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Multiple factors combined takes June gold futures to a new benchmark 2300

Multiple factors combined takes June gold futures to a new benchmark, $2300

As of 4:55 PM EDT the most active June contract of gold futures is fixed at $2300.60, up $28.100. This marks the sixth consecutive day of gains for the precious yellow metal, with the last four trading sessions culminating in new record closes.

During the past five days, gold managed to overcome the headwinds of four days of dollar strength, which typically dampens the appeal of the yellow metal. Also, gold was able to overcome rising yields in U.S. Treasuries, which also lessens the allure for gold.

The dollar's strength today can be attributed to a recent report revealing that U.S. manufacturing grew for the first time in 1 ½ years in March. Data from the U.S. showed that the country's factory orders rebounded more-than-anticipated, and the number of job openings slightly beat estimates in February, indicating the strength of the U.S. economy and narrowing the window for the Fed to start reducing interest rates.

Gold's recent gains also occurred as the CME's FedWatch tool lowered the probability of a rate cut in June from 60% to 58%. Last week the probability of a rate cut in June was at 70%, highlighting the shifting expectations surrounding the Fed's monetary policy stance.

Geopolitical tensions have also played a role in accelerating the demand for gold as a safe-haven asset. Growing conflicts in the Middle East, particularly an Israeli airstrike on Iran's embassy in Syria, have heightened concerns. Iran has vowed to retaliate against Israel for the attack on the Iranian embassy compound in Damascus, further elevating geopolitical uncertainty.

Supply constraints have also contributed to gold's recent surge. Central banks globally have been actively adding gold bullion to their reserves, diminishing available supply. Additionally, momentum hedge funds have been actively taking long positions in gold futures, further fueling the rally.

Moreover, rising oil prices have added to the demand for gold, as higher energy costs translate to heightened inflationary pressures down the road, making the precious metal an attractive hedge against inflation.

With a confluence of factors driving its ascent, gold's resilience and appeal have taken the most active June future’s contract above $2300 for the first time in history.

Wishing you as always good trading,

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

Gold price hits new record highs as the West loses price-setting powers: Frank Giustra Pierre Lassonde on new geopolitical reality resource nationalism

Gold price hits new record highs as the West loses price-setting powers: Frank Giustra & Pierre Lassonde on new geopolitical reality & resource nationalism

As gold set another record high, Canadian mining legends Frank Giustra, CEO of Fiore Group, and Pierre Lassonde, Chairman Emeritus at Franco-Nevada, say the West has lost its power to set the price of gold. Giustra and Lassonde also warn that in the new geopolitical reality of resource nationalism, Canada is failing its economy and citizens.

With gold futures hitting another record high of above $2,264 an ounce at the start of the second quarter, Giustra and Lassonde pointed to a major shift in the gold market.

"The world hasn't woken up yet. The marginal buyer of gold is no longer the U.S. It's no longer Europe. It's China. Between the country's central bank and the Chinese public, China takes up over two-thirds of all the annual production. They are the new marginal buyer. That's where the gold price is set," Lassonde told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, during Kitco Insights Interactive Mining Titans' Power Panel.

For what this means for the U.S. dollar and gold this year and beyond, watch the video above.

BRICS Plus, which now includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, Ethiopia, Iran, and the United Arab Emirates, can get up one morning and say they are going "to back their collective new currency with gold," which they can now set to create more credit and reserves, Giustra pointed out.

A coordinated move by the BRICS Plus against the U.S. dollar could lead to violent results, he warned.

"No one wants war, but here's the problem — the U. S. is facing an existential threat. It's a national security issue," Giustra said. "If there's a sudden move towards replacing the U.S. dollar, meaning perhaps a BRICS announcement of a new currency [backed by] gold, I think then it would react quite violently.

Giustra also outlined the top geopolitical risks for 2024. For insights, watch the video above.

Has Canada lost the battle for resources?

Securing critical metals for the energy transition has become a matter of national security for many countries. However, Canada is losing this battle, according to Giustra and Lassonde.

While many countries are facing massive metal shortages, Canada is distracted with overseas investments. For example, Canadian pension funds that represent CAD$2.7 trillion of Canadian savings have more invested in China than they do in Canada, which is unforgivable, Giustra and Lassonde told Kitco News.

More specifically, Canadian pension funds have less than 3% of their total assets invested in Canadian public companies, down from 28% in 2000.

