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Gold Price News: Gold Finds Plenty of Support Amid US Debt Ceiling Talks
Although gold has fallen back from the near record high it surged to earlier in the month, it remains at a level that the precious metal has only traded at a smattering of times in its long history as market confidence remains fragile and investors are seeking gold to manage their risk.
With the biggest headwind of the last year, the Federal Reserve’s consistent hiking of interest rates, seemingly drawing to a close and a trading environment that is still risk averse, gold has found significant support a little below the psychologically important threshold of $2,000 an ounce. While a fresh push above $2,000 looks unlikely, assuming the US debt ceiling talks do reach an agreement, gold looks well supported and looks set to continue trading comfortably above $1,950 in the medium term. Read More
Silver Price News: Silver Drifts Sideways Awaiting Fresh Catalyst
Silver is struggling to find its identity in the current macroeconomic environment, with investors trying to determine if it is an industrial metal threatened by the prospect of the US defaulting on its debt and with countries around the world still grappling with high inflation that could tip their economies into recession. Or is it a safe haven asset, like its precious metal peer gold, that can offer some protection to portfolios given the level of uncertainty and fragile market confidence?
The truth as ever is somewhere in between and it is these pull and push factors (as well as its smaller market size) that can lead to silver’s more volatile ride than gold.
The fundamentals remain strong for silver with the metal a key component of the dominant industrial theme, the energy transition, and set for another year in which demand outstrips supply. Yet despite this buoyant outlook, the price is effectively flat on the year having lost all its gains made earlier in the month. Read More
'Gold is the best hedge': The catalyst to take gold price higher is debt ceiling debate, says RBC
Even though much attention is being given to whether the Federal Reserve will pause in June, the debt ceiling debate is the primary near-term catalyst that could move prices higher, said RBC.
"It is indeed monetary policy and the path of the Fed that will determine the medium- and long-term price outcomes for gold, but heightening anxiety about the debt ceiling is the near-term catalyst to watch," RBC Capital Markets senior associate Allison Enck said in a note.
Aside from the debt cap issue, gold is likely to remain range-bound. "The main near-term potential catalyst for a move higher lies in the debt ceiling debate," Enck said. "Even assuming a deal is eventually reached, we wouldn't disregard potential growing financial angst as the deadline approaches."
Gold would move higher because it is one of the few assets to see additional flows as investors look for a hedge.
"While an eventual resolution would mean such flows are short-lived (and may eventually normalize closer to our high scenario at least), in the near term, we believe gold looks like the best hedge in the more immediate offing," Enck noted. Read More
Gold price could 'easily' regain $2k next week as more debt ceiling troubles ahead - analysts
Even though gold is wrapping up the week down $30 — its worst performance since February — the Friday afternoon rebound keeps the bullish gold trend alive.
The gold market recovered after Federal Reserve Chair Jerome Powell said rates might not have to rise as much due to tighter credit conditions after the banking sector turmoil.
"The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation," Powell said at the Thomas Laubach Research Conference Friday. "So, as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals. Of course, the extent of that is highly uncertain." Read More
Gold, silver pressured by bearish charts, outside markets
Gold and silver prices are moderately lower in midday U.S. trading Monday. The two markets are seeing pressure on chart-based selling as their near-term technical postures have deteriorated recently. A higher U.S. dollar index and a rise in U.S. Treasury yields to start the trading week are also bearish for the precious metals. June gold was last down $7.80 at $1,973.90 and July silver was down $0.27 at $23.79.
There was some more "Fed speak" from a Federal Reserve official today. Minneapolis Fed President Neel Kashkari said on CNBC that the U.S. central bank is determined to bring inflation down to around 2% annually. However, he said he was unsure if the Fed would raise interest rates at its next FOMC meeting in June. All in all, it appears Fed officials, including Chairman Jay Powell, are not quite ready to back off on U.S. monetary policy tightening. If the Fed does not raise rates next month, many are prepared to call it a "hawkish pause." The Fed's still-hawkish lean has been bearish for gold and silver and bullish for the U.S. dollar.
Technically, June gold futures bulls still have the overall near-term technical advantage but are fading. Prices are now in a fledgling downtrend on the daily bar chart, to suggest a near-term market top is in place. Bulls' next upside price objective is to produce a close above solid resistance at $2,025.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,988.80 and then at $2,000.00. First support is seen at the May low of $1,954.40 and then at $1,950.00. Wyckoff's Market Rating: 6.0.
Image Source: Kitco News
July silver futures bears have the slight overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at last week's high of $24.395. Next support is seen at the May low of $23.485 and then at $23.00. Wyckoff's Market Rating: 4.5. Read More
Image Source: Kitco News
Poland boosts its gold reserves by 15 tonnes, biggest increase in nearly 3 years
Polish central bank bought 14.8 tonnes of gold in April, which was the biggest purchase since June 2019.
According to the National Bank of Poland, the country's gold reserves rose to 7.828 million fine troy ounces (243.5 metric tonnes) last month from 7.352 million. This was the largest increase since June 2019, when Poland's reserves rose by 94.9 tonnes.
The value of gold, including gold deposits and gold swaps, climbed to $15.52 billion in April from $14.55 billion.
The April purchase also comes after the Bank's Governor Adam Glapinski's said in 2021 that Poland was planning to add 100 tonnes to its gold holdings to prepare for "the most unfavourable circumstances."
"Why does the central bank own gold? Because gold will retain its value even when someone cuts off the power to the global financial system," Glapinski told local newspaper. "Of course, we do not assume that this will happen. But as the saying goes - forewarned is always insured. And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process." Read More
Debt-ceiling talks between Biden and McCarthy to resume at 5:30 EDT
The latest round of debt-ceiling talks between the President and House Speaker will begin tonight at 5:30 PM EDT. While both sides have presented optimism on passing legislation that would temporarily suspend, or raise the debt limit ceiling, the Democrats and Republicans are still far apart.
Comments by the House Speaker today emphatically stated that "nothing is agreed to and there are still a lot of obstacles for a deal." This after a phone call between the president aboard Air Force One and McCarthy Sunday evening was "productive" according to McCarthy. President Biden held a news conference in Hiroshima where he criticized the legislation proposed by the house saying that he could not promise fellow world leaders that the United States would not default.
On Sunday President Biden said that he believes he has the authority to invoke the 14th amendment as a potential solution if the negotiations continue to result in a stalemate. However, the U.S. Treasury Secretary, Janet Yellen believes that the 14th Amendment is not a viable option as it cannot "be used appropriately in these circumstances, given the legal uncertainty surrounding it and given the tight deadline in which we find ourselves".
In an interview on Sunday with NBC Janet Yellen again had a strong warning about what was at stake if the two sides aren't able to reach a resolution and raise or suspend the debt ceiling.
"I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven't changed my assessment. So I think that that's a hard deadline," Read More
Live From The Vault - Episode:123. Rehypothecated Gold HELL!
In this week’s Live from the Vault, Andrew Maguire brings us up to date on the escalating battle between physical and paper gold, the current price dip, and how the trapped Federal Reserve might be able to get out of its predicament...
The precious metals expert also talks about the possibility of an upcoming US debt default, how the re-evaluation of gold could affect silver, and reports on China’s quiet decision to make gold more accessible for their nearly 1.5 billion citizens.
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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.
