Today's Gold and Silver News - June 23rd

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Silver Slips Close to $21 as Recession Fears Allied to Interest Rate Hikes Dwindle its Appeal

Silver has slipped closer to $21 an ounce amid another down day for stock markets as fears mount that runaway inflation will tip over into a global recession as central banks face the unenviable task of curbing rising prices without choking economic activity. 

The metal has fallen out of favor among investors with every negative driver leapt on to prompt often exacerbated declines for silver. Take today for example: risk-off sentiment typically sees haven assets such as gold and silver benefit, yet the broader concern that interest rates will need to keep on rising has denuded these potential gains. However, while gold is down about 0.4%, silver has been hit with a 1.8% plunge currently.

While this reflects the reduced trading volumes of silver versus gold that do leave silver more prone to sharper and more volatile moves, it also demonstrates the willingness of investors to kick the boot in against the metal.

The prospect, and indeed the reality, of rising interest rates, are undoubtedly detrimental to the appeal of the non-yield bearing asset of silver while an economic slowdown will also reduce the metal’s industrial appeal.

However, given the metal derives a lot of its industrial demand from two of the key sectors of our time: batteries for electric vehicles and photovoltaics for solar energy; the negative case for silver looks to be overplayed and in the medium-term, the metal has plenty of potential to return to the $27 an ounce level seen as recently as March. Read More

Gold Isn’t Immune to Stock Market Plunge Amid Likelihood of More Rate Rises Needed

A bad day on equities has also seen gold fall too with the precious metal failing to benefit from haven-seeking investors.

Concerns over a recession have triggered plunges in the price of oil and global equity markets yet while gold hasn’t suffered as steep a decline, the prospect of further tightening needed by central banks has dragged its price down too.

Risk-off sentiment typically sees gold be one of the few beneficiaries but instead it has slipped below $1,830 an ounce. The latest figures from the UK confirmed that inflation continues to rise, with it now at a 40-year high, with Canadian data set to confirm that consumer prices are yet to peak there too. 

Already central banks, notably the Bank of England and the Federal Reserve, have been forced into a series of interest rate hikes and with inflation far from being tamed, the pressure to continue acting keeps on mounting. In this environment, the non-yield-bearing asset of physical gold becomes less attractive with interest-paying assets favored instead.

However, the broader context of a market fearing a global recession is likely to cap how far gold will fall with the asset having endured through countless previous recessions and proven a reliable store of value over time. Read More

Switzerland imported gold from Russia once again

Switzerland has imported gold from Russia (May) for the first time since Russia sent troops into Ukraine, Swiss customs data confirmed on Tuesday.

Switzerland is the world's largest refining and transit center for gold and Russia is one of the biggest bullion producers. Sanctions on Russia have not directly targeted commercial gold shipments but many banks, shippers and refiners stopped dealing with Russian metal after the conflict in Ukraine began.

The Swiss received 3.1 tonnes of gold worth around $200 million from Russia in May, accounting for around 2-3% of its total gold imports, the customs data show.

In comparison to an average of around 2 tonnes of gold a month imported by Switzerland from Russia in the 12 months to February. On the export side, Swiss shipments of gold to China fell in May but exports to India rose to their highest in six months. China and India are the two largest bullion consumer markets. Read More

Gold a bit firmer amid conflicting daily fundamentals

Gold prices are slightly higher in midday U.S. trading Wednesday, supported by a solid drop in U.S. Treasury yields and in the U.S. dollar index. However, gains are limited by a solid decline in crude oil prices. August gold futures were last up $1.50 at $1,840.40. July Comex silver futures were last down $0.303 at $21.465 an ounce.

Gold prices only briefly gyrated following the release of the prepared text of Federal Reserve Chairman Jerome Powell’s remarks to a U.S. Senate panel. Prices quickly returned to near the levels seen just before the prepared text hit the newswires. Powell continued to sound a hawkish tone on U.S. monetary policy, including saying the Fed will have to keep raising interest rates to tamp down problematic price inflation. The marketplace deemed the Fed chief’s comments as not surprising.

