Today's Gold and Silver News - 25th August

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Gold Shows Resilience Despite US Dollar Strength

Gold is trading above $1,750. Bullion is showing some interesting signs of a rebound, or at least a stabilisation, despite the brilliant performance of the greenback and the fact that 10-year treasuries yields are still above 3%, both bearish factors for precious metals, in normal circumstances.

Indeed, the dollar index jumped in the first part of this week to 109, reaching a two-decade high.

In an unusual move, various commodities in fact gained ground despite the strength of the US currency. WTI returned above $94, while the north European Brent jumped to $100. Gold was not an exception and held above $1,750, confirming its resilience in the current scenario.

Some banks are now forecasting a further increase in gold prices by the end of the year.

Commerzbank for example is now predicting that gold will trade at $1,800 by the end of 2022 (2.5% above its current price).

Investors are now focusing on the upcoming Jackson Hole economic symposium, where the chairman of the Federal Reserve, Jerome Powell, and other policymakers could reveal some further information about the next steps that will be taken by the Federal Reserve, in order to counteract rising inflation.

The markets are now pricing in an interest rate hike of between 0.50 or 0.75% in September’s meeting, followed by another 0.50% increase in rates by the end of the year. After announcing rate hikes at every single meeting so far this year, the US central bank is forecasted to be much less active in 2023. According to the current market expectations, rates should remain stable between 3.50 and 4.00% during H1 2023 if there are no further inflation shocks. 

From a technical point of view, gold is now close to the important support zone of $1,750, while the next key levels to monitor are placed at $1,720 and $1,680. On the other hand, we could see a trigger to the upside if the price rises above $1,790 and if it breaks above the resistance placed at $1,820. Read More

Silver Just Below $19 Ahead of Jackson Hole Symposium

The performance of silver has been negative so far in 2022, with a decline of 18% year to date.

A mix of negative factors, including fear of recession, rising interest rates and a strong US Dollar, hit the price of the industrial metal hard. Overall, the trend remains weak but in the last 36 hours, silver seems to have stopped its decline, building an interesting support zone at $18.

The price rebounded twice after reaching this level, ahead of the Jackson Hole Symposium, during which the chairman of the Federal Reserve might offer some hints on the next policy moves by the US central banks. Moreover, from a technical point of view, there are further support zones placed at $18.50 and between $18 and $18.20 per ounce.

Investors are keeping their eyes on the Fed’s reaction to growing inflation, which has reached 8.50% in the United States. Policymakers are trying to mitigate price growth and avoid the risks of a recession. Any dovish news from the Fed could represent a positive catalyst for silver, while any hawkish decision could increase the bearish pressure on the precious metal.

From a technical point of view, gold is now close to the important support zone of $1,750, while the next key levels to monitor are placed at $1,720 and $1,680. On the other hand, we could see a trigger to the upside if the price rises above $1,790 and if it breaks above the resistance placed at $1,820. Read More

Gold sees modest short covering, bargain buying

Gold prices are firmer in midday U.S. trading Wednesday, on a routine upside price correction from recent selling pressure. Short covering in the futures market and some perceived bargain buying in the cash market are featured. The U.S. dollar index is trading slightly down and near its daily low, which also gave the metals market bulls a bit of encouragement. However, rising U.S. Treasury bond yields at mid-week has limited buying interest in the metals. October gold futures were last up $4.90 at $1,756.30. September Comex silver futures were last down $0.021 at $19.005 an ounce.

U.S. stock indexes are higher at midday. The marketplace is awaiting the late-week Jackson Hole, Wyoming Federal Reserve annual symposium that begins Thursday and includes a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed meetings have significantly moved markets. Markets are expecting Powell to lean hawkish on U.S. monetary policy and on the Fed’s fight against inflation.  

Technically, October gold futures bears still have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at today’s high of $1,759.70 and then at 1,775.00. First support is seen at today’s low of $1,745.50 and then at this week’s low of $1,730.40. Wyckoff's Market Rating: 2.5.

Image Source: Kitco News

September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $20.87. The next downside price objective for the bears is closing prices below solid support at the July low of $18.01. First resistance is seen at this week’s high of $19.155 and then at $19.50. Next support is seen at this week’s low of $18.605 and then at $18.35. Wyckoff's Market Rating: 2.0. Read More

Image Source: Kitco News

Gold price and silver price pop ahead of Jackson Hole, here's what to expect from Powell's speech

After a poor start to the week, the precious metals sector is seeing a turnaround as markets continue to calibrate for the Federal Reserve Chair Jerome Powell's keynote at the Jackson Hole symposium.

Gold and silver saw an impressive rally Tuesday as the U.S. dollar index retreated from 20-year highs and bargain hunters came in after last week's selloff.

At the time of writing, December Comex gold futures were trading at $1,764, up 0.90% on the day. And September silver futures were at $19.10, up 0.94% on the day.

The big catalyst for precious metals and the markets this week is Powell's speech at the Jackson Hole meeting on Friday, which only has a placeholder title for now — 'Economic Outlook.' But the symposium's overarching theme will be 'Reassessing Constraints on the Economy and Policy.'

