Today's Gold and Silver News - May 23rd

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Gold Set For Rare Weekly Gain Having Finally Found Support From Equity Sell-Off

Gold is set for its first weekly gain in a month having finally found some support from the broader sell-off in equities. 

Now trading between $1,840 and $1,850 an ounce, gold has responded positively after starting the week below $1,800 an ounce. In such volatile and jittery trading conditions, with investor confidence hit by sustained elevated inflation and broader growth concerns, gold initially saw it being dragged down rather than benefiting from haven seekers. 

The main headwind for gold remains the Federal Reserve’s hawkish monetary policy, with further interest rate rises of 50 basis points all but guaranteed in both June and July.

This macroeconomic climate will cap how much territory gold can recover but the strong initial recovery after slipping below $1,800 demonstrates where the strongest support for gold lies.

The recent dominance of the Fed’s actions as the driver for the gold price has overshadowed other factors that are supportive for the ultimate haven asset.

The war in Ukraine is sadly showing no sign of ending any time soon while the cause of the Fed’s hawkish pivot, rising inflation, is in itself a supportive factor for gold as an asset that has proven itself to hold its relative value over centuries.

Now that gold has finally found some support, the price may well be set for a period of sideways trading around its current range. Read More

Silver Climbs Back Towards $22 After Brutal Month Left Metal Undervalued

Silver has finally stemmed its losses with the price pushing back up towards $22 an ounce.

While this still represents a significant drop compared with where the metal was trading in mid-April, for silver investors this presents some light relief after a brutal run saw the price sink to its lowest since July 2020.

The macroeconomic hasn’t broadly changed in recent days with buyers finally returning to silver more a reflection of how undervalued it had become.

The Federal Reserve’s planned series of interest rate hikes will remain a significant headwind for silver, with its lack of yield making it less attractive compared to other interest-bearing asset classes. Concerns over global economic growth are also a limiting factor with silver’s more industrial outlook compared with gold.

However, in these volatile trading conditions that have seen some dramatic daily moves on the world’s largest equity indices, a sudden surge in silver’s price shouldn’t be ruled out.

With a smaller investment pool than gold, silver can experience bigger swings and if investors start to buy into silver’s fundamental appeal, which could see another record year of demand, then the price could quickly spring back up to the $25 an ounce level seen just a few weeks ago. Read More

Uncertainty rocks equity markets but boosts bullish sentiment in gold

Bullish sentiment is starting to rise in the gold market as the precious metal is looking to end its four-week losing streak after bouncing off support below $1,800 an ounce.

The latest results of the Kitco News Weekly Gold Survey show that both Wall Street analysts and Main Street investors are solidly bullish on the precious metal next week. Not only has gold found some technical momentum after falling into oversold territory, but analysts note its safe-haven allure is once again shining bright.

Gold's rally this week comes as U.S. equity markets end their seventh consecutive week in negative territory. Wednesday, the S&P dropped 4%, seeing its worst one-day selloff since June 2020, when the global COVID-19 pandemic first roiled markets.

Phillip Streible, chief market strategist at Blue Line Futures, said that he is bullish on gold as investors look to hedge against further financial market weakness. He added that in the current environment, he sees gold and the U.S. dollar moving in tandem as safe-haven assets.

"Equity market conditions can still get a lot worse," he said. "There are signs that economic conditions in the U.S. are starting to deteriorate," he said. Read More

Gold/Silver: It's all about to come unhinged

It was an eventful week in precious metals with what seemingly solidified a new hard floor in gold at $1785/oz. I am somewhat skeptical that I can say the same thing about silver, which has been trading more like a risk asset rather than a safe haven or an inflation hedge. U.S. Equities are on track for seven straight weeks of losses, and with investors conditioned to believe that the Fed will come to the rescue, they will be left disappointed until well into the back half of the year. Comments from Fed Chairman Jerome Powell on multiple occasions solidify this stance when he previously said, "the process of getting inflation down to 2% will also include some pain..." and just this week, he told the Wall Street Journal that "no one should doubt" the Federal Reserve's resolve to quell U.S. inflation. "What we need to see is inflation coming down in a clear and convincing way, and we are going to keep pushing until we see that." Read More

Gold's big $1,800 test on the radar next week as stocks' steep selloff intensifies

With the U.S. stock market still at risk, should gold be trading higher? Analysts see next week as an important test for gold as markets debate the effects of the Federal Reserve's oversized hikes.

Gold is ending the week with its first weekly gain in five weeks as the precious metal finally saw renewed safe-haven demand on concerns over inflation and economic growth. June Comex gold futures were last trading at $1,841.40, up 1.8% on the week.

