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Gold market sees new record closing price but the major test is next week

Gold market sees new record closing price, but the major test is next week

With gold prices pushing to within striking distance of $2,100 an ounce, seeing a new record settlement Friday, the market is setting itself up for a major week ahead, one filled with significant macroeconomic risks.

April gold futures settled Friday at $2,095.70 an ounce, a record close for the precious metal and up more than 2% from last week. The rally started Thursday as prices pushed above initial resistance above $2,050 an ounce after the Federal Reserve’s preferred inflation gauge showed a benign rise in consumer prices.

The gold market is seeing its best weekly gains since November

Meanwhile, silver managed to end the week with a 1% gain, with prices back above $23 an ounce. Although silver continues to underperform gold, some analysts have said it remains an attractive value play in a bull market.

Despite a slow start, disappointing economic data on Friday created some weakness in the U.S. dollar, giving gold and silver room to move quickly to the upside.

“Thursday's and Friday's gains reaffirm gold's ability to rise above its 50-day moving average, which it failed to do a month ago,” said Alex Kuptsikevich, senior market analyst at FxPro.

While gold has managed to break above resistance at $2,050, Kuptsikevich added that the next major resistance level to watch is $2,088. At the same time, the market can see significant upside if the momentum lasts.

“There is an even longer-term scenario. The pullback from the beginning of the year to mid-February is a classic Fibonacci retracement of 61.8% of the first growth impulse from the October lows. The realization of this scenario will be the advance to $2255,” he said.

However, not all analysts are convinced that gold is headed higher, even as it ends the week with significant momentum. In a note Thursday, Nicky Shiels, head of metals strategy at MKS PAMP, noted that gold’s outside move could be the result of its months-long consolidation. She said that momentum can push gold prices higher, but the fundamental picture remains the same, for now.

“With positioning in gold and silver running neutral & short, respectively, technically compressed price action and overall sentiment in precious metals burnt out, it really was a recipe for unexplained outsized moves. Was the PCE a game-changer? No, and not enough data to declare disinflation is about to end, and the Fed may just never cut,” she said in her note. “Can technical rallies extend? Sure. But this is not a catalyst to rope in fresh investor interest, and physical alone doesn’t chase, so it’ll come down to paper shorts and cues provided by macro. Overall, Gold remains bid-to-higher.”

Market analysts at CPM Group are also not optimistic that the gold market can hold Friday’s gains as it is caught in a well-defined trading pattern.

“Gold prices have sold off most every time they have tested resistance levels, and as prices test strong support levels, investors step back into the market, initiating new longs once more. This has kept gold prices in a wide range, mostly above $2,000,” the analysts said in a note late Friday.

“Gold prices are now testing $2,100, having firmly broken above $2,050 yesterday. The market appears to be looking for reasons to go long gold, and taking profits as technical resistance levels are tested,” the analysts added. “It is unclear if prices will continue to climb in the near term, but they already have made strong gains, suggesting the potential for a short-term pullback on profit taking. A retrenchment in prices could push gold back toward $2,075, which could potentially present a buying opportunity should the upward momentum continue.”

Some analysts have noted that gold could face a significant test next week with the release of February’s nonfarm payrolls report. At the same time, markets will be anxious to hear what Federal Reserve Chair Jerome Powell will say in his two days of testimony before Congress.

Adam Button, chief currency strategist at Forexlive.com, said that he will probably be paying more attention to labor market data next week as that could have more impact on the U.S. dollar.

He said weak labor market data could impact the U.S. dollar more than Powell’s comments.

“We basically know what Powell is going to say: interest rates will be coming down, but not anytime soon,” he said. “He will probably also say that the Federal Reserve will continue to monitor incoming data. Weak job growth could sustain gold’s rally.”

It’s not just U.S. economic data that could impact the U.S. dollar. The European Central Bank will meet to decide its monetary policy next week and a hawkish stance could support the euro in the near term.

Commodity analysts at Brown Brothers Harriman said they expect the ECB to strike a cautious tone next week as Europe’s latest inflation data came in hotter than expected.

