Today's Gold and Silver News - May 19th

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Silver’s Slide May Finally Have Stopped as Price Climbs Back Above $21

After a painful month for silver that saw its price plunge from near $26 an ounce to below $21 an ounce, the metal is finally showing signs of having found its bottom with the price now climbing tentatively back above $21. 

There hasn’t been a substantive change to the trading environment with Federal Reserve Chair Jerome Powell reiterating that the US central bank will continue to raise interest rates in June and July. 

This hawkish environment has seen silver punished consistently but it has now found a level where investors have the confidence to support the asset once again.

While the fundamental case remains strong for silver, the likelihood of interest rate rises over the coming months on both sides of the Atlantic hasn’t allowed that case to be heard. For now, silver holders can breathe a sigh of relief that the losses may finally have paused but the road to recovery back to $25 still has lots of bumps ahead. Read More

Gold Finds Support Above $1,800 Despite UK Inflation Hitting 40-Year High

Inflation is yet again the major talking point on Wednesday after the UK’s latest figures showed that annual inflation is at its highest level since 1982.

However, despite inflation now standing at 9% in the UK, as the figure was in line with expectations, the market reaction has been muted so far with gold trading little changed at around $1,815 an ounce.

This level represents a small improvement from the start of the week with the price managing to bounce back above the key level of $1,800 an ounce after slumping to levels last seen in early February. 

Yet as long as inflation remains a primary concern for the major economies, gold is likely to find it difficult to make significant gains with the specter of rising interest rates severely denting the metal’s appeal. 

While inflation in the US is running a little less hot than in the UK, it is still a major source of worry with Federal Reserve Chair Jerome Powell stating yesterday that the bank will use all of its tools to bring inflation significantly lower and reinstating the likelihood of 50 basis point rate increases in both June and July. 

The fact that gold did recover back above $1,800 shows there is still support for the asset but investors hoping for a price above $1,850 may have to wait sometime yet. Read More

Gold and silver fail once again

Like reading a textbook, the recent price action in gold and silver has moved according to script. The technical trade has been almost perfect. While those who cry manipulation or some other nonsense, gold reached support rallied, reached resistance, and failed.

Once again, $1,800 gold and $21 silver are key levels to hold on to this move down. Based on current price action, troubles in the equity markets, and the ignorance of the FED, we suspect the metals have more room to go on the downside. In the next few days, we will be looking for a new support level.

Image Source: Kitco News

Too many mix trading and investing in the same strategy, which will destroy those who do. They are two completely separate strategies; mixing them creates too many issues, emotionally and rationally. The trend is lower, and the correct side for traders is short. You must quit fighting the tape and price action. Read More

Investors stockpile cash at highest levels in two decades - BofA survey

Fears of slower growth across the globe have investors amassing cash piles, with holdings rising to the highest levels in two decades, according to the latest Bank of America Corp. fund manager survey.

Optimism has reached an all-time low as investors with $872 billion under management reported being the most underweight equities since May 2020. The results of the BofA's survey showed investors net 13% underweight, from 6% overweight in the April survey.

Expectations around future growth were also weak, while rate hike estimates rose in May, with investors projecting 7.9 hikes, up from 7.4 in April, BofA said.

The survey pointed out that fund managers were "extremely bearish" in May, with cash levels among investors jumping to the highest level since September 2001. Cash holdings increased to 6.1% from 5.5% reported in the previous month's survey.

The two most significant risks identified were hawkish central banks at 31% and global recession at 27%. Inflation risk was lower at 18%, and war fears declined to 10%. Read More

Gold, silver look cheap as Fed rate hikes create threat of a recession - Degussa

The gold market continues to struggle to make material gains above $1,800 an ounce. Still, the precious metal remains cheap as investors continue to miss-price risk in the marketplace, according to one market analyst.

In his latest market commentary, Thorsten Polleit, chief economist of Degussa, said that both gold and silver are relatively cheap as investors ignore the growing risk that the Federal Reserve will push the U.S. economy into a recession as it raises interest rates.

