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Gold & Silver Market Analysis for Wednesday 13th October
Kinesis Money Macroeconomic Analysis
Today’s economic calendar is relatively busy, with significant macroeconomic data to consider from several countries.
Starting with the US, it’s important to first observe the US CPI and the minutes of the last Federal Open Market Committee (FOMC) meeting. The CPI, an acronym for the Consumer Price Index, will enlighten investors about the recent pressure of inflation on the economic system.
Any data above the forecast of 0.2% could be a driver that prompts the Federal Reserve to act rapidly with the beginning of tapering.
Alternatively, data below what was expected could cause increasing uncertainty about the timing of the Fed’s next movements. It should be noted that recent US labour data (nonfarm payrolls) already deviated from those expectations. Read More
Gold price sees $20 swings as inflation accelerates slightly in September
The U.S. inflation data accelerated slightly more than expected in September, with the U.S. Consumer Price Index rising 0.4% after August's advance of 0.3%, the U.S. Labor Department said.
Consensus forecasts were calling for a rise of 0.3%.
Annualized inflation was at 5.4% versus the projected 5.3%. September's increase matched the largest annual price gain since 2008. This comes after August's 5.3% advance.
Monthly core inflation, which strips out volatile food and energy costs, came in as expected, up 0.2% in September, following a 0.1% advance in August. Annualized core inflation also met expectations, coming in at 4% after registering the same advance during the previous month. Read More
Fed lays out plan to reduce bond purchases, flags inflation worries
The Federal Reserve signaled on Wednesday it could start reducing its crisis-era support for the U.S. economy by the middle of next month, with a growing number of its policymakers worried that high inflation could persist longer than previously thought.
Though no decision on a "taper" of the U.S. central bank's $120 billion in monthly asset purchases was reached at its Sept. 21-22 policy meeting, "participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate," according to the minutes of that meeting. Read More
Potential looming energy crisis could derail economy
Oil prices have surged this year, up more than 60 percent in 2021. For the first time since 2014, oil is trading at more than $80 a barrel. It's possible that oil prices could top $100 a barrel, John Burnett, Founder of 1 Empire Group said.
Speaking in a panel along with Michele Schneider, Managing Director of the Marketgauge Group hosted by Michelle Makori, Lead Anchor and Editor-in-Chief of Kitco News, both Burnett and Schneider agreed that the energy sector is poised for further growth. Read More
Gold price powers to 4-week high on chart-based buying, weaker greenback
Gold and silver prices are posting strong gains in midday U.S. trading Wednesday, with both metals hitting four-week highs. Buy stop orders were hit in the futures markets for the metals after key technical resistance levels were penetrated on the upside. A sell-off in the U.S. dollar index today also worked in favor of the precious metals market bulls. December gold futures were last up $35.90 at $1,795.00. December Comex silver was last up $0.646 at $23.16 an ounce. Read More
'This is a game-changer for gold': Shift in Fed's rate hike expectations take gold price towards $1,800
The new U.S. inflation data release has triggered a rollercoaster ride in gold, with the latest move taking the precious metal nearly $40 higher on the day.
September's inflation numbers showed price pressures accelerating to 5.4% annually, slightly more than the market was expecting.
"We are starting to see the market growing nervous about the U.S. consumer. After digesting this report, it shows that the market is now anticipating sooner rate hikes. At the same time, we see the yield curve flattening, and that is good news for gold," OANDA senior market analyst Edward Moya told Kitco News. "Gold is entering a period where risks now outweigh the reopening trade, and we'll see more safe-haven flows into gold. This is a major reversal of trends and very positive for gold." Read More
Weak economy, contracting production plus strong demand could push silver price to $40 by mid-2022
The price of silver could possibly surge to $40 an ounce by mid-2022, James Anderson, CEO and Chairman of Guanajuato Silver Company predicts. But Silver has continued to underperform 2021 estimates, currently hovering at about $23 an ounce.
Anderson explained why he is so bullish on silver. "If we have a weak economy coupled with a drive towards needing and using more silver, you're going to have base metal mines shutting down that produce silver as a by-product, just as an enormous demand for silver comes to the fore," he said. "In that environment, you could easily see silver go to the $40 price range. But it is more likely we will see silver at $30 before it hits $40. I can see it hitting $40 halfway through next year." Read More
Inflationary data suggests the Fed is now stuck between a rock and a hard place
The government released the inflationary report for September today vis-à-vis the CPI (Consumer Price Index), which showed that inflation continues to increase. In July of this year, the consumer price index reached an apex of 5.4% and then decreased to 5.3% in August. Today's report shows that inflationary pressure is now back to 5.4% year over year. Estimates by economists polled by Dow Jones were forecasting that this rate would increase only by 0.3% keeping the year-over-year rate at 5.3% Read More
Inflation returns to 13-year high, stocks overdue for ‘fairly significant drawdown’ - Ted Oakley
Headline CPI inflation is now back at 5.4%, up from 5.3% in August, according to data released Wednesday.
Ted Oakley, founder, and partner of Oxbow Advisors, told David Lin, anchor, for Kitco News, that a diversity of hard assets is required to properly hedge against higher consumer prices. Read More
Gold and silver consolidate in the Asia-Pac session after rising on Wednesday
After a decent session on Wednesday gold has stalled just ahead of $1800/oz to trade at $1792/oz. Silver has broken the psychological $23.00/oz level but trades flat leading into the EU open. Elsewhere in the commodities complex, copper is 1.83% higher and spot WTI has risen 0.70%. 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 other advice.
