Rally in gold and silver is far from over

From the beginning of October to the last day in November silver has had a profound and dramatically strong gain. This despite one moderately deep correction beginning on October 19, and concluding on November 13. Monday, November 13, was the exact day that Silver pivoted back to a bullish demeanor. During the short span of a couple of weeks, silver futures traded from their lows at $21.93 to their current fix of $25.67.

Gold also ran a very parallel course with its rally beginning during the first week of October when it was trading at a mere $1840 per ounce, to the conclusion of the first leg of this rally occurring on Friday, October 27 at approximately $2040. Like silver, a strong correction followed taking gold to $1960 during the middle of November. Both precious metals resumed the rally with a vengeance once they individually completed their correction.

While both metals gained tremendous ground in terms of percentage gains market sentiment seemed to be favoring gold as a haven asset over silver. Gold pricing had a much more substantial gain than silver while both precious metals had more than respectable performances.

Because of its high usage as a major industrial component silver has had strong demand. However, according to the World Council, the pace at which central banks worldwide have been accumulating gold is at a new record and astute investors need to step back and wonder why.

More importantly, the underlying reasons that these metals will continue to rise are fairly transparent. Our national debt has grown to a record level above $34 trillion. The cost to just service the interest on that debt is quickly becoming as expensive as the annual Defense Department’s budget. Both Chairman Powell and Secretary of the Treasury Janet Yellen are on record stating emphatically that this is not sustainable. Add to that the multiple geopolitical hotspots that continue to rage, a recent decline in the dollar, and an imminent pivot by the Federal Reserve from a highly restrictive policy to a more accommodative one that officials are beginning to speak about.

While the above-mentioned economic fabric will be beneficial to both precious metals it is gold that will continue to gain value at a much greater pace than silver. The key takeaway for precious metals investors is that continued accumulation of physical gold and silver will be of great benefit further down the road.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Gold, silver posting modest gains amid bullish technicals

Gold and silver prices are firmer near midday Wednesday. February gold futures hit a six-month high overnight, while March silver notched a three-month high. The two precious metals are being boosted by increasingly bullish near-term chart postures. A recently slumping U.S. dollar index that overnight hit a 3.5-month low is also a bullish outside market element for the metals markets. February gold was last up $3.90 at $2,064.10. March silver was last up $0.138 at $25.44.

(In my weekly Front Burner email report today, I detailed the price prospects for gold and silver in the coming weeks, and they are bullish. If you did not get it and are not signed up, send me an email at jim@jimwyckoff.com and I'll forward it to you.)

U.S. economic data released today had little impact on the gold and silver markets. The second estimate of third-quarter GDP came in just a little higher than the first estimate. The personal consumption expenditures (PCE) inflation readings were just slightly less than the first GDP estimates.

Asian and European markets were mixed to firmer in overnight trading. U.S. stock indexes are firmer in late-morning dealings.

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The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are slightly higher and trading around $76.75 a barrel. An OPEC-plus meeting takes place this week. Reports say there have been cartel member disagreements on whether to further cut collective crude oil production. There is now no clear marketplace consensus on what OPEC will announce regarding its overall oil production. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.28% and has fallen this week.

Technically, February gold futures prices hit another six-month high today. The bulls have the firm overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today's high of $2,072.70 and then at $2,085.00. First support is seen at $2,050.00 and then at $2,039.70. Wyckoff's Market Rating: 7.0

March silver futures prices hit a three-month high today. The silver bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $26.10. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today's high of $25.68 and then at the August high of $25.775. Next support is seen at $25.00 and then at this week's low of $24.68. Wyckoff's Market Rating: 7.0.

March N.Y. copper closed down 40 points at 383.55 cents today. Prices closed near the session low today and hit a 2.5-month high early on. The copper bulls have the overall near-term technical advantage. 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 September high of 392.65 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at today's high of 386.45 cents and then at 390.00 cents. First support is seen at this week's low of 378.60 cents and then at 375.80 cents. Wyckoff's Market Rating: 6.0.

