Stronger U.S. jobs data pressure gold, silver

Gold and silver prices are lower in midday U.S. trading Thursday, following a much stronger-than-expected U.S. ADP employment report this morning that showed a gain in jobs that was double market expectations. The report pushed the U.S. dollar index well off its overnight low and also pushed U.S. Treasury yields higher. August gold was last down $10.50 at $1,916.70 and September silver was down $0.497 at $22.905.

The June U.S. ADP report showed a rise of 497,000 jobs, compared to market expectations for a gain of 220,000. That data falls into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve continue to raise interest rates. Now comes the U.S. employment situation report from the Labor Department Friday morning. The key non-farm payrolls number was forecast up 240,000 versus a gain of 339,000 in the May report. However, today''s strong ADP jobs number has many thinking Friday''s Labor Department jobs report will also be stronger.

The latest FOMC minutes from the Federal Reserve were released Wednesday afternoon and they also leaned hawkish. The minutes from the June 13-14 meeting showed that while almost all Fed officials deemed it "appropriate and acceptable" to keep the key Fed funds rate unchanged at a 5.0-5.25% range, some would have supported a 0.25% increase, according to a Bloomberg report. The minutes also said "almost all" FOMC members agreed that further tightening of U.S. monetary policy will be needed this year. The gold and silver markets did not react strongly to the minutes.

All of the above have likely now moved the needle over to high odds that the Federal Reserve will raise interest rates at its July FOMC meeting, after pausing at the June meeting.

  Looking past Turkey's gold sales, central banks continued to buy gold in May

Asian and European stock markets were mostly lower in overnight trading. U.S. stock indexes are solidly lower at midday.

The key outside markets today see the U.S. dollar index modestly lower but up from overnight lows. Nymex crude oil prices are slightly down and trading around $71.25 a barrel. The benchmark 10-year U.S. Treasury note yield is rising and presently fetching 4.067% and at the highest level since March.

Technically, August gold futures bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls'' next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today''s high of $1,934.00 and then at this week''s high of $1,942.90. First support is seen at today''s low of $1,908.50 and then at $1,900.00. Wyckoff's Market Rating: 3.5

September silver futures bears have the overall near-term technical advantage. A choppy, two-month-old price downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at the March low of $20.425. First resistance is seen at $23.25 and then at this week''s high of $23.535. Next support is seen at today''s low of $22.72 and then at last week''s low of $22.485. Wyckoff's Market Rating: 3.5.

September N.Y. copper closed down 305 points at 373.80 cents today. Prices closed nearer the session low. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen at today''s high of 377.60 cents and then at this week''s high of 380.95 cents. First support is seen at today''s low of 372.25 cents and then at last week''s low of 368.30 cents. Wyckoff's Market Rating: 3.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

Tim Moseley

Gold pauses ahead of FOMC minutes release

Gold prices are near steady up and silver solidly higher in midday U.S. trading Wednesday. Short covering from the futures traders was featured, especially in silver, ahead of the afternoon FOMC minutes from the Federal Reserve. August gold was last up $0.10 at $1,929.60 and September silver was up $0.308 at $23.42.

Despite a holiday-shortened U.S. trading week, it’s still a busy one for the marketplace. The latest FOMC minutes from the Federal Reserve will be scrutinized for any fresh clues on the timing of the next monetary policy move by the central bank. The U.S. employment situation report for June is out Friday. The key non-farm payrolls number is forecast up 240,000 versus a gain of 339,000 in the May report.

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Asian and European stock markets were mostly lower in overnight trading. U.S. stock indexes are mixed at midday.

  Spot gold and silver prices hold gains, testing resistance in quiet holiday trading

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are solidly higher and trading around $72.00 a barrel. Reports said Saudia Arabia and Russia will extend their oil-production cuts by another month. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.898%.

Technically, August gold futures bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today’s high of $1,942.90 and then at $1,950.00. First support is seen at this week’s low of $1,917.70 and then at $1,900.00. Wyckoff's Market Rating: 4.0.

September silver futures bears have the overall near-term technical advantage. A choppy, two-month-old price downtrend is still in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $24.835. The next downside price objective for the bears is closing prices below solid support at the March low of $20.425. First resistance is seen at today’s high of $23.45 and then at $24.00. Next support is seen at $23.00 and then at last week’s low of $22.485. Wyckoff's Market Rating: 4.0.