Economic data to watch next week:

Tuesday: ISM services PMI

Wednesday: ADP employment data, Bank of Canada monetary policy decision, Powell’s testimony before the House Financial Services Committee, JOLTS job openings

Thursday; European Central Bank monetary policy meeting, weekly jobless claims; Powell’s testimony before Senate Banking Committee

Friday: Nonfarm payrolls report
 

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley

The Fed to intervene in a collapse scenario what it means for the stock market recession calls

The Fed to intervene in a collapse scenario, what it means for the stock market & recession calls – Alex Krüger

Those calling for a recession and a market collapse are wrong because the Federal Reserve wants to intervene before that happens, according to Alex Krüger, Economist and Partner at Asgard Markets.

The 'Fed put' is back, Krüger told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. The term ‘Fed put,’ a play on the option term ‘put,’ is the market belief that the Fed would step in and implement policies to limit the stock market's decline beyond a certain level.

"The 'Fed put' was removed from the market in early 2022 when they made it clear that their focus is now on inflation, sending stocks crashing," Krüger said. "Things changed in December when the Fed stated that the risks are balanced to both the upside and downside, and they are focused on jobs just as much as they are on interest rates."

That means that the Fed will intervene if things start to collapse. This was already seen in 2023 during the failures of regional banks, including Silicon Valley Bank, Signature Bank, and First Republic Bank.

In response to the banking crisis, the Fed quickly introduced the Bank Term Funding Program (BTFP) in March 2023, an emergency lending program that allows banks to take on loans of up to one year to boost liquidity.

During last year's banking crisis, there was one surprising asset winner. For insights, watch the video above. The same asset can again benefit if the Fed intervenes to prop up the economy.

Because of the 'Fed put,' the most likely outcome is a soft landing, Krüger pointed out, advising to ignore the noise and focus on the bigger picture when trading.

"A very large percentage of market participants are focused on how expensive things are, how AI is a bubble, how the yield curve inversion has to lead to a major recession and a major crash. My response is that it's noise. And the bigger picture is that we should be focusing on interest rates going down, inflation going down, and liquidity going up," he said.

For insights on how much more upside there is in the stock market, watch the video above.

However, there are several scenarios that could derail this outlook. "First of all, black swans … armed conflict in the Korean peninsula or China-Taiwan, or conflict escalating between Russia and Ukraine," Krüger said.

Another scenario that could derail the soft landing outlook is an acceleration in inflation. "The outlook should change because the Fed's outlook will change if it happens," he noted.

Take on crypto: Bitcoin, Ethereum, Solana, Worldcoin

In the crypto space, Krüger pays close attention to Bitcoin, Ethereum, and Solana. To get his top crypto picks for 2024, watch the video above.

The new spot Bitcoin ETFs are attracting new types of investors, pushing prices towards new all-time highs.

BlackRock's spot bitcoin exchange-traded fund IBIT alone saw $1.357 billion in trading volume Tuesday, breaking Monday's record of $1.3 billion, according to Bloomberg Intelligence ETF analyst Eric Balchunas.

Krüger views the introduction of spot Bitcoin ETFs as a way towards mainstream adoption that will eventually include central banks holding Bitcoin alongside gold as a reserve asset.

"At the moment, Bitcoin is an extremely volatile asset that doesn't belong in the reserves of a central bank, but eventually, that volatility will disappear," he said. "We will see new market participants in the Bitcoin options market. Eventually, central banks will adopt Bitcoin as a reserve asset."

 

To get insights on how that would impact Bitcoin prices and which central banks will likely push the needle the most, watch the video above.

 

The next big driver for crypto investors is a potential approval of a spot Ethereum ETF. On timing and chances of that happening this year, watch the video above.

 

To get Krüger updated price forecasts for Bitcoin, Ethereum, Solana, Worldcoin, and his other top crypto picks, watch the video above.

Kitco Media

Anna Golubova

Anna Golubova is the Producer for Kitco News. With more than ten years of experience in media, she has covered a range of topics, focusing on economy and politics. Anna began to exclusively cover economic news in 2013, attending media lockups at the Bank of Canada and Statistics Canada to report on a range of key macro economic events, including interest rate announcements, GDP, unemployment, and retail. She holds a Master of Arts in International Relations from NPSIA, Carleton and a Bachelor's degree in Political Science and History from the University of Ottawa.

