Today's Gold and Silver News - 31st August

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Silver looks to be heading to an important support area

Silver has been moving lower in recent sessions and today is no different as the grey metal is trading 0.40% lower. From a technical standpoint, the price has been making lower highs and lower lows since the 14th August high of $20.87oz. The strength of U.S. dollar has clearly been having an impact on the precious metals sector. Gold has also struggled in recent sessions along with platinum and palladium. 

Looking at the 4-hour chart below, the price has broken through the most recent support level at $18.90/oz on 26th August and then used the zone again as a resistance on Monday. The confirmation of the move lower will come if the current wave low of $18.49/oz to make a new lower low wave. 

The next support is lying in wait at $18.12/oz. This was a strong zone back in mid to late July. after hitting that support the price moved 15% higher and on the higher timeframes, it is the current consolidation low. It will be interesting to watch the volumes as the price hits that level as the market participation might increase due to the importance of the level. In the U.S. session, we are due to hear from two Fed members and this could inspire some volatility. Read More

Image Source: Kitco News

BRICS president: Russia and India have no need for the U.S. dollar

 Russia and India no longer need the U.S. dollar for mutual settlements, said BRICS International Forum President Purnima Anand.

A new mechanism has been established between the two countries, using only rubles and rupees, Anand told reporters last week.

"We have implemented the mechanism of mutual settlements in rubles and rupees, and there is no need for our countries to use the dollar in mutual settlements," Russian state news agency RIA quoted Anand as saying.

Anand added that a similar mechanism is being developed between Russia and China to eliminate the use of the greenback and employ only rubles and yuan.

This way of paying for goods gives Russia a way to go around the sanctions imposed on the country following its invasion of Ukraine.

"The BRICS countries are opening up to Russia, offering the opportunity for the country to overcome the consequences of sanctions," Anand said.

Russia has also increased its ties with India, as trade jumped fivefold over the past four decades, according to Anand. India has been importing more oil from Russia, while Moscow has stepped up purchases of agricultural products, textiles, and medicine.

India has resisted the pressure from the West to ban Russian oil. "When Russia's military operation in Ukraine began, naturally there was pressure on India to stop importing Russian oil. But the Ministry of Foreign Affairs had to reject this pressure. The Russian side was assured that supplies would not be stopped and the sanctions regime would in no way affect the relationship between our countries," Anand stated. Read More

Gold, silver pressured amid big drop in crude oil prices

Gold and silver prices are lower in midday U.S. trading Tuesday, due in part to a drop of over $5.00 in Nymex crude oil futures prices (as of this writing). Bearish near-term technicals are also weighing on the precious metals. October gold futures were last down $12.10 at $1,728.40. September Comex silver futures were last down $0.36 at $18.31 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are lower at midday. Traders and investors are still concerned about Covid lockdowns in China that are crimping the world’s second-largest economy. Last week’s hawkish speech on U.S. monetary policy by Fed Chairman Powell is also hanging over and depressing the marketplace.

Technically, October gold futures prices were poised to close at hit a four-week low close today. The gold futures bears have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at today’s high of $1,743.10 and then at $1,750.00. First support is seen at this week’s low of $1,722.50 and then at $1,715.00. Wyckoff's Market Rating: 2.5.

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December silver futures prices hit a six-week low today. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at $17.50. First resistance is seen at this week’s high of $18.70 and then at $19.00. Next support is seen at the July low of $18.175 and then at $18.00. Wyckoff's Market Rating: 2.0. Read More

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Real fears of rising rates take gold lower on the Fed’s hawkish demeanour

As of 5:05 PM EDT gold futures basis, the most active December Comex contract is currently fixed at $1735.60 after factoring in today’s decline of $14.10 or 0.81%. September silver is also trading lower with the most active futures contract currently fixed at $18.50 after factoring in today’s decline of $0.407 or 2.19%. Both precious metals have declined over the last three trading days but silver has had a much larger percentage decline than gold based on the recent hard decline in U.S. equities that directly affect the industrial demand for silver.

Image Source: Kitco News

The dollar has been in essence neutral with fractional declines or advances over the last three days. Today the dollar index is fixed at 108.795 after factoring in today’s decline of 0.005 points. That means that the totality of price declines witnessed since Chairman Powell’s Keynote speech at last week’s Jackson Hole Economic Symposium has been driven by market participants actively selling both gold and silver.

In essence, the primary message that Chairman Powell delivered on Friday was that the Federal Reserve will continue to raise rates to reduce inflation “until the job is done”. This idea still lingers in the forefront of market participants' minds. Yesterday gold futures traded to a low of $1731.80 but quickly recovered as market participants bought the dip. Yesterday gold closed at $1750 almost $20 above yesterday’s low.

