The highly anticipated Jackson Hole Economic Symposium commences today

Each year the Kansas City Federal Reserve hosts one of the most important economic symposiums in Jackson Hole, Wyoming. This major event is attended by the top central bankers in the United States and globally. This year’s event, the 2022 Economic Policy Symposium, "Reassessing Constraints on the Economy and Policy," will be held August 25-27.

While the Federal Reserve Bank of Kansas City is attended by dozens of central bankers, policymakers, academics, and economists from around the world, it will be Friday’s keynote speech by Chairman Jerome Powell that will garner the most attention.

This year’s symposium occurs at a critical time as the Federal Reserve began an aggressive tightening of its monetary policy. Beginning in March of this year the Federal Reserve raised its Fed funds rate for the first time since 2018. More so, they have raised rates at each of the last four FOMC meetings. They raised rates by 25 basis points in March, 50 basis points in May, and 75 basis points at both the June and July FOMC meetings.

The Federal Reserve also announced that it would begin to taper or reduce its asset balance sheet. However, based on information from the Statista Research Department as of July 26, 2022, the Federal Reserve had $8.89 trillion in assets. Considering that in 2007 their assets were roughly at $0.9 trillion the Federal Reserve has been extremely challenged in reducing its assets. The only noticeable reduction occurred in September 2019 when the Federal Reserve reduced its $4.5 trillion balance sheet to $3.77 trillion.

Economists and analysts are divided as to the content of Friday’s keynote speech by Chairman Powell. Some analysts suggest that market participants are bracing themselves for an extremely hawkish speech by Powell, while others are anticipating that Powell might have a more dovish demeanor suggesting that the Federal Reserve will begin to lessen its aggressive rate hikes based on recent economic reports indicating an economic contraction in multiple sectors such as new-home sales and a disappointing U.S. manufacturing sector index report.

My current assessment is that Powell will first offer assurances to the American public that they are doing everything within their power to reduce inflation. Then chairman Powell will likely use his go-to playbook and state that all decisions are data-dependent and thereby deflect any specific timelines when they will begin to reduce the amount and frequency of each rate hike.

The Federal Reserve will hold its next FOMC meeting on September 20 – 21, a week after the release of the CPI inflation index for August.

Although there is much debate and uncertainty as to the tone and demeanor of Powell’s keynote speech, Chairman Powell will continue to walk an extremely thin tightrope between the current economic contraction and the current level of inflation. The likelihood that the Federal Reserve can pull off a “soft landing” will be difficult at best and impossible at worst.

These facts have been highly supportive of gold prices over the last few weeks. Gold has risen from its low of $1678 on July 21 to its current value of $1771.80 today. Today’s gains were a combination of a softer dollar, fractional declines in U.S. Treasuries yields, and market participants actively buying the precious yellow metal.

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

Gold sees modest short covering, bargain buying

Gold prices are firmer in midday U.S. trading Wednesday, on a routine upside price correction from recent selling pressure. Short covering in the futures market and some perceived bargain buying in the cash market are featured. The U.S. dollar index is trading slightly down and near its daily low, which also gave the metals market bulls a bit of encouragement. However, rising U.S. Treasury bond yields at mid-week has limited buying interest in the metals. October gold futures were last up $4.90 at $1,756.30. September Comex silver futures were last down $0.021 at $19.005 an ounce.

U.S. stock indexes are higher at midday. The marketplace is awaiting the late-week Jackson Hole, Wyoming Federal Reserve annual symposium that begins Thursday and includes a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed meetings have significantly moved markets. Markets are expecting Powell to lean hawkish on U.S. monetary policy and on the Fed’s fight against inflation.

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The key outside markets today see Nymex crude oil prices lower and trading around $93.00 a barrel. The U.S. dollar index is slightly lower at midday, after hitting a 20-year high on Tuesday. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.109%. Bond yields have been on the rise recently.

Technically, October gold futures bears still have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. 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 $1,759.70 and then at 1,775.00. First support is seen at today’s low of $1,745.50 and then at this week’s low of $1,730.40. Wyckoff's Market Rating: 2.5.

September 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 the August high of $20.87. The next downside price objective for the bears is closing prices below solid support at the July low of $18.01. First resistance is seen at this week’s high of $19.155 and then at $19.50. Next support is seen at this week’s low of $18.605 and then at $18.35. Wyckoff's Market Rating: 2.0.