"[The theme] suggests a focus on the economy's supply side … As pressure on global supply chains eases, that implies that a reduction in inflation could now be achieved with a relatively modest easing in demand. It is a key basis for our view that a recession can still be avoided over the coming quarters. The Fed is clearly hoping for a similar outcome, and officials may try to bolster that case next week," said Capital Economics senior U.S. economist Andrew Hunter.

The U.S. dollar and U.S. Treasury yields continue to be the dominant drivers for gold. Every time they rise, gold retreats, while any declines trigger a rally in the precious metal.

"The dollar continues to draw ample strength from risk aversion and fears over the Fed reasserting its hawkish message this week," said FXTM senior research analyst Lukman Otunuga. "If Powell fortifies expectations around the Fed moving ahead with another jumbo rate hike in September and more tightening ahead, this could boost the dollar. Alternatively, a cautious-sounding Powell that expresses concerns over the U.S. economic outlook may reduce the odds of big rate moves, weakening the dollar." Read More

Qatar boosts gold reserves to record levels after buying 14.8 tonnes in July

July, it turns out, was a busy month for central banks as they increased their gold reserves. The Qatar Central Bank is the latest to announce an increase in its holding of the precious metal.

In a tweet Tuesday, Krishan Gopaul, senior European and Middle East market analyst at the World Gold Council, said that reserve data from the central bank shows it bought 14.8 tonnes of gold last month.

Gopaul added that it appears this is the central bank's biggest gold purchase on record, going as far back as 1967.

"Gold reserves now stand at 72.3t, the highest on record," he said.

Monday, Gopaul also reported that the Central Bank of Uzbekistan bought 8.7 tonnes of gold in July, matching the purchases it made in June.

According to some analysts, central banks could have seen July as a strategic time to buy gold as prices fell to a 16-month low, dropping briefly below $1,700 an ounce.

Gold prices have struggled through most of 2022 as the Federal Reserve aggressively raises interest rates in an attempt to slow the economy and cool rising inflation pressures.

However, despite the headwinds, many analysts remain bullish on gold long-term, specifically because central banks continue to buy gold.

In his latest report, Moe Zulifiqar, market analyst at the Lombardi Letter, said that central bank gold demand could push gold prices above $3,000 an ounce in the long term. Read More

Investors are laser-focused on the Jackson Hole Economic Policy Symposium

This year’s Jackson Hole Symposium will unquestionably be the most important event this month. Central bankers and analysts will face a unique economic backdrop much different than last year’s symposium. Last year inflation was running at approximately 5% and the assumption amongst the vast majority of central bankers and policymakers was that inflation was transitory. The assumption was that the supply chain bottlenecks and issues that were a large component moving inflation higher would unwind naturally.

With inflation currently at 8.5%, market participants are bracing themselves for Chairman Jerome Powell’s Keynote speech on Friday. The expectations are currently rather high that the chairman will unveil an extremely hawkish tone in regards to their aggressive monetary policy of interest rate hikes to effectively reduce inflation that is still at a 40-year high. However, his upcoming speech contains an extreme amount of uncertainty as to whether or not the Federal Reserve expresses an extremely hawkish tone or the opposite in which Powell signals that the Federal Reserve might ease off of its extremely aggressive rate hikes. Read More

Gold price would be $150 higher if not for the U.S. dollar – Wells Fargo

The U.S. dollar has been the main culprit holding gold back this summer, but Wells Fargo still projects the precious metal to end the year above $2,000 an ounce.

Despite this week's gains, gold is still trading below $1,800 an ounce as markets await Federal Reserve Chair Jerome Powell's keynote speech at the Jackson Hole symposium on Friday. At the time of writing, spot gold was trading just above the $1,752 an ounce level, up 0.22% on the day.

If not for the U.S. dollar index at 20-year highs, gold would be around $150 higher than its current trading levels, Wells Fargo's real asset strategy head John LaForge told Kitco News.

"I'm still shocked that gold doesn't want to move. The U.S. dollar is what's holding gold back. Gold would have been closer to $1,900 if not for the move in the dollar," LaForge said on Wednesday. "Gold is still that chameleon asset. For six months, it's moving with real rates. And just when you figured that out, it's moving with the dollar. And just when you figure that out, it's moving with some crisis. For something so muted, it's amazing how often it switches teams."

Wells Fargo's year-end target remains $2,000- $2,100 an ounce, but if the U.S. dollar keeps surprising on the upside, that target could be unachievable. Read More

Jackson Hole 2022: This is what to expect - Gary Wagner

On Friday, Federal Reserve Chairman Jerome Powell will give his speech at the annual Jackson Hole Symposium in Wyoming.

The widely anticipated event will give hints about the upcoming Fed policy.

To help market participants, Powell will need to be clear about when the Fed will stop raising rates, said Gary Wagner, editor at TheGoldForecast.com.

Wagner spoke with David Lin, Anchor and Producer at Kitco News. 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.