Gold prices holding support above $1,675 as UofM inflation expectations fall to one-year low

The gold market is holding critical support at around $1,675 an ounce as consumer sentiment continues to improve and inflation expectations remain anchored.

Friday, the University of Michigan said a preliminary estimate of its consumer sentiment survey edged up to 59.5 from August's reading of 58.2. The data was relatively in line with expectations.

The gold market, seeing some modest relief in initial reaction to the latest sentiment data. December gold futures pushed into neutral territory, trading near session highs at $1,678.10 an ounce.

Although sentiment is relatively stable, the report noted there is still a high level of uncertainty among consumers.

"After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy," said Joanne Hsu, director of consumer surveys at the UofM.

A positive for the gold market, the survey highlighted falling inflation expectations. The report said that consumers see inflation rising 4.6% by next year, down from the previous projection of 4.8%.

The report said that this is the lowest inflation forecast in a year.

Five-year inflation expectations dropped to 2.9%, down from August's reading of 3.1%.

"However, it is unclear if these improvements will persist, as consumers continued to exhibit substantial uncertainty over the future trajectory of prices," said Hsu.

Economists have noted that if inflation expectations remain anchored, the Federal Reserve could slow the pace of its aggressive monetary policy stance. However, many economists have noted that it will take more than just one or two sentiment surveys to slow the current trend.

"The dip there will offer some comfort to the Fed as it looks to combat rising prices. That emphasizes the credibiliity of the Fed (along with falling gas prices) and gives them some breathing room," said Adam Button, chief currency strategist at Forexlive.com

Markets all but expect the Federal Reserve to raise the Fed Funds rate by 75 basis points next week. The CME FedWatch Tool puts the chance of a full 1% move at only 16%.

However, markets still see a much higher terminal rate near 5%, which some analysts said could keep a lid on gold prices.

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold price pounded to 2-plus-year low by economic worries, bearish charts

Gold prices are sharply down and hit a nearly 2.5-year low in midday U.S. trading Thursday. Silver prices are also solidly lower. The precious metals are being hit by global economic worries that threaten to dent commercial and consumer demand for raw commodities, including the metals. October gold was last down $36.00 at $1,662.20 and December silver was down $0.324 at $19.245.

The marketplace was a bit calmer overnight and early this morning, but it appears recent hawkish monetary policy comments from central bank officials and noted market analysts have combined with hot inflation readings to quickly sap what little risk appetite had been seen earlier today. And remember, the stock and financial markets are at the time of year (September and October) where the going can get very tough. Gold and silver bulls remain frustrated that the risk aversion in the marketplace is not translating into more safe-haven demand for the two metals.

Traders are focusing on next week’s FOMC meeting, which is expected to see the Fed raise the key U.S. Fed funds rate by 0.75% in its effort to tamp down problematic price inflation. Precious metals traders are reckoning the tighter monetary policies of most of the major central banks of the world will further slow global economic growth that would in turn reduce consumer and commercial demand for metals.

Inflation triggered worst market sell-off since 2020, analyst predicts even more pain – John Feneck

Global stock markets were mostly slightly higher overnight. U.S. stock indexes are lower at midday.

The key outside markets today see Nymex crude oil prices solidly lower and trading around $85.50 a barrel. The U.S. dollar index is near steady in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 3.44%.

Technically, October gold futures prices hit a nearly 2.5-year low today. The gold futures bears have the solid overall near-term technical advantage and gained more power today. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,675.00 and then at $1,686.30. First support is seen at $1,650.00 and then at $1,635.00. Wyckoff's Market Rating: 1.5.

December silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at today’s high of $19.625 and then at $20.00. Next support is seen at $19.00 and then at this week’s low of $18.775. Wyckoff's Market Rating: 2.5.