Kitco Media

Michelle Makori

Time to Buy Gold and Silver

Tim Moseley

Gold silver slightly down as next US inflation data point awaited

Gold, silver slightly down as next U.S. inflation data point awaited

Gold and silver prices are modestly down near midday Wednesday. A firmer U.S. dollar index today is a negative “outside market” force working against the precious metals market bulls. Also, the near-term technical postures for gold and silver are still leaning bearish, which is inviting some of the chart-based traders to the sell sides. April gold was last down $3.10 at $2,041.00. March silver was last down $0.182 at $22.35.

U.S. stock index futures are weaker near midday. Bitcoin prices have soared this week and are presently trading above $61,000. Barron’s today reported bitcoin’s rise is due to better risk appetite in the marketplace, the big rally in the technology heavy Nasdaq stock index, and notions the Federal Reserve will lower U.S. interest rates later this year.

Today’s revision of fourth-quarter 2023 U.S. gross domestic product readings showed GDP up 3.2%, year-on-year, versus the initial reading of up 3.3%. The 4Q personal consumption expenditures) PCE price index was up 1.8%, year-on-year, versus up 1.7% in the advance report. The core PCE price index was up 2.1% in 4Q, compared to the advance reading of up 2.0%. Today’s GDP data was not a big markets-mover, as the numbers did not stray far from market expectations.

The bigger U.S. data point of the week is likely going to be Thursday morning’s personal income and outlays report for January, which also includes the PCE inflation indexes. The PCE price index in January is seen up 2.6%, year-on-year, while the core PCE price index is seen up 2.9% in the same period. Those forecasts are just slightly higher than the readings seen in the December report. It’s been said the Federal Reserve officials pay extra close attention to the inflation data in the personal income and outlays report.

Recent U.S. inflation numbers have come in a bit warmer than expected. Not hot, but still warm enough to likely have swayed the Federal Reserve into reckoning it will wait until the second half of 2024 to consider lowering interest rates.

The market to watch Thursday morning following the personal income and outlays report will be the U.S. Treasury futures markets. Immediately after the data is released at 8:30 a.m. EST, the Treasury bond and note futures markets’ price action will indicate what the marketplace thinks about the latest U.S. inflation data. Remember that Treasury futures prices move in the opposite direction of the more closely followed yields. U.S. T-Bond and T-Note prices have been trending down the past four weeks. That suggests Treasury traders suspect U.S. inflation data will continue to come in too warm to allow the Federal Reserve to lower interest rates this spring. So watch the U.S. Treasury bond and note futures markets

Wednesday morning. You can bet other market traders will have one eye on the bond markets right after the report. Remember the old market adage: “Bond traders are the smartest guys in the room.”

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady and trading around $79.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.28%.

Technically, April gold futures bears have the slight overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at last week’s high of $2,053.20 and then at $2,061.00. First support is seen at today’s low of $2,033.40 and then at $2,025.00. Wyckoff's Market Rating: 4.5.

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $23.56. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. First resistance is seen at Tuesday’s high of $22.71 and then at $23.00. Next support is seen at today’s low of $22.245 and then at $22.00. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed down 155 points at 381.25 cents today. Prices closed nearer the session low today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 394.70 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 365.50 cents. First resistance is seen at this week’s high of 387.15 cents and then at last week’s high of 390.85 cents. First support is seen at 380.00 cents and then at 375.00 cents. Wyckoff's Market Rating: 5.0.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Gold slightly up in lackluster dealings

Gold slightly up in lackluster dealings

Gold prices are a bit firmer and silver prices a bit weaker near midday Tuesday. Gold is seeing some short covering in the futures market and some perceived bargain hunting in the cash market. Precious metals traders are awaiting the next fundamental even to provide a spark to trading action. That may come with some U.S. inflation data coming out later this week. April gold was last up $6.00 at $2,044.90. March silver was last down $0.046 at $22.48.

U.S. stock index futures are mixed near midday. It’s been a quieter trading week so far.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are firmer and trading around $78.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.291%.

The U.S. data point of the week is likely going to be Thursday morning’s personal income and outlays report for January, which includes the personal consumption expenditures (PCE) inflation indexes. The PCE price index in January is seen up 2.6%, year-on-year, while the core PCE price index is seen up 2.9% in the same period. Those forecasts are just slightly higher than the readings seen in the December report.

