Today's Gold and Silver News - June 22nd

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Hedge funds fled gold ahead of the Fed rate hike but didn't go very far

Hedge funds fled the gold market in anticipation of the Federal Reserve's biggest rate hike in 28 years, according to the latest trade data from the Commodity Futures Trading Commission.

Although investors quickly unloaded their bullish bets in gold and increased their bearish positioning, some analysts note that sentiment remains pretty neutral. Gold prices remain caught in a trend between support at $1,800 an ounce and resistance at $1,850 an ounce.

Last week the Federal Reserve raised interest rates by 75 basis points, pushing real interest rates higher, which was negative for gold; however, some analysts note that growing recession fears and volatility in equity markets are providing some support for the precious metal.

"Gold remains rangebound following a week of high drama that saw dramatic yield spikes being offset by growing unease about the economic outlook with recession worries on the rise as central banks step up their efforts to curb inflation," said Ole Hansen, Head of Commodity Strategy at Saxo Bank.

"Speculators cut bullish futures to a nine-month low ahead of last week's FOMC rate hike announcement while total bullion-backed ETF holdings on Friday dropped to three months low, both highlighting the current uncertainty about the short-term direction." Read More

U.S. existing home sales return to 2019 levels after May’s 3.4% drop, gold price steady

Gold was trading steady U.S. existing home sales fell for the fourth month in a row, dropping 3.4% in May.

Existing home sales declined to a seasonally adjusted and annualized rate of 5.41 million units last month, compared to April’s annualized rate of 5.6 million homes, the National Association of Realtors (NAR) said on Tuesday. Market consensus projections were calling for existing home sales to rise to 5.4 million.

On an annual basis, May’s existing sales were down 8.6%.

After two years of "gangbuster performance," the housing market is back to the 2019 levels seen before the pandemic, said NAR's chief economist Lawrence Yun.

"The market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions," Yun said.

Also, the NAR's chief economist added that more declines are expected in the upcoming months because of challenges surrounding housing affordability, such as a sharp rise in mortgage rates. Read More

Gold a bit weaker in lazy summertime trading

Gold prices are modestly lower in lackluster midday U.S. trading Tuesday, on the first official day of summer. A solid rebound in the U.S. stock indexes and rising bond yields are weighing on the safe-haven metal. August gold futures were last down $3.50 at $1,837.10. July Comex silver futures were last up $0.158 at $21.75 an ounce.

Technically, the August gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures 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 $1,800.00. First resistance is seen at the overnight high of $1,848.40 and then at $1,861.50. First support is seen at $1,825.00 and then at $1,816.30. Wyckoff's Market Rating: 3.5

Image Source: Kitco News

July silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $22.565 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 $22.25. Next support is seen at the overnight low of $21.43 and then at $21.25. Wyckoff's Market Rating: 3.0. Read More

Image Source: Kitco News

Fed will pivot policy, lower rates by Q1 2023, spark new bull run for gold, silver

The Federal Reserve's hawkish stance is not sustainable, and it is likely that not only will the world's largest central bank stop raising rates altogether by the end of the year, they will reverse course and lower rates, according to Keith Neumeyer, CEO of First Majestic Silver.

Speaking to Michelle Makori, Editor-in-Chief and Lead Anchor of Kitco News at the Prospectors & Developers Association of Canada conference in Toronto, Neumeyer said that the Fed's monetary policy pivot will likely occur by Q4 of 2022 and spur another bull rally in the precious metals. Read More

Gold holds above a key support level in light of rising interest and yields

Gold continues to trade in an extremely narrow range as the precious yellow metal reacts to two opposing forces; rising interest rates and inflation. However, the recent price declines in gold have been shallow and short-lived at best. Most importantly, gold prices have held above a key support level which is Fibonacci based. The data set used for this Fibonacci retracement set contains a long period of data. It begins at $1678 which is the low created in August 2021, up to this year’s highest value of $2077. This data set covers a price range of approximately $400.

Chart number one is a daily chart of the continuous contract of gold futures. It currently is representing the most active August 2022 contract. After hitting this year’s high in March what followed was a deep correction moving gold from $2077 to $1785. Gold dropped a total of $292 or 15.12% in approximately 2 ½ months. This correction was directly attributable to market participants' focusing on dollar strength the result of rising interest rates and yields.

Image Source: Kitco News

What followed after gold hit $1785 was an initial rally up to $1881 finding resistance at the 50-day moving average and then correcting to approximately $1807 before forming a base and regaining some value. Read More

Gold and silver move lower ahead of the European open

Gold (-0.44%) and silver (-1.70%) are both struggling ahead of the European open. In the rest of the commodities complex, spot WTI has fallen 4.60% and copper is 2.56% in the red. 

After the positive close on Wall Street, indices in the Asia Pac area failed to capitalize. The Nikkei 225 (-0.37%), ASX (-0.23%) and Shanghai Composite (-1.77%) all struggled. Futures in Europe are indicating a negative open. 

In FX markets, the biggest mover is NZD/USD which fell 1.16% overnight. The dollar index is 0.23% in the black. In the crypto space, BTC/USD is back near $20k. 

News from overnight: 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.