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Gold Price News: Gold Loses 3% Over Two Days As Interest Rate Cuts Fade
Gold prices fell sharply on Thursday, extending Wednesday’s hefty losses, as recent comments from US Fed officials triggered a dialling back of bets on the timing of interest rate cuts later this year.
Prices fell as low as $2,341 an ounce on Thursday, down sharply from around $2,381 an ounce in late deals on Wednesday.
The latest action means gold has lost around $80, or 3.3% of its value, in the space of two days.
Gold prices were already lower on Wednesday, but the losses were compounded by the release of minutes from the US Federal Open Market Committee meeting on Wednesday evening. US Fed officials’ comments this week suggested interest rates may need to stay higher for longer in a bid to bring inflation under control, and some even advocated a rate hike if necessary. Read More
Silver Price News: Silver Falls Further On Doubts Over Rate Cuts
Silver prices made further losses on Thursday, adding to Wednesday’s drop, as the precious metals markets took a knock from fresh doubts over the chances of interest rate cuts.
Prices fell as low as $30.11 an ounce on Thursday, compared with around $30.95 an ounce in late deals on Wednesday.
Silver’s losses on Wednesday and Thursday were in line with weaker gold prices. The two metals reacted negatively to comments from US Fed officials this week which cast doubt on the prospects for interest rate cuts in September, as the markets had been expecting.
Some Fed officials even signalled the possibility of interest rate hikes if needed to curb persistent inflation, and the markets now appear to favour November as the most likely date for any rate cuts, compared with September previously.
The prospect of a continuation of the current rate of 5.25-5.5% for several more months represents a headwind for gold and silver as non-interest-bearing assets. Read More
Gold bull market: Just getting started?- Adam Rozenswajg
Gold prices could reach $5,000 to $7,000 per ounce, marking the beginning of a prolonged and substantial bull market. According to Adam Rozencwajg, managing partner at Goehring & Rozencwajg, this dramatic forecast hinges on unprecedented central bank accumulation and significant shifts in global monetary systems.
Rozencwajg believes we are only in the early stages of this rally. "I think we are in the early innings here of a very prolonged and substantial gold bull market. Ultimately, I think that prices could get really out of control. How high could they ultimately get? You could make a case for five, six, $7,000 gold," he explained. He suggests that this could happen within the next decade if current trends continue. This bullish sentiment is underpinned by unprecedented central bank buying. "We've seen central banks buy well over 1,000 tons of gold. That's the fastest pace of accumulation we have seen since we've gone off the gold standard in 1971," Rozencwajg added in a recent interview with Jeremy Szafron, Anchor at Kitco News. Read More
Gold has new momentum as its utility grows in global trade - Franklin Templeton’s Steve Land
The Federal Reserve’s reluctance to cut interest rates as inflation fears remain is creating some volatility in the precious metals market; however, gold’s growing utility as a monetary asset continues to provide long-term support for prices, according to one fund manager.
In an interview with Kitco News Wednesday, Steve Land, lead portfolio manager of Franklin Templeton’s Franklin Gold and Precious Metals Fund, said that while he doesn’t see the world going back to a gold standard or the U.S. dollar losing its reserve currency status, he does see growing use of gold to settle international trade.
“When you look at how much of the world is getting segregated from the U.S., if you want to buy cheap oil from Russia, it makes sense to use some gold to facilitate that trade,” he said. “I think it makes sense for governments to hold more gold as the world becomes more insular.” Read More
Fed will cut five times this year, driving gold to $3,000 by H1 2025 – Citigroup’s Max Layton
The current pullback in gold prices is very temporary, as the Federal Reserve will deliver multiple rate cuts which will propel gold prices to $3,000 in the next 12 months, according to Max Layton, Global Head of Citigroup Commodities Research.
In an interview with Bloomberg TV earlier on Friday, Layton was asked how focused his team is on the role of the dollar in metals markets, including the potential impact of the interest rate path.
“We certainly think about that,” Layton said. “The house view is quite out of consensus, Citi Research's house view. We've got five Fed cuts this year, lowering rates into the end of the year, early next year, and that's certainly going to be, we think, the backbone of the next move higher in gold.” Read More
A higher for longer monetary policy is spooking gold; prices see the biggest drop in eight months
While central bank purchases and robust Asian demand have created a long-term uptrend in gold, uncertainty surrounding the Federal Reserve's monetary policy continues to generate significant short-term volatility.
At the start of the week, gold prices rallied to a record high above $2,450 an ounce as markets started to solidify expectations that the Federal Reserve was on track to cut rates two times this year.
However, the new breakout rally proved short-lived as gold prepares to end the week more than $100 lower. June gold futures last traded at $2,334.90 an ounce, down nearly 5% from its record highs; prices are down 3.4% from last Friday, its worst selloff in eight months.
The Federal Reserve's minutes from the April/May Federal Open Market Committee meeting show a hawkish sentiment, with the central bank reluctant to cut interest rates as inflation pressures remain elevated. Read More
Gold futures’ net longs hit four-year high, silver’s rally sparks shorting, but both metals start the week strong
Speculative interest in gold is at its highest level since before the pandemic, while silver’s price spike triggered a wave of shorting, according to the latest trade data from the Commodity Futures Trading Commission.
The CFTC's disaggregated Commitments of Traders report for the week ending May 21 showed money managers increased their speculative gross long positions in Comex gold futures by 12% to their highest level in over four years, with gold futures now net long 194k contracts.
U.S. futures markets are closed Monday for the Memorial Day long weekend, but gold prices are showing considerable strength to start the last week of May. At the time of writing, spot gold last traded at $2,355.61 per ounce, and is up 0.92% on the session.
Meanwhile, silver’s rally above $30 per ounce during the reporting period spurred a round of short selling in silver futures, which drove net longs down 4k to 37.7k total contracts. Read More
Gold and silver both poised to resume uptrend after last week’s correction – Saxo’s Larsson
Precious metals saw a sharp bearish correction last week, but prices are rebounding this week with silver leading the pack, according to Kim Cramer Larsson, Technical Analyst at Saxo Bank.
“Gold (XAUUSD) seems to be bouncing from the cloud (shaded area—the Ichimoku Cloud) between the 0.618 and the 0.786 retracement, and the minor support at around 2,326,” Larsson wrote. “A dip down to the 0.786 retracement at 2,314 could still occur before rebounding.”
Larsson said that if the gold price breaks above $2,385 per ounce, the prior uptrend is likely back on track with potential to target $2,500. “The 55-day moving average will add to the bullish support,” he said, whereas “A close below 2,277 confirms a downtrend.” Read More
Image Source: Kitco News
Live From The Vault - Episode: 174
The Multipolar World Feat. Dr Stephen Leeb
In this week’s episode of Live from the Vault, Andrew Maguire is joined by Dr Stephen Leeb, world-renowned publisher of the ‘Intel for Investors’ newsletter, money manager and investment strategist for over forty years.
The precious metals experts dive straight into an in-depth discussion on the world’s changing status quo, before exploring how China is driving gold prices as the world becomes increasingly multipolar.
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.