Technically, April gold futures bears have the slight overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at last week’s high of $2,053.20 and then at $2,061.00. First support is seen at this week’s low of $2,034.10 and then at $2,025.00. Wyckoff's Market Rating: 4.5.

March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $23.56. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. First resistance is seen at $23.00 and then at $23.20. Next support is seen at $22.25 and then at $22.00. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed up 5 points at 382.05 cents today. Prices closed nearer the session low today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 394.70 cents. The next downside price objective for the

bears is closing prices below solid technical support at the February low of 365.50 cents. First resistance is seen at this week’s high of 387.15 cents and then at last week’s high of 390.85 cents. First support is seen at 380.00 cents and then at 375.00 cents. Wyckoff's Market Rating: 5.0.
 

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

Tim Moseley

Growing alarm over US debt: Why the Fed is ‘Dr Frankenstein’s monster’ that is part of the problem Charles Payne

Growing alarm over U.S. debt: Why the Fed is 'Dr. Frankenstein's monster' that is part of the problem – Charles Payne

(Kitco News) – With the U.S. national debt surging above $34 trillion, many prominent investors and financial leaders are raising alarm over a looming crisis. Even Federal Reserve Chair Jerome Powell has weighed in expressing concern that U.S. debt is unsustainable. However, the U.S. central bank is a major part of the problem, according to Charles Payne, Host of Making Money on FOX Business Network and the author of ‘Unbreakable Investor.’

 

Powell issued his own candid warning on U.S. debt during CBS’s ’60 Minutes,’ criticizing lawmakers for effectively borrowing from future generations with their unsustainable fiscal policies and stating that it was time for “an adult conversation.”

“In the long run, the U.S. is on an unsustainable fiscal path,” Powell said on Sunday. “And that just means that the debt is growing faster than the economy … We're effectively borrowing from future generations … It’s time for us to get back to putting a priority on fiscal sustainability. And sooner's better than later.”

While weighing in on the U.S. fiscal policy might be controversial for Powell, the Fed is a big part of the problem when it comes to debt, Payne told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.

“It's a nice sound bite,” Payne said. “But the function of the federal reserve itself belies what he was saying. They've always been the biggest buyers of U.S. Treasuries, which facilitate this crazy nonstop spending on both sides of the political aisle. That's why he had free reign to speak about it. It wasn't like he was pointing fingers at anyone in particular.”

The important thing to understand is how the Fed plays a central role in all this, Payne added. “We're here at the precipice of this situation where [Powell] rightfully acknowledges that there's a problem, but to be quite frank, I don't see the Federal Reserve doing anything about it,” he said. “They play a role in all of this. They're not backing away from this role.”

On top of that, the Fed receives more power and responsibility almost every year. “I think the Federal Reserve is already far too powerful an entity, not truly responsible to anyone, not truly answering to anyone. It's part of the problem. He's pointed out a major problem. Unfortunately, he didn't underscore his part of the problem,” Payne explained.

Payne highlighted that the Fed has become the most powerful entity in the world in its ability to move domestic and even global economies. For more on Payne's insights on the Fed's role outlined in his latest book 'Unbreakable Investor,' watch the video above for details.

"The Federal Reserve is responsible for far too much. And who do they answer to? Realistically, who gets to fire Jerome Powell tomorrow? No one. I'm concerned that we've created this all-powerful entity, almost like Dr. Frankenstein's monster, and within that entity, people would be shocked to learn how left-leaning it is right now,” Payne said.

An organization that is supposed to be nonpartisan has become very political, and there are serious consequences that could come from that. “Overwhelmingly, they’re very liberal, left-leaningDemocrats. These are the folks that will take control of the most powerful entity out there," Payne said. “And I do believe it will be more politicized."

Payne also weighed in on whether he foresees a scenario with no U.S. central bank or one with diminished powers. For insights, watch the video above.

The U.S. ‘fumbled’ its reserve currency status: Accelerating de-dollarization and unsustainable debt levels

Quickly rising U.S. debt levels are becoming one of the top concerns among individuals like JPMorgan Chase CEO Jamie Dimon, who says the U.S. economy is heading toward a financial crisis due to escalating national debt.

Speaking at the Bipartisan Policy Center, Dimon cautioned of a looming "hockey stick" surge in debt, adding that if U.S. lawmakers don’t alter the current path of spending, there could be “rebellion” among foreign owners of U.S. government bonds. "It is a cliff, we see the cliff. It's about ten years out, we're going 60 miles an hour [toward it],” Dimon said.