Try out my "Markets Front Burner" email report. My next one is due out today and is going to be entitled, "When China sneezes…" 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. And it's free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold surges, dollar declines on Fed official's remark & geopolitical unrest

After opening at $2035.10 in trading today gold futures surged to a high not seen for approximately the last year. As of 3:15 PM EST, the most active February 2024 contract has surged by $26.30 and is currently fixed at $2061.50.

A major component of today's strong upside move in gold was the continued decline of the dollar. The dollar has traded to a lower high, a lower low, and a lower close for the last three consecutive trading days. Currently, the dollar is down 0.44% and the index is fixed at 102.65. Considering that the dollar index was trading above 106 on November 1, the decline in value amounts to approximately 4%. The dollar index is weighted against a basket of six foreign currencies with the euro accounting for over half of the index's weight.

The U.S. dollar index was created in 1973 as a method to track the value of the U.S. dollar against other major currencies including the Euro (58%), the Japanese yen (14%), the British pound (12%), the Canadian dollar (95), the Swedish krona (4%), and the Swiss franc (4%).

A single statement by one of the more hawkish voting members of the Fed might have been the impetus to continue the dollar's decline. Christopher Waller, a voting member of the Federal Reserve who has been a board Governor since 2020.

Today he told the American Enterprise Institute think tank that he believes that “inflation rates are moving along pretty much like I thought”. He added, “I am increasingly confident that policy is currently well-positioned to slow the economy and get inflation back to 2%”. Most importantly he suggested that the Fed could start lowering rates if inflation continues to decline “for several months”, adding that, “There is no reason to say we will keep it really high."

While he is only one of many voting members the fact that he is considered one of the more hawkish members carries a lot of weight when it comes to signaling that the Federal Reserve has concluded its rate hikes and is now considering rate cuts if certain variables come into fruition.

Considering that the world is facing violent conflicts in the Middle East and Ukraine, combined with Waller's words these facts have taken gold well past the elusive and key psychological level of $2000 per ounce. In fact, on a technical basis, there is minor support at today's high of $2065 based upon a former support level or price bottom that occurred at the end of April. If this resistance is taken out the next levels we would look at are $2080 and $2100.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Gold, silver hit multi-week highs on weak USDX, bullish charts

Gold and silver prices are moderately higher near midday Monday, but down from their daily highs. February gold hit a four-week high and March silver a three-month high today. The precious metals are seeing buying support from a slumping U.S. dollar index that is trading near last week's three-month low. The technical postures for both metals also lean bullish, which continues to invite the chart-based traders to the long sides of gold and silver. February gold was last up $5.80 at $2,029.50. March silver was last up $0.358 at $25.06.

Gold and silver futures bulls are also benefiting from notions the U.S. Federal Reserve is done raising U.S. interest rates, following some recent tamer inflation numbers. A Dow Jones Newswires headline today reads: "Gold edges higher on hopes Fed's tightening cycle may be over."

Asian and European markets were mostly weaker in overnight trading. U.S. stock indexes are mixed near midday. From a markets perspective, there were no major geopolitical developments over the long U.S. Thanksgiving holiday weekend.

  Gold needs to break above $2,010 for prices to have a chance at ATHs

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly lower and trading around $75.25 a barrel. An OPEC-plus meeting takes place this week. Reports say there have been cartel member disagreements on whether to further cut collective crude oil production. A Barron's headline today reads: "Oil prices are falling; OPEC is reaching the limits of its power." The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.574%.

Technically, February gold futures prices hit a four-week high today. The bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at the October high of $2,039.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at $2,039.70 and then at $2,050.00. First support is seen at today's low of $2,022.00 and then at last Friday's low of $2,011.30. Wyckoff's Market Rating: 6.0

March silver futures prices hit a three-month high today. The silver bulls have the firm overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $26.10. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today's high of $25.29 and then at $25.50. Next support is seen at today's low of $24.68 and then at $24.50. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed down 370 points at 379.55 cents today. Prices closed near 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 the September high of 392.65 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at today's high of 384.15 cents and then the November high of at 386.00 cents. First support is seen at 375.80 cents and then at 371.25 cents. Wyckoff's Market Rating: 6.0.

Try out my "Markets Front Burner" email report. My next one is due out today and is going to be entitled, "When China sneezes…" 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. And it's free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold prices holding above $2,000 as U.S. flash PMI provides muddled economic outlook

Gold prices are holding near session highs above $2,000 an ounce as preliminary indicators point to a further contraction within the manufacturing sector and neutral activity in the service sector.

