new all-time highs; however, one market strategist says that it's only a matter of time before it hits this target as the U.S. deficit continues to grow.
Jess Felder, founder of the Felder Report, has been a long-term gold bull and warned investors in late February that technical indicators showed gold on the cusp of breaking out to all-time highs. In his latest update, he reiterated his bullish stance highlighting fundamental support for higher prices.
Felder's comments come as gold prices continue to consolidate around $2,000 an ounce. June gold futures last traded at $2,017 an ounce, up 0.48% on the day.
Felder said that he expects gold prices to be driven to new all-time highs as the U.S. deficit continues to grow. He explained that data from the U.S. Treasury Department showed that in the first half of the Fiscal year, which ended in March, the Federal deficit hit $1.1 trillion, up by $432 billion compared to the same period in the previous fiscal year. He added that a big reason for the increase in spending was in part due to the rapid rise in interest costs.
"Longer-term, there is a clear widening trend that began back in 2015 that appears to now have resumed after some pandemic-inspired gyrations. And, if history is any guide, this deteriorating fiscal trend should represent a structurally bearish influence for the dollar in the months and years to come," he said. Read More
Dennis Gartman remains bullish on gold, recommends University of Akron endowment fund increase its exposure to 5%
Gold's inability to hold its ground above $2,000 is disappointing; however, it remains an attractive safe-haven asset, according to famed commodity investor Denis Gartman.
In his latest investment letter, Gartman said that as chairman of the University of Akron's Foundation's endowment investment committee, the precious metal has outperformed in the portfolio. He noted that the university's endowment fund reduced its equity holdings by 3% two years ago and put that into gold.
"As of today, GLD was up 15.7% over that time, while the broad Russell 2000 stock index was down by approximately 18.9% over that same period," he said.
He also recommended the fund increase its gold holding to 5% of the portfolio.
In his personal investments, Gartman reiterated his bullish positioning in gold and Treasuries. He added that he is also long-term bearish on equities.
"I'm still holding 80.6% of my portfolio in 2-year notes and 2.2% in cash. I am short of 6.4% of my portfolio via derivatives and I'm long of 10.8% via gold using GLD and GDX with a focus upon the latter," he said.
Gartman's bullish outlook for the precious metal comes as prices look to regain their foothold at $2,000 an ounce. The yellow metal sold off sharply last week, falling to a two-week low as market expectations around the Federal Reserve's monetary policy started to shift. Read More
Gold, silver firmer as USDX, U.S. Treasury yields dip
Gold and silver prices are modestly higher in midday U.S. trading Monday. A lower U.S. dollar index and a decline in U.S. Treasury yields are supporting the metals market bulls today. However, the metals market bulls are still tentative amid general marketplace sentiment that Federal Reserve monetary policy is likely to remain tight in the coming months, despite notions the U.S. and/or global economy could slip into recession during that period. June gold was last up $3.20 at $1,993.90 and May silver was up $0.147 at $25.21.
Technically, June gold futures bulls have the firm overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,000.00 and then at Friday’s high of $2,016.80. First support is seen at last week’s low of $1,980.90 and then at $1,965.90. Wyckoff's Market Rating: 7.0.
Image Source: Kitco News
May silver futures bulls have the solid overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.235. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at $23.585 and then at last week’s high of $25.71. Next support is seen at today’s low of $24.84 and then at last week’s low of $24.715. Wyckoff's Market Rating: 7.5. Read More
Image Source: Kitco News
Info from Thursday’s GDP and Friday’s PCE report will guide investors
This week will contain two exceedingly important government reports on the US economy. These two reports will be exceedingly important in guiding the final decision of the Federal Reserve at the FOMC meeting next week.
Beginning on Thursday the Bureau of Economic Analysis (BEA) will release the Gross Domestic Product first quarter report. An average of the current forecasts is predicting that the first quarter GDP for 2023 will come in at 1.8%. If correct, this would indicate that the economy continues to contract from the 2.6% GDP that was reported in the fourth quarter of last year.
According to Saxo.com, “The advance reading of the US real GDP growth, scheduled to release on Thursday, is expected, according to Bloomberg’s survey of economists, to slow to 2% Q/Q annualized in Q1, down from 2.6% in Q4 last year. Despite inventory drawdown potentially dragging GDP growth, personal consumption is expected to come in strong at 4% Q/Q annualized and be the key driving force to sustain GDP growth in Q1.”
This will be followed by Friday’s Personal Consumption Expenditures (PCE) index, the preferred measure of inflation and wage growth used by the Federal Reserve. Economists polled by Bloomberg are predicting a moderate forecast for the core PCE to show an increase of inflation by 0.3% MoM and 4.5% YoY. Read More
In this week’s Live from the Vault, Andrew Maguire drills down into the major structural changes within the options market, exposing COMEX machinations that were forcing gold to fall into the predetermined price range for decades.
The London wholesaler continues to sleuth the market players’ footprints, exposing the Fed’s coordinated efforts to suppress the physical gold price, in a desperate attempt to defend the US dollar hegemony.
.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.
