The Federal Reserve will hold its 11th FOMC meeting since they began rate-hikes

The Federal Reserve will begin its Federal Open Market Committee (FOMC) meeting exactly one week from today on Tuesday, June 13th. On the morning of the 13th, the government will release its latest report on inflationary pressures vis-à-vis the CPI (Consumer Price Index). This will be the last important piece of data that Fed officials will use to make their final decisions regarding monetary policy.

While their preferred inflation index is the PCE, the CPI will contain the most recent assessment of inflationary pressures. Inflation was above 9% just one month after the Federal Reserve initiated its first rate hike back in March 2022. In just over a year inflationary pressure has had a strong contraction.

Although the extremely hawkish and restrictive monetary policy of 10 consecutive rate hikes that took the Fed’s benchmark rate to between 5 and 5 ¼% has dramatically lowered inflation but it is still well above the Federal Reserve’s target. Fed members have been waiting for the data to indicate if inflationary pressures are headed toward their goal. However, while headline inflation has had a significant decline the core inflation index which omits food, energy, and housing has remained persistent and sticky between 5% and 6% since December 2022. Housing costs make up a large portion (about one-third) of the Consumer Price Index, and if you strip out food and energy costs housing costs are about 40% of the total CPI index.

Currently, there is an 81.1% probability that the Federal Reserve will initiate its first interest rate hike pause with under a 5 to 1 probability that the Fed will raise rates next week.

The Federal Reserve Bank of Cleveland “Nowcast” provides real-time daily estimates of the PCE and CPI levels. It uses daily oil prices, and weekly gasoline retail prices and combines them with monthly consumer prices to offer a time-sensitive forecast of inflation providing real-time insight.

According to Forbes, “Nowcasts of U.S. inflation for May suggest that headline inflation will slow, but that core inflation will remain well above the Fed’s target. On June 13, the U.S. Bureau of Labor Statistics will release the Consumer Price Index report for May. Headline inflation has decelerated sharply since last summer, but core inflation has remained in a narrower range. The latest nowcasts don’t imply that this will change much.”

The current assessment by the Cleveland Fed’s Nowcast is predicting that inflation will rise 0.19% month over month and core inflation will also rise by 0.45%. If these predictions are correct the annualized rate of inflation would be 4.1% and 5.3% respectively.

Although this would confirm that headline inflation is dropping below core inflation it is clear that components remain persistent, a dilemma for the Federal Reserve. Persistent inflation has also been highly supportive of gold. As of 6 PM EDT, gold futures basis the most active August contract is down $1.60 from the New York close and fixed at $1979.70.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

Gold gains as USDX slips, crude oil rallies

Gold prices are modestly up and silver a bit weaker in midday U.S. trading Monday. Both markets pushed well off their early session lows when the U.S. dollar index lost its good early gains and as crude oil prices rallied. August gold was last up $6.00 at $1,975.50 and July silver was down $0.092 at $23.655.

Asian and European stock markets were mixed today. U.S. stock indexes are mixed near midday. Gains in the metals were limited today in the aftermath of a stronger U.S. non-farm payrolls jobs rise in last Friday’s May employment report. That data reminded the marketplace that the Federal Reserve is likely to remain hawkish on its monetary policy for longer—even if it does do a pause in the rate-hike cycle at the June FOMC meeting.

In weekend news, Saudi Arabia decided to unilaterally cut its crude oil production by around 1 million barrels per day, starting in July. Meantime, the OPEC-plus cartel at its meeting decided to leave its collective crude oil output unchanged.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are higher and are trading around $72.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.887%.

Technically, August gold futures bulls have the overall near-term technical advantage. 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 May low of $1,949.60. First resistance is seen at $1,985.00 and then at $2,000.00. First support is seen at today’s low of $1,953.80 and then at $1,949.60. Wyckoff's Market Rating: 6.5.

