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Gold & Silver Market Analysis for Monday 6th December
Kinesis Money Macroeconomic Analysis
The countdown is on, with only 9 days to go until the 15th December, when the 2-day FOMC (Federal Open Market Committee) meeting will come to a close.
There is a good chance that the chairman of the Federal Reserve, Jerome Powell, will announce an increase in the pace of tapering.
In other words, the Fed could heavily reduce the purchasing of bonds, in preparation for a potential rise in interest rates within just a couple of months.
The gold price closed last week with a rebound to $1,785. Bullion was elevated by a modest decrease of the US Dollar, and the decline of the Treasury Yields. Indeed, the 10-year note yield has fallen to 1.35%, following the labor data, which showed a weaker recovery than the forecasts. Read More
British Royal Mint see second busiest day of 2021 as investors look for inflation hedges
Investment demand for paper gold remains lackluster as prices remain below $1,800 an ounce; however, physical demand for the precious metal remains strong as the British Royal Mint saw strong sales last week.
In an emailed comment to Kitco News, the British Royal Mint said that Nov. 30 was its second busiest day of the year with double the daily average number of transactions for its gold products.
The mint cannot give precise sales numbers but said its 10-ounce gold bar has been its most popular product. Read More
WisdomTree Launches new European commodity ETF for investors to hedge against inflation
European Investors have a new way to hedge against the growing inflation risk as WisdomTree launches a new broad-based commodity exchange-traded ETF.
The U.K.-based investment firm announced Monday that its WisdomTree Broad Commodities UCITS ETF (PCOM) has started trading on the London Stock Exchange and Börse Xetra. The company said that PCOM will track performance of the Bloomberg Commodity Total Return Index, which covers four broad commodity sectors: energy, agriculture, industrial metals, and precious metals. Read More
Do Investors Really Care about ESG?
Environmental, Social, and Governance (ESG) has come to the forefront for the mining industry by investors demanding increased attention to ESG matters and data. "Doors are closing for companies that are not disclosing ESG in a fashion that is acceptable to the underlying investors," emphasized Jamie Strauss, CEO, and Founder of Digbee. Digbee is an ESG disclosure and data platform for the mining industry.
"At the same time, if we begin to disclose ESG in a standardized form that investors can credibly track, then pools of capital and green money will become available. The green money is vast and most of those groups are allowed to invest in mining, but they choose not to," Strauss told Michelle Makori, Lead Anchor and Editor-in-Chief of Kitco News, on the sidelines of the Mines and Money London conference. Read More
Gold is stuck between these two forces, prices to climb towards $1,900 in Q1 2022 – Standard Chartered
The gold market is caught between two opposing forces, which are keeping the precious metal's trading range mostly between $1,750 and $1,850 an ounce, said Standard Chartered.
The latest puzzle for gold has been absorbing bullish omicron fears mixed in with a bearish physical market and a more aggressive Federal Reserve, said Standard Chartered precious metals analyst Suki Cooper.
"Gold has been caught between moderating Fed-rate-hike expectations (triggered by Omicron news) and safe-haven demand amid stagflation risks on the one hand; and a softer physical market (on fading seasonal demand) and fears of accelerated rate hikes on the other," Cooper said on Monday. Read More
Gold slightly up as crude oil rallies
Gold prices are up just a bit in midday U.S. trading Monday. Solid gains in crude oil prices to start the trading week (bullish) are slightly trumping better trader/investor risk attitudes (bearish). February gold was last up $1.50 at $1,785.40 and March Comex silver was last down $0.136 at $22.34 an ounce.
It was a quieter trading day Monday. Global stock markets were mixed to firmer. U.S. stock indexes are higher at midday. There is less risk aversion in the global marketplace to start the trading week. Early reports say the Omicron strain of the coronavirus appears to be a milder strain than Delta but may be more contagious. Read More
Hedges funds ditch bullish gold bets as Fed faces rising inflation threat
Hedge funds and money managers continue to liquidate their bullish gold bets as the Federal Reserve looks to fight the growing inflation threat by tightening monetary policy faster than expected.
According to the Commodity Futures Trading Commission (CFTC), bullish speculative interest in gold has fallen to a one-month low as prices are unable to hold gains above $1,800 an ounce.
The CFTC disaggregated Commitments of Traders report for the week ending Nov. 30 showed money managers reduced their speculative gross long positions in Comex gold futures by 14,804 contracts to137,469. At the same time, short positions dropped by 1,550 contracts to 45,384.
Gold's net length positioning is now at 92,085 contracts, down 12.5% from the previous week. The gold market was relatively volatile during the survey period as prices briefly pushed above $1,800 an ounce but could not withstand new selling pressure. Read More
Gold and silver trade higher leading into the European open
Gold (0.35%) and silver (0.30%) are heading into the European session on the front foot. The yellow metal is trading at $1783/oz and silver is at $22.43/oz. In the rest of the commodities complex, copper has fallen -0.47% while pot WTI has jumped another 1.10%.
Risk sentiment was good overnight. The Nikkei 225 (1.89%), ASX (0.95%), and Shanghai Composite (0.16%) all closed in positive territory. Futures in Europe are pointing towards a positive cash 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.
