Gold Price News: Gold Holds Steady, But Fragile

Gold heads into Friday a little stronger but also little changed from the week’s open.

It appears to have consolidated around the critical $2,312/oz level following the previous week’s decline. However, we note that some technicals have deteriorated, with the 50-day simple moving average now becoming a constraint and a head and shoulders pattern now apparent.

Nevertheless, from a fundamental perspective, gold has remained relatively resilient, facing mixed US inflation data and, crucially, the Federal Reserve cutting its ‘dot plot’ projection of interest rates from an implied three-quarter-point cut to just one such cut this year. In mitigation, the Cleveland Fed inflation nowcast has moderated a little over the last week, but with the core PCE (the Federal Reserve’s preferred inflation measure) still at 2.6%, this currently gives US rate-setters little scope for comfort.

Against this backdrop, one might expect that positive (downside) surprises for gold are now priced out of US rates markets. However, both 2-year and 10-year US Treasury yields have moved some 20bp lower this week, leaving a rebounding dollar as the only rate hawkish signal. CME FedWatch suggests futures are still pricing a significant (c. 30%) probability of more than one quarter-point cut in US rates by the end of 2024, little changed from a week ago.

The market calendar for today is quite light, with only May US import prices and June Michigan Consumer Sentiment prints likely to be of some interest to gold investors.

Mike Ingram

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Ticks Higher Ahead of US Inflation Figures

Market Analysis

Gold prices edged higher on Tuesday, posting modest day-on-day gains, as the markets looked ahead to the release of macroeconomic data on Wednesday for renewed direction.

Prices rose as high as $2,320 an ounce on Tuesday, compared with around $2,310 an ounce in late trades on Monday.

KAU/USD 1-hourly Kinesis Exchange

The relative price stability this week followed a dramatic price drop from as high as $2,388 an ounce last Friday after news reports said China’s central bank had stopped buying gold in May, breaking an 18-month streak of monthly purchases.

The latest action leaves gold prices some way short of their all-time high of just over $2,450 an ounce seen on May 20.

The markets were left speculating over the PBoC’s next move and what price level would encourage a resumption of purchases for its official gold holdings, with some suggesting a drop to $2,200 an ounce could reignite regular buying.

Current heightened geopolitical tensions around the world have combined with political uncertainty due to upcoming elections in several countries, and these factors have contributed to gold’s strength along with central bank buying in recent months.

Looking ahead, the markets will be watching out for Wednesday’s US inflation figures for May, as well as an expected interest rate decision by the US Fed, which is widely expected to involve keeping the current rate of 5.5% on hold for the time being.

Then Thursday will see the release of US Producer Price Inflation numbers for a further update on price rises, as the markets try to gauge the timing of possible interest rate cuts by the US Fed in the autumn.

Frank Watson

Time to Buy Gold and Silver

Tim Moseley

People are coming to the view that rates are less likely to go down to their pre-pandemic levels,’ Fed Chair Powell tells reporters

Federal Reserve Chair Jerome Powell used his post-FOMC press conference to try to reassure markets that even though the central bank’s latest data showed inflation projections rising and the number of expected rate cuts falling, the committee’s policy bias was still tilted toward easing. However, he also suggested people were getting used to the idea that interest rates would not return to pre-pandemic levels, signaling that the Fed may be preparing markets for a higher neutral rate.

Powell was asked at the outset whether FOMC members expected no further progress on inflation this year, given that the new Core PCE forecast was 2.8% by the year-end, and it's already at 2.75%.

“What's going on there is that we had very low readings in the second half of last year, June through December really, and we're now lapping those,” he said. “As you go through the 12-month window, a very low reading drops out and the new reading gets added to the 12-month window.”

“It's just a slight element of conservativism, that we're assuming a certain level of incoming monthly PCE and core PCE numbers,” he continued. “We're assuming good but not great numbers, and if you put that on top of where we are now, you get a very slight increase in the 12-month reading.”

“Now, do we have high confidence that that's right? No,” Powell said. “It's just a conservative way for forecasting things. If we were to get more readings like today's reading, then of course that wouldn't be the case.”

The Fed Chair was also asked if two or three more inflation readings like the one markets saw this morning would make a September rate cut possible.

