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Gold price poised to push to record highs as investor demand picks up - Franklin Templeton's Steve Land
The gold market continues to hold solid support above $1,950 even as the Federal Reserve unleashed its most aggressive tightening cycle in more than 40 years.
According to one market analyst, the precious metal is in a good position to push to record highs as the U.S. central bank moves closer to a terminal rate. In an interview with Kitco News, Steve Land, lead portfolio manager of Franklin Templeton's Franklin Gold and Precious Metals Fund, said that renewed investor demand is the key to gold pushing back to record highs above $2,000 an ounce.
Land added that slowing economic growth will continue to support recession fears in financial markets, which should, in turn, support investment demand for gold.
"I'm very happy with the gold price. It's performed exceptionally well, reflecting a lot of the economic uncertainty in the world," Land said. "I'm not complaining about $1,950."
Land's optimistic comments on gold come as the Federal Reserve starts its two-day monetary policy meeting. It all but guaranteed that the U.S. central bank will raise interest rates by 25 basis points following this meeting. At the same time, there are expectations that this could be the last rate hike in this tightening cycle.
Land said that whether this is the last rate hike or there is more to come, it is clear the Federal Reserve is nearing its end game. Read More
Gold-backed BRICS currency off the agenda for now, but bloc expansion will jeopardize petrodollar - Lobo Tiggre
A new BRICS currency probably isn’t going to be announced in the near term, but recent geopolitical events make a gold-backed alternative to the U.S. dollar more attractive to the bloc, according to Lobo Tiggre, Editor of The Independent Speculator.
Tiggre joined Kitco News’ Lead Anchor and Editor-in-Chief Michelle Makori to discuss the prospects for a gold-backed BRICS currency and its potential impact on the U.S. dollar.
Tiggre said he believes the statements from Anil Sooklal, the South African ambassador to BRICS. “There's never been talk of a BRICS currency, it's not on the agenda” for the August summit in Johannesburg, Sooklal said during a media briefing last week. “If the people hosting the conference were telling you this is not on the agenda, I think that is not too much of a stretch to take that at face value,” Tiggre said. Read More
JPMorgan Chase sees gold prices at record highs in 12 to 18 months
Growing expectations that the Federal Reserve is close to ending its latest tightening cycle and the threat of an impending recession will continue to support gold and silver prices, according to the last comments from JPMorgan Chase.
In his latest research note, Greg Shearer, executive director of global commodities research, said that he expects the Federal Reserve to start cutting interest rates by the second quarter of 2024 and falling real U.S. yields will be a "significant driver" for gold.
According to JPMorgan's mid-year forecast, analysts are looking for gold prices to average the second half of the year around $2,012 an ounce.
Shearer said in his latest note that he sees gold prices averaging around $2,175 an ounce by the fourth quarter of 2024, with further upside risks if the U.S. economy does fall into a recession. Read More
European silver purchases collapse in 2023 while U.S. maintains record pace
Following a massive year of physical silver purchases in both the United States and Europe in 2022, the two regions have gone in very different directions this year, according to analysts at Metals Focus.
“During 2020-22, exceptionally strong demand for silver coins and bars by western retail investors was an important feature of the global silver market; this in turn contributed to a widening physical deficit,” the analysts wrote in the latest Precious Metals Weekly report. “In North America (dominated by the US market), silver physical investment hit successive record highs over 2021-22, with last year’s volumes more than double that of the 2019 total. In Europe (led by Germany), investment also hit a new high in 2021 and then remained essentially unchanged at exceptionally high levels in 2022.”
The analysts noted that the two regions have seen a sharp divergence in 2023, however. “Demand in North America has remained robust, with the full-year total still on track to match 2022’s record level,” they said. “By contrast, European investment effectively collapsed in H1.23. Even assuming a recovery later this year, the total for 2023 is projected to be lower than in 2019.” Read More
Gold shows little reaction to widely expected 0.25% Fed rate hike
Gold prices are moderately higher in afternoon U.S. trading Wednesday and have shown little initial reaction to the U.S. central bank raising its main interest rate by a small amount, which was fully expected by the marketplace. August gold was last up $8.70 at $1,972.40 and September silver was up $0.181 at $25.005.
The just-released U.S. data point of the week, if not the month, saw the Federal Reserve's Open Market Committee (FOMC) raise the Fed funds rate by 25 basis points, to a range of $5.25% to 5.50% and at a 22-year high. The FOMC statement said U.S. economy is growing moderately but job gains have been "robust." Markets showed very little initial reaction. However, the marketplace will closely scrutinize Fed Chair Powell's remarks at his press conference for clues on the trajectory of Fed monetary policy in the coming months. Powell's press conference may be the bigger markets-mover this afternoon. Traders want to see if Powell continues to lean hawkish on U.S. monetary policy, or if he eases up a bit given the tamer U.S. inflation readings recently.
Technically, August gold futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Prices are in a three-week-old uptrend on the daily bar chart, but just barely. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,900.60. First resistance is seen at today's high of $1,976.30 and then at the July high of $1,989.80. First support is seen at today's low of $1,963.20 and then at this week's low of $1,951.60. Wyckoff's Market Rating: 5.5.
Image Source: Kitco News
September silver futures bulls have the overall near-term technical advantage. A four-week-old price uptrend is in place on the daily bar chart. Silver Bulls' next upside price objective is closing prices above solid technical resistance at $26.00. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the July high of $25.475 and then at $26.00. Next support is seen at this week's low of $24.425 and then at $24.00. Wyckoff's Market Rating: 6.5. Read More
Image Source: Kitco News
Gold prices holding near session highs as Federal Reserve raises interest rates by 25 basis points; provide little forward guidance
The gold market is holding firm as the Federal Reserve raised interest rates again but provided little forward guidance on the future of its monetary policy.
As widely expected, the Federal Reserve raised interest rates by 25 basis points, moving the Fed Funds rate to a range between 5.25% and 5.50%. U.S. interest rates are now at a 22-year high. However, analysts note that the latest monetary policy statement was essentially unchanged from last month's meeting as it continues to focus on bringing inflation down to its 2% target.
"In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, 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 monetary policy statement said.
The gold market is not seeing much reaction to the Federal Reserve's decision as it holds near-session highs. August gold futures last traded at $1,971.80 an ounce, up 0.40% on the day. Read More
Gold market holds gains as Fed keeps options open on future rate hikes
The gold market is holding on to solid gains as the Federal Reserve is playing its cards close to its chest, saying that future monetary policy will continue to depend on data.
In the press conference following the central bank's decision to raise interest rates by 25 basis points, Powell said that at this point, the committee is just as likely to raise interest rates in September as it would be to keep them unchanged.
However, he also reiterated his stance that the central bank is not looking at any rate cuts this year.
"We need to stay on task and hold policy at restrictive levels for some time," he said. "The process still has a long way to go."
The gold market was immune to Powell's neutral comments as it holds near-session highs. August gold futures last traded at $1,974.20 an ounce, up 0.53% on the day. Some analysts said that gold held its gains as some investors expected a more hawkish bias at the press conference.
Powell said that for the central bank even to consider cutting interest rates, it would need to see a credible and sustainable drop in inflation. He added that while consumer prices dropped sharply in June, it is just one report. His message for markets was clear: the Federal Reserve needs to see more data. 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.
