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Silver price 2022: Here's how silver can outperform gold as it plays catch-up next year
There have been many questions surrounding gold and silver's performance in 2021. But analysts remain optimistic, stating that silver can outperform gold once the bull market kicks off in 2022.
Both silver and gold had an uneventful year – silver last trading down 13.5% year-to-date and gold down 4.8%.
"Silver had no life of its own this year, fluctuating merely in gold's slipstream. On balance, it suffered disproportionately high losses as compared with gold. As a result, the gold/silver ratio has climbed from a good 70 at the beginning of the year to over 80 now," said Commerzbank analyst Daniel Briesemann.
For next year, analysts are not discouraged, noting that the bearish sentiment around precious metals is on the cusp of shifting, with the technical charts looking healthy and silver trading cheaply relative to gold. Read More
The Libor era nears its end
Libor, or the London Interbank Offered Rate, will no longer be used for new derivatives and loans as of Jan. 1. The benchmark and reference rate, which had $265 trillion linked to it globally at the start of 2021, is being scrapped in the biggest shake-up to markets since the introduction of the euro in 1999.
Libor, once dubbed the world's most important number, is a rate based on quotes from banks on how much it would cost to borrow short-term funds from one another. Although it dates to 1969, it was formalized in 1986 and has been used as a reference rate for a vast array of financial products, including student loans, credit cards, corporate loans, and mortgages.
Libor was discredited after the 2008 financial crisis when authorities found traders had manipulated it, prompting calls to reform and eventually replace the tarnished rate. Several global banks were fined. Read More
Can gold hold the new uptrend?
Although gold is getting hammered this morning, the trend has reversed to up based on yesterday's close. We will look at this as an opportunity to buy at better prices, but buying we are doing. Our algorithm is based on the pit closing hours, which were still higher yesterday even though after-hours gold was lower.
Now gold, silver, and platinum are in uptrends, although this morning's action is ugly. Of course, we are swing trading the paper metals, which means we are in for days, weeks, or months. Unless a reversal is triggered, we will hold our positions on either side. Nothing but the algorithm will change our positions.
Now the big question is, will the trend last? The answer depends on your time frame and capital position. Historically, gold, like equity markets, trend higher over time. However, big moves in the short run can trigger signals in either direction. Over time, what looks like a big move today barely registers on a long-term chart. Read More
Corrective action not a change of trend Yet!
What a difference 24 hours makes, as the gold market this morning is reportedly trading lower off less concern for the Omicron breakout. Yesterday, gold and silver were lifted off a decline in Omicron uncertainty.
However, a pandemic record daily US infection count of 441,000 from Monday seriously challenges the declining this argument. It could take confirmation of a less serious medical outcome from Omicron, strong US scheduled data, and/or a resumption of strong gains in equities to push the dollar into a downside breakout and spark gold back toward $1,825.
Furthermore, the charts have shifted from positive to negative, with gains from earlier in the week completely reversed and prices as of this writing sitting $21 below yesterday's high.
In a negative for the precious metals and many other commodities, Bloomberg has released a leading economic indicators study of the Chinese economy that expects December to show only moderate growth. Adding into the bearish shift is a four-day high/reversal in the dollar, which could have the capacity to rally 40 more points before encountering substantial resistance. The 200-day moving average in gold today is $1,800, while uptrend channel support is seen closer-in at $1,805.50. Read More
Demand for this metal is about to grow by 1,000% - Gianni Kovacevic
The electrification of the economy will rapidly transform the modes of transportation; the need for electric vehicles will bring higher demand for both copper and lithium, the latter of which is used in batteries.
Gianni Kovacevic, director of CopperBank, that the copper price, currently at $4.43 a pound, is going to grow to over $6 a pound, or what he calls the “inflation-adjusted all-time high.” Read More
Gold price pushing higher following 2.2% drop in U.S. pending home sales
The gold market is holding above its session lows and attracting some new bullish momentum even as U.S. consumers start the process of buying a home.
U.S. pending home sales index dropped 2.25 to 122.4 in November, the National Association of Realtors (NAR) said Wednesday. The consensus forecast called for an advance of 0.6%.
For the year pending home sales are down 2.7%, the report said.
"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability." Read More
Gold price weaker but up from daily lows amid lower USDX
Gold and silver prices are lower in midday trading but well up from their session lows. A lower U.S. dollar index today has helped lift the two metals up from their daily lows. However, profit-taking by the shorter-term futures traders, rising U.S. Treasury yields, and weaker crude oil prices on this day are price-negatives outweighing the positives. February gold was last down $6.40 at $1,804.30 and March Comex silver was last down $0.266 at $22.855 an ounce.
Global stock markets were mixed overnight. U.S. stock indexes are mixed at midday and are near their record highs. Lackluster, low-volume trading is featured as the year 2021 winds down. Look for more quiet trading the rest of this week. Trader and investor attitudes are still mostly upbeat heading into year-end, and that’s also bearish for the safe-haven metals. Read More
Platinum Palladium prices to hold steady in 2022; hydrogen economy a bullish unknown
2021 has been a dismal year for the entire precious metals sector, and the disappointment has been acutely felt within platinum group metals (PGMs) as palladium has been the worst performer.
Palladium is looking to end the year down more than 19% as prices trade below $2,000 an ounce. According to analysts, PGMs struggled most of the year as COVID-19 supply issues surrounding microchips significantly curtailed vehicle production.
Looking ahead to 2022, optimism is growing among analysts that these two precious metals can maintain a steady course as the global supply chain continues to recover. Commodity analysts at TD Securities are particularly bullish on PGMs and see the current price as a buying opportunity.
"We look to buy the dips in both platinum and palladium. With industrial demand headwinds mounting and the chip shortage still constraining auto demand, the early months of the year could still provide dips toward $1000/oz and $2000/oz for platinum and palladium, respectively. We feel prices near these levels represent ideal entry points to benefit from a coming outsized recovery in auto demand," the analysts said in a 2022 outlook report. 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.
