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World gold jewelry demand picks up
When analyzing gold it is key not to forget the demand for jewelry. Global demand took a massive hit during the pandemic and the bounce back in retail sales has been looking strong it also helped keep the gold price firm as the rate hiking cycle kicked in before all the geopolitical concerns induced safe-haven flows. There was a 40% increase in global demand from 2020 to 2021 to hit an estimated 1805 tonnes.
In 2020 (H2) due to the slowdown during the wedding season, India only imported 224 tonnes vs 497 tonnes in 2021. In addition to this, the two celebrations of Dushera and Dhantares brought shoppers back in Q4. Indian demand jumped by a massive 123% year on year which helped smash demand estimates. Read More
Gold and silver continue to go nowhere
Gold and silver continue to churn around the mean. The pattern is compressing, indicating a much bigger move is coming. As we look at the charts, gold’s support is at $1,900 and resistance is at $1,950. Silver is finding support at $24.5 and resistance at $26.00. We are short and expect them to hit support; however, at this point, we would not be surprised at any move. Read More
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The silver price needs to overcome this intraday resistance
The silver price has dropped in the European session despite starting the day higher. Overnight the dollar had been trading firmer and most commodities had been under pressure. Since hitting the high of $27.49/oz on 8th March the price has consolidated close to the current level but now a bearish chart pattern is forming.
Looking closer at the 4-hour chart below there is a clear head and shoulders pattern. The confirmation break would come if the green support area at $24.50/oz is taken out. Interestingly, the right shoulder resistance matches the trendline retest which gives it slightly more significance. Check out the technical analysis
Gold market holding above $1,900 as bond yields surge after Powell's 50-basis point hike signal
The gold market is seeing consistent selling pressure as markets react to Federal Reserve Chair Jerome Powell's hawkish comments signaling a potential 50-basis point move in May.
"We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meeting, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well," Powell said Tuesday, in his keynote address at the National Association for Business Economics Annual Economic Policy Conference.
Powell's comments pushed 10-year yields to nearly 2.40%, its highest level in almost three years. However, commodity analysts note that despite a stronger U.S. dollar and surging bond yields, gold prices are holding above critical support levels.
Analysts have noted that gold remains firmly entrenched between $1,900 and $1,950 an ounce. April gold futures last traded at $1,920.30 an ounce, down 0.48% on the day. Read More
It could 'take a decade' to get inflation under control if Fed fails - Almonty Industries CEO
The world is staring down the barrel of high inflation, slower economic growth, and commodities shortages. And if the Federal Reserve fails to get things under control, the problem could take years to fix, according to Almonty Industries CEO Lewis Black.
The war in Ukraine is directly contributing to the latest inflation surge. But it is important to remember that many commodities were already near record highs even before Russia invaded Ukraine, Black told Kitco News.
"We already had disruptions, and governments worldwide have printed so much money. When you inflict on the economy so much money, it creates inflation. The fashion right now is to blame Putin. And some commodities have rallied on the back of the invasion. But some were already at all-time highs or near those highs before that," he said. "Inflation is going to ultimately continue. The first step to recovery is an acknowledgment of your problem. And until that happens, things will continue to spiral out of control." Read More
Gold, silver pressured by rising bond yields, rally in U.S. stocks
Gold and silver prices are weaker in midday U.S. trading Tuesday. Sharply rising U.S. Treasury yields are putting pressure on the precious metals markets, as well as the recent rally in the U.S. stock indexes. April gold futures were last down $10.80 at $1,918.50 and May Comex silver was last down $0.423 at $24.88 an ounce.
Image Source: Kitco News
Technically, April gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at this week's high of $1,941.80 and then at $1,950.00. First support is seen at today's low of $1,909.80 and then at $1,900.00. Wyckoff's Market Rating: 6.0. Read More
WisdomTree uses gold as inflation hedge in new equity/gold ETF
WisdomTree targets investors worried about rising inflation and low-interest rates through new gold fund.
Last week the international investment fund launched the WisdomTree Efficient Gold Plus Equity Strategy Fund (Cboe BZX: GDE). The new exchange-traded product gives investors exposure to large-cap equities and gold.
In an interview with Kitco News, Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, explained that for every $100 invested in the ETF, $90 is invested in large-cap stocks. The other $10 is used as short short-term collateral, which helps fund $90 in gold futures. Through the ETF, investors would get $180 exposure in both gold and equities.
Schwartz explained that the ETF provides investors capital-efficient exposure in a portfolio.
"If you wanted to add a 3% position in gold, typically, you would sell some of your stocks to add the 3% gold," he said. "With this new ETF, you could take that 3% and have 90% in stocks and be fully aligned with gold. If you think gold is a good long-term inflation hedge, you could protect your entire allocation to large-cap stocks without selling your stocks." Read More
This is how gold price takes on $2,000 - Bloomberg Intelligence
One way for gold to finally breach that $2,000 an ounce resistance level on a sustainable basis is for the Federal Reserve to actually succeed in carrying out its message, according to Bloomberg Intelligence.
And that means a lower U.S. stock market.
"The Federal Reserve's mandate to control inflation guides people's ability to buy stuff, which may mean a lower stock market is needed for gold to advance. If equities keep rising along with interest rates, the precious metal will likely face greater pressure than if stocks do some of the Fed's work for it. Our bias leans toward the latter," Bloomberg Intelligence senior commodity strategist Mike McGlone wrote on Tuesday.
Federal Reserve Chair Jerome Powell's message that 50 basis point rate hikes are now possible is a clear signal for the U.S. stocks that the U.S. central bank is ready to take on inflation head-on.
"A primary force to stop an inflation-restraint cycle from the Fed is if the stock market does it for them," McGlone said. "We see the potential for parallels, with a primary driver for gold to breach resistance of $2,000 an ounce subject to the stock market declining." Read More
It's time to gear up for two 50-point hikes in May and June, says Goldman
Investors should be on the lookout for an aggressive Federal Reserve, said Goldman Sachs, projecting two 50-basis-point hikes at the May and June meeting followed by 25-point hikes at the remaining four meetings of the year.
"We now forecast 50bp hikes at both the May and June meetings, followed by 25bp hikes at the four remaining meetings in the back half of 2022 and three quarterly hikes in 2023Q1-Q3," Goldman economists Jan Hatzius and David Mericle wrote in a note on Monday. "Our best guess is that the shift in wording from 'steadily' in January to 'expeditiously' today is a signal that a 50bp rate hike is coming."
Goldman's terminal rate remained between 3% to 3.25%.
The updated projections come after Fed Chair Jerome Powell took a clear stance on inflation on Monday, stating that it is "much too high" and urging that the time to act is now. Read More
Gold drifts lower as investors react to Powell’s hawkish speech
As of 4:55 PM, EDT April gold futures are down $8.80, or 0.46% on the day, and are fixed at $1920.90. Spot gold is currently trading $14.50 lower, or 0.75%, at $1921. Today’s decline in the precious yellow metal can be directly attributed to investors reacting to a speech by Chairman Powell. Speaking at the National Association for Business Economics yesterday, Powell conveyed a much more hawkish demeanor in regards to interest rate hikes to combat the spiraling level of inflation. His speech inferred that the Federal Reserve would be much more aggressive regarding upcoming rate hikes than previously announced.
Image Source: Kitco News
Today’s nominal price decline of approximately $8 in gold rather than a much steeper selloff is an indication that concerns about the geopolitical tensions created by Russia’s invasion of Ukraine and inflation at a 40-year high continue to be highly supportive of gold pricing.
On a technical basis, gold has minor support at $1920 per ounce, support between $1895 and $1900 per ounce, and major support at $1879, based upon the current 50-day moving average. Resistance price points begin at $1944, based on the 21-day moving average, and major resistance at $1965, which is based upon previous price tops and the 38.2% Fibonacci retracement. The data set used for the Fibonacci retracement begins at $1781 and concludes at $2078. Read More
Silver edges higher into the European open
Gold is trading flat ahead of the European open at $1920/oz. Silver on the other hand has moved half a percent higher and is looking to test $25/oz. In the rest of the commodities complex, copper is also flat while spot WTI is 1.25% in the black.
Risk sentiment was good overnight as the Nikkei 225 (3.00%), ASX (0.50%), and Shanghai Composite (0.34%) all closed higher. European futures are indicating a positive cash open.
In FX markets, USD/JPY moved another 0.20% higher overnight and broke the 121.00 level. In the crypto space, BTC/USD is 0.41% lower trading at $42,211. 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.
