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Gold & Silver Market Analysis for Wednesday 8th December
Kinesis Money Macroeconomic Analysis - This week shows the return of a ‘risk-on’ mode within the markets. As fears surrounding the new Omicron variant subside, investors are increasing their long position on the stock markets. Notably, the two main oil benchmarks showed significant rebounds this week, with West Texas Intermediate (WTI) now being traded at $71 and Brent at $75.
The gold price has shown little volatility in the first part of this week, remaining in the lateral trading range between $1,760 and $1,800. As noted in Monday’s comment, bullion is looking for new catalysts that could permit the price to find a clear directionality.
On the currency market, the greenback retains its strength, with the dollar index above 96. The EUR/USD trading pair, on the other hand, is being traded just below 1.13.
With a decrease in the risk sentiment related to the new Covid variant, fears about further lockdowns have also lowered. The consequence of this was a moderate recovery of the Treasury yield; the 10-year Treasury yield is close to 1.50% and up 5% since the beginning of the week. Today will confirm the yields between 1.45% and 1.50% at the 10-year Treasury auction. Read More
Will it be gold or U.S. dollar at new record highs in 2022? 'I'm bullish on gold,' says NDR's chief global investment strategist
Gold and the U.S. dollar are well known for their inverse correlation. But will 2022 be the year of gold or the U.S. dollar? Ned Davis Research's (NDR) chief global investment strategist Tim Hayes weighs in.
With the Federal Reserve looking at a more aggressive tapering schedule next year and potentially two rate hikes, the U.S. dollar index has been holding up quite well at the 96 level, which has been weighing on gold.
But will the inflation narrative change the outlook for gold next year?
"The dollar made a high right after the COVID-19 crisis in March. And on the question of which one is more likely to make a new high — gold or the dollar — I'd say gold. I'm currently neutral on the dollar, which sort of implies that it stays in its trading range. But I'm bullish on gold," Hayes told Kitco News in an interview. Read More
Canadian gold price holding steady as BoC leaves interest rates unchanged
Gold priced in Canadian dollars is relatively steady as the Bank of Canada left interest rates unchanged following its monetary policy meeting
While the central bank is not looking to shift monetary policy anytime soon, it struck a relatively optimistic tone, highlighting improving economic conditions.
"Recent economic indicators suggest the economy had considerable momentum into the fourth quarter. This includes broad-based job gains in recent months that have brought the employment rate essentially back to its pre-pandemic level. Job vacancies remain elevated and wage growth has also picked up. Housing activity had been moderating, but appears to be regaining strength, notably in resales," the central bank said in its statement.
The gold market is not seeing much reaction to the Bank of Canada's latest monetary policy decision. Spot gold, priced in Canadian dollars, last traded at $2,252.59 an ounce, down 0.10% on the day. Read More
Gold, silver languish at mid-week amid less risk aversion
Gold and silver prices are trading not far from unchanged in midday U.S. dealings Wednesday. Buying interest is being limited in safe-haven gold and silver as trader and investor risk appetite has up-ticked markedly the past few trading days. Rising bond yields this week are also a negative for gold and silver markets. However, selling interest in the metals is being squelched by the big rebound in crude oil prices recently, which suggests "black gold" and the leader of the raw commodity sector has put in at least a near-term bottom. February gold was last down $0.50 at $1,784.20 and March Comex silver was last down $0.098 at $22.43 an ounce. Read More
Gold has been 'shockingly stable': It's a long-term play as U.S. dollar rolls over, says Jeffrey Gundlach
Billionaire "Bond King" Jeffrey Gundlach sees inflation not returning below the 4% handle next year, and bond markets are already "sniffing out a weaker economy" coming. For gold, this means a long-term hold after a "shockingly stable" and "boring" year.
There are "rough waters" ahead for the financial markets in 2022 as the Federal Reserve looks to accelerate its tapering schedule and raise rates next year, said DoubleLine CEO, Jeffrey Gundlach.
"Powell is going to double that pace of taper, which would get us out in March. It's quite likely that since the stock market and risk assets have been clearly supported for over a decade by balance sheet expansion, it is turning into rough waters," Gundlach said during the DoubleLine Total Return Webcast. Read More
CPI Inflation Index: will Friday’s report show that Inflation continues to increase?
On Friday, November 10 the U.S. Bureau of Labor Statistics will release its most current report on inflation for November 2021. Inflationary pressures have spiraled out of control and since June have consistently been at or above 5.3%. Currently, economists are forecasting that Friday’s report will show that inflation has increased by 0.7%. If that is correct it would take the current inflationary rate year-over-year to an alarming 6.8%. That level of inflation has not been seen since the 1980s. The real question is how accurate have previous forecasts been in projecting upcoming reports? Read More
Gold trades higher ahead of the European open
Gold (0.20%) is trading higher leading into the European open at $1786/oz. Silver on the other hand has fallen -0.34% and is trading at $22.33/oz. Looking at the rest of the commodities complex, spot WTI has risen 0.29% but copper has moved -0.07% into the red.
In risk markets, the Nikkei 225 (-0.47%) and ASX (-0.28%) struggled, while the Shanghai Composite rose 0.98%. Futures in Europe are indicating 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.
