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Silver Remains Strong Above $25.5 Per Ounce
US data showed inflation has reached a multi-decade high and investors are betting on gold and silver as a way to protect themselves against the risk of further increases in the pace of inflation.
In 2021 a large majority of central banks called inflation “transitory”. The situation dramatically changed in the last few months, especially after the beginning of the conflict between Russia and Ukraine. The recent inflation rally pushed the US CPI to 8.5% in March, and the price growth pace reached a historical record in Europe too, at 7.5%.
The precious metal started the week breaking above the key level of $25 per ounce, before continuing its bullish move to jump to $25.6/25.7.
As long as the price remains above $25, the technical scenario continues to be positive, with space for a further price increase. We should note, however, that silver has already gained almost 10% since the beginning of the year. Read More
New Inflation High Boosts Gold
At the end of 2021, many investment banks forecasted that inflation would start to slow down from Q2 2022. The data published yesterday proves just the opposite: a new increase in prices on both a monthly and a yearly basis.
The monthly data saw an increase of 0.3% (below analysts' average forecast of 0.5%), while the YoY figure jumped to an impressive +8.5% (+0.6% compared to the +7.9% of February 2022). Of course, the massive rise in commodity prices – particularly oil and gas – was a crucial catalyst in last month's price rally but there is no certainty that this scenario will change in the short term.
The gold price is continuing to show strength, remaining above the key support level of $1,950/1.960. A sustained move above this threshold could open the way for further recoveries, with the key level of $2,000 that seems much closer than a few days ago.
Even if the U.S. rates rise in the next few months, the surge in prices and the potential risk of hyperinflation is still boosting investors’ interest in gold as a prospective hedge against inflation. Read More
Peak inflation premature; gold price rising as U.S. PPI hits new record, rising 11.2% annually in March
Peak inflation premature; gold price rising as U.S. PPI hits new record, rising 11.2% annually in March
Gold prices are seeing further upside momentum as Tuesday calls for peak inflation might be premature after producers saw another record rise in price pressures.
Wednesday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1.4% in March following February's rise of 0.9%; the data was stronger than expected, with economists forecasting an increase of 1.1%.
The report said that annual inflation rose 11.2%, another new record high for the data set.
The gold market is seeing new momentum following the latest producer inflation data. June gold futures last traded at $1,981.80 an ounce, up 0.28% on the day. Read More
Gold priced in CAD holds most daily gains despite Bank of Canada’s oversized 50bps rate hike to 1%
The Bank of Canada (BoC) raised rates by 50 basis points, taking its key interest rate to 1% and marking the biggest hike in two decades. Canada’s central bank also said it will be halting government bond purchases to reduce its balance sheet in the fight against inflation.
The BoC stated that more hikes will be needed to deal with rising price pressures, which are running at three-decade highs in Canada.
“With the economy moving into excess demand and inflation persisting well above target, the Governing Council judges that interest rates will need to rise further,” the BoC said in the statement.
The Bank will also be pursuing quantitative easing (QT) by no longer replacing its holdings of maturing government bonds starting April 25.
This spring marks the start of the Bank’s aggressive monetary policy tightening that will attempt to quell inflation. Read More
Gold, silver up on hot inflation, bullish outside markets
Gold and silver prices are posting moderate gains in midday U.S. trading Wednesday, after another U.S. inflation report that ran record hot. A big rally in crude oil prices this week and a lower U.S. dollar index on this day are bullish outside market forces for the precious metals at mid-week. June gold futures were last up $6.80 at $1,982.90 and May Comex silver was last up $0.245 at $25.975 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 $1,985.80 and then at $2,000.00. First support is seen at today’s low of $1,966.30 and then at $1,950.00. Wyckoff's Market Rating: 7.0. Read More
As gold price eyes $2,000 again, its 'big test' is yet to come, says MKS
Hotter-than-expected inflation data kept gold in demand as prices breached the $1,980 an ounce level. But, the precious metal's "big test" is yet to come, according to MKS PAMP Group.
Markets are digesting inflation accelerating to new four-decade highs in March after rising 8.5% from a year earlier. On top of that, the U.S. Producer Price Index (PPI) advanced 11.2% from a year ago in March, posting another new record.
Many economists are projecting for March figures to mark a peak in inflation, citing decelerating core inflation, base effects, and some easing in supply chain issues.
Yet the gold market is still rising, unafraid of an aggressive Federal Reserve. June Comex gold futures advanced to $1,981.00 Wednesday, up 0.25% on the day.
"If this really is 'peak inflation' coupled with impending back-to-back 50bp Fed hikes, gold should be trading very defensively… it is not. Prices are up $30 since the CPI print as it harnesses the oversimplified view that 'high inflation prints = higher gold' program instead of the 'high inflation = hawkish Fed = lower gold' one," said MKS PAMP Group metals strategist Nicky Shiels. Read More
Gold moves higher as inflation and Ukraine fears dwarf concerns over hawkish Fed
Gold prices have been rising steadily over this last week which illustrates that investors are more alarmed by the current level of inflation and escalation of military action by Russia in Ukraine than by the future actions of the Federal Reserve.
As of 4:55 PM EDT gold futures basis, the most active June contract is fixed at $1981.70 after factoring in a gain of $5.60. Gold prices have been advancing since April 6 the last day that gold prices declined. Over the last five consecutive trading days, gold prices have moved higher. Today gold futures traded to a high of $1985.80 and a low of $1966.30. Read More
Image Source: Kitco News
Gold is holding at elevated levels ahead of the European open
Gold has moved marginally lower but is holding at elevated levels ($1972/oz). Silver is trading 0.08% higher heading into the European open. Elsewhere in the commodities complex, copper is half a percent higher and spot WTI is half a percent lower.
Indices performed well in the Asia Pac area. The Nikkei 225 (1.22%), ASX (0.59%), and Shanghai Composite (1.23%) all closed higher. Futures in Europe are indicating a positive cash open.
In FX markets, NZD/USD was the biggest mover overnight as the pair jumped 0.50%. The greenback was weaker across the board. In the crypto space, BTC/USD is holding above $40K and is trading 0.15% higher.
News from overnight: Read More
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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.