September N.Y. copper closed down 460 points at 364.95 cents today. Prices closed nearer the session low today. The copper bulls have the overall near-term technical advantage. Prices are in a 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 400.00 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 this week’s high of 373.15 cents and then at 380.00 cents. First support is seen at this week’s low of 360.40 cents and then at last week’s low of 354.20 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver rebound as USDX backs off, crude oil rallies

Gold and silver prices are higher in midday U.S. trading Tuesday, on short covering in the futures markets and bargain hunting in the cash markets, following recent selling pressure. The key "outside markets" are also in a bullish daily posture for the metals today, as the U.S. dollar index backed off a bit and crude oil prices were solidly higher. October gold futures were last up $13.80 at $1,752.40. September Comex silver were last up $0.147 at $19.03 an ounce.

U.S. stock indexes are weaker at midday. Traders and investors early this week are concerned about a still-aggressive Federal Reserve that is fighting problematic price inflation by raising U.S. interest rates at a rapid pace–even if it causes a U.S. economic recession. A Wall Street Journal news headline read: "Wall Street swings from greed to fear as the Fed's message sinks in." The marketplace is awaiting the late-week Jackson Hole, Wyoming Federal Reserve annual symposium, including a speech from Fed Chairman Jerome Powell Friday morning. Past Jackson Hole Fed meetings have significantly moved markets.

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The key outside markets today see Nymex crude oil prices solidly higher and trading around $93.25 a barrel. The U.S. dollar index is weaker on a corrective pullback after hitting a nearly 20-year high in early U.S. trading. The surging greenback is denting bullish enthusiasm in many raw commodity markets, as they are priced in U.S. dollars on the world market. The appreciating greenback is making those commodities more expensive to purchase in non-U.S. currency. Meantime, the yield on the 10-year U.S. Treasury note is fetching 3.0%.

Technically, October gold futures bears still have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. 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 $1,757.60 and then at 1,775.00. First support is seen at today's low of $1,733.80 and then at this week's low of $1,730.40. Wyckoff's Market Rating: 2.5.

September 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 the August high of $20.87. The next downside price objective for the bears is closing prices below solid support at the July low of $18.01. First resistance is seen at last Friday's high of $19.48 and then at $20.00. Next support is seen at this week's low of $18.605 and then at $18.35. Wyckoff's Market Rating: 2.0.

September N.Y. copper closed up 380 points at 368.95 cents today. Prices closed nearer the session high and hit a seven-week high today. The copper bulls have the overall near-term technical advantage. Prices are in a 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 400.00 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 373.15 cents and then at 380.00 cents. First support is seen at this week's low of 360.40 cents and then at last week's low of 354.20 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Commerzbank lowers gold price target to $1,800 and sees potential for higher prices by 2023

The third quarter has been disappointing for many gold investors as the precious metal has been in a sharp downtrend and recently has been unable to hold any gains above $1,800 an ounce.

Although gold has struggled in the face of rising interest rates and surging momentum in the U.S. dollar, Carsten Fritsch, precious metals analyst at Commerzbank, said in a report Monday that the price action is doing a lot better than one would expect given the current environment.

Although gold prices have dropped, prices have held initial support at around $1,700 an ounce as the Federal Reserve embarked on an extraordinary tightening cycle. So far this year, the U.S. central bank has raised interest rates by 2.25%, driving real yields higher and boosting the U.S. dollar to a 20-year high.

"Despite all the complaining about the disappointing gold price development in recent months from an investor's point of view, it should not be forgotten that gold is still the best performer this year compared to other asset classes," Fritsch said in the report.

"Gold is currently trading 4.5% below the level at the beginning of the year. In the case of U.S. bonds, the corresponding loss amounts to 9.5% due to the sharp rise in yields, if the T-Note future is used as a reference. The equity markets have lost around 14% since the beginning of the year as measured by the MSCI World, the bitcoin price even more than 50%," Fritsch added.

While the German bank sees some resilient strength in the gold market, they are still downgrading their gold price forecast for the rest of the year. In the report, Commerzbank said that it sees gold prices ending the year at around $1,800 an ounce, down from the previous forecast of $2,000.

"In the short term, gold could come under pressure again because the U.S. Federal Reserve is likely to raise interest rates further until the end of the year," Fritsch said.

However, Commerzbank isn't completely giving up on gold. The bank said that it is a little too early to look for a recovery, but they see the potential for higher prices by the start of 2023.

"As soon as it becomes apparent that the rate hike cycle is coming to an end, the gold price should start to rise. This is likely to be the case in the fourth quarter," Fritsch said. "Like the market, we expect the Fed to cut rates again next year as the U.S. economy slides into recession."

Commerzbank sees gold prices ending 2023 at $1,900 an ounce, down from the previous estimate at $2,000 an ounce.

The German bank is also lowering its silver price target to $20.50 an ounce, down from the previous forecast of $24 an ounce. For 2023, Fritsch said that prices could rise to $25 an ounce, down from the prior estimate of $27 an ounce.

Fritsch noted that the silver market has been hit with significant bearish sentiment as investors flee the market.

"Since the beginning of the year, the holdings of silver ETFs tracked by Bloomberg have fallen by more than 3,000 tons. This corresponds to 1.5 months of global mine production that is additionally available as supply. Since the beginning of July, the outflows amount to more than 1,900 tons," he said.

However, Fritsch added that by 2023 silver should see more demand due to the global push for green alternative energy.

Finally, Commerzbank is also lowering its year-end price target for platinum to $1,000 an ounce, down from $1,050 an ounce.

"Since the beginning of the year, these have now totalled more than 400 thousand ounces. The platinum market could therefore be more oversupplied this year than previously expected," Fritsch said.

Credit Suisse downgrades its average gold price forecast to $1,725

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold is falling and can't get up

The interesting thing about markets: just when you think you have figured them out, they do the opposite. Just six trading days ago, the precious metals looked ready to run; we reversed our silver position to long. Since the peak on Aug. 12, the metals have closed lower every day.

Therefore, the price action is important. It gives you a better handle on markets and stops you from chasing the news cycle. There are many reasons that gold, silver, and platinum should be rallying, but they are not. The price action told us that there is no hurry to be a buyer.

Markets have many factors that make them move, but one that is never important is the news cycle. Any news that would drive markets is always priced in before you see it. The flow of information is well ahead of reported news. Do yourself a favor, quit guessing or trying to outsmart the market and let price be your guide.

Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper. Knowing that, we can trade either side without emotions.

In all markets, price action determines what will happen in the next day, week, or month. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.

Patience, discipline, and money management always win the day. Let the map of the markets show you the way.

By Todd 'Bubba' Horwitz

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver weaker Thursday as USDX trades sharply up

Gold and silver prices are modestly lower in midday U.S. trading Thursday, pressured by solid gains in the U.S. dollar index today. Losses in the metals are limited by gains in the crude oil market today. October gold futures were last down $4.20 at $1,762.20. September Comex silver futures were last down $0.181 at $19.555 an ounce.

The marketplace Thursday quickly digested Wednesday afternoon's minutes from the last FOMC meeting of the Federal Reserve. Traders deemed the minutes neutral to just slightly dovish and markets showed no significant reactions to them. The CME Fed funds rate futures are now showing slightly better odds for a 0.5% rate hike at the September FOMC meeting.

Global stock markets were mixed overnight, with Asian indexes mostly down and European indexes mostly up. U.S. stock indexes are mixed to firmer at midday. The U.S. stock indexes have been enjoying price uptrends on the daily charts since early June, and that's another underlying bearish factor for the safe-haven metals markets.

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In overnight news, the Euro zone consumer price index for July came in hot, at up 8.9%, year-on-year.

The key outside markets today see Nymex crude oil prices higher and trading around $90.00 a barrel. The U.S. dollar index is solidly higher and hit a three-week high in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 2.85%.

Technically, October gold futures prices hit a two-week low today. The gold futures bears have the overall near-term technical advantage and have momentum on their side. Bulls' next upside price objective is to produce a close above solid resistance at the August high of $1,814.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today's high of $1,775.90 and then at Wednesday's high of 1,786.30. First support is seen at the August low of $1,759.70 and then at $1,750.00. Wyckoff's Market Rating: 3.0.