Also, Tudor Investment founder Paul Tudor Jones warned that even though it may look like the U.S. economy is firing on all cylinders, there is a “debt bomb” under the surface. “We’ve got a 6% to 7% budget deficit. We’re fast-pouring consumption like crazy,” Jones told CNBC. “The only question is … when does that manifest itself in markets? It could be this year, it could be next year. Productivity may mask, and it might be three or four years from now. But clearly, we’re on an unsustainable path.”

This concern around debt could have serious consequences when it comes to the dollar as the global reserve currency, according to Payne. "There's no doubt that the dollarization trend is picking up. We have fumbled this gift, this responsibility of being the world's reserve currency. The only problem is there's no one else out there to take advantage of it right now, but that's not always going to be the case," he said.

Payne added that it was important to pay attention to big oil-producing countries, like Saudi Arabia, accepting payments for oil in currencies other than the U.S. dollar.

To get Payne’s timeline for when the U.S. dollar could permanently lose its reserve currency status and what can replace it, watch the video above.

What does it all mean for the stock market in 2024?

Payne also outlined what this macro environment means for the U.S. stock market this year.

For Payne’s precise stock picks and investment insights, watch the video above.

 

Kitco Media

Anna Golubova

Time to Buy Gold and Silver

Tim Moseley

Analysts abandon bear cave for bull run retail traders stay balanced but bullish

Analysts abandon bear cave for bull run, retail traders stay balanced but bullish
 

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

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Analysts abandon bear cave for bull run, retail traders stay balanced but bullish teaser image

With the seasonal boost of the Lunar New Year and Valentine’s Day in the rearview mirror, the gold market saw relatively little volatility in the price action this week. Spot gold spent much of the week trading in a $10 range between $2,020 and $2,030 per ounce, though the weekly chart looks more dramatic, as the low of $2,012.81 was set near the open during the overnight session on Sunday evening, while Friday afternoon saw a late push to the weekly high of $2,041.41.

The latest Kitco News Weekly Gold Survey showed Main Street holding steady with a relatively balanced but overall bullish posture heading into the final week of February, while Wall Street analysts abandoned the bear cave to gear up for another projected bull run.

Adrian Day, President of Adrian Day Asset Management, was among those who see further gains for gold next week. “After declining earlier on indications that the Federal Reserve would delay rate cutting after optimistic expectations, the market is now brushing off those issues,” he said. “The underlying fundamentals are positive and supporting gold.”

“I’m sticking with ‘up’ for next week,” said James Stanley, senior market strategist at Forex.com. “USD bulls had an open door after the CPI report last week but given the reaction to the Austan Goolsbee comment about not getting ‘flipped out’ about a single inflation print, that says to me that the Fed really doesn’t want to entertain hawkish policy options at the moment. It’s not really a single inflation print: Core CPI has oscillated around 4% for the past five months, but the fact that the Fed has talked this down is meaningful. And the market reaction so far seems to agree.”

“The other side of that is that the European Central Bank has been holding firm regarding rate cuts and given the large allocation of the Euro in the DXY quote, that could similarly keep pressure on the USD next week, which I expect to be a positive for Gold,” Stanley added.

Adam Button, head of currency strategy at Forexlive.com, took the opposite view of the Fed’s likely response to hot data. “If we get a few more upside economic data surprises, the Fed will start to lose its dovish bias,” he said. “If so, we could see significant declines in gold.”

“The biggest risk to gold right now is if we get hot inflation data again, because a lot of this move right now is safety buying, flight to safety, but also the expectations that there's rate cuts coming sooner than later,” said Bob Haberkorn, Senior Commodities Broker at RJO Futures. “The last monthly data that came out pushed those expectations back further, there's still talk of June, but maybe September.”

Haberkorn said gold has formed a nice base around 2000. “It’s gone through there a few times, but just the geopolitical risk that's possibly on the horizon, coupled with U.S. elections this year, and the expectations of the Fed, has kept gold at that nice support level of $2,000,” he said. “Any dips below there have been getting bought up pretty quick.”

