Today's Gold and Silver News - May 16th

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Gold prices continues to struggle near $1,800 as UofM consumer sentiment drops to 59.1

The gold market continues to struggle, trading below $1,800 an ounce, and is unable to find any support from weak consumer confidence, according to the latest report from the University of Michigan.

Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index dropped to 59.7, down from the previous reading of 65.2. the data missed expectations as consensus forecasts were calling a small drop to 64.1.

“These declines were broad based--for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation--continuing the general downward trend in sentiment over the past year,” the report said.

According to the report, consumers' assessment of their current financial situation relative to a year ago is at its lowest reading since 2013. Read More

Gold and silver: is the sell-off over?

CPM Group's Jeffrey Christian dives into the most recent sell-off of Gold and Silver, He discusses some of the factors behind it, and what we can expect moving forward. He continues by discussing the core concepts underlining some of the questions we have been asked in recent videos. Read More

Gold lost 3.82% this week, resulting in a fourth consecutive weekly decline

Gold opened at $1977 on Monday, April 18, and this would mark the beginning of four consecutive weekly declines. As of 5:10 PM EDT gold futures basis, the most active June 2022 Comex contract is fixed at $1810.30 after factoring in today’s decline of $14.30 or 0.78%. Today’s decline in gold occurred without the benefit of dollar strength. The dollar index declined by 0.36% and is currently fixed at 104.515

The decline this week was the strongest percentage drawdown of the four weeks losing 3.87%. Considering that over the last four weeks gold’s value has decreased by 8.44%, almost half of that decline occurred this week. This correction devalued the price of gold by $167 per ounce, with $73 of that decline occurring this week.

Image Source: Kitco News

Over the last four weeks, a major factor pressuring gold prices lower has been dollar strength. The dollar has gained value for the last six consecutive weeks. Over the last four trading weeks, the U.S. dollar has gained 4.15% in value. This means that dollar strength accounted for just under one-half of gold’s price decline. Read More

'The standout has got to be the gold price' - Inventa's Craig Parry on metals and the big market drop

Metals are standing up relatively well during this steep market drawdown, said co-founder and partner of Inventa Capital, Craig Parry.

Parry spoke to Kitco on Thursday after this week's sell-off. The S&P is down 19% year to date. Read More

The Metals, Money, and Markets Weekly: Who's to blame - Mickey Fulp

Listen to the podcast

Gold can't catch a break

The gold market has found itself in a sticky situation as the prices have dropped nearly 4% this week, its worst selloff in roughly a year. After four consecutive weekly losses, the precious metal has fallen to its lowest level in three months. If you look at sentiment in the marketplace, gold might struggle to hold $1,800 an ounce.

This week's selloff is even worse because gold found no help from the latest inflation data. This week, U.S. CPI showed annual inflation rose 8.3% in April. Consumer prices dropped from March's 8.5% reading; however, it was still hotter than expected.

With gasoline prices hitting record highs nationwide and food prices moving up, there is a strong indication that inflation will be more persistent than some expect, including the Federal Reserve.

Inflation is also having a significant impact on consumer sentiment. According to the latest University of Michigan survey, consumer sentiment has dropped to its lowest point in 11 years. The survey also noted that consumers think now is the worst time to buy durable goods since the late-1970.

Despite all this disappointing economic news, the gold market can't catch a break. It appears that the Federal Reserve's aggressive monetary policy stance is working. Inflation expectations have remained well anchored. Read More

Gold price is in a 'danger zone' as prices drop another $30

The gold market is in a "danger zone" as prices move closer to $1,800 an ounce, according to analysts.

Another spike in the U.S. dollar trigged a drop in gold Thursday, with June Comex gold futures touching a low of $1,820.40 an ounce and last trading at $1,822.30, down 1.7% on the day. In the meantime, the U.S. dollar index soared to a fresh 20-year high, last at 104.80.

Gold has solid support at the $1,800 an ounce level, but a break below could lead to a steeper selloff.

"The dollar has firmly put gold in the danger zone and a break of the $1,800 level could lead to further technical selling," OANDA senior market analyst Edward Moya. "Gold can't attract any attention until this move in the dollar ends."

Gold's struggle after below the $1,900 an ounce level has coincided with a selloff in the U.S. stock market. Investors have been transitioning to risk-off sentiment on fears around the Federal Reserve's ability to fight inflation without triggering a recession.

"Right now, Treasury yields and the stock market are both declining, which should suggest we are getting close to a capitulation with this de-risking moment on Wall Street. If gold breaks below the $1,800 level, technical selling could support a drop towards $1,750," Moya added. Read More

Gold price sees worst week in 11 months, but is the market oversold?

The gold market is looking to close the week down around 4%, its worst weekly close since mid-June 2021. But its current price level of around $1,800 an ounce could put gold at risk of a bigger selloff, according to analysts.

Gold was hurt by technical selling pressure after dropping below the $1,830 an ounce Thursday, which served as support. The precious metals also suffered from higher U.S. dollar and expectations of an aggressive Federal Reserve following hotter-than-expected inflation data. 

June Comex gold futures were last at $1,809.90 an ounce, down more than $70 on the week.

"We've seen the CPI come in stronger than expected this week. The 8.3% pace in April is problematic, especially after markets were expecting 8.1%. That automatically told us that the Federal Reserve would not soften its hawkish stance," TD Securities head of global strategy Bart Melek told Kitco News. "It's unlikely that inflation will come off sharply any time soon."

This outlook has weighed on gold and the precious metal moved significantly lower. "The $1,830 was good support, but we breached it. Now, $1,790 is the next support level as gold consolidates," Melek said. Read More

Bearish sentiment points to gold prices falling below $1,800 next week

The gold market is seeing its worst weekly performance in roughly a year. And the price action might not get much better next week as sentiment has dropped among Wall Street analysts and retail investors, according to the latest Kitco News Weekly Gold Survey.

Not only are gold prices ending the week with a 3.7% loss, but this is the fourth consecutive week of losses. The gold market has been hit with significant selling pressure as the U.S. dollar traded near its highest level in 20 years. Although some analysts have said that gold appears to be oversold, it still faces some challenging headwinds.

"As the old saying goes, markets can stay overbought and oversold longer than most of us can stay solvent," said Darin Newsom, president of Darin Newsom analytics. "Additionally, Newsom's Rule #6 tells us 'fundamentals win in the end,' and the U.S. dollar's fundamentals remain bullish."

Marc Chandler, managing director at Bannockburn Global Forex, also noted that momentum indicators look a slight stretch. Still, he doesn't see momentum shifting in the near term. He added that he could see gold prices fall to $1,780 an ounce next week.

"Rising rates keep gold on the defensive, despite the firm inflation readings," he said. Read More

Gold price in 5 years: $1,300 or $4,000?

A massive selloff in U.S. stocks, extreme panic in the crypto space, and the worst week for gold in almost a year are just a few headlines that describe the volatility seen all across the board. Here's a look at Kitco's top three stories of the week: 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.