x
Image Source: Unsplash
Gold, silver up as crude oil spikes up, USDX sells off
Gold and silver futures prices are solidly higher in midday U.S. action Tuesday, boosted by positive daily outside markets that include sharply higher crude oil prices, a lower U.S. dollar index, and a slight drop in U.S. Treasury yields. February gold futures were last up $17.90 at $1,816.90 and March Comex silver was last up $0.323 at $22.785 an ounce.
Federal Reserve Chairman Jerome Powell testified to a Senate banking committee today, regarding his nomination for a second term as Fed chair. He was asked questions about Fed monetary policy and inflation prospects. Powell revealed insight that was not much different than that proffered by the Fed recently. What may have helped lift crude oil prices and in turn helped rally the precious metals is that Powell was very upbeat on U.S. economic growth prospects. Also, Powell did not sound any more hawkish than what the marketplace has seen from the Fed recently.
Global stock markets were mixed overnight. U.S. stock indexes are higher at midday. Traders and investors are a bit more cautious this week, trying to adjust to a marketplace of tighter central bank monetary policies in 2022, amid rising inflation. Read More
.gif)
Gold targets 1820
We are seeing a solid rally in gold, silver, and platinum this morning. Are the patterns reversing? We remain short across the board but can see a path to a reversal. A close above $1,820 gold is the key for change.
All markets have been wild since the start of 2022; over the past two days, there have been some big reversals in equities and now crude oil is exploding up almost $3.00 at $81 per barrel. The commodity markets are attracting new money with troubles brewing worldwide.
We will remain short until our algorithm changes but would not be aggressively selling here. Sometimes discretion is the word and today, that applies. When trading, you can’t be stubborn and must be flexible based on the market action. Read More
This is the difference between gold price surging above $2k or plunging below $1,600 in 2022
There are many opposing forecasts out there when it comes to gold price action in 2022. But what's the main difference between gold climbing back above $2,000 or dropping below $1,600 an ounce?
RBC Capital Markets has outlined two outlooks for gold — the high and the low scenarios. The high one sees gold trading above $2,024 an ounce on average in 2022. And the low one estimates for gold to trade at $1,576 an ounce.
The difference between those two outlooks is COVID-19 developments and equity market performance.
"The high scenario would be one where inflation has taken hold and the economy under-performs expectations. And so it looks like a much more risk-off outlook," RBC Capital Markets vice president of Global Commodity Strategy Chris Louney told Kitco News. Read More
Gold could benefit as March rate hike unlikely - TD Securities
Gold prices remain trapped around $1,800 an ounce as investors expect the Federal Reserve to aggressively tighten its monetary policy through 2022 to combat rising inflation pressures.
However, Bart Melek, head of commodity strategy at TD Securities, said that markets projections for central bank tightening might be a little too ambitious, which could support gold prices in the near term.
According to the CME FedWatch tool, markets are pricing in four rate hikes this year, with the first move coming as early as March. At the same time, comments from the U.S. central bank suggest that not only is it looking to end its monthly bond purchase by March, but it could start reducing its balance sheet before the end of the year. Read More
Gold price sees 1% gain as Fed's Powell talks policy normalization, controlling inflation and recession risk
The gold market advanced to new daily highs, rising 1% on the day as Federal Reserve Chair Jerome Powell sounded upbeat on the U.S. economy, employment and promised to get inflation under control.
"This year, we see an economy where the labor market is recovering rapidly and inflation is well above 2%. This tells us is that the economy no longer needs or wants the highly accommodative policies we had in place to deal with the pandemic. But it is a long way to normal," Powell said during his nomination testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs.
Powell also warned that if inflation gets entrenched, the Fed would need to embrace a much tighter monetary policy, which could trigger a recession. "If inflation does become too persistent, that will lead to much tighter monetary policy and that could lead to a recession," he said.
The Fed chair added that price stability is also a threat to the hiring progress. "Achieving maximum employment will require price stability." Read More
Fed's Powell gives hope to gold bulls in Q1 2022, watch the $1,830 level - Pepperstone
There is optimism in the gold space after Federal Reserve Chair Jerome Powell's nomination testimony triggered a price rally, according to Pepperstone.
The key level to watch now is the $1,830 an ounce, with gold bulls now hopeful of what the first quarter could bring for the precious metal.
Gold climbed to new daily highs as Powell testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. At the time of writing, February Comex gold futures were trading at $1,821.20, up 1.25% on the day.
Even though Powell sounded as hawkish as before, markets got a glimpse of how flexible the Fed is when tightening monetary policy going forward. Read More
This is 'the most undervalued metal on the planet' - David Morgan's 2022 outlook
Expect silver, the "most undervalued metal on the planet" to finally breach $30 an ounce in 2022, said David Morgan of TheMorganReport.com.
"I think [retail demand for silver] is going to be up because the stock market starts to sell off, the 10-year goes through the golden cross, we start to see more uncertainty in the market, and then if the cryptocurrency market starts to wane, we will see a lot more interest in the precious metals, so I think all three of those things are synergistic to push the metals higher," Morgan said.
Industrial demand continues to provide tailwinds going into 2022, Morgan added.
"Electrification...anything electrical or electronic will probably [be the main driver]. Solar panels will probably play a big role," he said. Read More
Chairman Powell admits, “Inflation is running very far above target”
While it seemed obvious to most economic analysts as well as everyday citizens that inflationary pressures have been running rampant, out-of-control continuing to spiral to higher levels, the Federal Reserve for too long maintained its stance that rises in inflation were transitory and would quickly subside. To add insult to injury Chairman Powell in testimony during a congressional hearing to confirm his confirmation earlier today for a second term, continued his doctrine that inflationary pressures will ease by the middle of this year.
Economic forecasts for tomorrow’s core CPI index (Consumer Price Index) are expecting that the core CPI, which strips out food and energy costs, will gold from 4.9% in November to 5.4% in December. More alarming is the CPI index which contains data for rising energy and food costs are anticipating that the current level of inflation in December will reach 7% year-over-year, a 0.2% increase from November’s actual numbers of 6.8%. Read More
Gold and silver trade marginally lower heading into the European open
Gold and silver are marginally lower heading into the European open despite a solid session on Tuesday. In the rest of the commodities complex, copper is 1.10% higher while spot WTI has risen 0.09%.
In the Asia Pac area, the indices performed well. The Nikkei 225 (1.92%), ASX (0.66%) and Shanghai Composite (0.84%) all traded higher. Futures in Europe are also pointing towards a positive cash open.
The FX majors barely moved overnight. USD/CAD had a tough session on Tuesday and is now holding at 1.2565. In the crypto space, BTC/USD is -0.45% lower on the day trading at $43,554. 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.