That is dramatically different from what we are witnessing in trading today. Gold futures are only a few dollars above today’s low which is $1732.90. Although gold’s price range contained a lower high and higher low than yesterday the price decline from open to close is noticeably different. Read More

China’s gold imports from Russia surge 750% in July

China has significantly stepped up its gold purchases from Russia amid a Western ban on Russian gold following its invasion of Ukraine.

China imported $108.8 million worth of Russian gold in July. That is a 750% jump from the previous month’s total of $12.7 million and an increase of 4,800% from $2.2 million reported during the same month a year ago, Russian media RBC reported citing Chinese customs data. The data listed included raw and semi-finished forms of gold.

More buying from China comes after the U.S., Britain, Canada, Japan, the EU, and Switzerland banned Russian gold exports following Russia’s invasion of Ukraine.

Earlier in August, it was reported that Russia is looking into its own international standard for precious metals after getting banned by the London Bullion Market Association (LBMA). And it could have a fixed price in national currencies. 

The country’s Finance Ministry said it was “critical” to create the new Moscow World Standard (MWS) to “normalize the functioning of the precious metals industry” and have an alternative to the LBMA. Read More

Gold and silver are mixed heading into the European open

After a 0.78% drop on Tuesday gold starts the session 0.09% lower on Wednesday. Silver on the other hand is holding its head above water trading 0.29% in the black. In the rest of the commodities complex, both copper (0.54%) and spot WTI (0.10%) are trading higher. 

Overnight stocks in the Asia Pac area followed the negative lead from Wall Street. The Nikkei 225 (-0.37%), ASX (-0.16%) and Shanghai Composite (-1.01%) all traded in negative territory. Futures markets in Asia are pointing towards a positive cash open. 

In FX markets, the biggest mover was AUD/USD which rose 0.58% overnight. In the crypto space, BTC/USD remains just above $20k. 

News from overnight: Read More

Gold On Worst Monthly Run in 4 Years Following Powell’s Stark Reminder on Future Hikes

Gold looks set to end August on a downward trend, extending the month’s losses with the precious metal set for its fifth consecutive monthly decline, its worst run in 4 years.

The catalyst for gold’s reversal in fortunes was the switch in policy by the Federal Reserve to a more hawkish monetary policy in April that has resulted in a series of interest rate hikes in recent months as well as a reduction of the amount of the debt it holds. In some senses little has changed in the intervening months with Fed Chair Jerome Powell recently reiterating the need for more rate increases in order to bring inflation back down to its 2% target and more debt being allowed to mature. 

In this environment, gold has struggled as higher interest rates make interest-paying assets such as bonds more attractive. The rally seen earlier in the month where gold climbed above $1,800 an ounce has proven illusory as it was built on the false expectation that promising US economic data would reduce the pace and severity of future interest rate hikes the Fed would need to impose. However, recent comments by a slew of Fed officials, culminating in Powell’s recent hawkish warning, have brought gold’s price crashing back down and it is now headed towards $1,700 an ounce.

How gold reacts as it approaches this key threshold will be demonstrative of the amount of support that remains for the metal. While there remain fears of a global recession as well as the ongoing war in Ukraine, there should be enough support to ensure gold doesn’t dip below the lows touched in July but on the other side it is hard to see how gold can make significant gains when central banks across the world are intent on raising interest rates.

Source: Kinesis

Silver’s Optimism Fades as Price Sinks Towards 2-Year Lows on Reminder of Hawkish Fed

The optimism that silver investors were enjoying earlier in the month when the metal was holding above $20 an ounce have been washed away in the last few weeks with the price now flirting with the lows reached in July and threatening to sink down to the levels last seen in July 2020.

As has been the case for much of the year, the key driver for silver’s price action is the words and actions of the Federal Reserve. Hopes that the US central bank may not need to be so aggressive with its future monetary policy in the wake of economic data that showed the US was holding up surprisingly well despite high inflation have been replaced by the stark reality following comments from Fed Chair Jerome Powell that the bank will continue to raise interest rates for the foreseeable future.

Silver’s lack of yield means that the metal struggles in an environment where interest rates are rising so this reminder that plenty of action is still needed by central banks across the world to curb persistently high inflation has brought the price of silver shuddering down.

How silver reacts as it trades near the lows of last month will be instructive after the metal appeared to form a strong bottoming of its price when it sank to those levels. With a fundamental outlook that still points to healthy demand for silver due to its use in key industries such as solar energy and electric vehicles, investors may once again see these sub-$19 an ounce levels as a buying opportunity.

Source: Kinesis

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.