“I talk to all of the other participants on the FOMC every cycle, and we talk about their summary of economic projections [SEP], and their dot plot, and everything,” he said. “What I hear and see is that people are looking at a range of plausible outcomes, and in many cases, they're thinking ‘I can't really distinguish between two of these, they're so close, these are very close calls.’ But we ask them to write down the most likely one, so they do.”

“As you've said, 15 of the 19 are clustered around one or two [cuts],” Powell went on. “I look at all of them as plausible, so I think that does tell you what the committee thinks. But what everyone agrees on is it's going to be data-dependent. They're not trying to send a strong signal that this is what I think is the right thing. It's just what they think at a given point in time, subject to data.”

“In terms of future meetings, we don't make decisions about future meetings until we get there,” he added. “We want to gain further confidence. Certainly more good inflation readings will help with that.”

Powell was asked whether any FOMC members had changed their interest rate projections after the 8:30 am CPI release.

“When there's an important data print during the meeting, first day or second day, what we do is we make sure people remember that they have the ability to update, we tell them how to do that, and some people do, some people don't,” he said. “Most people don't, and I'm not going to get into the specifics. But you have the ability to do that, so that what's in the SEP actually does reflect the data that we got today, to the extent you can reflect it in one day.”

“I think we'll see PPI tomorrow, we'll know more about the PCE reading as the month goes on,” Powell added.

The Fed Chair was also asked whether the labor market is more vulnerable to higher rates now that many of the post-pandemic imbalances have eased.

“By so many measures, the labor market was overheated two years ago, and we've seen it gradually move back into much better balance between supply and demand,” Powell replied. “So what have we seen? We've seen labor force supply come up quite a bit through immigration and through recovering participation. On the demand side, we've seen quits moving down, we've seen job openings moving down, we've seen wage increases moving from very, very high levels a couple of years ago back down to more sustainable levels.”

Powell acknowledged that unemployment has risen by about 0.6% in a little over a year, but he characterized that as “very, very gradual,” and said 4% unemployment remains historically low. “We watch […] the labor market very carefully, and that's what we see,” he said. “We see gradual cooling, gradual moving toward better balance. We're monitoring it carefully for signs of something more than that, but we really don't see that.”

Chair Powell was then asked about the significant shift in the SEP since the March meeting, with the latest version showing a much shallower path of rate cuts this year.

“The big thing that changed was the inflation forecast moved up several tenths before the end of the year,” he said. “We had really good inflation data in the second half of last year, then a pause in progress in the first quarter. And what we took away from that was that it's probably going to take longer to get the confidence we need to begin to loosen policy.”

“The sense of that is that rate cuts that might have taken place this year, take place next year,” he continued. “There are fewer rate cuts in the median this year but there's one more next year. So really, if you look at year-end 2025 and '26, you're almost exactly where you would have been, just it's moved later because of that progress.”

The Chair was then asked about the SEP’s long run interest rate forecast, which also moved higher, and whether this indicated that rates may not be restrictive enough.

“You're right, it did move up,” he replied. “I just think people are coming to the view that rates are less likely to go down to their pre-pandemic levels, which were very low by recent history measures. Now, we can't really know that. Ultimately, we think that things like the neutral rate are driven by longer run, slow moving forces.”

The Fed Chair added that as time has gone on, everyone is wondering just how restrictive the policy has become. “My answer has been that policy is restrictive,” he said. “The question of whether it's sufficiently restrictive is going to be one we know over time. I think the evidence is pretty clear that policy is restrictive and is having the effects that we would hope for.”

Powell was then asked to explain why the central bank would cut at all this year when the growth forecast doesn't predict any slowdown in 2024, the unemployment forecast doesn’t show significant weakening of the labor market, and the latest inflation forecasts average out to no change.

“We think policy is restrictive and we think ultimately that if you just set policy at a restrictive level, eventually you'll see real weakening in the economy,” Powell replied. “That's always been the thought, that since we raised rates this far, we've always been pointing to cuts at a certain point. Not to eliminate the possibility of hikes, but no one has that as their base case, no one on the committee does.”

Powell then addressed signs that consumer-level inflation pressures were easing, saying that there were still problematic areas.

“It's true that inflationary pressures have come down, but we're still getting high inflation readings,” he said. “In some parts of non-housing services you see elevated inflation still, and it could be to do with wages.”

Powell added that goods prices have fluctuated. “There's been a surprising increase in import prices on goods which is kind of hard to understand, and we've taken some signal from that,” he said. “Wages are still running, I would say, above a sustainable path, which would be that of trend inflation and trend productivity. We haven't thought of wages as being the principal cause of inflation, but at the same time, getting back to 2% inflation is likely to require a return to a more sustainable level, which is somewhat below the current level of increases.”