Technically, August gold futures bears have the overall near-term technical advantage. However, the recent sideways and choppy trading action at lower price levels is suggesting a market bottom is in place. 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 $1,800.00. First resistance is seen at today’s high of $1,850.30 and then at last week’s high of $1,861.50. First support is seen at today’s low of $1,824.50 and then at $1,815.00. Wyckoff's Market Rating: 3.5.

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July silver futures bears have the overall near-term technical advantage. However, recent sideways and choppy price action begins to suggest a market bottom is in place. 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 today’s high of $21.675 and then at $22.00. Next support is seen at today’s low of $21.205 and then at $20.00. Wyckoff's Market Rating: 3.0. Read More

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Fed's Powell weighs on recession risks, reaffirms commitment to aggressive rate hikes

The U.S. central bank is "strongly committed" to bringing inflation under control and is moving "expeditiously" to do so, said Federal Reserve Chair, Jerome Powell.

Powell reaffirmed his commitment to the Fed's aggressive rate hike plan in light of stubbornly high inflation.

"My colleagues and I are acutely aware that high inflation imposes significant hardship," Powell testified before the Senate Banking Committee. "Over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2 percent. We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy."

The Fed is now "highly attentive" to the risks high inflation poses and understands "the full scope of the problem," which is why it is using its tools to address that "pretty vigorously," Powell described to U.S. Senators Wednesday.

The decision to raise rates by 75 basis points in June reflects that thinking. "We thought it was appropriate to move more aggressively," Powell said. "Right now, the labor market is unsustainably hot. On the inflation side, we are far from our target. We have to restore price stability in order to have a sustained period of maximum employment in the longer term. Don't think we need to provoke a recession but essential to restore price stability." Read More

Russia looks to set up special gold and gem reserves to mobilize during times of war

Russia's Finance Ministry proposed to create separate special precious metals and gems reserves intended for quick mobilization in times of war. This is an amendment to an existing bill and if passed, Russian President Vladimir Putin would be able to directly oversee how the special reserves are used, according to the proposed legislation.

The proposed amendment states that part of Russia's precious metals and gemstone reserves would be set aside to be used for the mobilization needs of the country, Russian media reported this week citing the existing bill titled "On mobilization training and mobilization in the Russian Federation."

Russian gold and foreign exchange reserves include gold, silver, platinum, palladium, natural diamonds, emeralds, rubies, sapphires, natural pearls, unique ambers, and more.

Under the law, these special reserves would be made available to sell if the country needed additional funding to maintain its defense capabilities as well as its economic and financial security during times of "mobilization," RBC.ru reported. Read More

Gold holds above key support, and the tug-of-war continues

Whether you describe the underlying cause of recent changes in financial assets as a tug-of-war, double-edged sword, or battle of opposing forces, inflation versus rising rates continues to cause market sentiment to oscillate. Depending on if inflation or rates are the primary focal points of market participants. That sentiment results in bullish or bearish currents for gold and the dollar as safe-haven assets.

Today, gold traded to a high of $1850.30 a low of $1824.50 and as of 5:55 PM, EDT had a fractional uptick. Gold futures had a trading range of approximately $25 but only managed to gain $0.90 on the day. August gold futures are currently fixed at $1839.70. This could be cited as a true example of opposing forces yielding no victory for either faction. With the FOMC meeting out of the way for this month, traders are awaiting the most recent inflationary data.

Image Source: Kitco News

Today’s fractional gains in gold prices are occurring in conjunction with dollar weakness which provided tailwinds for pricing. The dollar index lost 0.2% today and is currently fixed at 104.00. Crude oil recently has traded as high as $123 per barrel. However, oil prices have softened and are currently fixed at $104.19. While crude oil prices are certainly still elevated and above $100 per barrel, oil has retreated over 15% in the last two weeks. Read More

Gold heads lower leading into the European open

Heading into the European session, gold (-0.21%) and silver (-0.33%) are both trading lower. In the rest of the commodities complex, copper (-0.87) is underperforming while spot WTI (0.34%) is trying to recover from some of the losses seen yesterday. 

The Nikkei 225 (0.08%), ASX (0.31%) and Shanghai Composite (1.50%) all traded higher overnight. Futures in Europe are indicating a negative cash open. 

In FX markets, AUD/USD was the biggest mover overnight falling 0.38%. In the crypto space, Bitcoin has popped back above $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.