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Gold & Silver Market Analysis for Monday 13th December
Kinesis Macroeconomic Analysis: Price growth continues to be exorbitant. US inflation jumped to its highest level in almost 40 years, with the data released on Friday. The Bureau of Labor Statistics attested that inflation had reached a rate of 6.8%, with solid growth in prices across the wide majority of sectors.
It is still uncertain how the slow down of energy sector prices, such as the main oil benchmarks: WTI (West Texas Intermediate), Brent Crude, and Natural gas, will impact the market, potentially curbing inflation and affecting prices in general.
It seems more evident that the Federal Reserve is worried about the ever-increasing, inflation rate. This has heightened the possibility of a faster tapering process – one of the main topics set for discussion in the Tue 14th-Wed 15th FOMC meeting.
Investors are awaiting the upcoming decisions of the US Central banks and their guidance for the next few months. Their actions will be pertinent during building expectations of an accelerated tapering process.
Kinesis Money Gold Analysis - Read More
Inflation is transitory is 'the worst call' in Fed's history, says El-Erian
The Federal Reserve's decision to label inflation as 'transitory' might be the worst call in the central bank's history, said Mohamed El-Erian, chief economic adviser at Allianz SE.
"The characterization of inflation as transitory -- it's probably the worst inflation call in the history of the Federal Reserve," El-Erian told CBS's "Face the Nation" on Sunday. "It results in a high probability of a policy mistake."
The Fed will have to act fast to respond to rising inflation, El-Erian said as markets were still digesting Friday's U.S. inflation number that showed the fastest annual pace in nearly 40 years, rising 6.8% in November.
"The Fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility. Otherwise, it will become a driver of higher inflation expectations that feed off themselves." Read More
Gold, silver up ahead of major central bank meetings this week
Gold and silver prices are modestly higher at midday Monday. The metals are seeing some support on continued inflation worries and by weaker U.S. stock indexes and lower U.S. bond yields today. It's a huge week for central banks meetings that will grab the marketplace spotlight. February gold was last up $5.50 at $1,790.40 and March Comex silver was last up $0.13 at $23.325 an ounce.
Global stock markets were mostly firmer in overnight trading. It's a quieter start to the trading week. However, activity will certainly pick up as the week progresses as all the major central banks hold monetary policy meetings this week. The Federal Reserve's FOMC meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to announce the acceleration of asset purchases tapering on Wednesday as the U.S. faces the hottest inflation in nearly 40 years. For the European Central Bank meeting Thursday, little change in monetary policy is expected. Read More
Longer-term charts neutral-bullish for gold, but bulls have a potential ace
It's important to keep in mind that chart analysis and trading can be divided into three timeframes: short-term, medium-term, and long-term. The shorter-term traders are in and out of the markets often and would probably benefit from using mostly intra-day charts, such as hourly or even minute charts. Medium-term traders who trade less may stay in a market for several days or a few weeks are likely more inclined to employ daily bar charts in their analysis. Longer-term traders/investors who have a trading horizon of months or even years are better suited to more closely examine longer-term weekly and monthly charts. However, it's actually prudent for traders of all trading timeframes to examine the shorter-term, medium-term, and longer-term charts. History shows that market prices, when trending, tend to gravitate toward historical highs (in an uptrend) and historical lows (in a downtrend). Read More
A hawkish Powell scaring gold bulls from the marketplace
Hawkish comments from Federal Reserve Chair Jerome Powell continue to drive hedge funds away from gold and silver, according to analysts, after reviewing the latest data from the Commodity Futures Trading Commission (CFTC).
The latest data shows that sentiment in gold is at its lowest point since late October as funds liquidate their bullish bets.
The CFTC disaggregated Commitments of Traders report for the week ending Dec. 7 showed money managers dropped their speculative gross long positions in Comex gold futures by 12,402 contracts to 125,067. At the same time, short positions dropped by 1,058 contracts to 44,326.
Gold's net length now stands at 80,741 contracts, down more than 12% compared to the previous week. During the survey period, gold prices were fairly steady, with prices unable to test resistance at $1,800 an ounce. Read More
Gold continues to edge higher as investors focus upon rising inflation
Gold futures had modest gains in trading today as investors focus upon the recent CPI inflation index data indicating that inflation is running at a 40-year high at 6.8% year over year. With inflationary levels at their current level, market participants are waiting for the FOMC meeting to begin tomorrow and conclude on Wednesday. They will be looking at how the Federal Reserve plans to deal with the current level of inflation in regards to their current monetary policy.
Expectations continue to be that the Fed will accelerate its timeline for tapering its monthly asset purchases. Currently, the Federal Reserve has been tapering its monthly asset purchases by $15 billion each month. This would take until June to complete the tapering process to a net-zero monthly accumulation. However, with inflationary pressures so high, they cannot begin "lift-off" or interest rate hikes before the completion of that task.
So, the question becomes how will the Federal Reserve adjust its current monetary policy to address the high levels of inflation? Read More
Gold continues to edge higher as investors focus upon rising inflation
Gold futures had modest gains in trading today as investors focus upon the recent CPI inflation index data indicating that inflation is running at a 40-year high at 6.8% year over year. With inflationary levels at their current level, market participants are waiting for the FOMC meeting to begin tomorrow and conclude on Wednesday. They will be looking at how the Federal Reserve plans to deal with the current level of inflation in regards to their current monetary policy. Read More
‘Dragflation’ is here, Fed will ‘blow everything up’ once interest rates hit this level - Gerald Celente
Gerald Celente, publisher of The Trends Journal told Michelle Makori, editor-in-chief of Kitco News, that should an “artificially low” interest rate policy end, disaster would hit global financial markets.
“When [the Fed] starts raising interest rates seriously, this thing is going to go down big and it’s going to go down hard,” Celente said. “I believe they’re going to [raise rates] sooner rather than later, near the beginning of the year, in January, February, and they’re going to do it step by step, they’re going to play the markets out. I believe we’re going to get through a lot of 2022 in moderately good shape. My hit point is where the Fed gets interest rates up to 1.5%. That’s going to be the end.”
“The end” refers to a meltdown of risk assets like equities. Read More
Tide will turn for gold price in 2022 as real yields remain low despite Fed rate hikes
Many gold investors will be happy to put 2021 in their rearview mirrors as the precious metal has lagged behind what has been a red hot commodity market for most of the year.
Despite a positive price environment of historically negative real interest rates, the gold market has suffered from lackluster demand as investors focused on the Federal Reserve tightening interest rates, which started with a reduction in its monthly bond purchases in November. Read More
Gold remains flat ahead of the European open
Gold is trading just above flat leading into the European session at $1787/oz. Silver is -0.16% lower holding above the $22/oz area. In the rest of the commodities complex, spot WTI is half a percent in the black while copper remains flat.
Risk sentiment overnight followed the bearish tone from Wall St. and the Nikkei (-0.73%), ASX (-0.01%), and Shanghai Composite (-0.53%) all fell. Futures in Europe pointing towards a positive open. 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.