September N.Y. copper closed down 180 points at 377.60 cents today. Prices closed near mid-range. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen at 382.50 cents and then at 385.00 cents. First support is seen at today’s low of 373.25 cents and then at last week’s low of 368.30 cents. Wyckoff's Market Rating: 3.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

Tim Moseley

Gold prices to remain in neutral territory for the rest of 2023, silver to see slightly higher prices – BMO Capital Markets

Gold's brief push above $2,000 an ounce in mid-May could represent the yellow metal's high-water mark for the year as markets continue to adjust to dynamic interest rate expectations and a resilient U.S. economy.

In their latest quarterly outlook, analysts at BMO Capital Markets said that they are leaving their year-end average gold price target unchanged at $1,905 an ounce, and warned that the precious metal is losing momentum as it has not been able to hold its gains above $2,000.

"Gold has struggled for direction over recent weeks as markets digest climbing treasury yields, dollar strength, the potential lagged impact of an unprecedented cumulative rate-hiking cycle, and elevated geopolitical risk," the analysts said in the report. "Our base case remains that uncertainty coupled with macro headwinds will see gold prices well supported into Q3; however, as we gain clarity on the central bank rate trajectory and the ‘hard landing' scenario is averted, we see gold losing some of its luster into year-end."

The neutral outlook comes as gold prices hold support above $1,900 an ounce but remain unable to break initial resistance around $1,930.

The report noted that BMO's chief economist Douglas Porter does not see any serious sign the U.S. economy is rolling over, which could support the Federal Reserve's aggressive monetary policy stance.

"In our view, a severe U.S. economic downturn and consequent reactionary Fed rate cuts anytime soon are unlikely, and as such, after we are likely past the nadir in the macrocycle, we do see gold and silver prices softening into year-end," the analysts said

While BMO sees gold running in place for the rest of the year, the Canadian bank is slightly more optimistic about silver. The bank raised its 2023 average silver price to $22.70 an ounce, up 3% from its second-quarter price forecast.

BMO's modest increase in its silver price outlook comes as the precious metal tests resistance around $23 an ounce. Although the bank is positive on silver, they do see some potential headwinds for the rest of the year.

  Spot gold and silver prices hold gains, testing resistance in quiet holiday trading

"Silver's supportive fundamentals have struggled to supplant muted institutional investor appetite, with little sign sustained ETP inflows will materialize near term," the analysts said.

"In our view, silver prices are poised to roll over into year-end, owing to weaker jewelry and silverware demand compared to the same period last year, industrial demand headwinds, and diminishing safe-haven demand."

Despite foreseeing challenges through the rest of 2023, the analysts noted that the silver market is supported by long-term bullish fundamentals.

"Longer-term silver demand from solar installations and the rollout of the 5G network should provide a multi-decade annuity as the world accelerates renewable targets and pushes to increase connectivity," the analysts said. "That said, despite the acceleration in renewable generation capacity targets owing to the increased emphasis on energy security, we expect ongoing thrifting and emerging technologies such as thin films to offset some of the potential gains in silver demand."

By

Neils Christensen

For Kitco News

Time to Buy Gold and silver

Tim Moseley

Gold, silver see mild rebounds on short covering

Gold and silver prices are modestly higher in midday U.S. trading Monday. Short covering from the futures traders is featured following the recent selling pressure in both markets. Activity was muted to start the U.S. holiday-shortened trading week. August gold was last up $4.20 at $1,933.50 and September silver was up $0.11 at $23.13.

Asian and European stock markets were mixed to higher in quieter overnight trading. U.S. stock indexes mixed at midday. The S&P stock index futures hit a 14-month high last Friday. Trading was quieter today as many American traders and investors are taking an extra day off, ahead of the U.S. Independence Day holiday Tuesday when all U.S. markets are closed. Some U.S. markets close early today.

It’s still a busy week for the marketplace as the U.S. employment situation report for June is out Friday. The key non-farm payrolls number is forecast up 240,000 versus a gain of 339,000 in the May report.

U.S. Treasury Secretary Janet Yellen travels to China Thursday for meetings with high-level Chinese officials.

  Here's why gold price is above $1,900 despite two looming rate hikes

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are a bit firmer and trading around $71.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.85%.