Gold prices trended lower throughout Powell’s press conference, with spot gold sliding from $2,332.34 when he began speaking to $2,317.29 by the time he finished taking questions.

Kitco Media

Ernest Hoffman

Time to Buy Gold and Silver

Tim Moseley

Great reset & financial world war coming: This is global elite's plan to come out on top – Carol Roth

The world is on the brink of a financial reset, with the global elite planning to come out on top, according to Carol Roth, New York Times bestselling author of 'You Will Own Nothing,' who says this threatens to leave the average person losing private property rights, other liberties and being subject to centralized control and draconian oversight.

"There is this change coming," Roth told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "In many ways, it's not so much that [the elite] intentionally try to keep you down. They are trying to preserve their power and their wealth. And if yours has to go away for that to happen, then that's just okay by them."

Roth warns that a financial world war or major shift in the financial order is coming and adds that it is not as conspiratorial as it sounds.

"If you go to the White House's website and look at remarks that President Biden gave to the business roundtable back in 2021, he talks on a regular basis about things changing in the financial order and says there is going to be a new world order out there," Roth noted

The U.S. is about 80 years into the cycle of being at the center of the global financial system, with the U.S. dollar being the world's reserve currency.

Roth highlights how every “empire” in history has collapsed, losing its financial supremacy, from the Romans to the Portuguese to the British.

"Before us, it was the British; before the British, it was the Dutch. And so I would imagine when you're in that position, you feel very invincible about it," Roth pointed out. "But if we look at the reality of debt loads in the United States and the debt service and all of the printing that's gone around the world, and the fact that the Fed has not done a good job of holding the reserve currency stable, you're seeing some of these shifts happen."

Roth points out that the BRICS Plus countries are actively de-dollarizing and trading in their own currencies, while central banks are selling off U.S. Treasuries and stocking up on gold.

For Roth's take on the decline of the U.S. as a global superpower and the kind of shift that's coming, watch the video above.

"Over the last decade, the amount of U.S. government debt has more than doubled from $16 trillion to over $35 trillion," Roth said. "At the same time, central banks worldwide were net sellers of Treasuries. And the interesting dynamic is that they're not going into another currency per se, but they're going into gold."

World Economic Forum's 2030 agenda

Roth also pointed out that as we see the bifurcation of the global monetary system and the U.S. hegemony wane, there are non-governmental players pushing an agenda that leads to less economic and individual freedoms.

Roth explains why private property ownership is integral to all other rights and how the push to diminish individual ownership is being led by the World Economic Forum (WEF), big technology companies and the United Nations.

“Private property is the guardian of every other right. Property rights are fundamental to wealth creation. Studying wealth creation at the individual level, you can see that the way that individuals create wealth is through ownership,” Roth wrote in ‘You Will Own Nothing.’ “Once you as an individual own nothing, it is easy for the government or similar center of power to gain figurative ownership and control over you. I will say this many times to hit at home, if you own nothing, they own you.”

She highlighted the World Economic Forum's (WEF) 2030 agenda, which lists eight predictions, the top being, 'You will own nothing and be happy.' The post was originally published in 2018 on WEF's Twitter account, now X.

Roth explains that the WEF has made a concerted effort to influence leaders in the public and private sectors to promote its agenda and ideals.

"I encourage everybody to look up the video with Klaus Schwab at the Harvard Kennedy School of Government when he talks about the Young Global Leaders program. And you have people like Canada's Justin Trudeau and Chrystia Freeland, who have been part of these programs, and he cites them — 'I look around, and I know all these people, and they've been part of the WEF's Young Global Leader program.' And so when somebody like Klaus Schwab says, 'We penetrate the cabinets,' I'm not sure what else that might mean other than 'We penetrate the cabinets,'" Roth explained. "So, while this is supposed to be a non-governmental organization, it seems like they're very entrenched in government."

For more background on the WEF and the role Klaus Schwab, the 86-year-old founder of the World Economic Forum, played during the decades he was at the helm, watch the video above.

Since recording this video, the WEF has announced that Schwab will step down as executive chairman and transition to a non-executive role by January 2025.