He said that next week, the main things for gold traders to watch will be Treasury yields and the stocks. “The strength in the U.S. equity markets really put a cap on what gold could do this week,” he said. “It's risk-on environment here versus flight-to-safety buying. I think the headline PCE and any Fed speak next week on rate hikes and rate cuts is going to be the next main driver here. I expect gold to remain in this range into the next Fed announcement.”

Haberkorn believes the upcoming Fed speakers will remain consistent in their message. “If one of them does hint towards something with cuts sooner than later, that would be extremely beneficial for the gold bulls at this point,” he said. “But it's pretty impressive that gold has maintained $2,000 given the spot where our interest rates are at. It just highlights the fear that's out there in the world at this point that has strong demand across the board here for gold assets.”

This week, 11 analysts participated in the Kitco News Gold Survey, and Wall Street has done a near-total about-face on gold’s prospects from last week. Eight experts, or 73%, expected to see higher gold prices next week, while one lone analyst, representing 9%, predicted a price drop, and two experts, or 18%, expected gold prices to trade sideways during the coming week.

Meanwhile, 203 votes were cast in Kitco’s online polls, with Main Street maintaining the same basic distribution of views it had last week. 89 retail investors, representing 43%, looked for gold to rise next week. Another 52, or 26%, predicted it would be lower, while 63 respondents, or 31%, were neutral on the near-term prospects for the precious metal.

 

As the Fed’s key measure of inflation, Thursday’s PCE price index will be the highlight among releases next week, but there’s a full docket beyond inflation data. Markets will also be watching new home sales on Monday, durable goods orders and consumer confidence on Tuesday, Wednesday’s Preliminary Q4 US GDP report, pending home sales on Thursday, and ISM manufacturing PMI on Friday.

Darin Newsom, Senior Market Analyst at Barchart.com, sees the technical picture trending solidly green next week. “The short-term trend on April’s daily chart looks to have turned up,” he said. “Initial resistance could be at the recent high of $2,045.50. Beyond that the target is up at $2,061.30, then $2,083.20.”

“Gold rallied five of the past six sessions coming into today,” said Marc Chandler, Managing Director at Bannockburn Global Forex. “The Dollar Index has also fallen in six of the last seven sessions before today.”

Chandler said he expects the dollar to continue to trend lower, as he believes the interest rate adjustment is nearly over. “The market has converged to the three rate cuts the median Fed dot pointed to in December,” he said. “The momentum indicators are turning up. I think there is scope for spot gold to trade toward $2050 in the week ahead.”

He noted that this month’s high near $2065.50 was set on Feb. 1. “Maybe we can see that on a soft employment report on March 8,” Chandler added. “That said, some demand for gold was reported from China, but with higher stocks, FOMO may see less demand for gold for Chinese investors.”

Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, was looking at the upward move in gold markets on Friday.

“I think it might be risk-off,” he said. “We saw earlier in the week, and over the last couple of weeks, when Bitcoin really shot up, gold was really struggling, so I always look at gold versus the U.S. dollar, and then tier-two is gold versus Bitcoin, because when you have people that are looking to trade alternative assets, when they're risk on, they'll trade cryptos, and when they're risk off, they'll do precious metals.”

Cieszynski said gold’s move isn’t so much about people getting fearful, but just an easing of risk appetite now that we're past earnings season. “Every single major piece of news is now out,” he said. “With the Nvidia earnings, Cisco, all the big names have now reported results in the U.S., so we're really at the end of earnings season now. We don't have any of those things coming in to drive more risk appetite.”

He noted that if we see profit taking in the risk markets, that could be beneficial for gold. “I'll go bullish on gold next week,” he said. “It's not necessarily that there's a negative event, it's just a lack of events to keep the party going.”

Cieszynski said that while next week’s PCE report is important, markets tend to underreact to it. “PCE usually is seen as more confirmation,” he said. “I still think most mainstream people don't understand PCE, so they all go off and look at the other ones. In fact, the markets often willfully ignore it in favor of CPI. Whereas if you look at PCE, you can see a mile away what the Fed is going to do.”

Turning to the timing of the Fed’s pivot, Cieszynski said the Fed will actually want to deliver the first rate cut in June if the data allows it, and the timing of the election is a key consideration.

“If you're going to do three rate cuts quarterly, then you'll start at the end of June,” he said. “You'll do June, September, and December. That kind of says, ‘we're on a regular thing,’ and it keeps them away from the election.”

