Today's Gold and Silver News - 3rd November

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Silver Makes Steady Headway Even as Another Large Fed Hike Expected

Silver is edging up towards $20 an ounce even though today is likely to bring another large interest rate hike by the Federal Reserve. This positive start to what is likely to be a busy trading day illustrates the strength of support that is building up for silver.

Since silver’s multi-month slump finally reached its nadir in September, the price has been consistently trying to recover some of the ground it lost over the previous six months. Yet its efforts to build a significant rally have been stymied by the prospect of more interest rate hikes by central banks across the world, in particular the Fed, as silver’s lack of yield makes it less attractive compared with interest-bearing assets such as bonds when rates are increasing. Read More

Gold Flirts With $1,650 an Ounce as Markets Await Fed Rate Decision

Gold continues to trade either side of $1,650 an ounce as the markets await the Federal Reserve’s latest interest rate decision later today. The overwhelming expectation is that the US central bank will implement its fourth consecutive hike of 75 basis points, something that has long since been priced into markets. 

Yet while today’s announcement is unlikely to materially move gold, assuming the Fed does increase its rate in line with expectations, the press conference by Fed Chair Jerome Powell that follows the decision is much likelier to have an impact. Investors will be closely scrutinizing his every word to determine how much longer and how much harder the Fed is likely to keep hiking rates for. Read More

Central banks buy record amount of gold in Q3 and large chunks are from unknown buyers

Gold purchases from central banks reached a record during the last quarter, revealed the World Gold Council's quarterly report. But the caveat was that the big players remain anonymous.

A total of nearly 400 tons was bought by central banks in the third quarter, the most on record. This also marked a 300% jump from the same period a year ago, the World Gold Council said in its Gold Demand Trends report released Tuesday.

Year-to-date, central banks bought 673 tons, more than any other annual total since 1967 — when the U.S. dollar was still backed by gold.

Turkey, Uzbekistan, and Qatar emerged as the biggest known buyers. But there was still a sizeable unknown contingent. "The level of official sector demand in Q3 is the combination of steady reported purchases by central banks and a substantial estimate for unreported buying," the WGC's report pointed out.

Countries known for not reporting their gold purchases regularly include China and Russia.

"Not all official institutions publicly report their gold holdings or may do so with a lag. It's also worth noting that while Metals Focus suggests purchases occurred during Q3, it's possible they may have started earlier in the year," the report noted. Read More

Russian banks face gold bar shortages as local demand surges

As Russian investors embrace gold this year, local banks face shortages of smaller troy-ounce gold bars.

The surge in demand comes after Russia scrapped the 20% value-added tax on metals purchases back in March and then got rid of the 13% income tax on the sale of gold for 2022-2023. The move was designed to encourage diversification into precious metals over foreign currencies, such as the U.S. dollar and euro.

The main issue with the current shortage is that Russian refiners are used to supplying banks with large ingots for bulk purchases, as this was the main investment focus in the past, Vedomosti reported. Refiners are already working to shift the production to smaller-sized minted bars, but it is not a quick transition and will take time.

Before the surge in demand from the local population, gold was primarily bought in bulk by the Russian central bank to be exported abroad. That is why refiners' main objective was to produce large bars. Read More

Gold hits daily highs as FOMC leans less hawkish

Gold and silver prices are solidly higher and hit daily highs in early afternoon U.S. trading Wednesday, following an FOMC statement that was just a bit more dovish on U.S. monetary policy than expected. A lower U.S. dollar index and lower U.S. Treasury yields at mid-week are also prompting some buying interest. December gold was last up $17.00 at $1,666.50 and December silver was up $0.273 at $19.94.

The Federal Reserve's just-concluded Open Market Committee (FOMC) meeting saw the U.S. central bank raise its main Fed funds rate by 0.75%, to 4.00%, as expected. The FOMC statement said the Fed will take into consideration the health of the U.S. economy after its recent “cumulative tightening.” The market read that statement as leaning less hawkish on U.S. monetary policy going forward. The marketplace now awaits Fed Chairman Jerome Powell's afternoon press conference, hoping he will shed even more light on the Fed's future monetary policy path.

