Today's Gold and Silver News - May 24th

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Silver Closes in on $22 as Investors Reconsider Value of Assets After Brutal Sell-Off

Silver is closing on $22 an ounce as asset classes readjust their levels after a series of sharp drops in recent weeks. 

While the sell-off saw global indices plunge, silver seemed to be meted out its own extra punishment by investors with the price slumping from close to $26 an ounce to below $21 an ounce in barely a month. Having been sold off so brutally, silver now has great potential to recover a considerable amount of territory during this readjustment phase.

Today the weaker US dollar, which silver is priced in, is helping the metal gain. Going forward silver can continue to benefit from a fresh appraisal of the global economic outlook which could boost silver’s industrial appeal.

While the gains for silver are likely to be capped by the prospect of the Federal Reserve administering interest rate hikes in both June and July, the fundamental outlook for silver still presents a strong enough case for the metal to gain back to levels seen in mid-April. Read More

Gold Climbs Above $1,850 on Weaker US Dollar, Readjustment of True Value of Assets

A weakening in the strength of the US dollar has given gold a slight boost at the start of a new week of trading, with the price now climbing above $1,850 an ounce. 

The dollar’s dip is the latest reaction as investors take the chance to fully assess the potential impact of the Federal Reserve’s tightening of monetary policy. Initially, inflation concerns and the withdrawal of stimulus hit equities, particularly growth stocks, hard with gold also dragged down in an environment where multiple interest rate hikes are anticipated.

Now, having had time to reflect on the broader economic outlook with no new major drivers in recent weeks, there has been an adjustment of prices across asset classes to better reflect their “true” value after a punishing couple of weeks. 

The economic outlook isn’t as bad as the brutal sell-off suggested so the week has started with dips for the dollar and gains for equities and gold. While today’s increase is welcomed by holders of gold, how much further the precious metal can climb is likely to be capped by the reality that central banks in both America and Europe are set on a course of interest rate hikes over the coming months. 

The readjustment illustrates the underlying support that remains for gold yet with the hawkish environment creating considerable resistance, the price is likely to remain around current levels for the time being. Read More

Gold price pushes to $1,850 as U.S. dollar drops 2% from 20-year peak

The gold market has regained another significant psychological level as prices push back above $1.850 an ounce. According to analysts, the precious metal is finding new bullish momentum as the U.S. dollar sees further selling pressure.

The U.S. dollar index has fallen to a one-month low of 102.15 and is down more than 2% after hitting a 20-year high two weeks ago. Meanwhile, the gold prices are up nearly 4% after bouncing off support below $1,800 an ounce last week. June gold futures last traded at $1,852 an ounce, up 0.51% on the day.

Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, noted the gold market has regained its technical bullish momentum as prices push back above their 200-day moving average. However, she added that investors need to continue to watch the U.S. dollar and bond yields.

"The recent retreat in the dollar and the U.S. yields are what support the higher valuation in gold since last week; therefore, any change of direction on the dollar and yields front could stop the rally," she said. Read More

'When people can see the end, gold typically starts ripping' - Sandstorm Gold CEO Nolan Watson

Gold is just getting started, said Sandstorm Gold Royalty CEO Nolan Watson.

On Wednesday Watson spoke to Kitco at the Vancouver Resource Investment Conference. Sandstorm Gold Royalty (TSX: SSL) is a precious metal streaming and royalty company.

In May Sandstorm announced it was acquiring Nomad Royalty, as well as nine royalties and one stream from BaseCore Metals, for total consideration of $1.1 billion. With the close of the transactions, Sandstorm said it is increasing its 2022 production guidance to between 80,000 and 85,000 gold equivalent ounces and to 155,000 gold equivalent ounces by 2025. Read More

Royal Mint Physical Gold ETC sees investment demand grow 115% so far this year

The gold market may have seen some turbulent months as prices have fallen sharply from $2,000; however, investment demand for gold has remained strong as the Royal Mint sees strong demand for its gold-backed Exchange-Traded Commodity (ETC).

In a report published last week, HANetf, said its Royal Mint Physical Gold ETC (RMAU) exceeded $600 million in assets under management as of April 29, a 115% increase year-to-date.
The ETC has seen its gold holding increase by 169,392.822 this year.

Analysts have noted that the gold market has seen strong investment demand through 2022, driven by rising inflation pressures, and geopolitical uncertainty due to Russia's ongoing war in Ukraine. The invasion has particularly impacted Europe as disruptions in the global supply chain have pushed food and energy prices to record highs. Rising inflation has threatened to push Europe into a recession, according to some economists.