"When you look at the mineral sector in Canada, it's been totally ignored by the government for the last 40 years. Our politicians, both at the federal and the provincial level, couldn't care less about the mining industry," Lassonde said. "Frank says we could lose the race. We've already lost the race."

Giustra pointed out that bold action is required to solve this crisis, but Canada lacks visionary leadership.

"Canada is endowed as one of the most prolific mineral countries on the planet, the second largest landmass in the world, and largely unexplored. [However], there is almost zero investment in the Canadian mineral sector. It's worrisome. Canada's in danger of losing out in this race for critical minerals," he said.

On what this all means for Canada's economy and some of the irreversible consequences, watch the video above.

This panel is brought to you by Eagle Plains Resources.

Eagle Plains is a mineral exploration company operating for 30 years with over 50 projects in Western Canada. The company has over $7M cash, generates significant revenue, has only 115M shares outstanding, and has never been rolled back.

Kitco Media

Michelle Makori

Time to Buy Gold and Silver

Tim Moseley

Gold price solidly up very near all-time highs

Gold price solidly up, very near all-time highs

Gold prices are sharply up in midday U.S. trading Thursday, near the daily highs, and are closing in on the recent record highs. Silver prices are modestly higher. More technical buying is featured in both metals, amid bullish charts. June gold was last up $27.10 at $2,239.90. May silver was last up $0.198 at $24.95.

It was a very busy U.S. data release schedule Thursday, but none of the data contained big surprises and the markets showed no major reactions. U.S. markets are closed Friday for the Good Friday holiday but personal income and outlays, including PCE inflation data, will be released that day.

Today is the last U.S. trading day of the week, of the month and of the quarter, which makes it an important trading day from a technical chart perspective. Gold today is set to close at a very bullish weekly, monthly and quarterly high close today, as well as a record high close in futures markets.

U.S. stock indexes are mixed at midday. The U.S. stock indexes continue on a slow and steady rise and are near their recent record highs.

Federal Reserve Governor Christopher Waller said Wednesday recent stronger-than-expected U.S. inflation data is “disappointing” and said that he wants to see “at least a couple months of better inflation data” before cutting, Bloomberg reported. “In my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data,” Waller said.

The key outside markets today see the U.S. dollar index slightly higher but down from the daily high. Nymex crude oil prices are higher and trading around $82.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.2%.

Technically, the gold futures bulls have the solid overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the contract high of $2,246.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $2,170.80. First resistance is seen at the contract high of $2,246.60 and then at $2,250.00. First support is seen at today’s low of $2,207.50 and then at $2,200.00. Wyckoff's Market Rating: 9.0.

The silver bulls have the overall near-term technical advantage but have faded recently. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at last week’s high of

$25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week’s high of $25.055 and then at $25.50. Next support is seen at this week’s low of $24.445 and then at $24.22. Wyckoff's Market Rating: 6.0.

Hey!! Try out my “Markets Front Burner” weekly email report. Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Email me at jim@jimwyckoff.com and I’ll add your email address to the Front Burner list.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

US Core PCE rises 03 in February in line with expectations

U.S. Core PCE rises 0.3% in February, in line with expectations

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Gold investors, with nothing else to do, can at least breathe a sigh of relief as inflation pressures rise in line with expectations.

Friday, The U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.3% last month. The data rose in line with economist expectations.

However, as a sign that inflation pressures aren’t going away, the report also noted an upward revision for January, with core inflation rising by 0.5%.

For the last 12 months, consumer price pressure continued to ease, rising 2.8% in February. Although inflation is still well above the Federal Reserve’s target of 2%, it continues to trend lower.

The report said headline inflation rose 0.3% last month, a tick lower than expected. Economists were looking for a 0.4% increase. For the year, headline inflation rose 2.5%, in line with consensus projections.

Markets are closed for Good Friday, so there has been no reaction to the latest inflation data.

With inflation pressures rising in line with expectations, investors could start to focus on a growing imbalance in the economy as consumers spent more than they made last month.

The report said wages increased less than expected last month, rising 0.3%. According to consensus forecasts, economists were looking for a 0.4% increase. Meanwhile, personal consumption jumped 0.8% in February. Economists forecasted a 0.5% increase.

According to some economists, the in-line inflation data could support the Federal Reserve's plan to begin its easing cycle in June, even as inflation remains elevated.

