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Gold Price News: Gold at 2-Month Low But End of Slide in Sight
Gold is trading a little above $1,800 an ounce at its lowest level in two months as markets prepare for more interest rate hikes, with the European Central Bank’s Christine Lagarde saying the bank had “every reason” to make a 50 basis point increase in March.
In this readjusted macroeconomic environment where interest rates, particularly those of the Federal Reserve, are now likely to increase higher and for longer than anticipated in January, gold has endured a sharp reality check with its price tumbling by almost $150 an ounce so far in February.
How far gold continues to slide will be determined by the strength of support that remains from central banks and other institutional holders. Read More
Silver Price News: Silver Below $21 to Lowest Level in Almost 3 Months
Silver has sunk below $21 an ounce with the price now at its lowest level since early November as the metal has been punished for its lack of yield at a time when interest rates look set to climb higher for longer than previously anticipated.
After briefly showing signs that silver had found a floor in the middle of last week, the precious metal’s fortunes have once again turned with the price dropping another $1 an ounce in less than a week.
This latest decline adds to silver’s curious 2023 so far with the metal entering the year looking set for a positive year with the factors in place for it to continue its strong recovery over the final quarter of 2022. Read More
Inflation could reach 12% in 2023 with 'V-shaped recovery' next year - Michael Wilkerson
Although U.S. inflation peaked at 9.1 percent in June of last year and has cooled down for 7 months in a row with January's CPI reading of 6.4 percent, prices will reverse course and rise in 2023 according to Michael Wilkerson, Founder of Stormwall Advisors and Author of Why America Matters: The Case for a New Exceptionalism, who sees inflation reaching between 8 and 12 percent later this year.
Wilkerson, who has three decades of experience as an emerging markets investor, M&A expert, and business leader, including as managing director at M&A firm Lazard, said that inflation has yet to catch up to M2 money growth.
"The money supply increased by 40 percent just from the year 2000," he observed. "You've never had a time in history where the money supply increased by that much without it resulting in inflation… price inflation always catches up with money supply inflation."
Speaking with Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, Wilkerson observed that since 2008 the M2 money supply has tripled, going from $7 trillion to almost $22 trillion. Read More
Aggressive monetary policy tightening might not be over, says BIS
With U.S. markets worried about a more aggressive Federal Reserve due to stubborn inflation, the Bank for International Settlements warned that markets should not rule out a global synchronized reversion to higher-than-expected rate levels.
"Central banks have been very clear about the priority of getting the job done and of being cautious about declaring victory too early," said Claudio Borio, head of the monetary and economic department at the BIS. "[This] cautious attitude is the appropriate one."
To ensure that high inflation is brought under control, central banks will remain hawkish for longer than expected, the BIS said in its latest quarterly report.
It is important for central banks to avoid repeating the mistakes of the 1970s by not declaring victory too early, Borio told journalists.
"What you don't want to do at all costs is to repeat the stop-go policies of the 1970s when you are reversing (rates), and you then realize that the job has not been done," Borio said. "Then you have to go back and forth." Read More
Record solar demand should support silver as prices start the week below $21 - Heraeus
Shifting interest rate expectations continue to take their toll on the precious metals market, with silver leading the selloff as prices start the week below $21 an ounce.
However, one precious metals research firm says the green energy transition should provide some support for the precious metal in 2023. The comments come as silver has seen sharp declines this month. March silver futures last traded at $20.635 an ounce, down nearly 1% on the day.
In their latest precious metals update, commodity analysts at Heraeus Precious Metals said that silver demand in the solar sector is expected to reach record highs this year following the 150 million ounces consumed last year.
Even as solar panel producers look for ways to reduce the amount of silver they need, a trend analysts describe as thrifting, the sheer volume of panels expected to be produced this year outweighs these potential limitations.
"The West's energy transition is helping to drive silver demand growth. Despite the economic slowdown and possible recessions in the US and Europe, demand for renewable technology and solar photovoltaic (PV) modules is not expected to contract. Fiscal stimulus and government support for the energy transition is forecast to result in another record year for PV installations globally – including Europe and the US," the analysts said. Read More
Gold sees short-covering bounce Monday
Gold prices are moderately higher in midday U.S. trading Monday, on short covering in the futures market after dropping to a nine-week low in overnight dealings. Silver prices are weaker and hit a nearly four-month low today. April gold was last up $8.10 at $1,825.00 and March silver was down $0.135 at $20.675.