“If they go September, then you'd be talking about them trying to do a rate cut at the end of October, and that's not realistic. They're not going to do anything,” he said. “Let's put it this way: If they don't cut rates at the end of June, then you're looking at two rate cuts, not three, because you're not going to go July-September-November. You might go July-September-December, but they don't seem to like doing that anymore.”

Cieszynski emphasized that the move wouldn’t be about making markets happy, rather it’s about getting on a rate cutting path that works with the election calendar and aligns with their history.

“They don't want people going, ‘the Fed is on, the Fed is off, the Fed is on,” he said. “They don't want it, because that creates instability and undermines confidence. They don't want the Fed to be the wild card. As much as they say they're data-dependent, once they start a program, they try to be fairly consistent and not keep everybody guessing.”

Mark Leibovit, publisher of the VR Metals/Resource Letter, believes U.S. government manipulation is restraining gold’s strength, but foreign buyers are driving the price action regardless.

“Commentary had virtually no reference to government suppression of price,” he said. “Despite that, the physical market outside the U.S. is taking control from the COMEX. Adding to positions on manipulated shakeouts.”

And Kitco Senior Analyst Jim Wyckoff sees gold prices still stuck in their recent channel next week. “Steady and sideways,” he said. “Stiff technical support levels lie just below the market. Yet, there has been no fundamental catalyst to inspire the bulls to get more active on the long side.”
 

Sot gold last traded at $2,036.09 at the time of writing, up 0.58% on the day and 1.14% on the week.

Kitco Media

Ernest Hoffman

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Drifts As US Jobless Numbers Fall

Gold Price News: Gold Drifts As US Jobless Numbers Fall

Gold prices edged slightly lower on Thursday, after US unemployment figures came in below market expectations, suggesting a slightly stronger economy and less pressure for a loosening of monetary policy.

Prices initially pushed higher to $2,035 an ounce in early morning deals, but it was downhill from the morning peak, with prices dropping as low as $2,020 an ounce by late afternoon.

US initial jobless claims figures were released Thursday showing that the number of people claiming unemployment benefits in the US fell by 12,000 to 201,000 in the week ending February 17, well below market expectations of 218,000, and marking the lowest unemployment level for five weeks.

US stock markets were also higher on Thursday, contributing to the bullish picture of the economy. Any signs of a stronger-than-expected economy tend to ease the pressure on central banks to cut interest rates, allowing more leeway to maintain a hawkish stance on monetary policy for longer. The prospect of an extended period of higher interest rates is bearish for gold because it raises the opportunity cost of holding non-yield-bearing assets like precious metals.

Looking ahead, the immediate outlook for macroeconomic data releases is light, although the markets may pay some attention to the German Ifo Business Climate figures for February due for release on Friday, providing a snapshot of the health of the EU’s powerhouse economy. Beyond that, eyes will be on Monday’s speech by ECB President Christine Lagarde for clues on the EU economy and the central bank’s monetary policy stance.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Prices Gain As US Dollar Dips

Gold Price News: Gold Prices Gain As US Dollar Dips

Gold prices made further gains on Monday and Tuesday to rise above $2,030 an ounce for the first time since February 9.

The US dollar fell against other major currencies on Tuesday, adding further to a downward move that’s continued since February 14. A weaker dollar tends to drive dollar-denominated assets like gold and silver higher as it makes the precious metals cheaper for buyers in other currencies. US Treasury yields also fell on Tuesday, adding to the bullish picture for gold prices.

The latest moves came against a background of heightened geopolitical risk, after news reports on Sunday said Iran-backed Houthis in Yemen had attacked another ship in the Gulf of Aden. The Houthis have said their attacks are a response to the Israeli state’s military actions in Gaza.

The ongoing hostilities against ships are a concern for the markets as they threaten deliveries in a key commercial waterway, and the uncertainty they pose tends to drive investment away from riskier assets toward safe havens like gold.

The markets were also looking ahead to Wednesday’s US Fed FOMC minutes and expected comments from Fed officials to gain insight into the timing of any interest rate cuts in the coming months. Recent figures suggest the market is now split on whether the first cuts are likely to come in May, June or July, while in January, most bets were on a May cut.

