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Gold prices down more than 2% as risk sentiment shifts on Russia/Ukraine peace talks
The gold market is being hit with significant selling pressure as the price falls below $1,900 an ounce. Analysts are warning traders and investors that the precious metal has room to move lower in the near term.
According to some analysts, gold's safe-haven demand is taking a significant hit as Russia and Ukraine start new peace talks in Istanbul, Turkey. According to reports, Ukraine has proposed adopting a neutral status in exchange for security guarantees. At the same time, Russia has also stated that it will "dramatically" reduce its military operations near Kyiv and Chernihiv.
Analysts note that the latest peace talks are creating a "risk-on" environment as equity markets opened the North American session up 1%.
At the same time, April gold futures last traded at $1,895 an ounce, down more than 2% on the day. Read More
Gold price off its lows but still under pressure as U.S. consumer confidence rises to 107.2
The gold market continues to see strong selling pressure, with prices trading around $1,900, as improving U.S. consumer sentiment appears to have little impact on the precious metal.
American consumer confidence index rose to 107.2, up from February's initial reading of 110.5, the U.S. Conference Board reported Wednesday. Economists were expecting to see the index at a reading of around 106.9.
The relatively in-line economic data is having little impact on gold as shifting investor sentiment weighs on the precious metal. April gold futures last traded at $1,909.60 an ounce, down 1.5% on the day.
The relatively in-line economic data is having little impact on gold as shifting investor sentiment weighs on the precious metal. April gold futures last traded at $1,909.60 an ounce, down 1.5% on the day. Read More
Japan outlaws gold exports to Russia, steps up sanctions
Japan's Ministry of Finance said it would ban precious metals exports to Russia as it steps up its sanctions against Moscow in response to its invasion of Ukraine.
The ban comes into force on April 5 and includes gold and other luxury items like jewelry, high-end cars, liquor, and cosmetics.
"In cooperation with the U.S. and the EU, Japan joins the sanction against Russian oligarchs and the ruling class," the ministry said on Tuesday.
The move comes after Prime Minister Fumio Kishida's commitment to step up sanctions against Russia at last week's the Group of Seven (G7) meeting. Read More
Gold, silver down but well up from early lows
Gold and silver prices are solidly lower at midday Tuesday but have moved well up from the sharp losses and five-week lows that were hit in early U.S. trading. The precious metals were pressured by an increase in trader and investor risk appetite. Profit-taking and weak long liquidation by the shorter-term futures traders were also featured in gold and silver. Lower crude oil prices and rising bond yields are also weighing on the safe-haven metals. April gold futures were last down $26.30 at $1,913.70 and May Comex silver was last down $0.441 at $24.755 an ounce.
Image Source: Kitco News
May silver futures prices hit a five-week low early on today. The silver bulls have a slight overall near-term technical advantage but are fading. Prices are now in a three-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $26.16 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $25.135 and then at $25.50. Next support is seen at $24.55 and then at $24.25. Wyckoff's Market Rating: 5.5. Read More
Lessons from the 1970s: war in Ukraine to 'reshape commodity markets for years to come' - Capital Economics
If the lessons of the 1970s were to be applied to the current geopolitical situation, the commodity markets could be transformed by the war in Ukraine, according to Capital Economics.
"The experience of the 1970s suggests that the ongoing war in Ukraine and its effects on commodity prices will reshape commodity markets for years to come," said Capital Economics commodities economist Kieran Clancy said in a report published Tuesday.
The long-term consequences that stand out include demand destruction and new energy independence goals.
"Elevated prices are likely to lead to some degree of demand destruction. And further ahead, a renewed focus on energy independence in Europe and elsewhere will have longer-lived consequences for commodity demand and supply," Clancy wrote. Read More
Gold pricing - it's all about the Federal Reserve’s next move at the May FOMC
Inflationary rates have been rising dramatically over the last year. We have seen both the CPI and PCE inflation index increasing each month since October last year. The latest number to be released by the government was the CPI index for February which came in at a 40 year high of 7.9%. This is the highest level in 40 years since January 1982. On March 31, the government will release the PCE index (Personal Consumption Expenditures Price Index) for February.
President of the Philadelphia Federal Reserve Patrick Harker said that he favors a “methodical” series of quarter percentage point interest rate increases, but is open to larger half percent point hikes if inflation does not soon show signs of easing.
The most recent projections by the Federal Reserve Bank of Cleveland indicate that inflation will not show signs of easing which means that the likelihood of more aggressive interest rate hikes at the remaining six FOMC meetings is highly likely.
That will pressure gold to stabilize its price at approximately $1900 or even cause the precious yellow metal to decline further. Currently, April futures are down $22, or 1.13%, and fixed at $1917.80. The June 2022 contract which will soon become the most active traded month is currently fixed at $1923.40 after factoring in today's decline of $21.30. Gold's selloff today was tempered by dollar weakness with the dollar index currently down 0.59% and fixed at 98.47. Read More
Gold and silver trade higher ahead of the European open
After rejecting lows of $1890.35/oz gold is trading 0.28% higher at $1924.40/oz ahead of the European open. Silver is also trading higher by 0.30%. Elsewhere in the commodities complex, copper is 1.16% and spot WTI has risen 0.73%.
Risk sentiment overnight was good as the ASX (0.67%) and Shanghai Composite (1.72%) closed higher but the Nikkei 225 fell 0.80%. Futures in Europe are indicating a positive cash open.
In FX markets, USD/JPY was once again the big mover as the pair fell 0.83%. NZD/USD also traded well rising just over half a percent. In the crypto space, BTC/USD traded flat overnight.
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.
