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Gold on the back foot as markets await central banks' inflation response
Dollar dips from 16-month highs as rally takes a pause
* Gold could trade in $1,850-$1,875 range in near term-analyst
* Silver demand could rise this year-Silver Institute
Nov 18 (Reuters) - Gold prices edged lower on Thursday as investors remained torn over how fast the U.S. Federal Reserve will taper its monetary stimulus and raise interest rates after the recent strong inflation data out of the United States.
Spot gold was down 0.2% at $1,863.70 per ounce by 1226 GMT, while U.S. gold futures eased 0.2% to $1,866.10.
The U.S. dollar paused for breath, slipping back from a 16-month peak as traders assessed whether its recent surge was starting to stall. A weaker dollar makes gold more attractive for buyers holding other currencies. Read More
Commerzbank: Physical silver supply shortage
Commerzbank commodities analyst Daniel Briesemann has picked up a narrative that some had been wondering about since the whole meme stock fiasco. The Reddit trading group did start to look at silver ETF's thinking that the silver market was dangerous under-supplied. Briesemann noted that the Silver Institute noted there is a supply deficit and he explains more in his latest report.
Breisemann noted "The Silver Institute published an interim report of the situation on the global silver market yesterday afternoon. Apparently, the physical market is set to show a supply deficit (of 7 million ounces) again this year for the first time since 2015. Overall demand for silver is expected to grow by 15% to 1.29 billion ounces, its highest level in six years, with all demand components contributing." Read More
Gold rises from daily lows as U.S. weekly jobless claims come in at 268,000
The initial weekly jobless claims declined by 1,000 to 268,000 in the week to Saturday, slightly disappointing market expectations but still marking a new pandemic low.
Economists’ consensus calls projected for initial claims to come in at 260,000 following the revised level of 269,000 reported in the previous week.
Gold rose from daily lows following the data release, with December Comex gold futures last trading at $1,867.30, down 0.16% on the day. Earlier in the session, gold hit a low of $1,856.60 an ounce. Read More
Gold price has room to run to $1,900; but it’s better to own miners than the metal – CIBC
The gold market is in a sweet spot and has the potential to hit $1,950 an ounce as inflation pressures continue to build, according to analysts at CIBC.
Not only has the gold market broken out of a five-month consolidation pattern, but the analysts noted that the precious metal is entering a seasonally strong period, which runs from November through February. The analysts pointed out that the new momentum in gold also points to improving sentiment in the mining equities.
"Gold sector breadth has notably improved with over 90% of its constituents showing a +12% median gain over the 50-day average, along with 68% of the sector that is showing a median gain of +5% over the 200-d average. The combination of a higher breadth number and bigger gains over key technical averages is often a good recipe for stronger uptrend forces," the analysts said. Read More
Gold, silver pull back on normal profit-taking
Gold and silver prices are moderately lower in midday U.S. trading Thursday, on routine downside corrections and light profit-taking from the shorter-term futures traders. December gold was last down $7.70 at $1,862.50 and December Comex silver was last down $0.212 at $24.955 an ounce. Read More
Gold prices would be doing better in current environment if it wasn’t for cryptocurrencies – Credit Suisse
The gold market continues to trade near a five-month high and despite its recent breakout rally, one international bank said that current prices are still disappointing.
In a report published Thursday, analysts at Credit Suisse said they were lowering their 2022 price forecast for the precious metal. The Swiss bank sees gold prices averaging next year around $1,850 an ounce, down 2.6% from their previous forecast of $1,900 an ounce.
Analysts Fahad Tariq and Jessica Xu, authors of the latest report, said that there is a disconnect between gold prices and bond yields.
“The 10Y U.S. TIPS yield (i.e. real rate) remains deeply negative at - 1.10% at the time of this writing,” the analysts said. “Based on our two-factor model - TIPS yield and USD index - the implied gold price is ~$1,910/oz vs. ~$1,863/oz spot.” Read More
Gold has gained over $100 in November but now has entered a period of price consolidation
Since November 11 gold began to consolidate after completing the current leg of the most recent rally that began on November 4. The rally started one day after the conclusion of the November FOMC meeting. They announced that they would begin to taper their $120 billion asset accumulation later in the month. They announced that they would have a monthly reduction totaling $15 billion and continue the reduction until they are at a net-zero. Concurrently they indicated in unison with the ECB and Bank of England to keep interest rates extremely accommodative. Read More
Fed's policy stance to push gold price down over the next few years, says Capital Economics
Despite worrying inflation levels, gold is not likely to surge over the next few years as the U.S. Federal Reserve begins to tighten its monetary policy stance, according to a report by Capital Economics.
"While our forecast that high inflation in the U.S. will be more persistent than the markets expect should ultimately mean that investors demand higher inflation compensation, we also believe that a modest tightening of the Fed's monetary policy stance will drag real Treasury yields a bit higher. That should be enough to cause the gold price to fall over the next few years," said Capital Economics assistant economist Kieran Tompkins. Read More
Don't invest in gold until you understand these fundamentals - Gary Wagner gives price targets
This upcoming Thanksgiving will be the most expensive ever, and inflation will continue to be a serious concern for investors, said Gary Wagner, editor of TheGoldForecast.com who advocates that gold is still the ultimate store of wealth.
On a technical basis, gold is still in its consolidating phase, Wagner told David Lin, anchor for Kitco News. Read More
Gold is trading flat leading into the European open
Gold is flat heading into the European session. The yellow metal will start the day trading at $1858/oz. Silver has moved 0.30% higher and trades at $24.85/oz. In the rest of the commodities complex, copper has risen 1.91% and spot WTI has moved 0.39% higher. 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.