A prolonged period of very low interest rates, coupled with massive quantitative easing by central banks, was a key factor in gold’s dramatic price increase since the global financial crisis of 2008-2009. The rate-hiking cycle seen over the last two years has contributed to halting the price increase for gold, and any eventual cutting of interest rates could once again provide a stimulus for precious metals prices.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Ends Higher to Pare Weekly Losses

Gold Price News: Gold Ends Higher to Pare Weekly Losses

Gold prices were marginally higher on Friday, ending the week in an upward trend, and partly regaining ground lost earlier in the week.

Prices spent most of the morning at around $2,005 an ounce, and barring a brief drop to $1,995 an ounce, prices held their ground to trade at $2,005 to $2,010 by late afternoon.

The modest gains followed a strong day on Thursday when gold rebounded from Wednesday’s intra-week low of $1,985 an ounce.

US producer prices were released Friday showing an increase of 0.3% in January, larger than the market’s expected 0.1% rise. And core PPI figures, which exclude food and energy, which tend to be volatile, showed a larger rise of 0.5%, versus market expectations of a 0.1% increase. Inflation figures matter because they add pressure on central banks to maintain higher rates for longer, a negative factor for non-interest-bearing assets like gold.

Gold’s sudden drop below $2,000 coincided with the release of the US stats in the early afternoon, although prices quickly rebounded to end marginally higher day-on-day.

Looking ahead, Tuesday will see the release of monthly inflation data from Canada, while eyes will also be on Wednesday’s US Fed FOMC minutes for further clues about potential interest rate trajectories. The Fed’s next meetings are scheduled for March 20 and May 1. Data from interest rate traders points to a roughly 35% probability of a 25-basis point cut in rates at the May meeting.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

Time to Buy Gold and Silver

Tim Moseley

Are investors swapping their gold for Bitcoin as inflation fears rise?

Are investors swapping their gold for Bitcoin as inflation fears rise?

For months now, economists have warned consumers that inflation will be a challenging monster to slay, that that last push to get prices below 2% will be a hard mile, or a tough row to hoe; take your pick of analogies or metaphors because they are all true.

This past week, we saw both consumer and producer prices rise more than expected, and while prices have come down from their 2022 peaks, we are still a long way from the Federal Reserve’s target of 2%.

Gold and silver prices dropped to multi-month lows, testing critical support at $2,000 and $22 an ounce, respectively. Investors continue to flee the gold market as higher-for-longer interest rates support higher bond yields and a stronger U.S. dollar.

Instead of gold, investors continue to push equities to record highs, and they also see new opportunities in Bitcoin. This past week, Kitco’s Jordan Finneseth noted that so far this year, more than $3 billion has flowed out of global gold-backed exchange-traded products. At the same time, the newly approved Bitcoin ETFs have seen total inflows of $4.115 billion.

Finneseth noted that with inflows of $4 billion, the cryptocurrency ETFs achieved in one month what took the gold market two years.

However, even in this difficult environment, we still must acknowledge the underlying strength of the precious metals market.

Despite the selling pressure, the precious metals were able to hold critical support levels. Silver, in particular, has rallied 7% from its lows earlier this week. Gold and silver may not be attractive assets as the Federal Reserve maintains its aggressive monetary policy stance; however, very few investors are actively shorting these assets.

Along with the inflation threat, fears of a recession have not completely disappeared; at the same time, there is enough geopolitical uncertainty to maintain a robust safe-haven bid in gold.

Let’s also not forget that a healthy physical gold market provides some price support. According to the National Retailers Federation, U.S. consumers were expected to spend a record $6.4 billion in jewelry for this year’s Valentine's Day. Jewelry purchases represented a significant portion of the $25.8 billion expected to be spent on gifts ahead of Feb. 14.

Meanwhile, China continues to assert its dominance in the gold market. According to a report from the World Gold Council, China’s gold market set all-time highs in several sectors in January. The WGC noted that 271 tonnes of gold was withdrawn from the Shanghai Gold Exchange last month, the busiest January on record and the third-biggest in the exchange’s entire history. Total holdings in Chinese-listed gold ETFs hit a record high last month At the same time, the People’s Bank of China continued to buy gold for the 15th consecutive month.

Despite the selling pressure in the gold market, there are some significant pillars of strength, and for many analysts, buying on dips is seen as a solid tactical investment.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley