x
Image Source: Unsplash
Food shortage is next, inflation to go to 'the moon,' gold will rebound - Todd Horwitz
"We are probably going to have a food shortage next year based on what's going on with Russia and Ukraine, because those two countries supply 30% of the wheat crop," predicted Todd 'Bubba' Horwitz, Chief Market Strategist at BubbaTrading.com. "Mother nature is not cooperating in the United States, following Australia and Brazil both having bad planting seasons. Inflation is going to the moon; we are only in the early stages of it."
Horwitz discussed inflation and the gold market with David Lin, Anchor at Kitco News. Read More
Gold can't catch a break as prices down nearly 3% even after disappointing U.S. ISM data
Disappointing manufacturing data is not providing any bullish momentum for the gold market as it continues to be hit with massive selling pressure.
Monday, the Institute for Supply Management (ISM). said its manufacturing index showed a reading of 55.4% for April, down from March’s reading of 57.1%. The data was weaker than expected, as consensus forecasts were calling for a reading of around 57.5%.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
Although the manufacturing sector continues to expand, the report noted that this is the lowest reading since July 2020.
The gold market is ignoring the latest economic data as technical selling momentum dominates market sentiment, according to some analysts. June gold futures last traded at $1,859.90 an ounce, down 2.71% on the day. Read More
Gold silver prices down more than 2% as perfect storm hits commodity markets
A perfect storm of market volatility, rising bond yields, and a strong U.S. dollar have hit the precious metal market, propelling gold and silver prices sharply lower.
Some analysts have noted that gold's inability to break above $1,920 an ounce Friday has significantly shifted sentiment to the bearish side at the start of the trading week. However, analysts also note that silver is leading the way on the downside after support at $23 an ounce broke overnight. July silver futures last traded at $22.57.0 an ounce, down nearly 2.21% on the day. Earlier in the session silver was down roughly 4%.
Meanwhile, gold last traded at $1,863.10 an ounce, down 2.5% on the day.
"Everything is just happening all at once and working against gold and silver," said Phillip Streible, chief market strategist at Blue Line Futures.
Streible noted that the first domino to fall in the commodity market was copper following disappointing manufacturing data from China. Weakness in copper hit silver's industrial component when then dragged down gold. Read More
Gold, silver smacked by strong USDX, rising bond yields, technical selling
Gold and silver prices are sharply lower in midday U.S. Trading Monday, with both scoring 2.5-month lows. The precious metals are getting hit early this week by the bearish outside market forces of a strong U.S. dollar index that is near a 20-year high, higher U.S. Treasury yields, and chart-based selling pressure as the near-term technical have eroded significantly the past two weeks. June gold futures were last down $42.50 at $1,869.40 and May Comex silver was last down $0.42 at $22.62 an ounce.
The economic data point of the week in the U.S. Federal Reserve Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise the key U.S. interest rate by 0.5%, amid the highest inflation levels in 40 years. The monthly U.S. jobs report is also due out Friday morning.
Image Source: Kitco News
Technically, June gold futures prices hit a 2.5-month low today. A price downtrend is in place on the daily bar chart. Bears have the overall near-term technical advantage and gained more power today. Bulls' next upside price objective is to produce a close above solid resistance at last week’s high of $1,935.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,883.00 and then at $1,900.00. First support is seen at today’s low of $1,853.40 and then at $1,800.00. Wyckoff's Market Rating: 4.0
Image Source: Kitco News
May silver futures prices hit a nearly three-month low today. A steep price downtrend is in place on the daily bar chart. The silver bears have a solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the December low of $21.445. First resistance is seen at today’s high of $22.83 and then at $23.00. Next support is seen at today’s low of $22.12 and then at $22.00. Wyckoff's Market Rating: 2.5. Read More
Hedge funds drop their bullish gold and silver bets ahead of Fed meeting - CFTC
The Federal Reserve's impending interest rate hike, which has driven the U.S. dollar to a nearly 20-year high is prompting gold investors to reduce their bullish positioning, according to the latest trade data from the Commodity Futures Trading Commission.
Analysts have noted that the Federal Reserve's plan to aggressively tight its monetary policy to address the growing inflation threat is a significant headwind for gold. Not only is the U.S. dollar hitting long-term resistance levels, but bond yields have pushed to within striking distance of 3%, the highest level since 2018.
However, many analysts have also noted that gold has historically hit a long-term low ahead of a new hiking cycle.
Ole Hansen, head of commodity strategy at Saxo Bank, described gold's current price action as a "dangerous market."
"Gold investors just need to get past Wednesday's FOMC meeting to find some new momentum," he said. Read More
On the heels of tomorrow's FOMC meeting gold prices plunge
Gold futures had a virtual meltdown today with the most active June 2022 contract declining by 2.54%. As of 5:11 PM EDT, the June contract is down by $48.50 and fixed at $1863.20. Concurrently both the dollar and U.S. debt yields increased dramatically. The dollar index moved back to recent highs and is currently fixed at 103.625 after factoring in today's gain of 0.662 points or 0.64%.
Image Source: Kitco News
The U.S. 10-year Treasury note hit a milestone yielding 3%, the first occurrence of yields at this level since 2018. The 10-year note slipped below today's high and by settlement was yielding 2.995%. The short-term two-year government bond gained 1.2 basis points with its current yield at 2.73%.
According to the Wall Street Journal, "the labor market is extremely tight and inflation is running at its fastest pace in decades, prompting the Fed to signal a rapid series of interest-rate increases and sparking a steep climb in yields that has sent shock waves through markets." Read More
Gold is 'the most confusing' of all commodities right now, here's why
Gold is abandoning its usual drivers and is focusing solely on the U.S. dollar, with prices tumbling around $50 on the day at the start of May trading. But the "unloved" metal could surprise the markets with a $2,100 year-end price target as investors shift their asset allocations, Wells Fargo's head of real asset strategy John LaForge told Kitco News.
The way gold behaved this year has surprised many investors, especially when the precious metal chose to ignore the risk-on/risk-off sentiment in the marketplace.
LaForge described gold's trading action as "the most confusing of all the commodities."
His comments come as gold dropped around $50 on the day, with June Comex gold futures last trading at $1,862.60, down 2.57% on the day.
"It doesn't seem to want to react to anything outside the U.S. dollar and that's been going on for a solid year and a half," LaForge said. "The bad news is bad news and the good news is bad news. It doesn't seem to matter. Gold reached a point where people just don't love it no matter what the fundamentals are. They'd rather go play and do other things. Bitcoin could be one of them. This period doesn't have to last, but that's where gold is today, which makes these things hard to explain." Read More
.png)
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.