Last week, the Federal Reserve signaled it wanted to cut interest rates three times this year, even as inflation was holding around 2.4%.

An impending pivot in the U.S. central bank’s aggressive monetary policies has emboldened gold investors in recent days. Thursday, during the final trading day in March and the first quarter, June gold futures rose to a new all-time high of $2,256.90 an ounce and settled the session at $2,234.40 an ounce.

In an interview with Kitco News, Darin Newsom, Senior Market Analyst at Barchart, said that inflation could be one factor in why the gold market has been able to defy fundamental and technical logic.

Gold’s rally on Thursday came despite resilient strength in the U.S. dollar, which closed the session near a six-week high above 104 points.

“Gold could be telling us that inflation will stay around for a while. And that there's a real there's a real threat geopolitically,” he said.

Some analysts have also noted that gold doesn’t actually need a rate cut to maintain its upward trajectory. While higher inflation could keep the Federal Reserve from cutting rates this year, it is unlikely they will raise interest rates. This environment would still push real interest rates lower, which should weigh on the U.S. dollar, supporting gold prices.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Gold appears unstoppable as it hits record highs above 2250 capping off a solid month and quarter

Gold appears unstoppable as it hits record highs above $2,250, capping off a solid month and quarter

The gold market continues to be an unstoppable juggernaut as it closes out the month and quarter near a record high, solidly above $2,200 an ounce.

Analysts note that gold’s performance on Thursday, which wraps up a shortened trading week ahead of the Easter long weekend, is even more impressive when compared to the U.S. dollar Index, which is trading near a six-week high above 104 points.

Gold prices last traded at $2,241 an ounce, up 2.7% from last week. For the month, gold is up 9%, and for the quarter, the precious metal is up 8%.

Gold’s further push into blue sky territory also comes ahead of important inflation data. Although markets are closed for Easter, it is not a recognized government holiday, so the U.S. Bureau of Economic Analysis will be releasing its Personal Consumption Expenditures (PCE) Index. According to consensus estimates, economists expect inflation to have risen 0.3% in February.

Some analysts have said that gold is attracting new momentum because inflation is less of a threat than it was. Last week the Federal Reserve signaled that it still looks for three rate cuts this year even as they see inflation holding above its 2% target.

Darin Newsom, Senior Market Analyst at Barchart said that the gold rally is a signal that investors are worried that the Federal Reserve won’t be able to get inflation under control as it starts to cut interest rates.

He added that he also sees gold well supported as a geopolitical risk hedge.

“Geopolitical fears are still out there and will only continue to grow as we approach the November U.S. election,” he said. “If the Fed starts cutting rates, bond yields will fall, which makes gold a more attractive safe-haven.”

At the same time, some analysts note that the U.S. dollar is losing its grip on the gold market as U.S. government debt continues to spiral higher.

“Gold is not expensive. The truth is that the U.S. dollar is cheap as the government floods the global economy with it,” said Julia Khandoshko, CEO at the European broker Mind Money, in an interview with Kitco News.

Although the Federal Reserve has been tightening its balance sheet as part of its aggressive monetary policy, some analysts have noted that the nation’s money supply continues to grow.

David Kranzler, precious metals analyst and creator of the The Mining Stock Journal said in a comment on social media that the U.S. The Monetary Base, as measured by Money Zero Maturity (MZM), is up nearly 10% since March 2023.

“Gold smells a massive money-printing program coming at some point. In fact, low-grade money printing has already occurred,” he said.

MZM represents money readily available within an economy for spending and consumption. and includes M2 money supply, less the time deposits, plus all money market funds.

Regardless of what is driving gold at its record highs, Adam Button, Chief Currency Strategist at Forexlive.com said that he expects this is only the start of the rally.

Despite gold’s historic rally, Button said that the precious metal sector continues to be ignored in the broader marketplace. He added that the mining sector, while off its lows is still significantly undervalued compared to gold prices.

“This quiet rally is extremely encouraging for gold investors,” he said. “This is not an exhausted bull market. The time to sell is when everyone is talking about gold and the miners are taking off.”

Although Button is bullish on gold, he added that investors should wait for a pullback before jumping in. He pointed out that there appears to be some initial support at $2,150 that could attract some buyers.

Ole Hansen, Head of Commodity Strategy at Saxo Bank said that he expects the gold market to have further upside potential. He added that it's more than just momentum that is pushing gold prices higher.