Technically, April gold futures prices hit a nine-week low today. Bears have the overall near-term technical advantage. A price downtrend is in place on the daily chart. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $1,856.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at last Friday’s high of $1,835.10 and then at $1,850.00. First support is seen at today’s low of $1,812.00 and then at $1,800.00. Wyckoff's Market Rating: 4.0.
Image Source: Kitco News
March silver futures prices hit a nearly four-month-low today. The silver bears have the firm overall near-term technical advantage. Prices are in a steep downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today’s high of $20.82 and then at $21.00. Next support is seen at today’s low of $21.515 and then at $20.00. Wyckoff's Market Rating: 3.5. Read More
Image Source: Kitco News
Gold trades lower until you factor in dollar weakness
Gold would have traded lower today if it was not for the dollar's weakness. The dollar is currently down 0.543 points or 0.52% with the dollar index fixed at 104.615. Concurrently, gold futures basis most active April contract is trading up $7.00 or 0.40% and fixed at $1824.10. This means that dollar weakness accounts for over 100% of today’s gains in gold. The resulting net change of gold is based on the dollar weakness and fractional selling pressure in gold.
The same relationship between gold and the dollar can be seen in the physical or spot market. According to the Kitco Gold Index (KGX), spot gold is currently fixed at $1818.10 after factoring in today’s net gain of $6.90. On closer inspection dollar weakness resulted in spot gold gaining $9.80 with fractional selling pressure taking back $2.90 of those gains.
The question becomes what fundamental events could explain dollar weakness today? For that, we need to look at two reports released today. Read More
Recession is still coming for the U.S., but at a later date, NABE says
After a solid start to the year, the National Association for Business Economics (NABE) now expects a U.S. recession to start later in the year, according to the latest survey.
Markets across the board began to take a hit in February after the latest U.S. jobs report came in better than expected. The macro data kept surprising on the upside for the rest of the month, from retail sales to PMI data, economic growth, and hotter-than-expected inflation numbers.
This triggered a re-pricing, with many economists updating their economic outlooks. But the consensus is still a U.S. recession this year, just a few months later.
The National Association for Business Economics' latest survey, published Monday, confirmed this outlook. Nearly 60% of survey panellists forecasted a more than 50% chance that the U.S. will enter a recession in the next 12 months.
Opinions diverged on exactly when that recession will hit. Only 28% pointed to the first quarter, 33% expect it in the second quarter, and 21% are watching the third quarter. Read More
Gold's price floor to be tested - Standard Chartered
With February's drop of 6%, the gold market will be testing its price floor shortly, according to the latest note by Standard Chartered.
The downward momentum has been driven by a higher-for-longer rate hike outlook, cemented by fear of sticky inflation.
"Gold prices continue to trend lower and have closed in on oversold territory. Macro headwinds have continued to build and one of the three pillars that drove the rally at the start of the year has weakened," said Standard Chartered precious metals analyst Suki Cooper. "The shift in tactical interest had become supportive as the market started pricing in peak rates and USD weakness prematurely, but as rate hiking expectations have risen, open interest data implies that positioning has been scaled back."
The two key drivers that gold needs to halt its selloff are robust physical demand and continued interest in the precious metal from central banks.
"The floor for the market will likely be tested, as well as the second two pillars: first China's demand and second and most importantly, official-sector demand," Cooper pointed out.
Gold's next support level is $1,788 an ounce. "We still think most of the upside risk will materialise in H1, with gold facing downside risk in H2-2023," she noted. Read More
Russia’s Cyberattack exposes U.S 2 Quadrillion dollar dilemma
In this week’s Live from the Vault, Andrew Maguire reveals the widely unreported details of Russia’s ransomware attack which has disrupted the CFTC platform, causing a month-long delay in their weekly COT Report submission.
The London wholesaler points out the magnitude of risk this cyber attack poses to the financial sector, explaining the effects of currency weaponisation in the deepening geopolitical conflict between the West and Russia.
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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.