Technically, August gold futures bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today’s high of $1,939.90 and then at $1,950.00. First support is seen at today’s low of $1,917.70 and then at $1,900.00. Wyckoff's Market Rating: 3.5.

September silver bears have the overall near-term technical advantage. A choppy, two-month-old price downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $24.835. The next downside price objective for the bears is closing prices below solid support at the March low of $20.425. First resistance is seen at last week’s high of $23.335 and then at $23.50. Next support is seen at today’s low of $22.91 and then at last week’s low of $22.485. Wyckoff's Market Rating: 4.0.

September N.Y. copper closed up 390 points at 379.85 cents today. Prices closed near the session high today on short covering. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen at 382.50 cents and then at 385.00 cents. First support is seen at today’s low of 375.95 cents and then at 372.50 cents. Wyckoff's Market Rating: 3.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

Tim Moseley

Fed will raise rates to 6% in 2023, gold could hit $10k by 2025 – Tom Luongo

The Federal Reserve will hike interest rates to 6 percent in 2023, according to Tom Luongo, Publisher of Gold, Goats 'n Guns.

Luongo had correctly forecast in 2022 that Fed Chair Jerome Powell would continue to hike into the 4.5 to 6 percent territory in 2023, when many analysts were forecasting a pivot or pause.

"I think he [Powell] will raise again, and possibly even raise multiple times before the end of the year," Luongo told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "We'll wind up somewhere around 6 percent by the end of the year."

Since March of 2022, the Federal Reserve has raised interest rates by 500 basis points in an effort to reduce inflation, which reached a peak of 9.1 percent in June of 2022.

The Federal Funds Rate is currently in a range of between 5 and 5.25 percent.

The Fed had previously slashed rates to zero in 2020 to help the U.S. government facilitate COVID-related relief. This, analysts claim, led to high inflation in 2022.

Luongo said that Powell was "forced" into a loose monetary policy, even though he personally was against it.

"Powell has always been a hard money guy," Luongo explained. "I think that COVID forced him into policy he didn't want."

To find out why Luongo thinks that high inflation will return, and what the Fed will do about it, watch the video above

Banking 'Implosion'

As the Fed tightens monetary policy, Luongo expects more bank failures across the United States.

"I just see the entire banking system imploding, detonating like a nuclear bomb," he said.

The U.S. banking system faced uncertainty following the failures of four major banks early this year. The latest bank to fail, First Republic, had over $200 billion in assets under management, making its collapse the second-largest in American history.

Luongo sees commercial real estate loans, which many regional banks are exposed to, as a catalyst for the next series of bank failures.

"You've got 20 percent vacancy rates in hot markets like Dallas and Miami," he observed. "[Regional banks] are exposed to a lot of commercial real estate… all credit-based assets are going to deflate."

To find out whether Luongo believes that another bank collapse would cause Powell to pivot, watch the video above

Gold

As the banking system collapses and the economy enters a recession, Luongo is forecasting that hard assets like gold will benefit.

"If we look at the 1970s as a model, we are looking at $8,000 to $10,000 in gold minimum, over the next couple of years," he forecast. "If the dollar collapses on the other side of Jerome Powell, then things could get very interesting for gold and gold investors."

To find out Luongo's outlook for gold miners, watch the video above

By

Cornelius Christian

For Kitco News

Time to Buy Gold and silver

Tim Moseley

When fiction reveals the flaws in well-thought-out plans

In both comedy films and real life, we often encounter situations where meticulously crafted plans fall flat on their faces. This article takes a humorous perspective on the notion that sometimes fiction can be more viable than a supposedly well-thought-out plan. While the focus of this article is the recent decline in gold, it also draws parallels to a comedic dialogue from Men in Black and a plan devised by Chairman Powell to reduce inflation. The common thread is the inherent flaw in assuming success without understanding the full truth behind the processes involved.

Gold has experienced a downward trend over the past two months, culminating in a deep price correction. Currently, gold futures are trading at a low of $1912.30, falling below a critical price support level. The failure to close above the 61.8% Fibonacci retracement suggests a higher probability of gold futures drifting towards $1900 next week, with little support until $1870. This situation highlights the fallibility of well-intentioned plans that overlook critical factors.