“Gold’s continued ability to withstand headwinds from dollar and yield movements is nothing but impressive and it highlights a market that continues to attract demand making it a relatively easy task for hedge funds to defend their huge long positions,” he said. “My main concern during the past couple of weeks has been the risk of weakness forcing a cascade of long liquidation, but with prices now above $2,200 that risk continues to fade.”

Although gold is ending a shortened trading week on a strong note, next week does present new risks. The economic calendar next week will focus on the U.S. labor market with March’s nonfarm payrolls report on Friday as the highlight.

The week also features a solid lineup of central bank speakers including Federal Reserve Chair Jerome Powell, who will be speaking at Stanford's Business, Government, and Society Forum.

Some analysts have said that stronger employment numbers, coupled with stubborn inflation may force the Federal Reserve to push back the start of its approaching easing cycle.

“Macro traders certainly still have scope to add to their gold length — but only if rates market expectations notably firm. This places the onus on upcoming data to corroborate the Fed's outlook for three cuts this year, but continued strength in the data with little change in tone from the FOMC also raises the risk of a buyer's strike in Treasuries, leading to higher rates that could mechanically weigh on the yellow metal through the re-accumulation of macro trader short acquisitions,” said commodity analysts at TD Securities.

Economic data for the week

Monday: ISM Manufacturing PMI

Tuesday: JOLTS job openings

Wednesday: ADP nonfarm employment change, ISM Service Sector PMI, Powell to speak

Thursday: Weekly jobless claims

Friday: Nonfarm payrolls

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Gold gains on technical buying friendly outside markets

Gold gains on technical buying, friendly outside markets

Gold prices are posting decent gains in midday U.S. trading Monday, supported by chart-based buying amid bullish technicals, and by friendly daily “outside market” forces that see the U.S. dollar index lower and crude oil prices higher. Silver prices are trading slightly up. April gold was last up $16.80 at $2,176.70. May silver was last up $0.042 at $24.885.

Broker SP Angel this morning said in an email dispatch that China and other central banks continue to buy gold. “Recent interest rate moves by major central banks of Japan, Taiwan and Turkey along with the expectations for U.S. rate cuts are making gold increasingly attractive. Investors also remain concerned at the level of high government debt supported by the U.S. and China.”

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are higher and trading around $82.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.25%.

Technically, April gold futures bulls have the solid overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the contract and record high of $2,225.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,149.20. First resistance is seen at the overnight high of $2,182.50 and then at Friday’s high of $2,188.00. First support is seen at today’s low of $2,164.40 and then at Friday’s low of $2.158.40. Wyckoff's Market Rating: 8.0.

May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at Friday’s high of $25.11 and then at $25.50. Next support is seen at last week’s low of $24.58 and then at $24.22. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 80 points at 401.55 cents today. Prices closed near mid-range. The copper bulls have the firm overall near-term technical advantage but appear tired now. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 416.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 385.00 cents. First resistance is seen at today’s high of 404.70 cents and then at Friday’s high of 406.65 cents. First support is seen at today’s low of 399.05 cents and then at 396.75 cents. Wyckoff's Market Rating: 7.0.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Gold price gains against the Swiss franc highlight its potential when the Fed starts cutting rate

Gold price gains against the Swiss franc highlight its potential when the Fed starts cutting rate

Gold price gains against the Swiss franc highlight its potential when the Fed starts cutting rates teaser image

The Federal Reserve’s signal that it still sees the potential for three rate cuts this year, even as inflation remains above its 2% target, has helped propel gold prices to new record highs.

However, some analysts have said that the gold’s true light will shine when the central bank actually embarks on its easing cycle. Some analysts have said that gold’s reaction to the Swiss National Bank’s move to ease is an indication of what to expect.

Thursday, Switzerland’s Swiss National Bank surprised markets with a 25 basis point cut, bringing interest rates to 1.5%. The SNB is the first major central bank to cut interest rates.

The central bank said it eased its monetary policy as inflation is expected to remain below its 2% target this year.

“For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. According to the new forecast, inflation is also likely to remain in this range over the next few years,” the bank said in its monetary policy statement.

The central bank also reduced its annual inflation forecasts. It now sees average inflation reaching 1.4% this year, down from its December estimate of 1.9%. Inflation is expected to slow even further next year, rising 1.2%, down from the previous 1.6% estimate. In its first look at 2026, the SNB projects average inflation at 1.1%.

