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Weaker Dollar Pushes Gold to Top End of Its Trading Range
Gold is starting a new trading week near the top end of its recent range as it hangs on to Friday’s gain generated by a slight US dollar weakening.
After last week’s busy week of interest rate increases, this week has a more geopolitical feel with COP27 and the US midterm elections the significant events. With neither likely to have a direct impact on gold, its price is likely to remain in its recent range either side of $1,650 an ounce with the relative strength or weakness of the dollar as the main driver. Read More
Silver Takes Advantage of Weaker Dollar to Jump Up Towards $21
Silver is striding towards $21 an ounce after a slight weakening in the US Dollar gave the metal sufficient wiggle room for its strong fundamental case to gain more prominence.
Silver’s recent price action has shown a metal desperate to climb significantly higher than its current levels but having to overcome considerable pressure from ever-rising interest rates in order to do so. Read More
Gold continues to protect your wealth long-term as recession fears continue to grow - SSGA's Milling-Stanley
The Federal Reserve is not done raising interest rates as the inflation threat remains persistently high. Although the central bank's aggressive monetary policy action could keep a lid on gold through the rest of the year, it still plays an essential role as part of a diversified portfolio, according to one market strategist.
In an interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said despite gold's disappointing price action through most of the year, it continues to outperform other major assets.
Although the S&P 500 has bounced off last month's two years lows, the broad equity market index is down 21% on the year. Meanwhile, gold prices holding new support above $1,675 an ounce is down roughly 9% year-to-date.
Although interest rates will continue to increase, Milling-Stanley said renewed fear of an economic slowdown could provide some bullish momentum for gold. Investors saw a glimpse of gold's potential on Friday as prices rallied sharply, up 3% as a critical recession gauge hit its highest level in 40 years. Read More
ETF outflows to cap gold price rally, says TD Securities
After a strong $50 move higher on Friday, does gold have a chance at a breakout? TD Securities says it's too early for gold to move, citing strong ETF outflows and bloated long positioning.
December Comex gold futures were last trading at $1,681.90, up 0.32% on the day after climbing from a low of around $1,630 registered Friday morning. Gold's turnaround came after the latest U.S. jobs report clarified some of the Federal Reserve's mixed messages, and China signalled a possible easing of its Covid-Zero policy.
"Despite a hawkish Fed meeting, commodity prices are staging a rally off year-to-date lows amid speculation that China will ease its restrictive zero-Covid policies. Precious metals prices are further being supported as bloated money manager shorts are squeezed by a weakening broad dollar index, sending gold prices trading back towards $1675/oz," said TD Securities senior commodity strategist Daniel Ghali.
TD has looked at positioning in gold, and it is not convinced that the overall downtrend is about to shift on a permanent basis.
"Our analysis suggests that CTA trend follower positioning largely explains changes in the CFTC's money manager positioning data. And, our model doesn't point to substantial short covering from CTAs below $1720/oz," Ghali said. "Given little CTA short covering expected, these are the culprits behind the ongoing squeeze. Ongoing ETF outflows and a still-bloated prop-trader long positions will likely cap the rally in gold." Read More
Gold ETF outflows for October turn holdings negative YTD
Global gold ETFs registered a net outflow of 59 tons or $3 billion in October, marking the sixth straight month of declines.
The October numbers mean that global gold ETF flows are now net negative year-to-date, down 52 tons on the year, according to data from the World Gold Council.
Gold ETFs started strong in 2022 with net inflows of 316 tons from January to April amid geopolitical risk events and rising inflation. But U.S. dollar strength and hawkish Fed policy led to net outflows of 368 tons from May to October.
At the end of October, total assets under management amounted to nearly $184 billion, or 3,490 tons, the lowest tonnage since April 2020, the analysts said in the report. October’s outflow was less pronounced than September’s 95 tons decline, however, as gold prices were relatively steady during the month. Read More
Gold showing early signs market bottom in place
Gold prices are modestly higher in midday U.S. trading Monday, but importantly held Friday’s strong gains that included a technically bullish weekly high close that is one chart clue that a market bottom is in place. Silver prices are firmer and hit a four-week high today. A lower U.S. dollar index was a bullish daily factor for the metals markets to start the trading week. December gold was last up $4.70 at $1,681.40 and December silver was up $0.161 at $20.945.
Global stock markets were mostly higher overnight. U.S. stock indexes are mixed at midday. It will be another busy week of corporate earnings reports. However, focus now is on the U.S. mid-term elections on Tuesday.
Technically, the gold futures bears have the overall near-term technical advantage. However, a price downtrend on the daily bar chart has been negated and last Friday saw a bullish weekly high close. These are technical clues that a market bottom is in place. 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 $1,686.40 and then at $1,700.00. First support is seen at today's low of $1,670.00 and then at $1,650.00. Wyckoff's Market Rating: 2.5.
Image Source: Kitco News
December silver futures prices hit a four-week high today. The silver bulls have the overall near-term technical advantage. Prices are in a choppy 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 $19.00. First resistance is seen at today's high of $21.08 and then at $21.31. Next support is seen at today's low of $20.435 and then at $20.00. Wyckoff's Market Rating: 6.0. Read More
Image Source: Kitco News
Is gold the first metal to bottom? And is Bitcoin price low enough to outperform traditional risk assets? Bloomberg Intelligence weighs in
Gold has solid support between $1,600-$1,700 an ounce and could be the first metal to bottom. And Bitcoin is now low enough to start outperforming traditional risk assets, Bloomberg Intelligence said in its November outlook reports.
After finding its bottom, gold could be on its way higher as the U.S. dollar subsides and its power over gold diminishes, according to Bloomberg Intelligence's senior macro strategist Mike McGlone.
"Gold … has made new highs in euro and yen terms in 2022. Similar highs in dollar-denominated gold is typically a matter of time, and we see the precious as a top candidate to be among the first of the metals to bottom," McGlone wrote.
Gold's bearish sentiment will end when the Federal Reserve eases up its most aggressive tightening in 40 years. "The Fed sledgehammer may be building a foundation for the precious metal," McGlone said. "The most aggressive Fed tightening cycle in about 40 years is unlikely to stop until something breaks, and sharp declines in bond prices and most currencies vs. the dollar may portend an approaching end game." Read More
Market participants are bracing for Thursday's CPI inflation data for October
On Thursday, November 11 at 8:30 EDT, the BLS (Bureau of Labor Statistics) will release the latest inflation report vis-à-vis the CPI index for October 2022.
While many analysts and market participants are expecting (hoping) that the Federal Reserve will begin a pivot from dramatic and strong rate hikes at each FOMC meeting to a pause in hikes during the first half of next year. The sad truth is that the most accurate and current forecast is indicating that inflation remains entrenched with the CPI above 8% and the PCE above 6%.
The PCE is still three times above the Fed's target inflation rate of 2%. Americans and global citizens are acutely aware of inflation remains entrenched, persistent, and high as their data comes from the price they are paying for goods and services.
The most current and accurate data on inflation comes from the Federal Reserve Bank of Cleveland's Inflation Nowcasting. The Federal bank of Cleveland releases estimates or forecasts daily for both the PCE and CPI. The numbers and graphs listed are the latest forecasts by the Fed created today. Read More
In this week’s Live from the Vault, Andrew Maguire investigates the ‘officially sanctioned’ PsyOps paper-sell operation disrupting the COMEX’s gold and silver price-setting mechanism.
The London whistleblower takes a detailed look at the staggering scale of EFP outflows draining paper market liquidity, as global buyers demand the physical delivery of their bullion.
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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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