July silver futures bulls and bears are on a level overall near-term technical playing field. 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 the May low of $22.785. First resistance is seen at $24.00 and then at last week’s high of $24.12. Next support is seen at today’s low of $23.32 and then at $23.00. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed up 450 points at 377.25 cents today. Prices closed nearer the session high. Short covering was featured. The copper bears still have the overall near-term technical advantage. However, a six-week-old downtrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 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 last week’s high of 378.90 cents and then at 385.00 cents. First support is seen at 370.00 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

Central banks' gold holdings drop for the first time in over a year in April, says World Gold Council

Global central bank gold holdings fell for the first time in more than a year in April, as Turkey sold over 80 tonnes of gold, the World Gold Council (WGC) said in a report.

Total central bank gold reserves dropped by 71 tonnes in April. The last time central bank gold holdings declined was in March 2022, and the net drop was one tonne, the report pointed out.

The monthly decrease is not representative of a trend reversal, said WGC's senior analyst Krishan Gopaul. "Country-level data reveals that, far from a sudden wave of central bank selling, the drop in reserves was primarily due to Türkiye," Gopaul said Friday.

The Central Bank of Turkey sold 81 tonnes of gold in April, reducing its gold holdings to 491 tonnes. This was after the central bank already sold 15 tonnes in March.

Last year, Turkey bought the most gold out of all central banks, purchasing 148 tonnes and increasing its gold reserves to 542 tonnes — the highest level on record.

The report explained that country-specific circumstances led Turkey to offload some of its gold.

"This was a specific response to local dynamics rather than a change to their long-term gold policy: the gold was sold into Türkiye's domestic market to satisfy very strong bar, coin and jewelry demand following a temporary partial ban on gold bullion imports," the report noted. "It remains to be seen if this selling will continue and, if so, at what pace."

Other sales in April were significantly smaller tonnage-wise. The National Bank of Kazakhstan sold 13 tonnes, the Central Bank of Uzbekistan offloaded two tonnes, and the National Bank of the Kyrgyz Republic sold 0.6 tonnes.

While massive gold selling is not likely to become the new trend, central bank gold purchases are slowing down.

Only four central banks bought gold in April, with Poland reporting additional 15 tonnes, the People's Bank of China buying eight tonnes (its sixth monthly purchase in a row), the Czech National Bank adding two tonnes, and the Central Bank of Mongolia purchasing an additional tonne.

The WGC is looking past April's drop in central bank gold holdings and projects more buying throughout 2023.

"Our view is also supported by findings from our latest Central Bank Gold Reserves survey, which shows reserves managers remain broadly positive towards gold," Gopaul said. "It's also worth noting that the Central Bank of Iraq recently announced a 2.5t purchase in May and signaled more to come."

Turkey's case is unique

Turkey has seen a surge in gold demand in the past year as citizens embraced the precious metal as a hedge against inflation, political and economic uncertainty, and local currency devaluation.

"Local demand for gold in Turkey is simply a desire to protect their purchasing power from a declining Lira," William Stack, financial advisor at Stack Financial Services LLC, told Kitco News. "Gold is a great asset to own when you are in a financial pinch because it can be sold when necessary."

Rising gold demand led to a jump in gold imports, which weighed on Turkey's widening current-account deficit. In response, Turkey introduced steps to curb gold imports in February and began selling its gold reserves to meet domestic demand.

But the move to offload some of its gold is not necessarily a losing scenario for the Turkish central bank, Stack pointed out.

"One reason Turkey is selling is that gold has risen 10% from a year ago, in dollar terms. In Lira-terms, the gain is more dramatic — 70-85%," he explained. "If Turkey sold gold internationally, it would weaken the Lira further. But when they sell gold to Turkish residents for Lira, it reduces the amount of Lira in the marketplace, thereby helping to strengthen the currency."

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold, silver gain on ideas FOMC will pause at next meeting

Gold and silver prices are solidly higher in midday U.S. trading Thursday, amid a big U.S. economic data dump that culminates with Friday morning's U.S. jobs report. The precious metals are boosted today by ideas the Federal Reserve may pause in its interest-rate-hiking cycle. August gold was last up $15.80 at $1,997.90 and July silver was up $0.403 at $23.985.

The Wall Street Journal reported today the Fed is likely to pause in its rate-hiking cycle at the June FOMC meeting, before raising rates again later this summer. That's a shift from the consensus marketplace belief just recently that the Fed would again raise rates at the June FOMC meeting. However, a "sizzling jobs report" on Friday would throw cold water on the Fed pause, said the Journal report.

There was a very heavy U.S. economic data slate Thursday. The data was a mixed bag but the ADP national employment report for May did run hot, showing a rise of 278,000 jobs—well above market expectations. Traders are now looking ahead to the Labor Department's employment situation report for May on Friday morning. The key non-farm payrolls number is seen coming in at up 190,000 compared to the April non-farm jobs number of up 253,000.

Asian and European stock markets were mostly higher overnight. U.S. stock indexes are higher at midday. The marketplace has been assuaged by the U.S. House of Representatives handily passing the government debt-ceiling-extension deal reach between Republicans and Democrats. The measure now goes before the Senate and is expected to also pass.

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The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil prices are solidly higher and trading around $71.00 a barrel. These two outside markets were also bullish elements for the metals markets today. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.677%.

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,050.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,949.60. First resistance is seen at $2,008.00 and then at $2,020.00. First support is seen at $1,985.00 and then at today's low of $1,970.10. Wyckoff's Market Rating: 6.5

July silver futures bulls and bears are back on a level overall near-term technical playing field. A four-week-old downtrend on the daily bar chart has been negated. 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 $24.40 and then at $24.75. Next support is seen at today's low of $23.355 and then at $23.00. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed up 800 points at 371.70 cents today. Prices closed nearer the session high. Short covering was featured. The copper bears still have the overall near-term technical advantage. Prices are still in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at today's high of 373.15 cents and then at 377.50 cents. First support is seen at this week's low of 362.20 cents and then at 360.00 cents. Wyckoff's Market Rating: 4.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold posts first loss in three months, but markets focus on Fed's 'hawkish pause'

 The gold market posted its first monthly loss since February, wrapping May down about $36. As markets eye the crucial Congress vote to lift the debt ceiling, some Federal Reserve speakers are pushing for a "hawkish pause" at the June 13-14 meeting.

The House of Representatives is set to vote on a bill to lift the $31.4 trillion debt limit on Wednesday – a critical step to avoid a default before the June 5 deadline provided by U.S. Treasury Secretary Janet Yellen. Voting is said to start late afternoon and end before 9 pm ET time.

"The far wings of both parties are expected to show some resistance, but this bill is expected to advance," said OANDA senior market analyst Edward Moya. "The Senate might have some difficulty passing the bill, but expectations are elevated that the U.S. will avoid defaulting on its debt."

For gold, a debt deal does not necessarily mean lower prices, Moya said in a note Wednesday. "The details behind the proposed piece of legislation include significantly lower spending, which will be a major blow to the economic outlook and likely trigger a much harder-hitting recession," he noted.

The more significant risk to the gold price is what the Fed decides to do in June and July, with market expectations shifting drastically in the last few weeks.

At the time of writing, the CME FedWatch Tool was back to projecting a 70% chance of a pause at the June meeting. The market leaned towards another 25-basis-point hike only a few trading sessions ago.

U.S. rate futures also started to price in a 70% chance of a pause by the Fed Wednesday, which is a u-turn from earlier in the session, according to Refinitiv's FedWatch.

Fed speakers trigger re-pricing

Expectations shifted after several Fed speakers leaned towards pausing or skipping a rate hike in June, which is a reversal from previous hawkish sentiments.

Philadelphia Fed President Patrick Harker said Wednesday that he supports a "skip" in rate hikes.

"I am in the camp increasingly coming into this meeting thinking that we really should skip," Harker said. But Friday's employment data "may change my mind," he added.

Fed Governor and vice chair nominee Philip Jefferson also said skipping a rate hike makes sense because it gives policymakers time to examine more data.

"Skipping a rate hike at a coming meeting would allow the (Federal Open Market) Committee to see more data before making decisions about the extent of additional policy firming," Jefferson said at a financial stability conference in Washington.

But not all Fed officials share this view. Federal Reserve Bank of Cleveland President Loretta Mester said no "compelling" evidence exists not to raise rates. "I don't really see a compelling reason to pause," Mester told Financial Times in an interview Wednesday. "I would see more of a compelling case for bringing the rates up and then holding for a while until you get less uncertain about where the economy is going."

In the meantime, macro data releases have supported more tightening by the U.S. central bank. The Federal Reserve's preferred inflation measure — the annual core PCE price index — accelerated to 4.7% in April versus the consensus forecast of 4.6%.

And the latest JOLTS job openings data showed that the labor market remains tight.

All eyes are on the U.S. April nonfarm payrolls report, scheduled to be published on Friday. "Market calls that the Fed is done hiking won't be able to shake off this labor market strength if Friday's NFP report confirms this trend," Moya said.

Despite gold's failure to maintain its gains after testing record highs earlier in May, analysts say it is a good sign that gold can trade above $1,950 an ounce. But the risk of falling back to the $1,900 remains, said Kinesis Money market analyst Rupert Rowling.

"Assuming the U.S. does ratify its new debt ceiling agreement, then June looks set to be a more challenging month for gold with more bearish factors than bullish ones," Rowling said Wednesday. "Attention will quickly switch to the U.S. jobs data and then the inflation data that comes out before the Federal Reserve meets to decide its June interest rate decision in the middle of the month."

At the time of writing, August Comex gold futures were trading at $1,981.20, up 0.21% on the day.

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold gains as USDX weakens, U.S. bond yields dip

Gold prices are solidly higher in midday U.S. trading Tuesday, supported by a weaker U.S. dollar index and a downtick in U.S. Treasury yields to start the U.S. trading week. The yellow metal hit a nine-week low overnight. Short covering in the futures market and some bargain buying in the cash were also featured today. August gold was last up $17.10 at $1,980.20 and July silver was down $0.015 at $23.34.

Trader and investor attitudes are more upbeat this week. Republican and Democratic leaders have agreed upon a deal to raise the U.S. government's debt limit. House and Senate votes on the matter are likely to occur later this week.

Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are mixed to firmer at midday.

The World Gold Council reported its survey shows 24% of central banks intend to increase their gold holdings in 2023. Reasons include higher inflation, geopolitical turmoil and interest rate worries.

  Gold price trades below $1,950 ahead of Congress debt ceiling vote and June Fed decision

The key outside markets today see the U.S. dollar index down on a corrective pullback after hitting a two-month high last week. Nymex crude oil prices are solidly lower and trading around $69.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.702%.

Technically, August gold futures prices hit a nine-week low early on today and then rebounded to score a bullish "outside day" up. Bulls have the slight overall near-term technical advantage. However, prices are in a four-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 $1,985.00 and then at $2,000.00. First support is seen at $1,965.00 and then at today's low of $1,949.60. Wyckoff's Market Rating: 5.5

July silver futures prices hit a nine-week low Friday. The silver bears have the overall near-term technical advantage. Prices are in a four-week-old 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 today's high of $23.51 and then at $23.75. Next support is seen at $23.00 and then at the May low of $22.785. Wyckoff's Market Rating: 4.0.