A Lesson from The Men in Black

The comedic dialogue in Men in Black's third installment provides an excellent example of the absurd assumptions that can lead to plan failures. When the alpha villain Boris the Animal time travels to Earth seeking revenge, he asks the younger Boris about their plan. The confident response is to prevent the deployment of the ArcNet and eliminate anyone who tries. However, the older Boris humorously points out that despite the seemingly foolproof plan, it ultimately fails. This parallel serve to illustrate the moral of the story—the preposterous assumption that underpinned the plan's flawed nature.

Boris the older animal asks: What's your plan?

The younger Boris responds with absolute certainty saying in a loud and threatening alpha voice… “Prevent the ArcNet from being deployed. Kill anyone who tries!”

It is this response that is overwhelmingly humorous when Boris the Animal says:

The older Boris responds sarcastically saying good plan – didn't work.

Chairman Powell's Plan and Inflation

MarketWatch published an article discussing Chairman Powell's plan to reduce inflation, which, like the fictional dialogue, is riddled with flawed assumptions. While sounding plausible on the surface, the plan lacks the necessary ingredients for success. The article highlights the steps Chairman Powell believes are necessary to address inflationary pressures but reveals that the plan is not yielding the desired outcomes. The flaws in these scenarios arise from incorrect identification of the processes needed to tackle the problems at hand.

The Complex Failure of Well-Thought-Out Plans: Both the fictional dialogue in Men in Black and Chairman Powell's plan exemplify the failure of well-thought-out plans. Despite the initial plausibility, these plans are deeply flawed, leading to improbable outcomes. The article emphasizes the theme of flawed assumptions, which can doom even the most meticulously crafted strategies to failure. While humor in fiction can entertain, it is disconcerting when real-life failures result from incorrect assessments of the problems at hand.

The Federal Reserve's Attempted Solutions

Persistent inflation has prompted global central banks, including the Federal Reserve, to employ interest rate hikes as a means to combat inflationary pressures. However, these rate hikes have failed to achieve their intended effect of lowering core inflation, which remains persistent at levels above 4%. Each rate hike has shown no direct correlation with a reduction in inflation within sectors. The explanation for this planning failure is succinct: "Good plan; didn't work."

In both fictional and real-life scenarios, plans can fall victim to flawed assumptions and incomplete understandings of the underlying processes. The recent decline in gold value serves as a backdrop to highlight the fallibility of well-thought-out plans. By examining the comedic dialogue in Men in Black and Chairman Powell's plan to reduce inflation, we uncover the importance of comprehending the full truth behind a problem before formulating solutions. The failures depicted remind us that the best plans do not always guarantee success when they lack a solid foundation of accurate information and analysis

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Bearish technicals limit buying interest in gold, silver

Gold and silver prices are modestly down in midday U.S. trading Wednesday, with gold notching a 3.5-month low overnight. A lack of markets-moving fundamental news at mid-week has traders focused more on the analytical charts for the precious metals, which are leaning bearish. August gold was last down $3.50 at $1,920.30 and July silver was down $0.095 at $22.865.

Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Japan Governor Kazuo Ueda took part in a panel discussion at an ECB forum on central banking that took place in Portugal today. The central bankers made no surprising comments that were significant markets-movers.

Asian and European stock markets were mixed overnight. U.S. stock indexes are mixed at midday. Risk aversion has eased at mid-week following the weekend insurrection in Russia that was quickly quelled. Quieter summertime trading ahead of the major U.S. Independence Day holiday next Tuesday seems to the feature at present.

  State Street Global Advisors sees healthy demand for gold and investors are getting younger

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are solidly up and trading around $69.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.731%.

Technically, August gold futures prices hit a 3.5-month low today. Bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,930.00 and then at this week’s high of $1,943.40. First support is seen at today’s low of 1,911.40 and then at $1,900.00. Wyckoff's Market Rating: 4.0.

July silver futures bears have the overall near-term technical advantage. A choppy, seven-week-old price downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at this week’s high of $23.15 and then at $23.50. Next support is seen at this week’s low of $22.435 and then at the June low of $22.14. Wyckoff's Market Rating: 4.0.

