Today's Gold and Silver News - June 24th

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Why won't gold and silver rally?

The world wants to know why gold and silver won’t rally? The simple answer is that the sellers are the strong hands dominating the buyers. This is classic action in any market. Buyers and sellers rotate, fighting for control. There isn’t a more complex answer, the sellers are in charge of silver, and the buyers are in charge of gold.

However, as we take a closer look at gold, although the trend is higher, we are watching a market in consolidation. This is the time of greatest uncertainty where the strong hands rotate between buyers and sellers. Consolidation is a pain and can last longer than anyone expects.

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The good news for gold, silver, and platinum bulls is that the markets are building a strong base. This would indicate a big rally is brewing. The only question is when. The when can only be determined by the price action and not by the news. The economics are already priced in. Do yourself a favor and watch the price action, not the pundits. Read More

Gold price at daily highs as U.S. manufacturing PMI reveals sharp slowdown in the U.S. economy

Gold prices were trading near-daily highs, erasing all early-morning losses, after the release of preliminary manufacturing and service-sector sentiment data for June.

The latest flash PMI data signaled "the weakest upturn in U.S. private-sector output since January's Omicron-induced slowdown in June," research firm IHS Markit said in its latest report.

According to the report, the flash U.S. manufacturing Purchasing Managers (PMI) Index for June dropped to 52.4, marking a 23-month low. The June number missed the market's expectations of a reading of 56.0.

The service sector saw the PMI reading fall to 51.6 in June, marking a five-month low.

Any monthly reading above 50 points to an expanding sector, while anything below that shows a contraction in activity.

"The pace of U.S. economic growth has slowed sharply in June, with deteriorating forward-looking indicators setting the scene for an economic contraction in the third quarter," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "The survey data are consistent with the economy expanding at an annualized rate of less than 1% in June, with the goods-producing sector already in decline and the vast service sector slowing sharply." Read More

Gold, silver weaker amid commodity markets slump

Gold and silver prices are modestly lower in midday U.S. trading Thursday, as the metals markets are participants in a general commodity market erosion led by crude oil. U.S. and global economic recession fears have hit the commodity markets hard amid ideas of reduced demand in the coming months, including for metals. August gold futures were last down $3.80 at $1,834.40. July Comex silver futures were last down $0.251 at $21.175 an ounce.

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 this week’s high of $1,850.30 and then at last week’s high of $1,861.50. First support is seen at this week’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 solid 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 today’s high of $21.495 and then at Wednesday’s high of $21.675. Next support is seen at $21.00 and then at the June low of $20.845. Wyckoff's Market Rating: 2.5. Read More

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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

What's gold price outlook as markets shift from inflation to recession fears?

Gold's volatility has been relatively low compared to other assets as the precious metal retains its "mild bull market" status and trades comfortably between $1,800-$1,900 an ounce. But don't expect a gold price rally until some confidence returns to the marketplace, according to MKS PAMP.

There is a shift in the market as inflation fears give way to recession panic, with equity investors opting out for cash over safe havens like gold, said MKS PAMP metals strategist Nicky Shiels.

"There has been unprecedented damage in equities (and other assets) where money has retreated into cash/US$, less so havens. Confidence needs to return," Shiels wrote in a note Thursday. "With the sell-off last week in the SPX, its correction is in line with the median correction seen in post-WWII recessions, but it's now the 4th worst 'non-recession correction' over the same period. We are in a market recession. Technically, SPX entered a bear market on June 13."

The irony for gold bulls is that the precious metal will likely need to see a combination of lower yields and a move higher in U.S. equities for gold to rise to the $1,880 an ounce level, she explained.

As things stand now, gold will have more buyers at the $1,900 an ounce price tag versus the $1,800 an ounce. "There's a notable lack of interest from the investment community (outside of retail coin/bars!)," she said. "The carnage in stock markets and other asset classes have kept the marginal player at bay."

One potential price rally trigger would be if the Fed "breaks something" as it aggressively tightens monetary policy. Read More

We are not trying to provoke a recession but it is certainly a possibility

Now in his second day of testimony Chairman Powell continues to address the exceedingly high level of inflation and the Federal Reserve's effort to curtail it. Currently, core inflation is running at three times the acceptable target of 2%, and the CPI inflation index at 8.6%.

Not since the 1980s has inflationary pressure been as consistent and hot as it currently is. While Chairman Powell suggested that the Federal Reserve was well aware of the challenges in front of them but they were prepared and able to bring inflation back to its 2% target. However, the facts speak for themselves, and those facts indicate that price increases have continued to accelerate over the last couple of months. The Fed's prayers that some components of the supply chain issues will begin to unwind this year have not as of yet been answered.

What lies ahead is an extremely aggressive Federal Reserve which has raised interest rates for the last three consecutive FOMC meetings taking the target fed funds rate to 1 ½ - 1 ¾%. Fed members including Chairman Powell have signaled that these rate hikes will continue and the magnitude will be data-dependent. Currently, it is widely accepted that the July FOMC meeting will result in another ¾% rate hike. This will most likely be followed by another rate hike of ½ a percent at the September FOMC meeting.

According to Reuters, "Fed Governor Michelle Bowman on Thursday said she supported a 75-basis-point increase in July, followed by 50-basis-point increases in "the next few" subsequent meetings, a more aggressive path of rate hikes than most of her fellow central bankers currently contemplate." Read More

Gold and silver are trading higher ahead of the European open

Gold (0.04%) and silver ((0.26%) are trading just above flat as we head into the European open. Looking at the rest of the major commodities, copper (0.30%) and WTI (0.59%) are both trading in the black too. 

Stocks performed well overnight as the Nikkei 225 (1.23%), ASX (0.77%), and Shanghai Composite (0.80%) all traded higher. Futures in Europe are also pointing to a positive open. 

The biggest FX mover overnight was NZD/USD (0.30%). The dollar index is currently 0.15% lower. In the crypto space, bitcoin is trading at $20,855.

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.