Technically, the gold futures bears still have the firm overall near-term technical advantage. Prices are still in a longer-term downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at last week's high of $1,679.40 and then at $1,700.00. First support is seen at today's low of $1,648.60 and then at this week's low of $1,633.60. Wyckoff's Market Rating: 2.5.

Image Source: Kitco News

The silver bulls have the slight overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $21.31. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at this week's high of $20.04 and then at $20.50. Next support is seen at today's low of $19.545 and then at $19.25. Wyckoff's Market Rating: 5.5. Read More

Image Source: Kitco News

Gold prices move near session highs as Federal Reserve raises interest rates 75 basis points

The gold market is seeing some new buying momentum as the Federal Reserve looks to slightly adjust its aggressive monetary policy stance.

In a widely anticipated move, the Federal Reserve raised its Fed Funds rate by 75 basis points. This is the fourth consecutive supersized rate hike this year. While the central bank remains focused on bringing inflation down, it does appear to be adjusting its stance.

The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

Analysts and economists expected the Federal Reserve to signal a slowdown in its tightening cycle in December and through the early part of 2023.

December gold futures last traded at $1,661.70 an ounce, up 0.77% on the day. "The market read that statement as leaning less hawkish on U.S. monetary policy going forward," said Jim Wyckoff, senior technical analyst at Kitco.com. Read More

Digital gold is inevitable - MarketVector

Like all financial assets, it is only a matter of time before the gold market embraces tokenization en mass; however, according to one market analyst, trust remains the biggest hurdle for the precious metal.

In a recent interview with Kitco News, Martin Leinweber, digital asset product strategist at MarketVector, said that tokenizing gold and evolving blockchain technology will unlock new demand for the gold market. Leinweber explained that a big advantage of digital gold is fractionalization. Consumers can own a small amount of gold on a digital exchange, a more affordable option than buying physical bullion.

However, Leinweber added that the gold market has a long way to go to catch up to other digital assets. "Digital gold is still a very niche market. But that is also a reflection of the overall landscape. Globally, hedge funds own less than 5% of gold in their portfolios."

The biggest challenge the gold market faces as it progresses through the digital landscape is trust, said Leinweber. He noted more investors would be inclined to embrace digital gold products if there were more regulations and standard auditing procedures. He explained that investors need to be confident that all digital tokens are backed by the physical metal that is securely stored. Read More

Powell volatility: Gold price drops as Fed Chair says 'ultimate level' of rates will be higher than previously expected

Gold lost all post-Fed statement gains as Chair Jerome Powell signaled that the "ultimate level" of interest rates would likely be higher than previously thought. He also said the window for a soft landing has "narrowed."

The precious metal quickly tumbled during Powell's press conference, which followed Fed's decision to raise rates by 75 basis points for the fourth time in a row. The latest hike means that the Fed has already raised rates by 375 bps since March, bringing the key policy rate to a range between 3.75%-4%.

After jumping to a daily high of $1,673.10 immediately after the announcement, December Comex gold futures then dropped to $1,639.70 as Powell was speaking to reporters Wednesday.

Powell said that even though a slowdown in rate hikes might happen in December or February, the U.S. central bank is likely to take rates higher than previously thought. "At some point … it will become appropriate to slow the pace of increases as we approach the level of interest rates that will be sufficiently restrictive to bring inflation down to our 2% goal," he said. "We still have some ways to go. And incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected." Read More

Stock market erases billions after FOMC rate hike, gold to stay flat until year-end - Gary Wagner

Gary Wagner, Editor of TheGoldForecast.com, explains how markets reacted to the Federal Reserve's rate hike decision on Wednesday, and discusses his outlook for gold with David Lin, Anchor for Kitco News.

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.