July N.Y. copper closed down 470 points at 372.35 cents today. Prices closed nearer the session low today and hit a three-week low. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.70 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 354.50 cents. First resistance is seen at today’s high of 278.10 cents and then at this week’s high of 383.60 cents. First support is seen at today’s low of 369.60 cents and then at 365.00 cents. Wyckoff's Market Rating: 4.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

U.S. durable goods beat expectations in May, gold price erases early-morning gains

The gold market erased its early-morning gains after the newly released data showed that orders for long-lasting U.S. factory goods were up 1.7% in May versus the expected decrease of 1%.

The monthly increase in durable goods orders was $4.9 billion and was largely driven by transportation equipment that was up for the third consecutive month, the U.S. Census Bureau said in the report.

The core durable goods section, which excludes the volatile transportation sector, was up 0.6% in May versus the expected drop of 0.1%. Excluding defense, new orders rose 3%.

The government’s durables report covers items with an expected life of at least three years, such as kitchen appliances, computers, furniture, autos, and airplanes. Economists carefully watch the data for signs of where the economy might be heading.

Despite the stronger-than-expected report, analysts still see weakness in investment to come.

“The wider evidence still suggests that business equipment investment has further to fall,” said Capital Economics deputy chief U.S. economist Andrew Hunter. “While the drag from higher rates on residential investment appears to be fading, we still think the hit to business investment has further to run.”

Following the release, gold declined, with upbeat economic data confirming the Federal Reserve's potential 25-basis-point rate increase in July. August Comex gold futures last traded at $1,933.70, down 0.01% on the day.

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold will rise with dollar as 'violent' global debt crisis unfolds, de-dollarization will take at least a decade – Brent Johnson

The dollar will gain strength relative to other currencies, along with gold, as a "violent" global debt crisis unfolds. That is according to Brent Johnson, Founder and CEO of Santiago Capital.

Johnson, who created the Dollar Milkshake Theory, said that "there is no alternative to the dollar" when it comes to international trade and debt agreements.

"I think that in that scenario [a global sovereign debt crisis], despite all the protestations to the contrary… the dollar will be seen as the cleanest dirty shirt," he told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "Investors and entities around the world will seek out dollars as a safe haven in that environment."

Johnson said that a global sovereign debt crisis is highly likely given "the growth of debt in the world," and the aftermath of a credit crunch.

He claimed that the combination of low global economic growth, high interest rates, significant debt burdens, and high inflation could trigger the crisis.

"Once a credit contraction takes place, then it can feed on itself, and you can get into a situation like we had in 2008," he suggested.

To find out when Johnson forecasts the global sovereign debt crisis taking place, watch the video above.

De-dollarization

The dollar's share in global reserves has fallen from 73 percent in 2001 to 58 percent today, according to the Royal Bank of Canada.

The trend toward de-dollarization is compounded by the BRICS alliance (Brazil, Russia, India, China, and South Africa), which is meeting in South Africa this August to unveil plans for a reserve asset to rival the dollar.

The Western response to Russia's invasion of Ukraine in 2022, which included banning Russia from the SWIFT international payments system, caused chills around the world. Many feared the "weaponization of the dollar," following these sanctions.

Although he agreed that there is a trend toward de-dollarization, Johnson forecast that it would take "at least" ten years for it to play out completely.

"I am not of the belief that the dollar gets inflated away and the dollar index falls versus foreign fiat currencies, and we go into a hyperinflation and the rest of the currencies stay strong," said Johnson.

He added that although foreign political leaders would seek to de-dollarize and negotiate bilateral trade agreements, there would be "pushback" from business leaders.

"Most of them [businessmen] want to be paid in dollars," he observed. "The dollar's purchasing power is better than the Brazilian real's purchasing power, or the Kenyan shilling's purchasing power, or the Turkish lira's."

Gold

As the dollar rises against other currencies, so will gold, according to Johnson.

"I think the dollar is going to get so strong that it wrecks the current [global monetary] system," Johnson predicted. "As the dollar rises, and the system comes under threat, and we have all this chaos and a new monetary system is proposed, gold will be trading at $5,000 or $8,000… Gold will go much higher as this chaos ensues."

To find out whether Johnson is adding more gold to his portfolio, watch the video above.

  Gold will reach $3k in market 'melt up' with S&P 500 up at least 36% by Q4 2023 – David Hunter

By

Cornelius Christian

For Kitco News

Time to Buy Gold and Silver

Tim Moseley