x
Image Source: Unsplash
Gold & Silver Market Analysis for Wednesday 12th January
Kinesis Money Gold Analysis: Following Jerome Powell’s intervention with the Senate, the gold price rebounded to reach a one-week-high. Despite the markets’ expectation that interest rates will rise significantly in the next few months, investors are showing a significant interest in gold.
Bullion jumped to $1,820 and is now just a dozen dollars off the resistance level placed at $1,830-$1,832. A clear surpass of this threshold would open space for new recoveries, while a signal of weakness would be evident with a decline to $1,800.
Today's main catalyst is likely to be the release of US inflation data. Any figures below expectations, could curb the dollar's rebound and help gold continue on its path to recovery.
Kinesis gold ($/g) chart - 1h - from Kinesis Exchange
Gold tries to break through $1,820 but is rejected
Gold, silver, and platinum had nice rallies on Tuesday. However, the critical level of $1,820 February Gold was rejected. This morning Gold is trading around $1,817; the possibility exists that it could break out today or it could fail.
As we have written for the past few weeks, we are short metals across the board; Tuesday’s rejection did nothing to change that. You must remember, we only trade the trend as assigned by our algorithm. We will remain short until at least tomorrow if gold doesn’t rally today; we will be short again tomorrow.
If you watch the news, listen to the pundits, you should be a buyer of physical gold. Although rates are climbing, nominal rates are still below zero. In all markets, everything always comes down to price and market expectations. In other words, the trend is lower until it isn’t. 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. Read More
Gold prices holding above $1,800 but sees little traction as U.C. CPI rises 7% in December
Gold prices are holding gains above $1,800 but is struggling to gain some bullish traction as consumer price pressures rise more than expected in December.
Wednesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.5% in last month, after a 0.8% rise in November. The data beat consensus forecasts as economists were forecasting a 0.4% rise.
For the year, the report said that headline inflation rose 7.0%. Annual inflation rose in line with expectations. The report said that inflation is at its highest level since June 1982.
Meanwhile, core CPI, which strips out food and energy costs, increased 0.6% in December, up from a 0.5% increase in November. Economists were expecting to see an increase of 0.5%. Read More
Jeffrey Gundlach is on 'recession watch,' remains bullish on gold long-term
As the Federal Reserve gears up to take on surging inflation, billionaire "Bond King" Jeffrey Gundlach says he is now on "recession watch."
The big red flag to watch in 2022 is how the economy reacts to tighter monetary policy in 2022, according to DoubleLine CEO Jeffrey Gundlach's Just Markets: 'I feel Young Again' webcast.
"Inflationary pressure is building," Gundlach said. "If we look at the economy … it's undeniable that's been supported by the quantitative easing and the Fed's balance sheet expansion. And since that's going away, it is just not plausible to think that we don't have more headwinds in 2022 for risk assets and, ultimately, for the economy. The signals from the bond market are starting to look a little bit like a pre-recessionary period."
Gundlach clarified that he is not calling for an imminent recession, but the U.S. consumer confidence and the yield curve data point to a potential slowdown. "We are going to be more on recession watch than we've been for the past two years," he said. Read More
Gold, silver gain amid bullish outside markets
Gold and silver futures prices are higher and near their daily highs in midday U.S. trading Wednesday. The precious metals are boosted at mid-week by positive daily outside markets that include solidly higher crude oil prices that are near last fall's seven-year high, a lower U.S. dollar index that hit a two-month low today, and a slight drop in U.S. Treasury yields. February gold futures were last up $7.70 at $1,826.20 and March Comex silver was last up $0.398 at $23.21 an ounce.
The U.S. data point of the week was Wednesday morning's consumer price index report for December, which came in at up 7.0%, year-on-year. The number was expected to come in at up 7.1%. Today's CPI number is the highest year-on-year consumer inflation in 40 years. Traders will be closely watching how U.S. Treasuries react to the CPI data today. There was little reaction to the CPI data. If yields do rise significantly, that would spook the general marketplace. The yield on the U.S. 10-year Treasury note is presently fetching 1.741%. Inflation in the U.S. and around the globe is still running generally hit in the major economies, which is an underlying bullish element for the metals markets. Read More
.gif)
Image Source: Kitco News
Burgeoning green economy may lead to a structural silver deficit - report
Metals Focus reported today that silver will play a crucial role in a burgeoning green economy and that rising demand has already put the silver market into a physical deficit, which has a strong likelihood of becoming structural.
According to a report, the star of silver use in the green economy over the last decade has been photovoltaics (PV), with PV installations have grown massively over the last decade, up from a modest 16GW in 2010 to 158GW in 2021.
The consultancy said that much of this growth has been driven by the push to reduce CO2 emissions and that despite a major cut in the amount of silver used on each cell, silver demand increased substantially between 2010 and 2021.
"We estimate that a typical cell in 2021 would only have contained around 20% of the silver used in 2010. Despite that thrifting and substitution, we estimate that silver in PV has risen from around 5% of total silver demand in 2010 to over 10% by 2021," Metals Focus added. Read More
Gold unfurls all of its sails to capture strong tailwinds from dollar weakness
Extreme dollar weakness resulted in strong tailwinds which propelled gold to higher pricing today. As of 5:45 PM EST gold futures basis, the most active February 2022 contract is currently trading up by seven dollars, a gain of 0.38% and fixed at $1825.30. Yesterday’s double-digit gain in gold pricing which opened at $1801.40, traded to a high of $1822.90, and then settled just below yesterday’s high at approximately $1818 was in anticipation that today’s CPI index would reveal that inflation continues to expand. The dollar lost just over 0.7%, giving up 0.67 points, and is currently fixed at 94.955.
Image Source: Kitco News
The U.S. dollar sold off strongly today as the Bureau of Labor Statistics released the most current data on inflation which showed that inflationary pressures continue to grow, now at the highest level we have seen in 40 years. Today’s inflation report revealed that the current level of inflationary pressures is now at a 40 year high, with the last occurrence of inflation at these levels occurring in June 1982. Read More
Gold and silver trade marginally higher ahead of the European open
Gold is trading marginally higher after a third consecutive positive close. The yellow metal is now trading at $1826/oz ahead of the European open. Silver is also trading slightly higher and has broken through the psychological $23/oz level. In the rest of the commodities complex, copper (-0.44%) and spot WTI (-0.66%) lost value overnight.
It was a mixed session for the indices overnight. The Nikkei 225 (-0.96%) and Shanghai Composite (-1.17%) fell while the ASX (0.48%) managed to trade nearly half a percent higher. Futures markets in Europe are indicating a slightly negative open.
There was some movement in FX markets overnight. EUR/USD and GBP/USD rose around 0.19% and the biggest mover was NZD/USD which rose 0.30%. In the crypto space, BTC/USD fell -0.60% but trades at $43,674. 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.