Economists from Capital Economics said that they expect the SNB will continue to lower interest rates this year as inflation pressures remain weak.

“As it happens, we think inflation is actually likely to be lower than the SNB is forecasting, and so we expect it to cut rates again in September and December, taking the policy rate to 1.0%, where we expect it to stay throughout 2024,” the economists said in a note.

The SNB’s interest rate cut has had a solid impact on the gold market. Gold prices have pushed significantly higher against the Swiss franc Thursday.

Holding near session highs, spot gold last traded at CHF55,352.36, up +2.06%.

Although some analysts have described the SNB’s move as a surprise, it is not unexpected for others. March Chandler, managing director at Bannockburn Global Forex, said that he has been warning investors that cuts were coming.

“Rate cuts from the Fed are coming, so the SNB has to beat them to it too because they need to give their currency some cushion against weakness in the U.S. dollar,” he said.

While it's not exactly an “apples to apples” comparison, some analysts have said that gold price action against the dollar when the Fed cuts could be similar to what has been seen against the Swiss franc.

Chandler said that the biggest difference is that he expects gold’s rally to lead what appears to be a likely cut in June. He added that he expects bond yields and the U.S. dollar to weaken ahead of the Fed’s June meeting, which will support higher gold prices.

Phillip Streible, chief market strategist at Blue Line Futures, said that gold’s move against the Swiss franc highlights broader market conditions. He pointed out that the weakness in the Swissy helped propel the broader U.S. dollar index to a one-month high, which has hurt gold.

Despite hitting all-time highs overnight above $2,220 an ounce, gold is ending the day in the red against the greenback. Spot gold last traded at $2,183.14 an ounce, down 0.13 on the day.

However, Streible said that gold still has plenty of room to run when it’s the Fed’s turn to cut rates.

“Research we have looked at says since the 1990s, gold has rallied 6% in the first 30 days after the Federal Reserve’s first rate cut in an easing cycle,” he said.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

Gold price rallies after FOMC statement deemed not too hawkish

Gold price rallies after FOMC statement deemed not too hawkish

Gold and silver prices are higher and neare daily highs in U.S. trading Wednesday, following a Federal Reserve monetary policy statement that the precious metals bulls saw as price-friendly. April gold was last up $13.30 at $2,173.10. May silver was last up $0.29 at $25.425.

The just-concluded Federal Open Market Committee (FOMC) monetary policy meeting saw the Federal Reserve keep its monetary policy unchanged, as expected. The key Fed Funds interest rate range was kept steady at 5.25% to 5.50%. The FOMC statement seemingly walked a neutral line on policy: not too hawkish and not too dovish. The statement said the U.S. economy is growing and inflation has eased but is still elevated. The statement said no rate cuts will occur until the Fed has more confidence inflation has been tamed. Still, the statement said the Fed sees three interest rat cuts this year. Judging by the reaction of the gold market, traders deemed the FOMC statement as not being too hawkish, and that the Fed appears willing to tolerate slightly higher inflation for longer. Now the marketplace awaits the afternoon press conference from Fed Chairman Jerome Powell. Traders will closely scrutinize Powell’s remarks for clues on the future path and timing of Fed monetary policy.

The key outside markets today see the U.S. dollar index weaker after being higher before the FOMC statement. The USDX had seen a solid rebound from the March low and the bulls have the technical advantage. Nymex crude oil prices are solidly lower and trading around $81.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.3%.

The Bank of England holds its regular monetary policy meeting Thursday.

Technically, April gold futures bulls have the solid overall near-term technical advantage. A four-week-old uptrend is in place on the daily bar chart. A bullish pennant pattern has formed on the daily bar chart, but needs to see an upside breakout very soon to complete the formation. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,203.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,100.00. First resistance is seen at $2,180.00 and then at $2,190.00. First support is seen at this week’s low of $2,149.20 and then at $2.140.00. Wyckoff's Market Rating: 8.0.

May silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the December high of $26.575. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at last week’s high of $25.66 and then at $26.00. Next support is seen at $25.00 and then at $24.50. Wyckoff's Market Rating: 7.0.