December N.Y. copper closed down 380 points at 348.20 cents today. Prices closed nearer the session low today. 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 August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at 355.00 cents and then at this week’s high of 369.25 cents. First support is seen at the September low of 336.10 cents and then at 330.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold gains, silver surges as USDX slumps

Gold is moderately higher and silver sharply up in midday U.S. trading Monday. The precious metals are supported by a depreciating U.S. dollar on the foreign exchange market. The U.S. dollar index is sharply lower today and hit a two-week low after last week posting a 20-year high. A dip in U.S. Treasury yields to start the trading week is also a positive for the precious metals markets. October gold was last up $14.00 at $1,733.00 and December silver was up $1.088 at $19.865.

U.S. stock indexes higher so far today. Stock and financial markets are almost half-way through the month of September with no major marketplace anxiety. The major U.S. stock indexes have seen short-term price downtrends stall out. History shows September and October can be rocky months for the stock and financial markets.

Traders and investors are awaiting the latest U.S. inflation report on Tuesday. The August consumer price index is seen coming in up 8.0%, year-on-year, compared to the July report showing an 8.5% rise. There are some signs in the economy that inflation in the U.S. is cooling off a bit.

Weak inflation will be key to a sustainable gold rally above $1,750

The other key outside market today sees Nymex crude oil prices higher and trading around $87.75 a barrel. The yield on the 10-year U.S. Treasury note is fetching 3.298%.

Technically,ctober gold futures bears still have the firm overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart is now in jeopardy. There is also the potential for a big and bullish double-bottom reversal pattern forming on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,769.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at $1,740.00 and then at $1,750.00. First support is seen at today’s low of $1,712.70 and then at $1,700.00. Wyckoff's Market Rating: 2.5.

December silver futures prices hit a three-week high today. The silver bears have the overall near-term technical advantage. However, the bulls have momentum on their side to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00. The next downside price objective for the bears is closing prices below solid support at $18.50. First resistance is seen at $20.00 and then at $20.50. Next support is seen at $19.50 and then at $19.00. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed up 235 points at 359.10 cents today. Prices closed nearer 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 August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at last week’s high of 362.85 cents and then at 365.00 cents. First support is seen at today’s low of 353.20 cents and then at 350.00 cents. Wyckoff's Market Rating: 3.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Weak inflation will be key to a sustainable gold rally above $1,750

Some optimism is creeping back into the gold market as prices end the week in neutral territory, bouncing off support at $1,700 an ounce.

However, analysts are warning investors that economic data next week needs to be significantly weaker than expected if that optimism blossoms in a new breakout on the upside.

The main focus for gold investors next week will be two inflation data points: the U.S. Consumer Price Index on Tuesday and the preliminary inflation expectations from the University of Michigan. Also on tap next week is August U.S. retail sales, which will be an essential gauge to determine how consumers are holding up as the Federal Reserve aggressively raises interest rates.

"Significantly weaker economic data next week will continue to pressure the U.S. dollar, which is positive for gold," said Sean Lusk, co-director of commercial hedging with Walsh Trading.

Ed Moya, senior U.S. market analyst at OANDA, said that weak inflation could give gold a boost next week as it could help investors and markets start to define how high the Federal Reserve will take interest rates.

"If inflation drops, then there is a chance we might not see interest rates go much above 4.00%," he said. "If that happens, then maybe the U.S. dollar has peaked, providing some relief for gold."

However, Moya also said that a slight miss in the data might not be enough to shift fairly solid expectations for the Federal Reserve's next monetary policy decision later this month. Markets see a 90% chance that the Federal Reserve will raise interest rates by 75 basis points.

Analysts have said that if those expectations don't come down, gold's new-found optimism could vanish fairly quickly.

"If the Fed raises interest rates by only 50 basis points, this could give gold some momentum," said Christopher Vecchio, senior market analyst at DailyFX.com.

Lusk said that gold has the potential to push to $1,760 an ounce next week; however, he added that "bull markets need to be fed."

"Gold rallies are being sold and that won't change until we have a better understanding of where interest rates are going," he said.

Bullish sentiment points to a limited short squeeze for gold prices, not a new breakout

Inflation expectations

According to consensus estimates, economists see headline CPI falling 0.1% in August as gasoline and energy prices dropped last month. At the same time, core inflation, which excludes energy and food prices, is expected to rise 0.2%.

