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Hold gold as governments have 'scandalously mistreated' their currencies – Byron King
The gold market remains trapped in consolidation below $1,850 an ounce. Still, one analyst said that the precious metal's long-term bullish setup remains firmly in place.
In a recent interview with Kitco News, Byron King, editor and precious metals expert at Agora Financial, said that he expects it's only a matter of time before gold once again becomes an essential monetary metal.
King said that with inflation rising out of control, consumers are losing faith in fiat currencies. He added that the situation can still get worse as governments continue to create money out of thin air.
"The way Western currencies have been mistreated by their own governments, mismanaged and mistreated, is scandalous," he said.
King said that the issues consumers currently face can be traced back to the 2008 financial crisis. Nearly 15 years ago, the government and the Federal Reserve flooded financial markets with money and liquidity that helped support the economy during the worst financial crisis since the Great Depression.
"We would've had a bad recession back then, but it would have cleaned out all the muck in the Augeas' stables," said King. "We would have had one hell of a miserable time for a year or two back then. Instead, the powers that be didn't want that, so they just kicked the can down the road. Well, guess what? We're at the end of the road."
With rising inflation and slower growth, the world is now once again on the brink of another recession. King said that the only solution politicians have to spend more money.
"That is how we got into this mess in the first place," He said. Read More
Brutal first half of '22 on track to shave $8 trillion off S&P 500
Steep losses in stocks and bonds, dizzying market swings, and a Federal Reserve intent on curbing the worst inflation in more than forty years have been among the hallmarks of U.S. markets in the first half of 2022.
As of Wednesday, the S&P 500 (.SPX) is on track to close the initial six months of 2022 with a 20% loss, shedding some $8.2 trillion in market value as the index heads for its steepest first-half decline since 1970.
The index earlier this month confirmed the common definition of a bear market by closing down over 20% from its January record peak. read more
Bonds have fared a little better, with the ICE BofA Treasury Index (.MERG0Q0) down nearly 10% this year, on pace for its worst year in the index's history going back to 1997.
For now, investors see a little respite from the gyrations that have pummeled markets over the last several months amid worries that the Fed's fight against inflation will further dry up risk appetite while potentially throwing the U.S. economy into recession.
The coming month will bring a fresh round of corporate earnings, the latest inflation data and culminate in a Fed meeting, leaving plenty of opportunities for markets to build on a nascent rally in stocks that began in mid-June or seek out fresh lows.
Soaring inflation forced the Fed to quickly raise rates in the first half of the year, throwing into reverse the easy monetary policy that helped the S&P 500 more than double from its March 2020 lows. Read More
Gold, silver down as chart-based bears pressing their case
Gold and silver prices are lower at midday today, in a choppy, two-sided trading session. The significantly bearish near-term technical postures for both metals are inviting the speculators to play the short sides of the futures markets at present. Gold hit a six-week low and silver a two-year low today. August gold futures were last down $6.80 at $1,810.60. Gold prices are close to key chart support levels ($1,800.00 and $1,792.00) that if breached would likely set off heavy sell stop orders in the futures market. July Comex silver futures were last down $0.363 at $20.29 an ounce.
Technically, August gold prices hit a six-week low early on today. Bears have the firm overall near-term technical advantage and have gained power this week. Prices are starting to trend down on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the June high of $1,882.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,792.00. First resistance is seen at today’s high of $1,826.80 and then at Wednesday’s high of $1,834.90. First support is seen at $1,800.00 and then at $1,792.00. Wyckoff's Market Rating: 2.5.
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July silver futures prices hit a two-year low today. The silver bears have the solid overall near-term technical advantage and gained more power today. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today’s high of $20.705 and then at $21.00. Next support is seen at today’s low of $20.16 and then at $20.00. Wyckoff's Market Rating: 1.0. Read More
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After 125 years Yukon’s gold rush gets bigger and bigger
People have been pulling gold out of Canada's Yukon Territory for 125 years. Yet, mining executives say that the jurisdiction's full potential remains untapped as companies continue expanding their precious metal resources and finding new significant green-field discoveries.
"The beauty of the Yukon is that even with its long history, it is still very much underexplored," said Heather Burrell, President and Managing Director at Archer Cathro, an independent geological consulting firm. The company has been a prominent explorer in the Yukon for the last five decades and has made significant discoveries, including the Coffee project, which was initially bought by Goldcorp and is now owned by Newmont.
Archer Cathro also discovered the Osiris project, which has become famous for its Carlin-style gold deposit and is being developed by ATAC Resources.
Leading the Yukon's precious metal sector is Victoria Gold, which looks to produce 200,000 ounces of gold this year and ramp up production to 250,000 ounces of gold next year.
"We are just getting started," said John McConnell, president of the junior producer, in an interview with Kitco News during the Yukon Mining Alliance's Investment Conference.
In the first quarter of 2022, Victoria Gold saw revenues of $59.5 million after selling 25,518 ounces of gold. McConnell said its free cash flow will pay down the company's debt. He added that the company expects its debt to be below $100 million by the end of the year. Read More
Interested in gold? Pay attention to Canada
Doug Silver knew that Canada was an important for mining and gold, but he didn’t realize how important until he crunched the numbers.
In June, Silver, who is CEO Balfour Holdings, spoke to Kitco at the Mining Investment Event of the North in Quebec City where he gave a keynote.
"It was just amazing how many different aspects I could look at. Canada was always number one. It has the most deposits, it has the most companies, it's got a fantastic stock exchange, great regulators, good democracy," said Silver.
Silver noted that Canada's mineral endowment is varied.
"Canada leads in so many different types of deposits, and that's good because you don't want your industry only focused on one commodity," said Silver. Read More
Kinesis completes third independent metals audit
Kinesis announces the completion of its first independent audit of 2022.
The third independent audit and verification of the gold and silver bullion, underpinning all Kinesis gold and silver-backed currencies, has been completed.
As we’re still awaiting documentation from Inspectorate International, the full results will be available on our website once documents are supplied.
Independent officers from Inspectorate International entered all Kinesis vaulting facilities across the world and physically tallied the quantity of gold and silver, comparing it against the quantity stated by Kinesis in an inventory report supplied to the auditor. The weight of the metals reported on is then compared to a snapshot of the Kinesis currencies in circulation, taken at the same time that the physical metals reports were generated.
Kinesis understands the total transparency required for users to feel their precious metals are in safe hands. We place great value on preserving the trust of our users, which is why we are committed to ensuring that all our audits meet the highest standards of integrity, accuracy, and verifiability.
Pandemic-related restrictions – which had rendered a global physical audit impossible – have now been eased. Resultantly, auditing specialists have been permitted access to all locations of Kinesis vaulting infrastructure, at the first available opportunity.
As an integral part of Kinesis’ vision, we will continue to deliver independently conducted, biannual audits to provide you with the transparency you deserve.
Once published, the full documentation will be made available here.
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Inflation as seen through the PCE price index remains at elevated levels
Today’s report revealed that there is only marginal relief from rising inflation which continues at a record pace. The Federal Reserve’s preferred inflation report, the Personal Consumption Expenditures price index was released today. Inflation as seen through the PCE came in at 6.3% year-on-year for May equaling inflationary pressures for April.
In May the PCE index gained 0.6%, following a gain of 0.2% in April. However, the core PCE index had its lowest increase since November 2021. The report indicated that core PCE dropped to 4.7% a year-on-year in May, a slight decline from April’s reading of 4.9%.
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The initial knee-jerk reaction took gold from $1803 at 8:30 AM EDT to $1825 over the next 15 minutes. The most active August 2022 futures contract traded to its intraday high of $1826.80 at 9:00 AM. The initial reaction to today’s inflation report created bullish market sentiment for gold as it was perceived that this report would decrease the size of the next rate hike when the FOMC convenes for its July meeting.
This optimism was short-lived at best because one hour and forty-five minutes later gold futures declined to $1805.10. As of 5:05 PM, EDT gold futures are currently fixed at $1808 after factoring in today’s price decline of $9.50 or 0.52%.
Today’s price decline resulted in gold breaking below the support trendline created from a series of higher lows. The first low used to create this trendline occurred on May 16 when gold traded to a low of $1785.30. The second low used was based upon a low of $1806.60 that occurred on June 14. The first level of potential support should gold continue under pressure occurs at $1798 which is based upon the low that occurred on May 13. Read More
Commodities sell-off leading into the European open
Gold (-0.52%) and silver (-1.32%) have sold off overnight ahead of the European open. The commodities complex rout does not stop there as copper (-1.68%) and spot WTI (-0.82%) have both fallen too.
Things were not much better in risk markets. The Nikkei 225 (-1.73%), ASX (-0.43%) and Shanghai Composite (-0.37%) all traded in negative territory. Futures in Europe are also indicating a negative open.
In FX markets, the dollar index pushed 0.15% in the black. The biggest mover overnight was AUD/USD which fell over 1% and broke a technical support. In the crypto space, BTC/USD is trading at $19,396 down nearly 3%.
News headlines: 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.
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