Today's Gold and Silver News - May 31st

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If gold is not the best inflation hedge, then what is? Nancy Davis

Gold and oil are not ideal investments for those seeking inflation hedging, according to Nancy Davis, Founder and Managing Partner of Quadratic Capital Management. Davis spoke with David Lin, Anchor and Producer at Kitco News. Read More

Australian gold production falls in Q1

Australia’s gold production declined by 6% in the March quarter to 76 t compared with 81 t produced in the December quarter 2021, according to mining consultants Surbiton Associates reported this week.

It was said that the decline was partly owing to the effects of Covid-19 which restricted some operations, particularly in Western Australia, the nation’s largest gold-producing state, and also owing to considerable wet weather in several regions.

The consultants said “The disruption to production was not uniform. Some operations were hit really hard while others were barely affected, both in regard to Covid-19 and also to bad weather, which is often a problem in the March quarter,” said Surbiton director Dr. Sandra Close.

Close commented that the gold sector had done a remarkable job to keep up production but that now the impact of the virus has become widespread. Western Australia’s borders were finally re-opened on March 3 this year, having been closed to everyone, including fly-in fly-out workers, for 697 days. Read More

The gold price has an intraday resistance to break

Looking closer at the technicals on the 4-hour chart, the price has now developed a resistance at the $1867.8/oz area. This is the resistance to watch on the intraday charts. If the price does break that zone then the next level to watch on the upside is the psychological $1900/oz area.

If the resistance does hold then the short-term consolidation low at $1840/oz could be used again. The main area of support on the chart is the blue shaded area where the previous VPOC is marked.

From a Fibonacci perspective, the 0.382% retracement zone has been strong. If this breaks there is more resistance at 0.50% and that level confluences with the aforementioned $1900/oz area. For now, the bulls are in charge but it is not clear if this is a change in trend back to the upside or just a retracement. A break of $1900/oz could give us some more clues. Read More

Image Source: Kitco News

Gold prices stuck in no-mans land holding support at $1,850 on quiet U.S. holiday

Gold prices have dropped from their overnight highs but continue to hold support above $1,850 an ounce; Commodity analysts note that the market generally lacks conviction in any direction as U.S. markets are closed for the Memorial Day long weekend.

Spot gold prices are trading in neutral territory Monday morning, last trading around $1,856 an ounce.

Image Source: Kitco News

Analysts note that the precious metal is trading in the middle of its broader long-term range. Although gold prices continue to benefit from a weaker U.S. dollar, rising risk sentiment, helping to boost equity markets, is taking some shine off the yellow metal's safe-haven allure.

However, some analysts have said that the jump in the S&P 500 last week was a classic bear market. Analysts have said that rising fears of an impending recession will continue to weigh on equity markets.

"There could still be more pain to come," said Craig Erlam, Senior European Market Analyst at OANDA. "But at these levels, it's only natural that the vultures are circling. There isn't a huge amount to be excited about on inflation, interest rates and the economy but that doesn't mean there isn't value out there." Read More

Tennessee removes sales tax on gold and silver, only eight states to go

Gold and silver made another important step to becoming legal tender in the United States. Ahead of the Memorial Day long weekend, Tennessee Governor William Lee signed into law House Bill 1874, removing sales taxes on gold, silver, and platinum bullion coins.

Tennessee becomes the 42nd to pass laws that will make gold and silver hard currencies.

"The victory puts a capstone on long-running efforts by the Sound Money Defense League, Money Metals Exchange, Campaign for Liberty, and grassroots activists and coin dealers in Tennessee. Tennessee investors, savers, and small businesses can now acquire gold, silver, platinum, and palladium bullion and coins without being slapped with taxes as high as 10%, depending on the purchaser's specific location," the Sound Money Defense League, a national organization dedicated to making precious metals recognized money in the U.S. Read More

Hedge funds turn bullish on gold but remain heavily bearish on silver

Hedge funds have been quick to take profits and cover their short positions in the gold market as the U.S. dollar appears to have topped out after hitting a 20-year high.

Not only did a weaker U.S. dollar help to shift sentiment in the gold market, but falling bond yields, as recession fears grow, have also supported the precious metal, according to some analysts.

"The DXY index dropped 1.45%, the largest such weekly drop since July 2020, making the yellow metal more appealing. 10-year real rates slightly decreased by 6bp, decreasing the opportunity cost to hold non-yielding assets such as gold," said commodity analysts at Société Générale in a note Monday.

The French bank noted that the gold market saw $3.3 billion in bullish flows last week.

The CFTC disaggregated Commitments of Traders report for the week ending May 24 showed money managers increased their speculative gross long positions in Comex gold futures by 5,602 contracts to 121,174. At the same time, short positions fell by 12,095 contracts to 60,117.

Gold's net length now stands at 61,057 contracts, up nearly 41% from the previous week. The shift in speculative interest ended a five-week increase in bearish positioning. During the survey period, gold prices managed to push back above $1,850 an ounce, but prices have stalled since last week's move.

Some analysts have said that gold's recent price action is not surprising; it was technically oversold after falling below $1,800 an ounce in mid-May. Read More

Gold and silver trade marginally lower ahead of the European open

Gold (-0.09%) and silver (-0.29%) both trade marginally lower heading into the European open. In the rest of the commodities complex, copper has risen 0.28% while spot WTI has moved another 1.29% higher to trade at $119.15/bbl.

In the risk markets, there was a distinct lack of direction. The Nikkei 225 (-0.33%) and ASX (-1.03%) both closed lower, while the Shanghai Composite moved 1.18% in the black. Futures in Europe are indicating there will be a slightly negative cash open. 

In FX markets, GBP/USD was the biggest loser overnight after the pair fell 0.42%. In the crypto space, BTC/USD trades at $31,534. 

News from overnight: Read More

Why The Western Economy Can’t Survive. Feat. Bill Holter

In this week’s Live from the Vault, iconic financial commentator and life-long stockbroker, Bill Holter, joins Andrew Maguire to share his eye-opening examination of the West’s insurmountable debt.

As the Fed’s money-printing tactics start to closely resemble a Ponzi scheme, the precious metals expert explains, with mathematical certainty, why the current system is destined for bankruptcy.

Disclaimer: This video is provided for informational purposes only and not offered or intended to be used as legal, tax, investment, financial, or any other advice.