May N.Y. copper closed down 20 points at 407.25 cents today. Prices closed nearer the session high. The copper bulls have the solid overall near-term technical advantage. Prices are in a steep five-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 425.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at today’s high of 408.95 cents and then at Tuesday’s high of 413.65 cents. First support is seen at today’s low of 402.70 cents and then at 400.00 cents. Wyckoff's Market Rating: 7.5.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Investors speculate on Fed’s decision next week as inflation remains persistent

Investors speculate on Fed’s decision next week as inflation remains persistent

A primary purpose of holding or investing in gold is to protect one’s portfolio against high inflation. It has always been considered an inflationary hedge. Simply put, one can extrapolate that if interest rates remain elevated or spike higher it will provide bullish tailwinds supportive of higher gold pricing.

This is true with one exception; when the Federal Reserve is initiating either quantitative tightening or quantitative easing. Currently, the Federal Reserve is completing a multiyear period of quantitative tightening in which they have raised interest rates from historic lows of 0% to a ¼%, all the way to between 5 ¼% and 5 ½%.

Higher interest rates exude a bearish influence on gold because gold does not contain any intrinsic yield. When fixed income assets such as treasuries have high yields it diminishes the allure for gold. This scenario is the economic environment that we find ourselves in today.

One-Two Punch

This week two important reports revealed new data concerning current inflationary pressures. The Consumer Price Index revealed that inflation for February came in hotter than expected. Yesterday’s release of the most current Producer Price Index revealed that producers raised the price of their goods by 0.6% during the month of February. Because a hot PPI is a precursor to a hot CPI we can expect that inflation this month could continue to be elevated.

This has pressured gold off the highs achieved last Friday. Tuesday's release of the CPI took gold futures down $25, and on Wednesday gold recovered gaining back approximately $15 of Tuesday’s decline. For the remainder of the week, gold softened but still did not trade to a lower low than the low achieved on Tuesday.

One week ago, gold futures challenged $2200 per ounce and traded to a high of $2203. The price of gold above $2200 for the first time in history was short-lived, but the fact that gold has remained above $2150 all week is a sign that a base is being formed, and we may see that price tested again soon. Gold has been extremely resilient and able to hold onto most of its recent gains even with moderate headwinds from dollar strength, and higher treasury yields.

As of 6 PM EDT, gold futures basis the most active April contract is currently fixed at $2159.40 after factoring in today’s modest decline of $7.10 or 0.33%.

Market participants will now begin to enter a “wait-and-see mode” as the Federal Reserve will begin the March FOMC meeting. According to the CME’s FedWatch tool, it is almost a certainty that they will not announce or initiate any rate cuts for March. They will however release their most current economic outlook and release a revised “dot plot” an integral component of the SEP (summary of economic projections). The dot plot released in February anticipated that the first set of rate cuts by the Federal Reserve would begin this year and anticipated that they would cut rates by three-quarters of a percent. They also projected continued rate cuts in 2025, and 2026 as they “normalize” its benchmark interest rates (fed funds rate) just above 3%.

If there are no major changes in the dot plot released next week in essence that information should already be factored into current pricing and be supportive of gold prices maintaining value.
 

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Pulls Back From All-Time Highs

Gold Price News: Gold Pulls Back From All-Time Highs
 

Frank Watson

Gold News

Market Analysi

Gold prices pulled back slightly on Tuesday from their recent all-time highs after figures showed US inflation at higher-than-expected levels in February, prompting questions over any interest rate cuts.

Prices eased as low as $2,153 an ounce during the day Tuesday, compared with around $2,182 an ounce in late deals on Monday.


 

KAU price $/g – from Kinesis Exchange

US core inflation figures, which strip out volatile items such as energy and food, were released Tuesday. The figures came in at 0.4% in February compared with January, higher than the market’s expected 0.3%. And on a year-on-year basis, February came in at 3.8%, slightly above market expectations of 3.7%.

Higher than expected inflation suggests greater pressure on the US Fed to maintain higher interest rates for longer, weighing on non-yield-bearing assets like gold.

The US dollar also increased against other major currencies on Tuesday, weighing on dollar-denominated gold prices, while US 10-year Treasury yields also rebounded, adding further to the selling pressure on gold.

The pullback in prices follows all-time highs for gold, which briefly hit $2,195 an ounce on Friday as the markets bet on rate cuts materialising as soon as June, with additional support coming from recent central bank buying and safe-haven flows amid current heightened geopolitical tensions.

Elsewhere, the markets will be looking ahead to Thursday for the release of US producer prices for February as well as monthly retail sales, providing a further update on the state of the US economy.

Time to Buy Gold and Silver

Tim Moseley