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Gold Price News: Gold Nudges Higher to Close Out Bearish Week
Gold prices ticked higher on Friday to close out a largely bearish week for the yellow metal, which posted week-on-week losses of around 2.2%.
Prices edged up to $2,352 an ounce on Friday, before easing back to around $2,338 an ounce by Friday evening. That compares with Thursday’s range of $2,310 to $2,340 an ounce.
The latter part of the week was characterised by relative price stability following Monday’s hefty fall from as high as $2,387 an ounce.
US monthly personal income figures and Core PCE price index figures released on Friday were both in line with market expectations, while personal spending was slightly above expectations. Collectively, the figures provided little convincing momentum for gold prices in either direction.
Recent strength in the gold price, which saw fresh all-time highs of over $2,400 an ounce on April 12, has been attributed to a surge in buying among retail investors on the Shanghai Futures Exchange. However, some commentators have noted that while trading volumes surged on the exchange, the number of outstanding contracts barely moved, indicating that day-trading may have been behind the price surge, rather than buy-and-hold investors. Read More
Silver Price News: Silver Ends Week Lower, Support Seen Below $27.00
Silver prices edged lower on Friday to end the week with losses of around 5%, a larger relative drop than that seen in the gold markets.
Silver was trading at around $27.20 an ounce by late afternoon on Friday, slightly down from Thursday’s $27.47 an ounce.
Nevertheless, after the heavy losses on April 22, silver has shown some stability through the rest of the week, apparently finding buy-side support at below the $27.00 an ounce mark. This may give silver bulls some degree of optimism that the recent sell-off has faded. Silver hit multi-year highs of close to $30.00 an ounce on April 12.
Hopes of interest rate cuts this summer appear to have faded, with most market bets now favouring September for the first-rate cut by the US Fed. This higher-for-longer scenario for interest rates is notionally bearish for precious metals prices as non-interest-bearing assets.
That said, industrial demand for silver appears to be a bright spot in an otherwise more bearish demand picture. Overall global demand for silver fell by 7% in 2023, while industrial demand grew by 11% in the same year, according to figures by the Silver Institute. Read More
Gold, silver up a bit ahead of major U.S. data
Gold and silver prices are slightly higher in midday U.S. trading Monday. Trading is quieter to start the work week, as market participants are bracing for a very busy week for big U.S. economic data that will almost surely significantly move the markets. June gold was last up $2.90 at $2,350.10. May silver was last up $0.028 at $27.82.
This week’s U.S. data highlights include the Federal Reserve’s Open Market Committee meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. No changes in monetary policy are expected, but the FOMC statement and Powell’s presser will be very closely scrutinized by the marketplace. Recent warmer U.S. inflation data has prompted traders and analysts to dial back their timelines on interest rate cuts from the Fed, if they come at all this year. Former Fed official Roger Ferguson said on CNBC today that he expects Powell to sound a hawkish tone this week. A Wall Street Journal headline today reads: “High rates appear on track to persist long term.” On Friday morning comes the U.S. jobs report from the Labor Department.
Technically, June gold futures bulls have the firm overall near-term technical advantage. They are keeping alive a 2.5-month-old uptrend on the daily bar chart. A minor bear flag pattern has formed on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,250.00. First resistance is seen at last Friday’s high of $2,364.40 and then at $2,375.00. First support is seen at today’s low of $2,331.00 and then at $2,316.40. Wyckoff's Market Rating: 7.0.
Image Source: Kitco News
May silver futures bulls have the firm overall near-term technical advantage. A two-month-old price uptrend on the daily bar chart is still alive. Silver bulls' next upside price objective is closing prices above solid technical resistance at $29.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at last Friday’s high of $27.745 and then at $28.00. Next support is seen at today’s low of $26.96 and then at last week’s low of $26.715. Wyckoff's Market Rating: 7.0. Read More
Image Source: Kitco News
MKS’ Nicky Shiels asks if Costco gold is the market's new ETF moment
The precious metals sector has seen a few defining moments that have created a paradigm shift in the marketplace, and one strategist is wondering if gold is on the cusp of another disruptive event.
In a recent opinion piece, Nicky Shiels, Head of Research & Metals Strategy at MKS PAMP, said that since Costco started selling one-ounce gold bars on its website in early 2023, the precious metal has attracted a lot more mainstream attention.
In the past year, Costco's gold sales have exploded, and one-ounce bars are sold out online within a few hours. Earlier in April, equity analysts at Wells Fargo estimated that the giant retailer sells between $100 million and $200 million ounces of gold monthly.
Wells Fargo hypothesized that Costco's gold sales are more about driving online sales and attention than boosting the company's bottom line. Read More
Offsetting macroeconomic and market factors are pulling gold and silver prices in both directions as key correlations break down – Heraeus
Contradictory economic indicators are exerting equal and opposing forces on gold prices, while silver gains production in one region only to risk losing it in another, according to precious metals analysts at Heraeus.