Going into next week, the steep selloff in the equity space might not be over as the S&P 500 is now 20% below its all-time highs posted in January.

"During the last few weeks, we saw the stock market selling off and gold going along with it. But then we got a short-term peak in Treasury yields, which opened the door for gold to behave as a safe haven," OANDA senior market analyst Edward Moya told Kitco News. "The U.S. stock market is still at risk. We could see one last major plunge. And we'll probably see gold's safe-haven [properties] being tested once more. Selling exhaustion should be settling soon." Read More

Gold's 'luster' against equities, inflation, is weak; will it pick up in 2023? - Gary Wagner

Gary Wagner, Editor of TheGoldForecast.com, thinks gold has recently lost its "luster" as a hedge against equities and inflation.

Wagner spoke with David Lin, anchor and producer at Kitco News at the Vancouver Resource Investment Conference. Read More

The real 2022 'shocker' is coming, and it has to do with U.S. natural gas prices – Goehring & Rozencwajg

Anomalies and risk events of 2022 are far from over, with the next crisis developing in the U.S. natural gas market, according to Goehring & Rozencwajg Associates managing partner Leigh Goehring.

As markets are just coming to grips with the aftermath of Russia's invasion of Ukraine, followed by a surge in commodities like oil and agriculture, the next black swan event is already around the corner.

"The big crisis that is going to take everyone by surprise in the next six months is going to be here in North America, with the U.S. natural gas prices," Goehring told Kitco News. "This will be the real shocker because it is a full-blown crisis that is already taking place on a global basis in gas. The U.S. has been completely immune from all this over the last year or so. Even today, gas prices in Europe and Asia are at around $30 per mmbtu versus $8.20 per mmbtu in the U.S."

The concern here is that the U.S. might not be able to stay immune to this crisis for much longer as any unpredictable event could trigger a deficit in the U.S. natural gas market, especially with the U.S. now increasing its export levels. Read More

Gold's bull versus equities' bear

The Federal Reserve is cliff-walking on a very narrow ledge, and that is making equity investors very nervous; however, the gold market continues to do its job holding steady in volatile waters.

Wednesday, the S&P 500 fell 4% during the session, seeing its worst one-day selloff since June 2020. This week's price action has only added to the ugly picture as equity markets enter a bear market.

Year-to-date, the broad stock market index is down nearly 20% falling well below 4,000 points. In contrast, the gold market is roughly neutral on the year and is clearly the outperforming asset.

According to reports, investors are fleeing equities as inflation takes a bite out of corporate profits. At the same time, the Federal Reserve is looking to cool inflation by slowing down the economy through aggressive rate hikes.

"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," he said at a Wall Street Journal live event Tuesday. Read More

Real estate 'slowdown' starts in 2023; The Fed caused "housing inflation" - Danielle DiMartino Booth

The U.S. Federal Reserve is to blame for inflation and rising housing prices, said Danielle DiMartino Booth, CEO of Quill Intelligence, who said that 2023 is the year a housing crash could start.

Speaking to Michelle Makori, Editor-in-Chief of Kitco News at the Vancouver Resource Investment Conference, Booth, a former Fed insider, suggested that Powell could have tackled inflation sooner. Read More

Gold posts solid gains for the week as market participants focus on the economy

Gold prices closed higher on the day and the week resulting in solid gains. As of 5:50 PM, ET gold futures basis most active June contract is currently up $3.90 or 0.21% fixed at $1845.10. Considering that gold futures traded to a low this week of $1785 and closed near the highest value this week of $1848.60 gold had a good week.

Gold pricing had been under pressure for the fourth consecutive week before this week’s trading activity resulting in defined technical chart damage with gold breaking below its 200-day moving average last Thursday, May 12. This week’s low occurred on Monday, May 16 when gold prices hit a low of $1785, and traded to a high of $1825 before closing above its opening price on Monday and above Friday’s closing price at $1813.60. On Tuesday gold traded to a higher high and a higher low than Monday, even though gold closed fractionally lower than its opening price. On Wednesday gold traded to a lower low and a lower high than Tuesday’s price action but that all changed on Thursday.

Thursday’s price action moved gold solidly higher opening at $1816 and closing at $1841, above its 200-day moving average of $1837. Although today gold had only a small gain it opened and closed above its 200-day moving average which on a technical basis is significant. If gold can maintain pricing above $1837 on a technical basis, we can derive that gold prices are now back in a solid long-term bullish demeanor. Read More

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Markets at risk of ‘waterfall event’, this is how gold would perform – Lobo Tiggre

Lobo Tiggre, of The Independent Speculator, claimed that the market selloff is not yet over and that gold will do well in this environment. Tiggre spoke with David Lin, anchor, and producer at Kitco News. 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.