Today's Gold and Silver News - June 20th

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Can the gold price break above $1850/oz next week?

The gold price has had a bit of a revival in the middle of this week once again rejecting any downside moves below $1800/oz. The FOMC produced a 75 bps hike to take interest rates to 1.75%. Elsewhere, Fed Chair Jerome Powell said that the bank would not be looking at another 75 bps hike and reduced the projected speed of increases moving forward compared to some analyst expectations.

Looking closer at the impact on gold, the markets clearly felt there was some need for the safe-haven asset as the price has risen since the event on Wednesday. On the technical side, there is a consolidation high of $1879.45/oz that the buyers need to break to get some momentum going in this move higher. Beyond that, the next resistance is at the green shaded area near $1920/oz.

On the downside, a break of the previous wave low at $1805/oz could spell trouble. This would mean this recent move higher has just been a retracement and the underlying downtrend since March 2022 is still in play. There is trendline support and another key level that the bears would have to break. The red shaded zone represents a very congested price area that has been tested many times at $1780/oz. For now, the price is stuck between a rock and a hard place and a break of either of the aforementioned levels could give us clues about the future path of the yellow metal. Read More

Image Source: Kitco News

Gold markets fights the Fed but remains stuck in neutral

 The gold market has been resilient in the face of aggressive interest rate hikes from the Federal Reserve; however, sentiment in the marketplace could indicate that prices remain in neutral territory as countervailing forces dominate the precious metal.

The latest Kitco News Weekly Gold Survey shows that Wall Street analysts see gold prices trading sideways in the near-term and retail investors, while bullish on the precious metal, sentiment is down from its recent highs.

Analysts have explained that the gold market is caught in a tug of war as the Federal Reserve tries to cool down the economy by tightening interest rates rapidly. Wednesday, the U.S. central bank raised interest rates by 75 basis points, its biggest hike in 28 years. At the same time, updated projections from the committee show interest rates rising potentially 3.5% by year-end.

Despite this hawkish stance, gold prices have managed to hold their ground.

"All things considered, gold's performance has been impressive. I'm encouraged by its price action this week," said Colin Cieszynski, Chief Market Strategist at SIA Wealth Management. "Gold is doing exactly what it should be. It's soaring against all other currencies except the U.S. dollar."

However, Cieszynski added that he is neutral on gold in the near term as prices remain caught between support at $1,800 and resistance at $1,880 an ounce. Read More

Whatever the Fed's got gold can take it... so far

The gold market is looking to end the week with a 2% loss; however, many precious metals investors see the price action as a major victory with gold standing up to the most aggressive Federal Reserve in nearly 30 years.

With inflation hitting a fresh 40-year high last month the Federal Reserve had no choice but to raise interest rates by 75 basis points this week. At the same time the central bank also signed further aggressive action as it now sees interest rates potentially rising to 3.5% by the end of this year and hitting 4.00% in 2023.

Markets are even pricing in another 75 basis point move next month as Federal Reserve Chair Powell said that inflation remains the biggest threat to the economy.

Despite this hawkish sentiment, gold prices are ending the week just below $1,850 an ounce, which has been a critical psychological level for the past month. Broadly, although gold prices ending the week in negative territory, they continue to outperform equities. The S&P 500 is looking at a weekly loss of 5% as it falls deeper into bear-market territory.

Gold prices remain relatively unchanged so far this year, while the broad stock market index is down nearly 23%. Read More

A tug-of-war takes gold lower, then higher, and finally lower on Friday

Gold traders experienced extreme price volatility beginning with a $70 drop on Monday and Tuesday, higher prices on Wednesday and Thursday, and a final price decline on Friday. This tug-of-war shifted market sentiment causing market participants to concentrate on either spiraling inflation or higher interest rates. The shift between these two opposing forces resulted in dramatic price increases and declines.

Last week’s CPI report which revealed that the current level of inflation is at 8.6% created bullish undertones moving the market higher during the middle of the week. However, the focus shifted to the Federal Reserve's revision of its forward guidance announcing a rate hike of 75 -basis points (3/4%) on Wednesday taking fed funds rates to 1.5% - 1.75%. This was the largest single rate hike since 2009.

Based on a weekly price decline in gold of approximately $40 the clear winner of this tug-of-war is the interest rate hike enacted by the Federal Reserve on Wednesday. Read More

Gold is doing 'spectacular job' but price drop to $1,800 not ruled out, here's why

Gold surprised this week with its resilience and steadiness after an oversized 75-basis-point hike from the Federal Reserve and massive volatility across many markets. But analysts don't see a major rally developing in gold in the short-term, and they are not even ruling out a move back to $1,800.

The precious metal's reaction to the Fed's decision to raise rates by 75 basis points — the biggest increase since 1994 — has been very encouraging. Fed Chair Jerome Powell also signaled that another 75bps is possible in July, adding that the so-called 'softish landing' will now depend more on external factors like commodity prices. 

After digesting the information, the stock market saw a sharp drop, while gold rallied around $40 on Thursday. However, the rally was short-lived as August Comex gold futures retreated to 1,841.70 an ounce Friday, down 0.44% on the day.

"Gold's current relative stellar performance is surprising, as it usually tracks the Fed's policy rates and real interest rates intently," TD Securities global head of commodity strategy Bart Melek. "And, the market hiked its year-end Fed Funds expectation from 2.7% in mid-May to 3.6% now. At the same time, the 10-year real rate, which is the usual driver, jumped well over 50bps from a month earlier to 0.69% and some 180 bps higher from the start of the year." Read More

Financial World War Three has begun; Global reset, Bretton Woods 3.0 are next

 The world is already engaged in a financial "World War", and the transition towards a global reset is currently underway, according to Willem Middelkoop, founder of the Commodity Discovery Fund and author of "The Big Reset".

"This is a war, it's a financial, economic war, and according to me, it's World War Three," he said, noting that China has already demonstrated economic hostility by "not investing in U.S. Treasuries anymore, they're adding a lot of gold because it's the anti-dollar."

Speaking to Michelle Makori, Editor-In-Chief and Lead Anchor of Kitco News at the Prospectors & Developers Association Convention of Canada in Toronto, Middelkoop outlined that the global reset would likely result in a revamp of the current monetary system, in which the U.S. dollar is no longer the dominant reserve currency. Read More

Gold and silver trade higher ahead of the European open

Gold (0.19%) and silver (0.11%) are trading higher ahead of the European open. In the rest of the commodities complex, copper is 0.31% lower and spot WTI is 0.15% in the red. 

Indices traded lower overnight as the Nikkei 225 (-0.74%) and ASX (0.64%) both fell but the Shanghai Composite closed flat. Futures in Europe are flat ahead of the cash open.

In FX markets, the biggest mover was AUD/USD which rose 0.63%. In the crypto space, BTC/USD fell below $20k. 

News from the weekend: 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.