Today's Gold and Silver News - 27th October

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Gold Tracks Upward as Investors Expect Less Aggressive Fed

Gold is tracking steadily upward as the prospect of the Federal Reserve having to end its aggressive interest rate hikes earlier than previously expected has eased the pressure on the precious metal.

Gold’s gains so far this week have been steady rather than spectacular as while expectations are increasing that November may be the Fed’s last large rate hike, the reality remains that interest rates will continue rising in the short-term.

Given gold’s lack of yield, the environment of rising rates makes other interest-paying assets more attractive and provides a firm ceiling on how high gold can climb. Read More

Silver Closes in on $20 on Prospect of Fed Tempering Rate Hikes

Silver is closing in on $20 an ounce as it climbs to its highest level since early October.

An easing in the expectation for how hard and for how long the Federal Reserve will keep up its aggressive interest rate hikes has provided silver with sufficient light relief for the price to recover most of the ground it had lost over October.

A less aggressive Fed reduces the pressure that the non-yield-bearing silver has faced in the wake of ever-rising interest rates and has allowed the metal’s strong fundamental outlook to gain more prominence. Read More

Hedge funds are still bearish; gold investors want more proof the Fed will slow its rate hikes

Optimism in the gold market continues to be short-lived as hedge funds renewed their bearish bets, keeping prices at around $1,650 an ounce.

The Federal Reserve's aggressive monetary policy action continues to be the biggest headwind for gold prices as rising interest rates are supporting the U.S. dollar at its highest level in 20 years.

In a report Monday, commodity analysts at Société Générale noted that the precious metal market saw total outflows of $4.1 billion in futures markets last week as investors continue to react to hotter-than-expected inflation data.

"The U.S. core CPI increased 6.6% from a year ago, the strongest y-o-y jump since 1982," the analysts said. "This leaves room for the Fed to increase interest rates more aggressively, suggesting that another 75bp hike in November is highly likely."

Commodity analysts at TD Securities also said that rising inflation will continue to weigh on gold and silver prices. Read More

Bank of Canada surprises with a smaller 50 bps rate hike, gold priced in CAD jumps

The Bank of Canada surprised the markets with a slower tightening pace, as it raised rates by 50 basis points instead of the estimated 75-basis-point increase. This brought its key interest rate to 3.75%.

Canada's central bank said that the effects of its aggressive monetary policy tightening "are becoming evident in interest-sensitive areas of the economy," such as housing and household and business spending.

The slowdown in international demand is also starting to weigh on exports, and economic growth is "expected to stall through the end of this year and the first half of next year as the effects of higher interest rates spread through the economy," the central bank said Wednesday.

The Bank of Canada now projects GDP growth to slow from 3.25% this year to under 1% next year and 2% in 2024.

Following the announcement, gold priced in Canadian dollars popped higher, last trading near its new daily highs at $2,273.87, up more than 1% on the day. Read More

India sees record gold demand during Diwali

Physical demand for gold and silver continues to provide critical support for the precious metals as India sees record demand for the precious metal after two years of COVID-19 disruptions.

Oct. 24 marked Diwali, the Hindu festival of light that celebrates good luck, prosperity and positivity. Gold, a symbol of wealth and prosperity, sees significant demand during the five days of celebrations. This year according to preliminary reports, demand for gold and silver hit record highs this past weekend.

"The Indian gold industry has fully recovered from the Covid crisis as the demand for gold in India has reached its highest level! India's gold demand grew by up to 80% in the domestic market in the July-September quarter following a strong pick-up in economic activity and improved consumer demand," Pankaj Arora, National President of the All India Jewelers and Goldsmith Federation (AIJGF), said in a statement.

For some analysts, the strong demand during Diwali comes as no surprise. During the London Bullion Market Association annual precious metals conference, many analysts noted that Indian consumers currently have an insatiable appetite for silver. Read More

Support for gold should hold at $1,600 - Standard Charter's Suki Copper

Renewed buying momentum in the gold market has pushed gold prices to a nearly two-week high as both the U.S. dollar and bond yields fall, as markets continue to shift their expectations regarding the Federal Reserve's aggressive monetary policy stance.

Although gold could continue to struggle as the U.S. central bank will continue to raise interest rates through at least the first quarter of 2023, one precious metals analyst said that the market remains well supported at current prices.

In a recent interview with Yahoo Finance, Suki Copper, executive director and precious metals analyst at Standard Charter, said that physical demand, particularly from India and other Asian nations, is providing solid support for gold, around $1,650 an ounce.

"That price drop that we initially saw below 1,700 was greeted by quite strong physical interest in the gold market. So, the next level to look at from here will be $1,650, and then beyond that is $1,600," Copper said. Read More

Gold up; charts hint USDX, U.S. bond yields may have peaked

Gold and silver prices are solidly higher near midday U.S. trading Wednesday and hit two-week highs. The key outside markets are working in favor of the precious metals bulls at mid-week, as the U.S. dollar index is sharply lower, U.S. Treasury yields are lower and crude oil prices are higher. December gold was last up $18.80 at $1,676.70 and December silver was up $0.266 at $19.615.

Importantly, there are some very recent near-term technical developments that are now suggesting the U.S. dollar index has put in a major top and the U.S. stock indexes have put in major bottoms. To extrapolate, such could also mean inflation may be peaking (which would mean bond yields are peaking, too) and the Federal Reserve may be closer to the finish line on its aggressive monetary policy tightening path. All of the above may also mean the U.S. and/or global economy may be able to avoid a serious recession. While these are only extrapolations at present, it appears the precious metals traders are picking up on these early chart clues, reckoning not only that the greenback and bond yields may have peaked but also that it could mean better consumer and commercial demand for the metals markets in the coming months.

Technically, December gold futures prices hit a two-week high today. The gold futures bears have the firm overall near-term technical advantage. However, more price gains in the near term would form a bullish double-bottom reversal pattern on the daily bar chart, to suggest a market bottom is in place. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,690.00 and then at $1,700.00. First support is seen at today’s low of $1,653.80 and then at this week’s low of $1,641.20. Wyckoff's Market Rating: 2.5.

Image Source: Kitco News

December silver futures prices hit a two-week high today. The silver bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at $17.40. First resistance is seen at today’s high of $19.765 and then at $20.00. Next support is seen at today’s low of $19.18 and then at $19.00. Wyckoff's Market Rating: 3.0. Read More

Image Source: Kitco News

Gold has respectable gains, but still based on dollar weakness and not buying

Gold futures basis the most active December 2022 Comex contract is currently up $11.20 and fixed at $1669.70. Noteworthy was today’s intraday high of $1679.40 which came in just below the first level of resistance at $1680. However, once again we can see that while gold’s gains are respectable, they are based entirely upon dollar weakness. Furthermore, market participants bid the precious metal lower.

According to Reuters, “Gold prices rose to a two-week high on Wednesday as the dollar and U.S. bond yields slipped on expectations the Federal Reserve will temper its aggressive rate-hike stance starting December.”

As of 4:05 PM EDT, the dollar index is down 1.290 points or 1.16% and fixed at 109.54. The lack of market participants bidding gold higher can be seen through the eyes of the Kitco Gold Index (KGX). The screen print above of the KGC was taken at 3:53 PM EDT and shows spot gold was currently fixed at $1665 with a net gain of $11.90. However, as we have seen on multiple occasions recently it was dollar weakness that moved spot gold pricing up by $17.20, and selling pressure taking gold lower by $5.30.

This clearly shows that market participants continue to have their primary focus on the pace and magnitude at which the Federal Reserve continues to raise interest rates. 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.