Today's Gold and Silver News - 9th August

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Gold Holds Onto Gains Despite Healthy US Economy Increasing Chance of Fed Hikes

Gold starts a new week trading at around $1,775 an ounce as investors assess the likely trajectory of the Federal Reserve’s interest rate hikes in the wake of the positive jobs data released at the end of last week.

The figures showed the US had added double the number of jobs that was anticipated, giving the Fed greater scope to increase its series of interest rate hikes as it tries to curb inflation without risking tipping the economy into recession. 

While gold did drop a little on Friday in the wake of this news, it has largely held on to the gains it has made since late July, illustrating that support for the precious metal is strengthening. 

As such with gold’s upside gains capped by the potential of more aggressive rate hikes by the Fed and other central banks across the world, there now appears to be sufficient support to prevent the price falling to the $1,700 an ounce level seen in July. How strong that support proves to be will be tested when the Fed’s next interest rate decision is announced at the end of this month. Read More

Silver Holds Above $20 as Investors Weigh Positive US Economic Outlook vs Fed Hikes

Silver is holding above the crucial threshold of $20 an ounce, underlying the metal is creeping back in favour among investors after spectacularly losing support over the previous three months.

Strong jobs data can be interpreted in two contrasting ways for silver. The metal’s use in a range of industries, including in electric vehicles, means that signs of a strong US economy are positive for silver demand.

Equally, the robustness of the US economy gives the Federal Reserve greater confidence to implement the series of interest rate hikes it is planning, which would be a negative for silver as rising interest rates reduce the investor appeal of the non-yield-bearing metal.

The fact that silver remains above $20 despite the increasing likelihood of upcoming large interest rate hikes by the Fed points to the slight shift in the narrative surrounding the metal. With the bottom reached in July, the fundamental outlook which has this year being a record year demand-wise has been allowed to reenter investors’ thoughts. 

How much ground silver can recover is likely to be capped by the aggression of the Fed but investors will be anticipating that silver can continue to trade in the $20s with this slightly more optimistic medium-term outlook. Read More

Gold, silver boosted by falling USDX, U.S. bond yields, rising oil

Gold and silver prices are higher, with silver sharply up and hitting a five-week high in midday U.S. trading Monday. The precious metals were boosted today by a weaker U.S. dollar index and falling U.S. Treasury bond yields, as well as a rally in the crude oil market today. Some modest safe-haven demand was also featured in gold and silver. October gold futures were last up $12.70 at $1,793.00. September Comex silver futures were last up $0.808 at $20.645 an ounce.

Global stock markets were mixed to slightly up overnight. U.S. stock indexes are weaker at midday. Corporate earnings reports will be in focus for stock traders this week. We are in the “dog days” of summer, whereby trading volumes in many markets wane as traders and investors step away from markets and take family vacations. Much of Europe is on vacation during August. Markets are likely to be mostly quieter until after the U.S. Labor Day holiday in early September.

Traders are still watching China's military exercises near Taiwan. A Wall Street Journal headline reads, “China's military exercises showcase modern fighting force preparing for possible war in the Taiwan Strait.” This news is also likely keeping a modest safe-haven bid in the gold market.

Technically, October gold futures bears still have the overall near-term technical advantage. However, a fledgling price uptrend is still in place on the daily bar chart to suggest a market bottom is in place. Bulls' next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,720.00. First resistance is seen at the August high of $1,801.00 and then at 1,825.00. First support is seen at today's low of $1,776.20 and then at $1,769.50. Wyckoff's Market Rating: 4.0.

Image Source: Kitco News

September silver futures prices hit a five-week high today. September silver futures bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. 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 $20.745 and then at $21.00. Next support is seen at $20.51 and then at $20.00. Wyckoff's Market Rating: 4.0. Read More

Image Source: Kitco News

Risk of significant reversal in gold price rally as inflation report looms, says TD Securities

The strong employment report proved that the U.S. economy is still expanding despite two consecutive negative quarterly GDP releases. And for gold, this means that the price rally could be at risk, according to TD Securities.

In reaction to the U.S. economy adding 528,000 jobs in July, gold lost 1% on Friday. The July report more than doubled economist expectations of additional 250,000 jobs. On Monday, gold staged a recovery, with December Comex gold futures rising back to $1,793.00, up 0.70% on the day.

Friday's selloff was led by a shift in sentiment that markets were premature to price in a Federal Reserve pivot from the aggressive tightening cycle, said TD Securities head of commodity strategy Bart Melek.

"The 528k increase in payrolls, unemployment drop to just 3.5% and the outsized 5.2% y/y jump in earnings growth all suggest the U.S. economy is expanding, despite the two consecutive negative quarterly GDP prints," Melek said Friday. "This, along with service sector robustness and given the U.S. consumer has larger-than-normal holdings of cash in checking accounts and money market funds, which sit at around three trillion dollars, all suggest that there are plenty of inflationary pressures in the system."

This week, the attention will be on the July inflation report out of the U.S., with economists projecting the annual inflation pace to come in at 8.7% after rising to 9.1% in June.

According to Melek, inflation will continue to be stubbornly high, and the metric to watch would be the core inflation number, which excludes the food and energy sectors. "Core CPI may continue to increase, even as lower energy prices drive down the headline level," he said. "The U.S. July CPI data next week, particularly the core, will be the one to watch as any hint of stubborn inflation pressures in the system should help to debunk the early pivot argument." Read More

CFTC charges World Series of Poker player with manipulating gold and silver markets

In another spoofing case, the Commodity Futures Trading Commission (CFTC) charged a Nevada metals trader who has a lucrative poker side-gig with spoofing the gold and silver futures markets.

The CFTC said that Daniel Shak, who heads a small hedge fund SHK Management LLC, entered large orders for gold and silver futures that he intended to cancel before execution while also placing orders on the opposite side of the gold or silver futures market. And this happened on hundreds of occasions.

Spoofing is a tactic of manipulating gold and silver markets by making bids or offers and cancelling them before execution. The CFTC alleges that from February 2015 through March 2018, Shak engaged in this kind of activity repeatedly.

"By placing the spoof orders, Shak intentionally or recklessly sent false signals of increased supply or demand that were designed to trick market participants into executing against orders on the opposite side of the market, which he actually wanted filled," the CFTC said in a press release. "Shak's spoof orders allowed him to fill orders on the opposite side of the market sooner, at a better price, and/or in larger quantities than they otherwise would have been filled."

The CFTC is seeking civil monetary penalties, disgorgement, trading bans, and a permanent injunction against future violations of the federal commodities laws.

"These charges demonstrate once again that the CFTC will vigorously prosecute to the fullest extent of the law, misconduct that has the potential to undermine the integrity of our markets," said CFTC Acting Division of Enforcement director Gretchen Lowe. Read More

Gold and silver trade marginally lower ahead of the European open

Gold (-0.20%) and silver (-0.11%) are both trading lower ahead of the European open. In the rest of the commodities markets, copper is just under flat while spot WTI has fallen 0.64%.

Risk sentiment was mixed overnight as the Shanghai Composite (0.31%) and ASX (0.13%) moved higher but the Nikkei 225 closed -0.88% lower. Futures in Europe are projecting a negative cash open. 

FX markets were very quiet overnight the biggest mover was AUD/USD which fell 0.20%. In the crypto space, BTC/USD trades at $23,790.

News from overnight: Read More

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.