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Fear continues to be driving gold
Once again, Monday Gold pushed higher on the fears of the possibility of Russia invading Ukraine. We put the probability of that happening at less than 10%. The fears are being stoked by the administration trying to advance their agenda.
We are long Gold and reversed Silver this morning; however, that does not change our views that the spike rally is based on fear and short covering. This does not mean that Gold and Silver will not continue to rally; however, the speed at which the rally has traveled will slow. It would be no surprise to see a sell-off in the next day or two.
Too many watch markets tick by tick or second by second, which is enough to drive anyone crazy. We are long and expect the rally to continue; however, we know that the start of this rally was purely driven by fear. This is always one of the problems in the trading and investing world, immediate gratification.
Traders and investors must learn the value of delayed gratification, knowing that no market goes straight up or down. Read More
Gold market continues to see sharp technical selling pressure as U.S. PPI rises 9.7%
The gold price continues to see some sharp technical selling even as inflation pressures won't let up with producer prices once again rising more than expected
Wednesday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1.0 % in January following December's rise of 0.4%; the data was stronger than expected with economists forecasting an increase of 0.5%.
For the year headline, producer prices are up 9.7%.
The latest inflation data is proving some support for gold as prices have risen from their session lows; however, the market continues to see strong technical selling pressure after hitting a new three-month high Monday. April gold futures last traded at $1,851.90 an ounce, down nearly 1% on the day. Read More
It can’t be stressed enough the importance for traders and investors of examining longer-term price charts—even if one is a shorter-term trader. History shows that trending price moves tend to gravitate toward significant longer-term historical highs or lows, as seen on the monthly or weekly charts. See on the monthly continuation chart for nearby Comex gold futures that prices have been trending up since 2015. A bullish pennant pattern has also formed on the monthly gold chart. Gold market bulls should be very encouraged regarding their metal’s prospects in the coming few years, according to this longer-term price chart. Read More
Image source: Kitco.com
Energy crisis to trigger gold price bull run when inflationary mindset takes hold – Goehring & Rozencwajg
Surging energy prices spilling over into broader markets and triggering inflationary psychology is one of the Federal Reserve's worst-case scenarios. But that is exactly what could trigger the next bull run in gold, according to Goehring & Rozencwajg Associates managing partner Leigh Goehring.
The potential big shock this year is the energy crisis impacting oil, agriculture, and broader markets such as food, Goehring told Kitco News.
The oil market is looking tighter and tighter, which can be a precursor to a much bigger boom in agriculture and gold prices due to the onset of inflationary psychology.
"Demand is running much higher in the oil market than people thought, and supply will be much less than projected. In the fourth quarter of this year, we might end up in a situation where demand could very well surpass total pumping capability. The reason why it's important is that we've never been there before. Even if we go back to the great oil crisis in the 1970s, we never even got close to global pumping capability. However, we are very close today," Goehring warned. Read More
Silver is just getting started as investors start to bail on cryptocurrencies - Silver Hammer CEO
Silver prices remain caught in a wide range, unable to hold above $24. But the precious metal is destined for higher prices as market liquidity dries up and investors see value in real assets again, according to one mining executive.
In a recent telephone interview with Kitco News, Morgan Lekstrom, president and CEO of Silver Hammer Mining Corp., said that while silver's price action was disappointing in 2021, there will be plenty of opportunities for the precious metal to shine in 2022 as risk and volatility reenter the marketplace.
Lekstrom added that the de-risking trend could already be seen in cryptocurrencies. The digital marketplace has lost more than $1 trillion in market cap since reaching a peak in November of $3 trillion.
Lekstrom explained that the Federal Reserve's impending rate hike means that liquidity is drying up. Read More
Will gold price go back to $1,200? Mining legend Ian Telfer says peak gold already reached
“Peak gold,” describes a scenario in which the world reaches a maximum output of gold production.
Ian Telfer, former chairman of Goldcorp, told David Lin, anchor for Kitco News, that the industry has already hit that point.
“I think we have [reached peak gold]. I think that anything below $3,000 [an ounce] we have found most of the gold we’re going to find, maybe all the gold we’re going to find. If you look at the exploration successes over the last 20 years, they’ve been declining steadily for that period of time and it’s not because people haven’t spent money or they don’t want to find gold, it’s because, I think, all the deposits that can make money below $3,000 have been found,” Telfer said. Read More
Potential de-escalation with Russia – Ukraine takes gold to lower pricing
Precious metals across the board sustained moderate to strong price declines in light of recent news suggesting that the geopolitical tension between Russia and Ukraine has begun to de-escalate. Recent news indicated that some Russian troops that were positioned near the border of Ukraine began to leave and return to their base.
Image source: Kitco.com
As of 5:10 PM EST, the deepest percentage price decline today occurred in the precious metal palladium, which sustained a loss of 4.18%, or $98 taking the most active March contract to $2248. Today’s strong decline in palladium is directly related to the potential de-escalation of the geopolitical conflict in Russia and Ukraine. Since 40% of the annual global production of palladium occurs in Russia, any de-escalation of the geopolitical tensions would have a direct bearish impact on palladium. Read More
Gold and silver move higher ahead of the European open
After a retracement on Tuesday gold is trading 0.13% higher ahead of the European open. Silver is trading 0.39% higher at $23.43/oz. In the rest of the commodities complex, copper has moved nearly half a percent higher and spot WTI is 0.36% in the black.
Indices traded higher overnight as risk sentiment shifted positively. The Nikkei 225 (2.22%), ASX (1.08%), and Shanghai Composite (0.57%) all traded higher. Futures in Europe are pointing towards a positive open.
FX markets were pretty sideways the biggest mover was AUD/USD which rose 0.30%. In the crypto space, BTC/USD fell 1% to trade at $44,110. Read More
Markets Brush Off Inflation as Ukraine Optimism Persists But For How Long?
While inflation shows no sign of easing in the short-term, with the latest figures from the UK confirming annual inflation in January at 5.5%, concern over the impact of rising prices looks to already have been priced in with equities continuing to rise so far on Wednesday.
The bullish driver is the apparent stepping back by Russia from the brink of a military invasion into Ukraine with some of the troops posted to the region now returning.
However the situation remains tense and while the current trajectory points to a de-escalation in tensions, the threat of renewed military action by Russia roiling markets once again is ever-present. The latest stage in this saga comes from Brussels today where NATO defense ministers meet to discuss how genuine they believe Russia’s actions to be.
Returning to inflation, the UK’s high print and limited market reaction so far, with the London-based FTSE-100 up 1% so far today, suggests these high prints are no longer shocking investors with central banks already primed to increase interest rates throughout the year to try and bring inflation back towards 2%.
How fast and how high central banks move will be the crucial next phase in this inflationary story with expectations on rate rises possibly now overly hawkish.
The latest indication of how hawkish central banks are feeling will come later today with the publication of the minutes from the Federal Open Market Committee. With a rate hike in March all but guaranteed, the focus will be on how many more the Fed feels will be needed this year. 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.