"Gold has clearly become more appealing in recent months given the economic and geopolitical backdrop," said Hector McNeil, co-CEO of HANetf, in a statement to Kitco News. Read More

Gold, silver up as U.S. dollar index sharply down

Gold and silver prices are higher in midday U.S. trading Monday, but well down from their earlier session highs as the U.S. stock market is rallying. The metals are being supported by the sharp losses in the U.S. dollar index that hit a four-week low today. Some safe-haven demand is also featured early this week amid an overall marketplace that still shows risk appetite far from robust. June gold futures were last up $7.00 at $1,849.00. July Comex silver futures were last up $0.071 at $21.74 an ounce.

Image Source: Kitco News

Technically, June gold futures prices hit a two-week high early on today. A 2.5-month-old price downtrend is still in place on the daily bar chart. Bears have the overall near-term technical advantage. However, more price gains this week would likely negate the downtrend. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,785.00. First resistance is seen at today’s high of $1,864.30 and then at $1,875.00. First support is seen at today’s low of $1,843.30 and then at Friday’s low of $1,830.60. Wyckoff's Market Rating: 4.0.

Image Source: Kitco News

July silver futures see a price downtrend still in place on the daily bar chart. However, more price gains this week would likely negate the downtrend. The silver bears have the 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 the May low of $20.42. First resistance is seen at today’s high of $22.205 and then at $22.50. Next support is seen at $21.25 and then at $21.00. Wyckoff's Market Rating: 3.0. Read More

'I am basically exiting the junior resource space. I am very bearish.' - Mickey Fulp

Last year was most likely the height of gold miner prosperity, said mining analyst Mickey Fulp, who doubts that a period with high gold prices married with lost energy costs will ever reoccur.

On Tuesday Fulp, who runs the Mercenary Geologist, spoke to Kitco at the Vancouver Resource Investment Conference.

Fulp warns that oil prices are high and will remain high. Oil is going to be a key energy source for a long time to come, said Fulp. Read More

Recession is coming, inflation will melt by 2023, why David Rosenberg says farmland is the asset to buy

David Rosenberg, Chief Economist and Founder of Rosenberg Research, predicts a recession this year. He is also optimistic that the Federal Reserve can fight inflation by 2023.

Rosenberg spoke with Michelle Makori, Editor-in-Chief and lead anchor at Kitco News, at the Vancouver Resource Investment Conference.

The Federal Reserve recently raised interest rates, and Fed Chairman Jerome Powell has heightened his hawkish rhetoric. Rosenberg said this is too little, too late. A “soft landing” is not possible, and the Fed may cause a recession. Read More

Hedge funds continue to sell gold but sentiment is shifting

 The latest data from the Commodity Future Trading Commission (CFTC) shows that hedge funds continue to reduce their bullish exposure to gold; however, analysts have noted a shift in sentiment as prices have bounced off support below $1,800 an ounce.

In an interview with Kitco News, Peter Grosskopf, CEO of Sprott Inc, said that gold is due for a bounce higher in the near-term as bearish sentiment move close to extreme levels.

"Gold was getting pretty washed out, so I am comfortable saying that price should go higher as sentiment turns bullish," he said. "Gold continues to do its job and is once again an important risk-off asset."

The CFTC disaggregated Commitments of Traders report for the week ending May 10 showed money managers lowered their speculative gross long positions in Comex gold futures by 8,359 contracts to 123,931. At the same time, short positions rose by 10,273 contracts to 72,212.

Gold's net length now stands at 43,360 contracts, down 30% from the previous week. Gold's net length fell to an eight-month low. During the survey period, gold prices dropped to a four-month low of $1,785 before rebounding higher. Read More

Extreme dollar weakness today overcomes selling pressure in gold

103.80 was and continues to remain an important price level of technical resistance for the U.S. dollar index. The dollar index has flirted with this price point on three occasions, first occurring at the end of 2016 and then again during the first quarter of 2017.

According to Investopedia, the U.S. dollar index (USDX) measures the value of the U.S. dollar relative to a basket of foreign currencies. The USDX was established by the Federal Reserve in 1973 after the dissolution of the Bretton Woods agreement. The index measures dollar strength or weakness against six primary currencies and was updated in 1999.

Image Source: Kitco News

The chart above is a weekly Japanese candlestick chart of the dollar index. It begins at the end of 2016, with the dollar rising to a high just shy of 103.80. This is the first occurrence of dollar strength resulting in the index trading over 100 since the end of 2002. 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.