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Gold Price News: Gold Boosted by Haven Demand From Chinese Protests
Gold has been lifted by market jitters as a result of the protests in China about continuing lockdown restrictions. With equities down, gold has climbed back to around $1,760 an ounce as investors seek out the precious metal as a haven.
Today’s boost underlines the support that remains for gold that has enabled it to sustain most of the gains made earlier in the month on the prospect of a pivot by the Federal Reserve. Later this week, we will get a test of the strength of that support when Fed Chair Jerome Powell speaks with gold investors hoping for a dovish tone to his comments after his fellow Fed officials have struck a more hawkish tone with talk of the need for interest rates needing to reach 5%. Read More
Silver Price News: Silver Stable Above $21 Awaiting Fresh Catalyst
Silver continues to trade above $21 an ounce with the metal going through a consolidatory phase awaiting a fresh catalyst to drive the price.
Silver is caught between a strong fundamental outlook that suggests its price should be far higher, with another record year of demand in prospect, set against a macroeconomic picture in which interest rates are likely to continue rising for a while yet. Read More
Why Ghana wants to barter gold for fuel
Large mining companies in Ghana will have to sell 20% of their refined gold to the country's central bank starting on January 1, 2023, according to Vice-President Mahamudu Bawumia. This is part of a larger plan by the government to trade gold for fuel.
The message was posted on Bawumia's Facebook page. "The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will coordinate with the large-scale mining companies to ensure compliance with this directive," the vice president said.
The price of gold will be set via spot prices, he added. "The gold to be purchased by the Bank of Ghana and the PMMC will be in cedis at spot price with no discounts."
The Bank of Ghana will buy gold from large-scale miners such as Newmont Corp., AngloGold Ashanti Ltd., and Gold Fields Ltd., the post said.
Small-scale miners have also been ordered to sell their gold to the state-owned Precious Minerals Marketing Co, but the amount was not yet specified.
Ghana is Africa's largest gold producer, accounting for 117.6 tons in 2021. And now, its government wants to use this position to create a plan to buy fuel with bullion instead of U.S. dollars. Despite being a producer of crude oil, Ghana has been importing refined oil products since 2017 following an explosion at its only refinery.
The idea of using gold stems from the need to contain inflation and limit the devaluation of the cedi, the national currency, according to the government. Read More
Ghana readies to buy oil with gold, part of 'wider trend' of de-dollarization - E.B. Tucker
The global oil market, usually transacted with U.S. dollars, had a surprise last week as Ghana announced it would buy oil with gold. This is part of a "wider trend" of de-dollarization as the world moves towards multipolar "zones" of influence, said E.B. Tucker, Director of Metalla Royalty.
"Instead of just looking at Ghana, you have to notice a wider trend that's developing here, and this is going to create pressure on the U.S. system," he said.
Tucker pointed to the fact that since Russia's conflict with Ukraine, India and China have been purchasing Russian oil, refusing to go along with Western sanctions on Russia.
"India is trying to pursue this policy of neutral alignment with all parties," he explained. "They're also pretty eager buyers of Russian oil."
Tucker spoke with David Lin, Anchor and Producer at Kitco News. Read More
Gold, silver sell-off as USDX rebounds from overnight low
Gold and silver prices are lower and nearer their daily lows in midday U.S. trading Monday. The metals are seeing selling pressure as the U.S. dollar index has rallied after trading solidly lower overnight. There are also worries about global demand for metals as unrest in China, the world's second-largest economy, is likely to further squelch that country's economic growth. February gold was last down $11.10 at $1,757.90 and March silver was down $0.474 at $21.135.
The marketplace is very uneasy to start the trading week amid civil unrest in China over its strict zero-Covid policies. Reports said there were demonstrations across China over the weekend. It's the largest show of discontent since the Tiananmen Square protests in 1989. China is the world's second-largest economy and the most populous nation. The geopolitical and economic consequences of a further escalation in protests and any crackdown by Chinese authorities would be huge. However, if this situation escalates, look for better safe-haven demand for gold and silver.
Other big market events this week include a speech by Federal Reserve Chairman Jerome Powell on Wednesday afternoon and the U.S. employment report from the Labor Department on Friday morning.
Technically, February gold futures prices scored a bearish "outside day" down on the daily bar chart. The gold futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Bulls' next upside price objective is to produce a close above solid resistance at the November high of $1,806.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today's high of $1,778.50 and then at $1,790.00. First support is seen at $1,750.00 and then at last week's low of $1,733.50. Wyckoff's Market Rating: 5.5.
Image Source: Kitco News
March silver futures bulls have the slight overall near-term technical advantage. Prices are in a choppy three-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the November high of $22.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at today's high of $21.815 and then at $22.00. Next support is seen at $21.00 and then at last week's low of $20.79. Wyckoff's Market Rating: 5.5. Read More
Image Source: Kitco News
LME defends its March nickel decision, cites $20 billion 'death spiral'
The London Metal Exchange (LME) said its decision to cancel billions of dollars of nickel trades back in March was lawful and the only option given the circumstances, according to Monday's court filing.
The instance the LME refers to is the massive short squeeze in the nickel market witnessed earlier this year when prices surged 230% in one day and reached a record $100,000 a tonne on March 8. At that time, the LME suspended the market and cancelled billions of dollars worth of nickel trades.
The LME is now facing a combined $472 million lawsuit from U.S. hedge funds Elliott Associates and Jane Street Global Trading. But according to the defence filing, the LME had a regulatory obligation to cancel, citing unprecedented market conditions.
"The LME maintains that Elliott's and Jane Street's grounds for complaint have no merit and are based on a fundamental misunderstanding of the situation on 8 March and the decisions taken by the LME," an LME spokesperson said. "All the actions taken on 8 March were lawful and made in the interest of the market as a whole. The LME will continue to vigorously defend these proceedings."
The filing said the actions were necessary to avoid a $20 billion margin call that would have forced the LME into a "death spiral" and led to the bankruptcies of multiple clearing houses. Read More
Investors focus on China and Fed comments which pressured gold lower
Today gold futures are trading under pressure as market participants react to multiple events including comments by several Federal Reserve officials, protests in China, Chairman Powell's upcoming speech, and Friday's jobs report.
As of 4:48 PM EST gold futures basis of the December 2022 Comex contract is fixed at $1740 after factoring in today's decline of $14 or -0.80%. The most active or front month for gold futures will change from December to February 2023 within days. Currently, the February 2023 contract of Comex gold is down $14.10 and fixed at $1754.70.
Image Source: Kitco News
The December contract of silver futures is also trading lower today. Currently, December futures are down -2.59% or $0.56 and fixed at $20.87. The most active front month in silver futures is also moving from December to the March 2023 contract which is currently down 54.9 cents or -2.59% and fixed at $21.065.
Image Source: Kitco News
Weakness in both gold and silver today is the byproduct of multiple events. Concerns about mass protests in China are front and centre. According to the New York Times, "After a weekend of confrontations between officials and demonstrators, video from two sites in Shanghai and Beijing showed a heavy security presence." Read More
In this week’s episode of Live from the Vault, Andrew Maguire sits down with hedge fund expert and metals analyst, Dave Kranzler, to uncover the market indicators that point to the metals sector readying for the next move higher.
The industry leaders expose the mania of shorting COMEX gold and silver futures, with market structural imbalances echoing those last seen in 2008 - gold and silver on the upside could leave the speculators scrambling for physical value. 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.
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