"If we're right and core CPI increases by a more muted 0.2% m/m, then a late switch to a 50bp hike would still be possible," said Paul Ashworth, chief U.S. economist at Capital Economics, said in a note Friday.

However, not everyone is convinced that disappointing inflation data will move the needle on interest rate hikes.

Daniel Ghali, senior commodity strategist at TD Securities, said that this past week at the Cato Institute's Annual Monetary Policy Conference, Fed Chair Jerome Powell highlighted the Federal Reserve's dual mandate of price stability and maximum employment.

"Tightness in the labor market is probably going to keep interest rates elevated for a longer period of time," he said. "Wage growth is at a level we haven't seen since the 1980 and this could lead to a deanchoring of inflation expectations and that is what the Fed fears."
 

Ghali said that although gold prices could go up next week, he expects its current downtrend to remain in place.

"A weak CPI data could create a short squeeze, but we don't see that as sustainable," he said.

He added that while the precious metal may have priced in the Fed's aggressive rate hike, it hasn't priced in the duration of higher interest rates.

"While gold prices may now have accurately captured the expected level of interest rates, they are not reflecting the implications of a sustained period of restrictive policy. In this context, money managers continue to sell their length, while ETF holdings of gold remain in a sustained downtrend," he said.

Next week's data

Tuesday: U.S. CPI

Wednesday: U.S. PPI

Thursday: Retail Sales, Empire State Survey, Philadelphia Federal Reserve Survey, unemployment claims

Friday: University of Michigan Consumer Sentiment

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold holding fast against U.S. dollar, bond yields

It may be a little premature to be talking about a breakout in gold; however, according to several market analysts, the precious metal is ending the week on a solid note.

Although it's ending Friday in relatively neutral territory, analysts see a small victory in what the market didn't do: break down to new lows. Let's start with the U.S. dollar, which rose to a 20-year high against a basket of global currencies.

The greenback saw major breakouts against the Japanese yen and Chinese yuan; at the same time, the pound fell to a 35-year low against the U.S. dollar and the euro continues to trade below parity with the greenback, falling to a fresh 20-year low.

Currencies around the world are falling to the juggernaut that has become the U.S. dollar, all global currencies except gold. The precious metal has managed to hold fast support at $1,700 an ounce.

Gold also as managed to withstand rising bond yields. U.S. 10-year yields pushed to 3.5% this week, its highest level in two months. Heading into the weekend, markets see a 90% chance the U.S. central bank will raise interest rates by 75 basis points.

Market expectations solidified after Federal Reserve Chair Jerome Powell said the central bank will maintain its aggressive monetary policy stance “until the job is done."

Gold prices fell to session lows following Powell's hawkish comments, but ultimately support held.

Some analysts have said that gold has been able to withstand the rising bond yields and the U.S. dollar's momentum as investors are once again starting to see it as an important safe-haven asset as well as an inflation hedge.

In dismal headlines this week, Michael Gayed, portfolio manager and Publisher of the Lead-Lag Report, told Kitco News that the U.S. could be facing a sovereign debt crisis as Treasury yields continue to rise.

It's not just in the U.S. European Central Bank President Christine Lagarde raised the specter of recession after the ECB raised interest rates by a historic 75 basis points.

Perth Mint outpaces U.S. Mint in gold sales last Month

During the press conference, she said that a recession wasn't the ECB's base case scenario, but as part of its bearish scenario, they see the eurozone economy contracting by 0.9% in 2023.

Although some investors are starting to see value in gold, there is still a long way to go to undo the damage done this summer. Bears are still in control of the market as they liquidate their bullish gold bets.

There is still a long road before gold shines bright again, but at least it is holding fast for now.

Have a great weekend

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold backs down as Powell reiterates hawkish Federal Reserve

Gold prices are lower in midday U.S. trading Thursday, pressured by comments from Federal Reserve Chairman Jerome Powell that again leaned hawkish on U.S. monetary policy. Powell’s comments boosted the U.S. dollar index and U.S. Treasury yields, both of which had been weaker ahead of his speech. The yellow metal had seen higher prices overnight, but lost those gains to trade near steady when upbeat U.S. jobless claims data were released, and then sold off when Powell made his remarks. October gold was last down $10.80 at $1,707.40 and December silver was up $0.065 at $18.325.

Powell’s speech today was the last scheduled ahead of the FOMC meeting on Sept. 20-21, at which time the Fed is expected to raise the Fed Funds rate by 75 basis points. The Fed’s beige book, out Wednesday afternoon, pointed out weaker U.S. economic growth. Meantime, the European Central Bank met today and raised its main interest rate by 75 basis points, as expected.

U.S. stock indexes are higher at midday, and recouped early losses that occurred shortly after Powell’s hawkish monetary policy comments in a discussion with the Cato Institute. Global stock markets were mostly firmer overnight, following the strong gains in the U.S. stock market on Wednesday.

Brace for a possible U.S. debt crisis if inflation stays elevated, democracy itself is at risk – Michael Gayed

The key outside markets today see Nymex crude oil prices higher on a corrective rebound and trading around $83.50 a barrel after hitting an eight-month low overnight. The U.S. dollar index is firmer after hitting a 20-year high Wednesday. The yield on the 10-year U.S. Treasury note is fetching 3.292%.

Technically, October gold futures bears have the solid overall near-term technical advantage. 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 $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at today’s high of $1,729.30 and then at $1,740.00. First support is seen at $1,700.00 and then at $1,686.30. Wyckoff's Market Rating: 2.0.

December silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $19.50. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $18.665 and then at $19.00. Next support is seen at $18.00 and then at this week’s low of $17.74. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed up 800 points at 351.10 cents today. Prices closed near the session high today. 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 August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at 355.00 cents and then at 360.00 cents. First support is seen at today’s low of 344.20 cents and then at this week’s low of 336.10 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver bounce as USDX, Treasury yields decline today

Gold and silver prices are higher and near daily highs in midday U.S. trading Wednesday, on short covering in the futures markets and perceived bargain hunting in the cash markets, following recent losses. The U.S. dollar index and U.S. Treasury yields backed down from their higher levels today, which also encouraged some buying interest in the metals markets. However, a big drop in crude oil prices to an eight-month low today did limit the upside in the precious metals. October gold was last up $11.50 at $1,714.90 and December silver was up $0.352 at $18.26.

U.S. stock indexes are higher at midday but still trending down on the daily charts. Risk aversion remains somewhat elevated in the general marketplace. China reported today its imports and exports fell more than the trade expected in August as the world's second-largest economy continues to stall amid Covid lockdowns, a wobbly property market and a weaker yuan. "The headwinds facing the Chinese economy are becoming increasingly fierce and recent efforts to shore it up have appeared inadequate," said an email dispatch from analyst Craig Erlam with OANDA.

The Bank of Canada monetary policy meeting today saw the central bank raise interest rates by 75 basis points. The European Central Bank meets Thursday and many expect the ECB to raise its main interest rate by 75 basis points.

Gold bears remain in control as short squeeze runs out of momentum

The key outside markets today see Nymex crude oil prices sharply lower and trading around $82.65 a barrel. The U.S. dollar index is a bit weaker after hitting another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 3.2%.

Technically, October gold futures bears still have the solid overall near-term technical advantage. 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 $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $1,686.30. First resistance is seen at this week's high of $1,727.00 and then at $1,740.00. First support is seen at $1,700.00 and then at $1,686.30. Wyckoff's Market Rating: 2.0.

December silver futures bears still have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $19.50. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at this week's high of $18.465 and then at $18.80. Next support is seen at today's low of $17.74 and then at last week's low of $17.40. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 345 points at 342.70 cents today. Prices closed near mid-range today. The copper bears have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week's high of 350.00 cents and then at 360.00 cents. First support is seen at this week's low of 336.10 cents and then at 330.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold bears remain in control as short squeeze runs out of momentum

Gold bears remain firmly in control of the market as prices have been unable to hold gains above $1,750 and a short squeeze on hedge funds has proved to be short-lived.

According to market analysts, hedge funds remain pessimistic about gold as markets shift expectations that the Federal Reserve will quickly pivot from its current aggressive monetary policy strategy.

Further rate hikes through the rest of the year and in the first quarter of 2023 continue to support the U.S. dollar at a 20-year high and bond yields above 3%, two significant headwinds for the precious metal.

According to the CME FedWatch Tool, markets see a 74% chance that the Federal Reserve will raise interest rates by another 75 basis points later this month.

Commodity analysts at TD Securities noted that gold's dismal performance through the summer indicates that the market has priced in higher interest rates; however, they added that the next wave of selling will be driven by expectations that a much-anticipated pivot is further away than initially thought.

"While gold prices may now have accurately captured the expected level of interest rates, they are not reflecting the implications of a sustained period of restrictive policy. Further, we see odds of a major capitulation event growing with every tick lower in gold prices," the analysts said in a note. "Gold markets still feature an extremely concentrated and bloated position held by a small number of family offices and proprietary trading shops, which are increasingly at risk as prices approach their pandemic-era entry levels."

The CFTC disaggregated Commitments of Traders report for the week ending Aug. 30 showed money managers decreased their speculative gross long positions in Comex gold futures by 4,089 contracts to 91,761. At the same time, short positions rose by 6,234 contracts to 79,973.

Gold's net length now stands at 11,788 contracts, down 46% from the previous week. During the survey period, gold prices briefly rose above $1,750 an ounce but could not hold those gains.

Platinum remains well supported even as surplus grows to 974k ounces – WPIC

Since then, gold prices have been stuck near support just above $1,700 an ounce.

Commodity analysts at Société Générale noted that the entire precious metals complex saw bearish flows of $2.5 billion.

"These flows came as Jerome Powell delivered his Jackson Hole speech. As the US Fed chair reiterated that the focus of the central bank is to tame inflation, precious metal prices fell, as higher interest rates erode the appeal of the non-interest-generating, safe-asset, bullion," the analysts.

As bearish as the sentiment is in the gold market, it is being outpaced by silver. Hedge funds made significant bearish bets in silver, according to the latest trade data.

The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures fell by 564 contracts to 31,139. At the same time, short positions rose by 4,643 Analysts note that gross long are at their lowest point since Nov. 18, demonstrating how little contracts to 52,170.

bullish interest there is in the precious metal.

Silver's positioning remains net short by 21,031 contracts, up nearly 33%. During the survey period, silver prices dropped below $19.00 an ounce.

The sentiment in the silver market has continued to sour as prices have dropped below $18 an ounce.

Some analysts have said that growing recession fears continue to weigh on silver prices as 60% of demand comes from industrial uses.

Recession fears can also be seen in the copper market as hedge funds liquidate their bullish bets.

Copper's disaggregated report showed money-managed speculative gross long positions in Comex high-grade copper futures fell by 3,126 contracts to 37,617. At the same time, short positions rose by only 63 contracts to 46,284.

Positioning in the copper market remains solidly bearish with a new net short position of 8,667 contracts. During the survey period, copper prices hovered near support around $3.60 an ounce.

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

$50,000 gold is likely once the monetary system returns to a gold standard – John Butler

s the world transitions to a gold standard monetary system, the price of gold will skyrocket to $50,000 per ounce, said John Butler, Head of Treasury at TallyMoney and author of The Golden Revolution, Revisited.

“Today, the gold price is too low to allow markets to clear, because assets are over-valued vis-à-vis gold,” he said. “According to my calculations, you’re talking about something in the region of $50,000 per ounce being [reasonable] if you go back to a gold-backed international monetary system.”

Butler claimed that the process of transitioning to a gold standard is inevitable as the U.S. loses its economic dominance and the world become multipolar.

“Gold solves for the game-theoretic monetary equilibrium for a multipolar world that is, nevertheless, hugely dependent on international trade,” he explained. “At the end of the Second World War, the U.S. economy was roughly half the entire global economy. By activity today, it’s only 20 percent… If you just extrapolate this trend, ultimately, it’s going to tip the balance regardless of whether the U.S. retains military superiority or not.”

Butler spoke with David Lin, Anchor and Producer at Kitco News.

Fed policy and gold

On August 26th, Federal Reserve Chairman Jerome Powell gave a hawkish speech at the Jackson Hole Symposium, stating that it would require “pain” to bring inflation down to 2 percent.

The latest data show that U.S. inflation was 8.5 percent in July.

Opinion is divided on whether the Fed will pivot on its tightening cycle. Butler said that Powell would reverse rate hikes, which could benefit gold.

“[The Fed’s hawkish moment] is taking place right now,” said Butler. “When it goes, and markets reassess in a substantial way that central banks are far more powerless to act on inflation than they thought, I think gold is going to recover all of its losses this year, and indeed reach new highs.”

He added that Powell’s hawkish Jackson Hole speech was merely a “credibility restoration exercise,” and that “The U.S. economy is unable to last with strength if interest rates continue to rise,” which would cause “The Fed to blink sooner than most people believe.”

BRICS: a new reserve currency?

The BRICS nations (Brazil, Russia, India, China, and South Africa) are allegedly developing a new reserve currency, based on a basket of BRICs currencies, to rival the U.S. dollar.

Butler said that although the claim of a new reserve currency “has been a rhetorical talking point for an awfully long time,” that “a heightened degree of geopolitical tensions around the world” could mean more progress towards the BRICS’ goal.

“If [the BRICS] decide to somehow come up with a way to trade bilaterally, and to use each others’ currencies as reserves, or to create a basket of their own currencies and use that as reserves… that would be a world historical event,” he said.

In his book, Butler wrote that the BRICS countries would likely choose “a gold-backed currency of some sort” as “an objective reference currency that can be trusted and accepted by all.”

“The fact is that nobody can print gold, and nobody can create gold,” said Butler. “It’s nice to know that Mother Nature determines how much gold is available… [Gold] facilitates all the good things about international trade while mitigating the potential bad things about monetary manipulation.”
 

To find out Butler’s thoughts on Bitcoin, watch the video above
 

By Cornelius Christian

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold price rallies modestly as U.S. jobs data close to expectations

The gold market is holding on to modest gains but is still looking to end the week on a sour note below $1,750 an ounce as the U.S. economy continued to add slightly more jobs than expected last month.

Friday, the Bureau of Labor Statistics said 315,000 jobs were created in August The data beat expectations economists were forecasting job gains of around 295,000.

However, the unemployment rate jumped higher than expected, rising 3.7% last month. Economists were expecting the rate to hold steady at 3.5%.

The gold market is seeing some buying momentum following the latest employment report. December gold futures last traded at $1,721 an ounce, up 0.68% on the day.

Although the headline number was positive, the report noted sharp downward revisions for June. The bureau revised June’s employment data down by 105,000 jobs to 293,000. July’s data was revised down to 526,000 from the initial estimate of 528,000.

Also positive for gold are signs that wages could be plateauing, a sign that inflation pressures continue to ease. The report said that average hourly wages increased 0.3% or by 10 last month. Economists were expecting to see a 0.4% increase. For the year wages have risen 5.2%.

The weak wage inflation data’s positive impact on gold could seem counter intuitive for some investors. However, market analysts have noted that easing inflation pressure could prompt the Federal Reserve to slow its pace of monetary policy tightening, which would be positive for gold.

So far, the data has not had much impact on interest rate expectations. According to the CME FedWatch Tool, markets still see a 75% chance that the Federal Reserve raises the Fed Funds rate by 75 basis points later this month.

Avery Shenfeld, senior economist at CIBC, said that although the data was positive, there was still enough “bad news” in the report to bring some relief to markets.

“In an US overheated economy, slightly bad news should be good news for markets, and today’s jobs data had a small taste of that,” he said. “The bond market has been selling off in the days leading up to the data and will see a bit of relief today, and even equities might be happier with a somewhat cooler temperature reading on what has been a too-tight labor market.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley