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Gold headed for a test of 2000
Last week, gold and silver broke out above resistance and reversed to an uptrend. Both should test upper-end resistance as they tested support on the way down. We are long, but expect some selling pressure before breaking out to the upside.
Gold and silver are still in the consolidation pattern, which has tormented traders since the beginning of time. Eventually, they will break out and confirm a direction; until then, trading will continue to be challenging. History tells us they are going higher, but the short-term trends continue to change for traders.
Image Source: Kitco News
The resistance levels to watch are: gold at $2000 and silver at $26.5. Once they can move and hold above, there is room for a much bigger rally. In the meantime, there is no volume and no real driving force behind a rally. Remember, markets never announce themselves, but when the next move begins, it will be big. Read More
Yellen to convene high-level panel on food security crisis on Tuesday
U.S. Treasury Secretary Janet Yellen will convene a high-level panel on Tuesday to discuss the global response to an ongoing food security crisis exacerbated by Russia's war against Ukraine, the Treasury Department said in a statement.
The meeting will include the heads of the International Monetary Fund, World Bank, and the International Fund for Agricultural Development, as well as ministers representing the G7 and G20 countries and technical experts from international financial institutions, it said on Monday.
The meeting will address "the urgent response to the ongoing global food security crisis exacerbated by Russia’s invasion of Ukraine," and call on international financial institutions to "accelerate and deepen their response," Treasury said.
Russia says it is engaged in a "special military operation" in Ukraine.
"Secretary Yellen is deeply concerned about impacts that Russia’s reckless war are having on the global economy, including the risk of rising food insecurity in emerging markets and developing countries around the world, which are still struggling to recover from the pandemic," a senior Treasury official said. Read More
Chance of recession at 35% in next two years, says Goldman
As the Federal Reserve gets ready to introduce oversized hikes, recession calls continue to grow, with Goldman Sachs adding its projection into the mix.
Goldman sees a chance of a recession over the next two years at 35%, according to the bank's economists. Over the next 12 months, that chance is lower at about 15%.
One of the significant obstacles for the Federal Reserve during its tightening cycle will be the labor market. Based on previous scenarios, the Fed will have a hard time battling inflation by raising rates without triggering a recession, according to a note published Sunday by Goldman's chief economist Jan Hatzius.
Keeping the job market healthy while trying to slow wage growth will be tough, making the so-called "soft landing" a difficult task for the Fed, Hatzius wrote. "Taken at face value, these historical patterns suggest the Fed faces a hard path to a soft landing," he said.
On the other hand, this does not mean that a recession is inevitable, Hatzius added, citing that the post-COVID boom and normalization of supply chain disruptions could work in Fed's favor. Read More
Gold, silver push higher on bullish charts, safe-haven demand
Gold and silver prices are solidly higher at midday Monday and hit five-week highs. Save-haven demand and chart-based buying are featured, to suggest still more upside in the near term. June Comex gold futures briefly pushed to an intra-day high of $2,003.00. June gold futures were last up $17.80 at $1,992.70 and May Comex silver was last up $0.56 at $26.26 an ounce.
Image Source: Kitco News
Technically, June gold futures prices hit a five-week high today. Bulls have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,025.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at today's high of $2,003.00 and then at $2,018.30. First support is seen at today's low of $1,974.40 and then at $1,962.70. Wyckoff's Market Rating: 7.5. Read More
Gold price attempts to take $2,000, but Bitcoin and Ethereum miss the rally
Gold flirted with the $2,000 an ounce on Monday, led by safe-haven demand following a long weekend. Bitcoin and Ethereum failed to move higher, with the former trading below $40,000 and the latter below $3,000.
The risk-off sentiment drove more investors toward gold despite downward pressure from rising U.S dollar and U.S. Treasury yields.
Russia's invasion of Ukraine was once again top of mind at the beginning of the week as Ukrainian officials said Russia looked to have begun a new offensive in the east of the country.
"This morning, along almost the entire front line of Donetsk, Luhansk and Kharkiv regions, the occupiers attempted to break through our defences," Ukraine's Security Council Secretary Oleksiy Danilov said Monday.
Ukraine also said that seven people were killed in a Russian missile attack in Lviv, located in the west of Ukraine. In the meantime, the attack on Mariupol continued as the city remains "contested," Reuters cited a U.S. official as saying.
On top of the geopolitical uncertainty, recession calls are growing from various banks. The International Monetary Fund (IMF) also warned that Russia's attack on Ukraine could threaten the world's economic recovery. The IMF is scheduled to cut its global growth outlook this week as it starts its Spring Meetings Monday.
"To put it simply: we are facing a crisis on top of a crisis," said IMF's managing director Kristalina Georgieva in a speech Thursday. "Russia's invasion of Ukraine, devastating for the Ukrainian economy, is sending shockwaves throughout the globe." Read More
Gold breaks the key level of $2,000 in its first unsuccessful attempt
The combination of exceedingly high inflation and the geopolitical crisis in Ukraine were strong enough forces to run gold prices back above $2000.
The focus of my articles throughout last week dealt with how the Federal Reserve and global central banks were faced with a near-impossible task to reduce rising inflation. Dramatic measures would need to be taken including raising rates to at least half of the current level of inflation. That means raising rates to 4% - 6%.
However, this alone would not lead to the endgame of inflationary normalization. To achieve that goal governments have to focus upon the primary forces that led to a 40-year high. Inflation levels began to climb long before Russia attacked Ukraine. They began as central banks globally allocated enormous amount of capital to rebuild devastated economies that occurred during the recession, and to accomplish a task without their actions leading to a recession. Secondly, the primary force taking prices higher besides global devalued currencies were and are the supply chain issues that up till now have yet to be solved.
The military invasion by Russia into Ukraine added jet fuel to the fire, magnifying supply concerns in particular the cost of energy and food. Russia is the third-largest exporter of oil to countries worldwide. And the production of grain specifically corn and wheat, have a large component exported from both Ukraine and Russia. Read More
Gold and silver trade marginally lower at the European open
Gold opened higher on Sunday night but has since retraced to around $1975/oz. Silver is 0.27% lower trading at $25.77/oz. Elsewhere in the commodities complex, copper is 0.42% in the red, and spot WTI has lost half a percent.
Risk sentiment was mixed overnight. The Nikkei 225 (0.69%) and ASX (0.56%) traded higher but the Shanghai Composite fell 0.39%. Futures in Europe are indicating a negative cash open.
In FX markets, USD/JPY once again stole the show as the pair rose 0.89%. AUD/USD was the next biggest mover rising 0.36%. In the crypto markets, BTC/USD is still moving sideways at $40,748.
News from the weekend and overnight: Read More
Episode 69: Live from the Vault
Is Russia Triggering the Monetary System Reset?
In this week’s Live from the Vault, the author of the Mining Stock Journal, Dave Kranzler, joins Andrew Maguire once again to contemplate the changing dynamic of how paper and physical gold markets interact.
As the Russian currency keeps strengthening, the two precious metals experts delve into the monumental ramifications of pegging the Ruble to gold, and the possible emergence of a new monetary system.
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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.