In the company’s latest report, the analysts noted that one of the most important and consistent relationships between gold and the financial world has broken down over the past two years.
“Since around the year 2000, gold has exhibited a relatively strong inverse relationship with yields on the 10-year US Treasury note,” they said. “This is to be expected as the non-yielding nature of bullion means that as the coupon paid on very low-risk US government debt rises, the opportunity cost of holding gold also rises, and the interest in buying falls.”
They noted that to date in 2024, bond yields have risen as interest rate cut expectations have fallen. “Meanwhile, gold has made successive all-time highs, with particular strength shown in the last month prior to the recent correction,” they wrote. Read More
Gold is likely the ‘missing link’ in understanding the recent rebalancing of equity market sentiment – Lombard Odier
The hidden driver of the white-hot 2024 gold market may be a short-term rebalancing in equity sentiment, according to private Swiss bank Lombard Odier.
The recent report by Florian Ielpo, Head of Macro and Multi Asset and Didier Rabattu, CIO, of Sustainability Equities, attempted to control for a number of known factors to determine what else might be driving gold prices higher.
The authors note that the precious metal’s dramatic price surge “is particularly striking given that gold did little to protect investors from the effects of accelerating inflation over the past two years. So why rally now?”
They suspect that the rally is being fed by a “complex interplay of known and potentially unknown factors” including traditional fundamental drivers like inflation, real rates and risk aversion, the more recent phenomenon of large central bank purchases, and a “sense of bearishness arising from expensive equity markets.”
To assess how the known fundamental factors of inflation, real rates and risk aversion have evolved, Lombard Odier estimated their contributions to gold’s performance during Q4 2023 and Q1 2024. Read More
Gold Prices Subdued as Investors Await FOMC Meeting
Image Source: Kitco News
As of 5:30 PM EDT, gold futures based on the most active June 2024 contract are down $2.10, or -0.09%, settling at $2347.50. Today's decline would have been more significant if not for the dollar's weakness. The dollar is currently down -0.26%, taking the dollar index to 105.525. A neutral dollar would have resulted in gold losing more ground, as gold is directly paired against the dollar for value.
The Federal Reserve will commence its two-day Federal Open Market Committee (FOMC) meeting on Tuesday, concluding on Wednesday. It is widely anticipated that the Federal Reserve will leave its benchmark interest rate (fed funds rate) unchanged.
According to the CME's FedWatch tool, there is a 94.6% probability that the Fed will maintain its current rates and a 5.4% probability that they will cut rates by ¼%, which would take their benchmark rate to between 5% and 5.25%.
At the conclusion of this week's FOMC meeting, the Federal Reserve will release a statement, and Chairman Jerome Powell will hold a press conference.
According to the UBJ, "Forecasts from futures markets indicate a high degree of certainty that interest rates will remain unchanged, with only a negligible chance of a rate cut. Since July 2023, the FOMC has maintained a steady federal-funds rate target, holding it within a range of 5.25% to 5.50%. This steady stance reflects the committee's cautious approach, particularly in light of recent inflationary pressures." Read More
Gold market sees its best start in eight years as Asian retail demand and central bank purchases dominate Q1 - World Gold Council
The gold market saw its best start to the year since 2016 as robust Asian demand and record central bank purchases dominate the marketplace, according to the latest report from the World Gold Council.
Tuesday, the WGC released its first quarter Gold Demand Trends report, saying that, including Over-the-Counter purchases, global physical gold demand rose to 1,238 tonnes, an increase of 3% from the first quarter of 2023. Excluding the OTC market, the WGC said that gold demand dropped by 5% to 1,102 tonnes due to continued outflows in gold-backed exchange-traded funds.
In an interview with Kitco News, Juan Carlos Artigas, Head of Global Research at the WGC, said that while the OTC market can be pretty opaque, the current data strongly suggests that demand continues to come from Asian consumers, led by Chinese investors.
“There is strong anecdotal evidence and other data that points to the fact that there is strong demand in Asia, but it's happening more in the OTC market,” he said. “Asian consumers have been coming with a lot of force into the gold market.”
Looking at small bar and coin demand, the WGC said China saw the strongest quarter since 2017. Read More
Live From The Vault - Episode: 170
You need to protect your wealth NOW, Feat. Andy Schectman
In this week’s episode of Live from the Vault, Andrew Maguire is joined by Andy Schectman, President of Miles Franklin. The precious metals experts juxtapose the current physically-driven bull run with their long histories of financial education.
Revealing some surprising facts and statistics, Andy Schectman revisits past statements that may foreshadow the future of gold and silver. But amidst these revelations, he sounds the call: the time to safeguard your wealth is now.
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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.