July N.Y. copper closed down 160 points at 366.60 cents today. Prices closed near mid-range. The copper bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 335.00 cents. First resistance is seen at today's high of 371.10 cents and then at 375.00 cents. First support is seen at today's low of 362.70 cents and then at 360.00 cents. Wyckoff's Market Rating: 3.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

U.S. economic data hammers gold price as markets gear up for a rate hike in June

The gold market got battered by upbeat economic data and stubbornly high inflation. As gold posted its third weekly loss, markets recalibrated for another 25-basis-point rate hike in June after pause expectations got shattered.

Gold is looking to close down $35 on the week, with June Comex gold futures last trading at $1,945.80 an ounce. Despite the selloff, year-to-date gold is still up more than 6%.

The macro data was the main driver weighing on gold at the end of the week, TD Securities global head of commodity strategy Bart Melek told Kitco News.

"The durable goods number, personal spending, and the PCE inflation measures were all broadly above expectations," Melek said. "Not only is inflation not dropping, the Federal Reserve's preferred inflation measure — the core PCE price index — went to 4.7% in April."

Inflation near 5% is too high for the Fed to justify a pause in June, and the market is pricing that in. The latest market expectations see a 60% chance of a hike at the June 13-14 meeting, Gainesville Coins precious metals expert Everett Millman told Kitco News.

"That is a big reversal from earlier estimates," he said. "The speed at which this kind of re-pricing happens gets the attention of the gold market. Rapid changes in expectations lend themselves to more volatility."

On top of that, the U.S. dollar has performed well, and gold responded with a move down. "We think gold prices may be subdued for much of the quarter and probably into the early part of Q3," Melek said. "The market has mispriced Fed's intentions."

With the Fed zeroed in on inflation, not much will likely sway the central bank before the June meeting. Millman added that the debt ceiling debate drama is the one thing to closely monitor as any downgrades to the U.S. credit rating would trigger safe-haven flows into gold.

Meanwhile, negotiations to raise the U.S. government's $31.4 trillion debt ceiling before June 1 hit some obstacles on Friday. Earlier, Democratic and Republic negotiators appeared nearing a deal to lift the debt cap for two years while limiting some spending.

"We have made progress," lead Republican negotiator Garret Graves told reporters. "I said two days ago, we had we had some progress that was made on some key issues, but I want to be clear, we continue to have major issues that we have not bridged the gap on chief among them work requirements."

Gold price levels to watch

The next support level for gold is $1,940 an ounce, Millman said. Below that, investors should watch the $1,915 and $1,900.

Analysts do not rule out a move lower to $1,900. "Firm support is at around $1,900-$1,896," Melek said.

It is too soon to call a bottom in gold even though the precious metal is down more than $125 since testing record highs a few weeks ago, RJO Futures senior market strategist Frank Cholly told Kitco News.

"The market is telling us we will see another rate hike in June and maybe one in July. Gold doesn't like that," Cholly said. "Somewhere between the $1,950-$1,925 range on August futures, traders will find value, and the market will form a base before turning higher," he said.

Data next week

Tuesday: U.S. CB consumer confidence

Wednesday: U.S. JOLTs job openings, Beige Book

Thursday: U.S. jobless claims, U.S. ADP nonfarm employment, U.S. ISM manufacturing PMI

Friday: U.S. nonfarm payrolls

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold/Silver: A breakdown in two-year treasury yields triggers the next bull market

I wish everyone a Happy Memorial Day weekend and thank all of you for the positive feedback over the years, and it is an absolute pleasure to write for you all. Digging into the precious metals markets, we have been under pressure for most of May after the banking crisis became more of an isolated incident rather than the contagion effect everyone feared most. With that story fading into the sunset, a new story surrounding a potential U.S. Default was born where a new batch of speculators piled into the long side of the Gold and Silver while shorting U.S. Equities. Those traders are the ones that often "buy the tops while selling the bottoms" and vice versa. Thursday's massive rally in the Nasdaq and breakdown below $1950 on Gold most likely cleaned those short-term speculators out of the market. As the deadline for the debt ceiling approaches this week, the volatility in the precious metals and equity markets should continue to mount.