Friday, the S&P Global Flash U.S. manufacturing PMI data fell to 49.4, down from October's revised reading of 50.0. According to consensus estimates, economists were looking for a relatively unchanged reading of 49.9.

Activity within the manufacturing sector has dropped to a three-month low, the report said.

Meanwhile, the service sector PMI remains in expansion territory, rising to 50.8 from October's reading of 50.6. The data beat expectations, as consensus forecasts called for a roughly unchanged reading of 50.4.

The report said that activity within the service sector has risen to a four-month high.

Readings above 50 in such diffusion indexes are seen as a sign of economic growth. The farther an indicator is above or below 50, the greater or smaller the rate of change.

The gold market was seeing some renewed buying momentum ahead of the report, and the mixed data continues to provide some support. December gold futures last traded at $2,001.10 an ounce, up 0.42% on the day.

While U.S. economic activity remains in neutral territory, Siân Jones, principal economist at S&P Global Market Intelligence, said that conditions are moving closer to Federal Reserve expectations as the labor market and inflation show signs of cooling.

"Businesses cut employment for the first time in almost three-and-a-half years in response to concerns about the outlook. Job shedding has spread beyond the manufacturing sector, as services firms signaled a renewed drop in staff in November as cost savings were sought," Jones said in the report.

At the same time, the economist noted that inflation pressures are also starting to ease.

"Input price inflation softened again, with cost burdens rising at the slowest rate in over three years. The impact of hikes in oil prices appears to be dissipating in the manufacturing sector, where the rate of cost inflation slowed notably. Although ticking up slightly, selling price inflation remained subdued relative to the average over the last three years and was consistent with a rate of increase close to the Fed's 2% target," Jones said.

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Chinese traders buy 17.5 tonnes of gold, but Western buying remains exhausted – TD Securities

Western investors continue to avoid gold; however, Asian and emerging market demand continues to dominate and support prices at a critical juncture.

In a report published Wednesday, commodity analysts at TD Securities noted that in the past week, Chinese traders bought around 17.5 tonnes of notional gold.

In an interview with Kitco News, Daniel Ghali, senior commodity strategist at TD Securities, said that while they don't know the exact reason behind the purchases, they did coincide with buying momentum in the yuan as the People's Bank of China sold U.S. dollar and bought the yuan.

"Chinese traders continue to add to their gold holdings, extending a period of massive accumulation of gold, even as the yuan halts its appreciation," Ghali said in Wednesday's note.

Regardless of why Chinese investors bought gold, Ghali said it's another example of how Asian and emerging market central bank demand has transformed the marketplace this year.

"We do think this unexpected demand is one reason why gold prices have outperformed, given where the U.S. dollar and bond yields are," he said.

Although China has been a solid source of demand for the precious metal, Ghali said that the latest consumption remains highly speculative and unlikely to be the start of a long-term trend.

Ghali said that the missing piece for higher gold prices remains Western investment demand. He added that prices could fall back below $2,000 an ounce in the near term as safe-haven buying has been exhausted.

However, long-term TDS remains extremely bullish on gold. Ghali said that the bank sees record gold prices by the first half of next year.

"We expect Western investors to continue to ignore the gold market until the U.S. falls into a recession in the first half next year, which forces the Federal Reserve to aggressively cut interest rates," he said.

  Gold needs to break above $2,010 for prices to have a chance at ATHs

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold prices below $2,000, but seasonals remain favorable

Although gold remains stuck below $2,000 an ounce, some analysts remain optimistic that all-time highs are an achievable target by year-end or into the new year.

In quiet holiday trading, spot gold prices have stabilized Thursday at an elevated level, last trading at $1,992.20 an ounce, up 0.15% on the day.

Analysts are not expecting to see much of a rally through the rest of the week as most traders are now focused on the U.S. Thanksgiving Holiday and Black Friday shopping. U.S. markets are closed Thursday and will open for half a day Friday.

Heading into the holiday, the gold market could not hold new gains above $2,000 an ounce as markets continued to digest the minutes from the Federal Reserve’s November monetary policy meeting, which were released Tuesday afternoon.

Although the central bank left interest rates unchanged at its latest meeting, the minutes show that the committee is maintaining a hawkish basis as they expect to hold rates in restrictive territory for the foreseeable future.

"The bullion price found strong support earlier in the week, as expectations that the Fed's rate hiking cycle had ended consolidated amongst investors."

"The resulting mood led to a two-and-a-half-month low for the greenback and saw treasury yields drop, in a dynamic that benefited the non-yielding precious metal," said Ricardo Evangelista – senior analyst at ActivTrades, in a note to clients Thursday. "However, the subsequent publication of hawkish Fed minutes cooled this enthusiasm, and the release of strong labour data on Wednesday compounded the sentiment of uncertainty as investors hesitated to call the next Fed monetary policy move. With the 'higher-for-longer' view lingering and receding expectations of a rate cut in the first half of 2024, the upside for gold prices may be limited."

Although gold prices have been capped in recent weeks, there is still optimism that prices will eventually move higher.

"Gold has put in a decent performance so far this week after trading down to $1,965 on Monday. It has crossed above the $2,000 per ounce level a few times," said David Morrison, senior market analyst at Trade Nation. "But, as in late October, gold has failed to hold this level as support and has been knocked lower every time it approaches $2,010. Nevertheless, it’s currently trading just underneath this key area and it feels as if it wouldn’t take much for it to have another attempt at an upside break-out."

With markets waiting for a new catalyst, analysts have said that seasonal factors could play a bigger role in the price action, which would be extremely bullish for gold.

In a recent interview with Kitco News, Adam Button, head of currency strategy at Forexlive.com, said that gold’s year-end seasonal trade is one of the most reliable in the market.

"You buy gold before Thanksgiving and sell it in February," he said.

Nicky Shiels, head of metals strategy at MKS PAMP, said that in the last five years gold has seen average gains of 2.7% between Thanksgiving to Dec.31.

Gold and silver prices stuck, waiting for a catalyst – Quant Insight's Huw Roberts

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold, silver slide as USDX rallies, crude oil sells off

Gold and silver prices are lower in midday U.S. trading Wednesday, pressured by solid gains in the U.S. dollar index and sharp losses in crude oil. Better risk appetite in the general marketplace this week is also a bearish element for the safe-haven metals. December gold was last down $8.80 at $1,992.90. December silver was last down $0.194 at $23.675.

The key outside markets today see the U.S. dollar index solidly higher after hitting an 11-week low Tuesday. Nymex crude oil prices are sharply lower and trading around $74.75 a barrel. Reports today said the OPEC-plus cartel postponed its weekend meeting in Vienna because members are in disagreement on further oil-production cuts. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.428%.

U.S. stock indexes are higher at midday and at multi-week highs amid the better risk appetite in the marketplace. It's a quieter trading week as the U.S. Thanksgiving holiday is on Thursday, and Friday is typically one of the quietest U.S. trading days of the year. Look for U.S. traders to hit the exit doors early today, to get a jump on the holiday.

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The marketplace quickly digested the minutes from the last FOMC meeting of the Federal Reserve, which were released Wednesday afternoon. The FOMC minutes said the committee members noted the risk of higher-than-expected inflation and weaker-than-expected U.S. economic growth. The FOMC minutes said more evidence is needed before the Fed shifts its stance on U.S. interest rates. The marketplace took that to mean the Fed will continue to pause on its rate hikes for a few months as it weighs incoming economic data. Markets showed little reaction Tuesday afternoon as the minutes contained no surprises.

Technically, the gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close in December futures above solid resistance at the October high of $2,019.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,935.60. First resistance is seen at $2,000.00 and then at this week's high of $2,009.80. First support is seen at Tuesday's low of $1,979.90 and then at this week's low of $1,967.20. Wyckoff's Market Rating: 6.0

The silver bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $21.925. First resistance is seen at $24.00 and then at the November high of $24.22. Next support is seen at this week's low of $23.30 and then at $23.00. Wyckoff's Market Rating: 6.0.

Try out my "Markets Front Burner" email report. My next one is due out today and is going to be entitled, "When China sneezes…" 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. And it's free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley