Today's Gold and Silver News - June 28th

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Silver Enjoys Rare Day of Optimism as Markets Rebalance After Last Week’s Sell-Off

Silver investors can for a change look at the charts with a hint of optimism with the metal trading in green territory above $21 an ounce.

In fact, the bulk of equities and commodities are pointing upwards at the start of a new week of trading with the recent sell-offs deemed overly aggressive with some rebalancing of levels required.

Silver’s slump has mainly been a result of central banks, in particular the Federal Reserve, tightening their monetary policies in recent months by winding in stimulus packages and increasing interest rates. Yet today’s brief pause for reflection on the true state of the markets is a reminder that silver has been meted some particularly harsh treatment by traders.

Later this week the heads of the European Central Bank, the Bank of England, and the Fed will all be speaking so silver holders will be fearful of any indication that even more aggressive policies may be required to curb runaway inflation.

So while silver’s tentative gains today are long overdue given the medium-term outlook for the metal that still points to ever-increasing industrial demand, the heavy cloud of further interest rate hikes continues to overshadow the metal’s prospects. Read More

G-7’s Ban on Russian Gold Gives Traders Nudge Required to Claw Back Recent Losses

Gold has started the new trading week on the front foot and is regaining some of the losses it suffered last week.

While some of the move is merely a slight rebalancing with equities also recovering slightly, the price of gold was given a further boost by the Group of Seven nations planning to announce a ban on new gold imports from Russia.

Russia has already been effectively barred from selling its gold for a number of months since the London Bullion Market Association, which sets the standards for gold trading, removed Russian refiners from its Good Delivery list back in March. So while the G-7’s announcement is more symbolic than having a material impact on the availability of gold supplies, it gives traders a fresh motive to push the price of gold back upwards having drifted towards the bottom end of its trading range last week.

Later this week there is a slew of speeches from key central bankers, including Christine Lagarde, Andrew Bailey, and Jerome Powell, which should provide markets with a clearer indication of how hawkish the policies of their respective banks are likely to be over the coming months.

With gold having seen its gains capped and the price forced down as a result of the series of interest rate hikes the Federal Reserve, in particular, has imposed, holders of the precious metal will be hoping the bankers give indicators that there is no need to increase the expected pace of the planned rate rises. Read More

Gold price loses early gains as U.S. pending home sales surprise on the upside in May

Gold pared back all of its early-morning gains as the U.S. pending home sales beat expectations in May.

The U.S. pending home sales were up 0.7% in May following April’s downwardly revised drop of 4%, the National Association of Realtors (NAR) said on Monday. The consensus forecast called for a decline of 3.7%. 

On an annual basis, pending home sales were down 13.6% from May 2021.

The pending home sales index was at 99.9 in May after registering 99.2 in the previous month. "An index of 100 is equal to the level of contract activity in 2001," according to the report.

Despite the uptick, the U.S. housing market is in the midst of a transition due to higher mortgage rates that are hurting consumers, said NAR chief economist Lawrence Yun.

"Contract signings are down sizably from a year ago because of much higher mortgage rates," Yun said. "Trying to balance the housing market by choking off demand via higher mortgage rates is damaging to consumers and the economy. The better way to balance the market is through increased supply, which also helps the broader economy." Read More

Gold weaker as investor risk appetite up-ticks a bit

Gold prices are slightly down in choppy midday U.S. trading Monday. Prices have visited both sides unchanged today. The precious metals bulls are still holding their own early this week, in the face of a modest rise in U.S. Treasury yields and a recent rally in global stock markets. August gold futures were last down $3.30 at $1,827.00. July Comex silver futures were last up $0.145 at $21.27 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 todayâ??s high of $1,842.80 and then at last weekâ??s high of $1,850.30. First support is seen at last weekâ??s low of $1,817.70 and then at the June low of $1,806.10. Wyckoff's Market Rating: 3.5.

Image Source: Kitco News

July silver futures bears have the firm overall near-term technical advantage. However, the bulls are eyeing the potential for a bullish double-bottom reversal pattern forming. 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 todayâ??s high of $21.535 and then at $21.75. Next support is seen at todayâ??s low of $21.08 and then at $21.00. Wyckoff's Market Rating: 2.5. Read More

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World at 'tipping point': if inflation becomes entrenched, it'll trigger 'major paradigm shift' – BIS

The top economies of the world are at a tipping point. If inflation becomes entrenched, it will trigger "a major paradigm shift," the Bank for International Settlements said in its annual report.

The BIS warned that a high-inflation environment would make swift price increases the new normal and extremely hard to reverse.

"We may be reaching a tipping point, beyond which an inflationary psychology spreads and becomes entrenched. This would mean a major paradigm shift," the Sunday report stated.

Many countries are already on that path, which is why the BIS sees the central banks as not doing enough despite aggressive rate hike cycles from many across the globe, including the Federal Reserve.

"The key for central banks is to act quickly and decisively before inflation becomes entrenched," BIS general manager Agustín Carstens said. Read More

$1,800 gold puts M&A projects ‘on the table,’ but gold’s price will go higher – Alastair Still

The price of gold will rise due to worries about inflation, said Alastair Still, CEO of GoldMining Inc. He added that even a price of $1,800 per ounce offers many opportunities for mergers and acquisitions.

“I think the gold price is going to go higher,” he said. “We are all talking about inflation. That’s on the tip of everyone’s tongues these days. And I think that as the markets get turbulent… we’ll seek out gold as a safe haven.”

Still spoke with David Lin, Anchor and Producer at Kitco News, at the PDAC 2022 Convention in Toronto. Read More

Market participant wait for two key reports this week; GDP and PCE

Analysts and investors are waiting for two critical government reports due out on Wednesday and Thursday of this week. On Wednesday the Bureau of Economic Analysis (BEA) will release its latest numbers on real GDP which will be followed on Thursday by the PCE for May 2022.

Image Source: Kitco News

Concerns over a potential recession which will either be confirmed or negated by Wednesday’s GDP report. These concerns took both the dollar and gold lower today. As of 5:35 PM EDT gold futures basis, the most active August 2022 contract is trading $6.30 (-0.34%) lower and currently fixed at $1824 per ounce. The dollar lost 0.244 points today taking the dollar index to 103.715.

According to a report by Dr. David Kelly, Chief Global Strategist at J.P. Morgan asset management, “1Q22 Real GDP showed the economy contracted at a 1.5% annual rate in 1Q22, a deceleration from the boomy 4Q21. Weakness was primarily led by volatile trade and inventory data. Trade subtracted 3.2% from overall GDP growth as exports fell sharply and imports soared.”

The report also said that first-quarter 2022 earnings have held up better than expected. However, inflation continues to far exceed the FOMC’s 2% target with the May CPI report indicating hotter than expected inflation despite hopes by the Federal Reserve that it would moderate. Read More

Gold and silver trade higher leading into the European open

Gold is trading 0.34% higher leading into the European open. Silver is also having a good start and is nearly 1% in the black. Elsewhere in the commodities complex, copper (1.63%) and spot WTI (1.19%) are both trading well. 

In the risk markets, the Nikkei 225 (0.66%), ASX (0.86%), and Shanghai Composite (0.79%) all traded well overnight. Futures in Europe are indicating a positive open.

Over in the FX space, the dollar index (-0.16%) is slightly softer and the biggest mover overnight was AUD/USD (0.57%). Bitcoin is trading half a percent higher at $20,841.

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.