I expect this week to see a last-minute agreement and the "can kicked down the road again," where precious metals will most likely capitulate at that point, making a lower low on the day while closing unchanged or higher on the day. Is that enough to get Gold back to a neutral or bullish trend? Most likely not. We will need U.S. economic data to continue to cool, reducing the expectations of another interest rate hike in July and, ultimately, a "Fed Pivot." At that point, Two-Year Treasury Yields will likely have "peaked," marking a top in the U.S. Dollar and a bottom in Gold. Most of you have yet to see a Two-Year Treasury Yield chart in relation to the Gold market, so I want to share that below.

Daily Two-Year Treasury Yield Chart

Daily Gold Chart

The technical backdrop leaves Gold in a "bearish trend" as Fed fund futures are pricing another interest rate hike in July and one or two rate cuts by year-end. Gold remains near critical support at $1950 and needs to recapture $1980 on the charts to challenge $2000. Once Gold closes above $2000, the talking heads on financial news networks will wake up and begin the chase again, leaving all-time highs back in play. Remember, the playbook is similar to the 2018-2020 Gold bull market, where the Fed indicated there would be three more rate hikes, and ultimately none happened. The Fed reversed course and started cutting rates. That drove Gold up $650, which leaves our $2500 target achievable in the next 12-18 months.

To further help you develop a trading plan, I went back through 20 years of my trading strategies to create a Free New "5-Step Technical Analysis Guide to Gold that can easily apply to Silver." The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Gold.

Daily Silver Chart

The chart pattern in Silver has been strikingly similar to that of Gold since the beginning of May, with prices rejecting the first breach of the 50% retracement at $23. The recent correction gives us another excellent opportunity to add to core positions using the December 1000 oz Silver contract. Over the next 18-24 months, we expect Copper to make new all-time highs and Silver to break $35/oz.

Having the flexibility to enter and exit the market quickly makes it essential for Precious Metals investors to have a futures trading account alongside their core Physical Precious Metals holdings. If you are interested in speculating on the rise and fall of the price of Precious Metals on a shorter-term basis, such as two weeks or two months, or If you have never traded futures or commodities, I just completed a new educational guide that answers all your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book.

By

Phillip Streible

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Gold trades below its 100-day MA as hope of a potential debt-ceiling resolution advances

Gold futures basis the most active June 2023 Comex contract traded briefly below the 100-day simple moving average at $1939.50. Gold futures traded to a low of $1939 just $0.50 below its 100-day moving average which technical traders use as a benchmark to determine the interim trend of a stock or commodity. As of 5:00 PM EDT, the June contract is currently down $22.90 or 1.17% and fixed at $1941.70.

With just one day left before the United States begins a three-day holiday weekend in honor of Memorial Day, both Republican and Democratic leaders have expressed optimism that current negotiations will lead to a deal with legislation that raises the debt ceiling before the XDate occurs.

According to Reuters News, "U.S. President Joe Biden and top congressional Republican Kevin McCarthy on Thursday appeared to be nearing a deal to cut spending and raise the government's $31.4 trillion debt ceiling, with little time to spare to head off the risk of default."

A source cited by Reuters says that "the two sides are just about $7 billion apart on a total figure that would be well over $1 trillion".

A potential upcoming deal that would resolve the debt ceiling crisis has pressured gold dramatically lower now for the fourth consecutive day. Gold futures have declined almost $40 from Friday’s opening price of $1978 down to its current fix just below $1942 per ounce.

On a technical basis gold breached a Fibonacci 50% retracement today of $1947.80. The data set used for this retracement begins at $1810 (the lows that occurred in February of this year) to $2085. Gold’s 100-day moving average at $1939.50 was breached in trading today and becomes the first level of potential technical support. Below that the next level of technical support for gold futures at $1915 per ounce, which represents a 61.8% Fib retracement.

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley