Today's Gold and Silver News - May 18th

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New gold bull market to begin soon

Precious Metals have been hit hard in recent weeks but what is happening in the global macro world is necessary for a real bull market to begin in Gold, gold stocks, and Silver.

Recently and historically, every big move in precious metals has transpired around either a significant correction or bear market in stocks.

Think of the major lows in precious metals in recent years: March 2020, August 2018, December 2015, and October 2008. Economic and market turmoil is always a catalyst for precious metals.

This time will be no different.

The biggest and best cyclical bull markets in precious metals occurred amid or after a bear market, within the context of a secular bear market in stocks. Think of the early to mid-1930s, the 1970s, and 2000 to 2011.

In recent years, the issue for precious metals was the underperformance against the stock market, which remained in a secular bull market.

However, Gold is poised to begin a new secular bull market soon as the stock market has likely started a new secular bear market. Read More

Recession is 'very high risk factor' as Fed's path is 'narrow' — former Goldman Sachs CEO Blankfein

A recession in the U.S. is "definitely a risk" as the Federal Reserve faces a narrow path ahead as it tightens rates to fight inflation, said former Goldman Sachs CEO Lloyd Blankfein.

Speaking to the CBS' 'Face the Nation,' Blankfein stated that a recession is "a very, very high risk factor," but "it's not baked in the cake."

He added that businesses and consumers need to be prepared for that possibility. "If I were running a big company, I would be very prepared for it," Blankfein said Sunday. "If I were a consumer, I'd be prepared for it."

The Fed has the right tools for its battle with inflation, but its actions will take time to filter through.

"There's a path. It's a narrow path," said Blankfein, who is now Goldman Sachs' senior chairman after retiring from the CEO position in 2018. "But I think the Fed has very powerful tools. It's hard to finely tune them, and it's hard to see the effects of them quickly enough to alter it, but I think they're responding well. [Recession] is definitely a risk." Read More

Gold faces new competition as real yields turn positive - USBWM

 The gold market is finding some support at around $1,800 an ounce; however, according to one market strategist, the gold market faces some renewed competition through the rest of the year as the Federal Reserve raises interest rates aggressively.

In an interview with Kitco News, Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said that while inflation might have peaked, there are indications that core inflation will remain elevated through 2022, creating a challenging environment for the economy and financial markets.

In the current environment, Haworth said that real assets remain an attractive hedge against inflation and market volatility.

"We've seen significant multiple compression in the equity market already, and that to our mind means we have to look for ways to pull forward our cash flows, and real assets have been a key way for us to do that," he said.

However, Haworth added that he doesn't see gold as an attractive real asset. He said he sees gold continuing to struggle through 2022 as the Federal Reserve looks to raise interest rates to potentially 3% by December. Read More

Gold, silver up, but gains fade after upbeat U.S. economic data

Gold and silver prices are just modestly higher in midday U.S. trading Tuesday and lost solid early gains after some stronger-than-expected U.S. economic data and rising U.S. bond yields. The metals were supported by rising crude oil prices that hit a nine-week high earlier today, and sharp daily losses in the U.S. dollar index. However, crude oil prices did back down as the session progressed. June gold futures were last up $2.50 at $1,816.50. July Comex silver futures were last up $0.134 at $21.685 an ounce.

Image Source: Kitco News

Technically, June gold futures prices see a nine-week-old price downtrend in place on the daily bar chart. Bears have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,875.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,834.80 and then at $1,850.00. First support is seen at $1,800.00 and then at this week’s low of $1,785.00. Wyckoff's Market Rating: 3.0.

Image Source: Kitco News

July silver futures see a steep price downtrend in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at $22.00 and then at $22.50. Next support is seen at $21.50 and then at $21.00. Wyckoff's Market Rating: 2.0. Read More

Powell says Fed to 'keep pushing' rates higher until clear inflation is falling

The Federal Reserve will "keep pushing" to tighten U.S. monetary policy until it is clear that inflation is declining, Fed Chair Jerome Powell said on Tuesday.

"What we need to see is inflation coming down in a clear and convincing way and we're going to keep pushing until we see that," Powell said at a Wall Street Journal event. "If we don't see that, we will have to consider moving more aggressively" to tighten financial conditions.

As it hikes rates at coming policy meetings, the U.S. central bank would evaluate "meeting by meeting, data reading by data reading" how the economy and inflation are behaving, Powell said. Inflation is running at more than three times the Fed's 2% target. Read More

Gold price hits daily lows as Powell says Fed to move 'more aggressively' if inflation fails to come down

The gold market reversed its daily gains as Federal Reserve Chair Jerome Powell said monetary policy tightening could become more aggressive if inflation doesn't come down.

"What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don't see that, then we'll have to consider moving more aggressively. If we do see that, then we can consider moving to a slower pace," Powell said at a Wall Street Journal live event. "It's going to be a judgment call that we make going forward as we carefully monitor incoming data, the evolving financial conditions changing."

Powell even noted that the Fed could move beyond what is generally considered a neutral rate.

"Inflation coming down — that's what we really need to see. If that involves moving past broadly understood levels of neutral, we won't hesitate at all to do that. We'll just go until we are at a place where we can say yes, financial conditions are at an appropriate place, and we see inflation coming down. We'll go to that point," he said. 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.