According to the CME FedWatch Tool, markets expect interest rates to be at least 3% by the end of the year. Markets expect the U.S. central bank to raise interest rates by 50-basis points at the next three monetary policy meetings.

"That doesn't sound much. But the expectation that the Fed would end its extremely expansive policy has already triggered something of a landslide on the financial markets," he said in the report.

One of the reasons why gold and silver have seen significant selling pressure in the last four weeks is because investors have faith that central banks can engineer a "soft landing" that will weaken the economy enough to slow-growing inflation pressures but not enough to push it into a recession. Read More

Gold recovers early losses as U.S. stock market melts down

Gold prices are up a bit at midday Wednesday. The yellow metal recovered moderate early losses as some safe-haven demand surfaced amid a big sell-off in the U.S. stock market at mid-week. June gold futures were last up $1.40 at $1,820.50. July Comex silver futures were last down $0.11 at $21.64 an ounce

Image Source: Kitco News

Technically, June gold futures 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 this week's high of $1,834.80 and then at $1,850.00. First support is seen at today's low of $1,805.00 and then at $1,800.00. 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 this week's high of $21.925 and then at $22.00. Next support is seen at today's low of $21.38 and then at $21.00. Wyckoff's Market Rating: 2.0. Read More

U.S. dollar will keep gold price under pressure - VanEcK's Foster and Casanova

The gold market remains in its long-term bull market, but the rally in the U.S. dollar is keeping a lid on prices in what should be a perfect environment, according to the precious metals team at VanEck.

In their latest precious metals report, Joe Foster, portfolio manager, and strategist, and Imaru Casanova, deputy portfolio manager for the investment firm's VanEck International Investors Gold Fund (INIVX), said that the strength in the U.S. dollar is what sets the current gold market bull rally from previous years.

While the strategists remain long-term gold bulls, they said the precious metal could continue to struggle as the U.S. dollar trades around its highest level in 20 years.

The U.S. dollar index is currently trading at 103 points; meanwhile, gold prices remain trapped at around $1,800 an ounce.

"Gold is again serving its historic role as a financial safe haven and store of wealth. However, many gold advocates wonder why the gold price isn't higher, given all that has transpired," the portfolio managers said in the report. "While gold and the U.S. dollar sometimes trend higher together in periods of acute financial stress, the normal relationship is inverse. We believe the firm U.S. dollar has muted gold's advance in the current bull market." Read More

Commodities can thrive in a bear market - Andrew O'Donnell

 Markets will keep falling, according to Andrew O'Donnell, Founder and Managing Director of themarketmindset.ca. However, a careful stock picker can still find upsides in commodities. 

O'Donnell spoke with David Lin, anchor, and producer for Kitco News. 

O'Donnell's company, based in Vancouver, provides market analysis on equities, particularly those in the natural resource sector. Read More

Market crash to last until 2024; Gold to hit $900 before a rebound - Harry Dent

Markets have peaked and will continue in a bear market until 2024, and the Fed can do nothing about it.

That’s according to Harry Dent, President, and Founder of HS Dent. Dent spoke with Michelle Makori, Kitco News’s Editor-in-Chief and Lead Anchor.

“I think the market has already topped, January 4th for the S&P 500, and we’re heading down,” said Dent. “And the Federal Reserve is going to find out that their something-for-nothing stimulus didn’t really work in the end, and people are going to find this out only when things crash.”

Although the stock market has done well over the last few decades, Dent said this is deceptive.

“People are now thinking it can only go up,” said Dent. “You have to get shocked out of that, you know? History shows a 40 percent crash within the first several months.”

He explained that the Federal Reserve’s “money printing” has sustained the economy up until now. Yet when the crash comes, it will be worse than people think.

“We’re about to go into a recession already… There’s no soft landing here. The Fed is hoping for that. They don’t understand the underlying trends of the economy… We are so overstretched, the biggest bubble in everything… You can’t keep a dead body going.” 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.