September silver futures prices hit a two-week low today. The silver bears have the overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at $20.25. Next support is seen at $19.47 and then at $19.25. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed up 550 points at 363.70 cents today. Prices closed nearer the session high today and scored a bullish "outside day" up. The copper bulls and bears are on a level overall near-term technical playing field. 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 330.00 cents. First resistance is seen at the August high of 371.30 cents and then at 380.00 cents. First support is seen at today's low of 354.20 cents and then at 350.00 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver down on demand concerns – no reaction to FOMC minutes

Gold and silver prices are lower in afternoon U.S. trading Wednesday, amid worries about demand for precious metals following this week’s downbeat economic data coming out of China and still-heightened worries about a U.S. and/or global recession. Rising U.S. Treasury bond yields and a firmer U.S. dollar index on this day were also bearish outside market elements for the metals markets. October gold futures were last down $11.00 at $1,768.50. September Comex silver futures were last down $0.29 at $19.79 an ounce.

The just-released minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC) showed members remained concerned about inflation, believing it will remain elevated for some time to come. Members expect “ongoing increases” in the Federal Funds rate—the main U.S. interest rate. The FOMC members also said the U.S. economy’s trajectory was noticeably weaker than what they thought at the previous FOMC meeting. The marketplace was looking for clues on the timing and degrees of upcoming monetary policy tightening from the U.S. central bank. Right now, the Fed funds futures market is putting nearly even odds on either a 0.5% or a 0.75% interest rate increase at the September FOMC meeting. The marketplace, and the metals, showed now significant reaction to the minutes, which contained no big surprises.

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Global stock markets were mixed overnight, with Asian indexes mostly up and European indexes mostly down. U.S. stock indexes are lower in afternoon trading, on routine corrective pullbacks after hitting four-month highs on Tuesday. Corporate earnings reports are in focus this week.

The key outside markets today see Nymex crude oil prices higher and trading around $88.00 a barrel. The U.S. dollar index is higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.9%.

Technically, October gold futures prices hit a two-month low today. The gold futures bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the August high of $1,814.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today’s high of $1,786.30 and then at 1,800.00. First support is seen at the August low of $1,759.70 and then at $1,750.00. Wyckoff's Market Rating: 3.0.

September silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at $20.25. Next support is seen at $19.47 and then at $19.25. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed down 440 points at 358.05 cents today. Prices closed nearer the session low. The copper bulls and bears are on a level overall near-term technical playing field. Prices are trending up 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 330.00 cents. First resistance is seen at last week’s high of 371.30 cents and then at 380.00 cents. First support is seen at this week’s low of 354.60 cents and then at 350.00 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

Gold, silver lower as crude oil sinks, bond yields rise

Gold and silver prices are lower in near midday Tuesday. Weaker crude oil prices and rising U.S. Treasury bond yields on this say helped to pressure the precious metals markets. Also, recently rallying U.S. stock indexes that hit multi-month highs Monday are pulling away trader/investor interest in the long side of the safe-haven gold and silver markets. October gold futures were last down $7.80 at $1,780.00. September Comex silver futures were last down $0.167 at $20.11 an ounce.

Global stock markets were mixed to firmer overnight. U.S. stock indexes are mixed near midday. Corporate earnings reports are in focus this week. Risk appetite in the marketplace this week is less than robust after some downbeat economic from China that prompted China’s central bank to ease its monetary policy. Also, a weaker U.S. Empire State manufacturing report on Monday has ratcheted up worries about an impending U.S. recession.

The key outside markets today see Nymex crude oil prices lower and trading around $87.50 a barrel. Reports said Iran may be taking steps in its nuclear program to ease international sanctions on Iranian oil. The U.S. dollar index is a bit weaker in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.837%.

Technically, October gold futures bears have the overall near-term technical advantage. A fledgling price uptrend on the daily bar chart has been negated. Bulls’ next upside price objective is to produce a close above solid resistance at the August high of $1,814.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,725.00. First resistance is seen at today’s high of $1,787.60 and then at 1,800.00. First support is seen at today’s low of $1,775.20 and then at $1,760.00. Wyckoff's Market Rating: 3.5.

September silver futures bears have the overall near-term technical advantage. A fledgling uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at today’s high of $20.25 and then at $20.50. Next support is seen at today’s low of $19.86 and then at $19.47. Wyckoff's Market Rating: 3.5.

September N.Y. copper closed down 65 points at 361.10 cents today. Prices closed near mid-range. The copper bulls and bears are on a level overall near-term technical playing field. Prices are trending up 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 330.00 cents. First resistance is seen at last week’s high of 371.30 cents and then at 380.00 cents. First support is seen at this week’s low of 354.60 cents and then at 350.00 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

Time to buy Gold and Silver on the dips

Tim Moseley