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Gold Price News: Gold Drifts Towards $1,900 on Hawkish Central Banks
Gold is drifting ever closer to $1,900 an ounce as all the talk is of more interest rate rises still to come on both sides of the Atlantic.
Today sees the heads of the Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan all speaking at the central bank forum in Portugal and this will shed more light on how hawkish the bankers still feel they need to be to well and truly curb inflation.
Gold is struggling to gain much support in the current macroeconomic environment with the prospect of more rate hikes dragging down the precious metal as it doesn’t deliver a yield, making other interest-bearing assets more attractive in its place. Read More
Silver Price News: Silver Struggling For Attention on Mixed Economic Signals
Silver’s brief recovery has stalled again ahead of a busy day of central bankers speaking at their forum in Portugal with the market now expecting more interest rate hikes both in the US and Europe.
Silver has found itself stuck between a rock and a hard place as investors try to decide the true health of the global economy. On the one hand, there is the school of thought that these continued rate hikes will tip countries into recession, which would potentially be detrimental for silver’s industrial demand. On the other hand, silver is a haven asset that could be attractive while the global economy is under pressure.
So far, the global economy, particularly the US, has held up better than expected and given central banks more room for further interest rate increases, a scenario that is detrimental to silver due to its lack of yield. As such silver has struggled to gain much traction and is currently shuffling around below $23 an ounce. Read More
Gold price at risk of falling below $1,900 as Fed and ECB intensify inflation battle with July rate hikes
The inflation problem is not going away, with the Federal Reserve and the European Central Bank doubling down on their calls to keep raising rates amid promises of price stability. The gold market is not taking it well, with prices at risk of falling below $1,900 an ounce in the short term.
The latest macro data out of the U.S. supports more tightening by the Fed. The Conference Board's consumer confidence report surged to 109.7 in June – the best since January 2022. This has pushed recession calls further out, supporting another 25-basis-point hike by the Fed.
Other data included the U.S. durable goods rising more than expected and the new home sales soaring in May.
The CME FedWatch Tool now sees a 77% chance of a 25-bps rate hike in July. Morgan Stanley has also updated its forecast on Tuesday, jumping aboard the July rate hike train. "We now judge that the bar for a July hike is significantly lower than we had initially expected," economists said in a note. Read More
Bearish technicals limit buying interest in gold, silver
Gold and silver prices are modestly down in midday U.S. trading Wednesday, with gold notching a 3.5-month low overnight. A lack of markets-moving fundamental news at mid-week has traders focused more on the analytical charts for the precious metals, which are leaning bearish. August gold was last down $3.50 at $1,920.30 and July silver was down $0.095 at $22.865.
Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Japan Governor Kazuo Ueda took part in a panel discussion at an ECB forum on central banking that took place in Portugal today. The central bankers made no surprising comments that were significant markets-movers.
Technically, August gold futures prices hit a 3.5-month low today. Bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. 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 $1,900.00. First resistance is seen at $1,930.00 and then at this week’s high of $1,943.40. First support is seen at today’s low of 1,911.40 and then at $1,900.00. Wyckoff's Market Rating: 4.0.
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July silver futures bears have the overall near-term technical advantage. A choppy, seven-week-old price downtrend is in place on the daily bar chart. Silver Bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at this week’s high of $23.15 and then at $23.50. Next support is seen at this week’s low of $22.435 and then at the June low of $22.14. Wyckoff's Market Rating: 4.0. Read More
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ABN AMRO revises gold forecast lower as "Investors don't seem eager to buy gold at current levels"
Gold prices remain under pressure, trading at a three-month low as the Federal Reserve looks to raise interest rates further through 2023, and according to the latest research from ABN AMRO, while the precious metal is still expected to end the year higher, this selling pressure has tarnished its bullish momentum.
In her last gold price forecast, Georgette Boele, senior economist sustainability research at ABN AMRO, said that she is downgrading her long-term gold outlook as she now sees gold prices holding at $2,000 for the rest of this year and 2024, down from the previous 2024 forecast of $2,200.
"Investors don’t seem eager to buy gold at current levels probably because prices are relatively close to all-time high and if prices fall, the current level could not be seen for more than 5 years," she said in the research note.
Boele’s gold price downgrade comes as the precious metal struggles below $1,950 an ounce. August gold futures last traded at $1,921.60 an ounce, relatively flat on the day. Read More
'Higher and longer' 2% target is fully embraced by central banks worldwide
We need to see more softening in the labor market according to Chairman Powell. Central banks worldwide vowed to continue to raise interest rates to combat high and persistent core inflation levels. This as some top economic countries see GDP greatly contracting. GDP levels have fallen to 1.2% in the U.S. and Japan and 0.6% in England and the Eurozone.
“Although the policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough.”
According to Powell, we can expect more rate hikes and elevated levels for longer until the high core inflation level diminishes with the data confirming that. This monetary policy is sharded by major central banks including the ECB, Bank of England, and Bank of Japan.
This pressured gold pricing lower over the last three consecutive days taking the most active August futures contract to a low of $1911.40. This is the lowest value gold has traded at since March. 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.
