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Gold price jumps to test $1,975 as inflation accelerates to 8.5% in March
Gold traded at daily highs and tested the $1,975 an ounce level after inflation in the U.S. hit a new four-decade high in March, accelerating to 8.5% from a year earlier.
The U.S. Consumer Price Index (CPI) print of 8.5% was even higher than the market expectations, which called for price pressures to rise to 8.4%. The most recent data follows February’s 7.9% annual gain.
Core inflation, which strips out volatile food and energy costs, accelerated to 6.5% from a year ago, surprising slightly on the downside. Meanwhile, the monthly increase was also below markets' expectations, with an advance of 0.3%.
The biggest price increases were reported in gasoline, food, and shelter costs. “The gasoline index rose 18.3 percent in March and accounted for over half of the all items monthly increase; other energy component indexes also increased. The food index rose 1.0 percent and the food at home index rose 1.5 percent,” the release stated.
In an immediate reaction to the data, gold surged more than $25 and hit new daily highs to test the $1,975 an ounce level. June Comex gold futures were last trading at $1,976.50, up 1.45% on the day. Read More
'We are on the home stretch now' - Orezone's first gold pour set for Q3
Orezone's mine will be on schedule and under budget, said the president and CEO of Orezone Gold, Patrick Downey.
Downey spoke to Kitco on Friday.
Orezone Gold (ORE: TSX) is a Canadian development company that owns a 90% interest in Bomboré project, a large oxide resource underlain by a larger, open sulphide resource located in Burkina Faso. The company plans to develop the project in two stages, with the first gold pour scheduled for Q3-2022.
"We're very excited. We're on the home stretch now. We will be pouring first gold in Q3. We're right on schedule under budget. It's a testament to the great team of people that we've had on the ground," said Downey. Read More
Recession risk rises as WoodMac lowers its global economic forecasts
Recession fears continue to grow as economists lower their global growth forecasts due to rising inflation and geopolitical uncertainty caused by Russia's invasion of Ukraine.
Tuesday, research and consultancy group Wood Mackenzie said it was lowering its 2022 global growth forecast to 2.5%. Next year the economists see the global economy expanding by only 0.7%, as the world feels the long-term impact of Russia's war with Ukraine.
Although commodity prices have soared higher in the first quarter of 2022, WoodMac said that lower economic growth does not bode well for future gains. Peter Martin, research director at the firm, noted that rising commodity prices had pushed inflation prices higher, forcing central banks worldwide to tighten their monetary policies, pushing the threat of a recession even closer.
The research firm noted that sharp rises in energy and food prices hurt industry demand and erode consumer purchasing power. At the same time, global business confidence deteriorates, and investment contracts. Read More
Not being shared equally - high gold prices still not benefitting the whole sector
Despite high gold prices, the mood in the junior sector is just "meh," said the CEO of Soar Financial, Kai Hoffmann.
Hoffmann spoke to Kitco on Friday. On Wednesday Soar Financial hosts an online seminar, SF Online. Some presenters include Defiance Silver and Newcore Gold.
Gold has been on a tear, spiking on geopolitical tensions due to the Ukraine-Russia war last month. Macro data has also helped. On Tuesday gold reached $1,975 an ounce level after inflation in the U.S. hit a new four-decade high in March, accelerating to 8.5% from a year earlier. Read More
Gold, silver see strong advances as U.S. inflation hot, crude oil rallies
Gold and silver prices are posting solid gains in midday U.S. action Tuesday, with gold notching a four-week high and silver a two-week high. Another U.S. inflation report that ran hot and big gains in crude oil futures today boosted the precious metals markets. June gold futures were last up $30.40 at $1,979.10 and May Comex silver was last up $0.808 at $25.795 an ounce.
Image Source: Kitco News
Technically, April gold futures prices hit another four-week high today. Bulls have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,915.00. First resistance is seen at today’s high of $1,982.70 and then at $2,000.00. First support is seen at today’s low of $1,953.00 and then at this week’s low of $1,942.90. Wyckoff's Market Rating: 7.0. Read More
Inflation continues to support gold prices - Van Eck
Gold prices still have room to move higher even as the Federal Reserve and other central banks around the world tighten their monetary policies, according to the latest outlook from VanEck.
In a report published Monday, Joe Foster, portfolio manager, and Imaru Casanova, deputy portfolio manager, for the investment firm's gold strategy, said that although the Federal Reserve is looking to aggressively raise interest rates this year, including two 50-basis point hikes at the next two meetings, rising inflation will continue to keep real interest rates low through 2022.
Markets expect that the Federal Reserve could be even more aggressive than suggested in the minutes of the March monetary policy meeting. The CME FedWatch Tool shows markets are pricing in the possibility that interest rates will rise above 3% by the end of the year. Read More
Fed rate hikes will have minimal impact on gold and Bitcoin this year, here’s why - Frank Holmes
The Federal Reserve is expected to raise interest rates between five and seven times this year. It already increased rates by 25 basis points last month. "Higher interest rates will not crash the gold or cryptocurrency market. Real interest rates will not go positive," explained Frank Holmes, Executive Chairman of HIVE Blockchain Technologies. "The crypto market is on its own trajectory."
Holmes discussed the impact rising interest rates will have on Bitcoin and gold prices with David Lin, Anchor at Kitco News on the sidelines at the Bitcoin 2022 Conference in Miami. HIVE Blockchain Technologies is the first publicly-traded cryptocurrency miner. It is listed on the Toronto Venture Exchange. Read More
Inflation spirals to 8.5%, no surprise according to the Federal Reserve Bank of Cleveland
Today the BLS (Bureau of Labor Statistics) released its CPI inflation report for March 2022. The report showed that inflation had risen to 8.5% when compared to the inflation level in March 2021. When compared to month-over-month levels, inflation rose 0.6% as February's level of inflation came in at 7.9%. However, this news was no surprise as it had been released by the Federal Reserve Bank of Cleveland on March 30.
Forecasts by the Federal Reserve braced the investment community for this extreme acceleration in inflationary pressures, and today's report verified that inflationary pressures continued to grow in March. This sent ripples through financial assets resulting in rising yields in U.S. treasuries and a strong uptick in safe havens such as gold and the dollar. Read More
Image Source: Kitco News
Gold and silver trade higher ahead on the European open
Gold (0.12%) and silver (0.48%) both trade higher ahead of the European open. Gold has broken out of the previous wave high on the daily chart. In the rest of the commodities complex, copper (0.75%) has also risen but spot WTI has fallen nearly half a percent.
Indices in the Asia Pac area performed well overnight. The Nikkei 225 (1.93%) and ASX (0.34%) pushed higher but the Shanghai Composite fell 0.59%. Futures in Europe are indicating a positive cash open.
In FX markets, USD/JPY rose once again to hit its highest level in two decades. NZD/USD also fell 0.72% post RBNZ. In the crypto space, BTC/USD is flat but back above $40K.
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.
