Today's Gold and Silver News - June 1st

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Gold is Holding Above $1,850, as Focus is on Eurozone Inflation

All eyes are now on the inflation data in Europe, which will be released tomorrow. 

Last month this figure reached a record 7.4%. Analysts are betting on further increases, as inflation could jump to 7.6-7.7%. This rally in prices is also forcing the European Central Bank to up the pace of rate hikes, in advance of July’s meeting.

The environment of the last few months – with a strengthening dollar and growing rates – does not represent the best scenario for gold, as a traditionally non-yield-bearing asset, with the notable exception of Kinesis.

Despite this, bullion has managed to remain above $1,800, confirming investors’ interest in this asset during times of growing inflation. In the last few trading sessions, gold has jumped above $1,850, thanks to the slowdown of the US Dollar rally.

From a technical point of view, the scenario has slightly improved. A clear surpass of the resistance placed at $1,865 would open space for further recoveries of bullion, with potential targets placed at $1,900 and $1,920. However, a decline below $1,835 could trigger a bearish impulse, increasing the possibility of a new test to the important support zone of $1,800.  Read More

Silver is Down 5% YTD. Is it Time for Some Recovery?

Expectations surrounding an aggressive monetary policy from the Federal Reserve and the consequent strength of the greenback appear to have hit silver more than gold. Meanwhile, the gold-silver ratio jumped above 82. This means that when buying one ounce of gold, an equivalent of 82 ounces of silver is needed.

The fundamental scenario presents many doubts that a sell-off is fully justified. With that being said, it is important to consider the growing importance that silver will have in the green economy, due to its use in both photovoltaic panels and electric cars.

From a technical point of view, the scenario has improved in the last few weeks as the price rebounded from the bottom reached in mid-May at $20.5, to return above $22. Although, the scenario could return negative, with a fall below $21.6-21.7. 

In the case of new rebounds, the first important resistance zone is now placed at $22.3-22.4, which the metal already tested last week. A clear break-up of this level could open space for new recoveries, with potential targets to the following resistances, placed at $22.9, $23.2, and $23.5. Read More

Gold & Silver June Outlook – Monthly Review – 2022

Gold starts June on a firmer footing with markets having stabilized after the brutal mid-May sell-off on equities that managed to bring the price of gold down with it. Having briefly dipped below $1,800 an ounce in May, the precious metal has recovered to trade in a range of $1,840 to $1,860 an ounce.

All eyes will be on the Federal Reserve come June 15th when the central bank will announce its latest interest decision. Another hike of 50 basis points seems to be all but guaranteed as the Fed continues its course of tightening monetary policy to try and bring inflation back under control.

Minutes recently released from the Federal Open Market Committee provided the following nugget: “Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings.” Therefore any move in June that fails to match these expectations would trigger a volatile market reaction. Read More

Hedge funds turn bullish on gold but remain heavily bearish on silver

Hedge funds have been quick to take profits and cover their short positions in the gold market as the U.S. dollar appears to have topped out after hitting a 20-year high.

Not only did a weaker U.S. dollar help to shift sentiment in the gold market, but falling bond yields, as recession fears grow, have also supported the precious metal, according to some analysts.

"The DXY index dropped 1.45%, the largest such weekly drop since July 2020, making the yellow metal more appealing. 10-year real rates slightly decreased by 6bp, decreasing the opportunity cost to hold non-yielding assets such as gold," said commodity analysts at Société Générale in a note Monday.

The French bank noted that the gold market saw $3.3 billion in bullish flows last week.

The CFTC disaggregated Commitments of Traders report for the week ending May 24 showed money managers increased their speculative gross long positions in Comex gold futures by 5,602 contracts to 121,174. At the same time, short positions fell by 12,095 contracts to 60,117.

Gold's net length now stands at 61,057 contracts, up nearly 41% from the previous week. The shift in speculative interest ended a five-week increase in bearish positioning. During the survey period, gold prices managed to push back above $1,850 an ounce, but prices have stalled since last week's move. Read More

Gold, silver down as greenback, bond yields up

Gold and silver prices are lower in midday U.S. trading Tuesday, pressured in part by rising U.S. Treasury yields and a higher U.S. dollar index. August gold futures were last down $12.80 at $1,844.50. July Comex silver futures were last down $0.366 at $21.73 an ounce.

Image Source: Kitco News

Technically, Technically, August gold futures prices scored a bearish "outside day" down on the daily bar chart today. An 11-week-old price downtrend is in place on the daily bar chart. Bears have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. 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 $1,867.90 and then at last week's high of $1,875.00. First support is seen at today's low of $1,841.30 and then at $1,825.00. Wyckoff's Market Rating: 3.0.

Image Source: Kitco News

July silver futures see an 11-week-old price downtrend in place on the daily bar chart. The silver bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at $22.00 and then at last week's high of $22.475. Next support is seen at today's low of $21.455 and then at $21.25. Wyckoff's Market Rating: 2.5. Read More

Rising oil prices could push world into a recession; no economy can expand without energy - Bank of America

The oil market continues its relentless climb higher, pushing to within a hair's breadth of $120 a barrel Tuesday. The energy market continues to be dominated by supply chain issues due to Russia's ongoing invasion of Ukraine.

Because of the conflict, European leaders announced further sanctions on Russia, saying it would reduce Russia's oil imports by 90% by the end of the year.

Many economists have warned that rising energy prices, pushing inflation pressures to unprecedented levels, raises the threat of a recession. In a report Friday, Francisco Blanch, head of global commodities and derivatives research at Bank of America Securities, has added his voice to the conversation, saying there is a growing risk of a 1980s commodity-induced recession as oil prices hit move to new record highs.

"Can the global economy continue to expand with tightening oil supplies? Our estimates suggest that the world can handle a total disruption of just about 2mn b/d of Russian oil without risking a global recession," he said in his latest market report. Read More

Russia's central bank: expect more demand for gold and other currency alternatives to the U.S. dollar, the euro

Central banks, especially those in Asia and the Middle East, will be rethinking their foreign exchange reserve strategies regarding the U.S. dollar and the euro due to the West’s recent use of financial sanctions, according to Russia's central bank.

A slate of financial restrictions was placed on Russia following its invasion of Ukraine on February 24, including limits on the Russian central bank's reserves, resulting in the freeze of about half of Russia's $642 billion in reserves.

Russia expects other central banks, especially those in Asia and the Middle East, to buy more gold and opt for currencies such as China's yuan versus the U.S. dollar and the euro.

"One could expect an increase in demand for gold and a decline in the U.S. dollar's and the euro's role as reserve assets," the Russian central bank said in a report on financial stability. "According to the World Gold Council, global demand for gold in the first quarter of 2022 increased by 34% on an annual basis. Against the background of these global changes, periods of increased volatility in world markets are possible, which will contribute to the growth of interest rates."

The move toward assets like gold is all because of the West's sanctions against Russia and the talk of possibly seizing the frozen parts of Russia's reserves, the Russian central bank stated.

"One of the results of the imposed sanctions restrictions for the foreign exchange market was the tendency to increase the use of currencies alternative to the U.S. dollar and the euro," the central bank said, pointing to the Chinese yuan. Read More

Gold declines almost 1%, flirting with the 200-day moving average

Today's price decline results in the second consecutive month of lower prices. On a technical basis, the fact that gold tested and briefly dipped below its 200-day moving average brings up a realistic probability that the long-term market sentiment for gold is neutral to bearish.

As of 4:30 PM, ET. August gold is trading near its low today of $1837.60, and the 200-day moving average is currently fixed at $1846.90. Gold prices hit a low two weeks ago of $1792.80 before recovering and trading back above the 200-day moving average last week. Today gold opened at $1856.50 and traded to a high of $1867.90 before moving lower and breaking below the widely accepted long-term market sentiment study (200-day moving average) on an intra-day basis. Read More

Image Source: Kitco News

‘Substantial window' to avoid recession in U.S.; This is why gold price is not 'taking off' - Former BOC head Stephen Poloz

There is currently no guarantee of an imminent recession in the U.S., according to former Bank of Canada Governor Stephen Poloz.

Speaking to Michelle Makori, Editor-in-Chief of Kitco News, Poloz said that there is still time to “normalize the economy.” Read More

Gold has moved lower ahead of the European open

After closing just over 1% lower on Tuesday gold has started the session 0.11% in the red. Silver is hovering just above flat leading into the European open. In the rest of the commodities complex, copper and spot WTI are trading just under flat. 

In risk markets, the Nikkei 225 (0.60%) and ASX (0.32%) closed higher but the Shanghai Composite fell 0.39%. Futures in Europe are showing a slightly negative cash open may be on the cards.

In FX, USD/JPY was the biggest mover climbing 0.40% overnight. Elsewhere the dollar index is 0.19% higher. In the crypto space, BTC/USD is trading half a percent down at $31,635.

News from overnight: Read More

Disclaimer: This video is provided for informational purposes only and not offered or intended to be used as legal, tax, investment, financial, or any other advice.