Central bank digital currencies (CBDCs)

Central bank digital currencies, or CBDCs, are the primary tool in implementing various agendas that threaten freedom, according to Roth.

Roth raises the alarm over the recent progress made around Central Bank Digital Currencies or CBDCs. "A [CBDC] is the number one concern. If you want to do something that's just going to completely destroy the foundation of the United States of America, you bring in a central bank digital currency, and it's just completely over," Roth cautioned. "It is just the absolute most frightening thing for freedom and wealth creation."

What are CBDCs?

Central bank digital currencies are programmable, digital currencies that operate as fiat currency. They are controlled and issued by central banks.

Proponents claim CBDCs can prevent money laundering, deter criminal activities, improve the speed and security of transactions, help fine-tune monetary policy, and allow for financial inclusion.

Critics claim CBDCs are the ultimate tool of control, censorship, and surveillance that can be used to monitor every single payment made and received, obliterating financial privacy and anonymity.

CBDCs continue to see accelerated adoption this year, with 134 countries exploring these options. According to the Atlantic Council, this represents 98% of global GDP.

One of the latest significant developments has been SWIFT – the global bank messaging network – planning a new platform to connect all the CBDCs in development to the existing financial system. The platform is said to launch within the next two years.

Crypto vs. CBDCs

Roth warned that some within the government are manipulating interest in digital currencies and digital assets to mainstream CBDCs and intentionally trying to conflate CBDCs with cryptocurrencies. For more information, watch the video above.

Roth stresses that truly decentralized digital currencies like Bitcoin are the antithesis of CBDCs. "A central bank currency is the exact opposite in terms of purpose and focus and what it stands for than a cryptocurrency where you have something like Bitcoin, which is entirely decentralized," she said.

Roth added that one of the drivers behind the surge in cryptocurrencies, especially Bitcoin, is the growing interest in the decentralized nature of these types of digital currencies.

"That's really what that's about. It's about preserving wealth. It's about having control and freedom," she said. "Every government is exploring a CBDC in some way. [Even] the Fed is running pilot programs and doing research," she noted.

Roth points to gold, silver, Bitcoin, and any other physical metals as hedges against the risks posed by a potential CBDC.

For Roth's take on how to protect your wealth and freedom amid this coming financial shift, watch the video above.

"The idea of ownership has to be viewed through an important lens. If you want to create wealth and have personal sovereignty and freedom, that comes to you through owning things. Through that ownership, assets can retain their value and increase in value. They may want you to own nothing, but I want you to own as much as possible," Roth said.

Kitco Media

Michelle Makori

Time to Buy Gold and Silver

Tim Moseley

Fed in focus: Asset prices on hold as investors await rate decision and inflation data

Cryptocurrency prices trended lower to start the week as investor attention is focused on the Federal Reserve and its upcoming decision on interest rates and May's Consumer Price Index (CPI) inflation reading, both of which are due on Wednesday.

Stocks fell under pressure in early trading but managed to climb back into the green in the afternoon despite rising expectations that the Fed will keep interest rates at a two-decade high for longer. The CME FedWatch tool now shows that anticipation for a September rate cut has fallen to 49%, down from 60% a week ago.

Geopolitical developments in Europe also have investors on edge after France's President Macron and German Chancellor Olaf Scholz suffered lopsided losses to far-right parties in European elections on Sunday. The euro fell to its lowest level in a month after the results were released, while the Paris stock index sank around 2% in the wake of Macron announcing snap elections.

At the market close on Monday, the S&P, Dow, and Nasdaq were all in the green, up 0.26%, 0.18%, and 0.35%, respectively.

Data provided by TradingView shows that Bitcoin (BTC) briefly spiked back above $70,000 in early trading to hit a high of $70,195, but gave back the gains in the afternoon and returned to support near $69,600.

BTC/USD Chart by TradingView

At the time of writing, Bitcoin trades at $69,640, an increase of 0.05% on the 24-hour chart.

Short-term leverage flush

“Highly positive ETF flows for the last 20 trading days have helped to offset pressure on BTC, however, the fact that this was unable to move the price further, and push BTC above its range high is a negative in the short-term,” said analysts at Bitfinex. “The counter-argument is that traders are executing a basis arbitrage trade, where they have long spot exposure and short perpetual futures to collect funding payments.”

“However, it is important to note that this is highly speculative,” they added. “As per the chart below, there has been high open interest (OI) on BTC, as well as on altcoins.”

“Coinglass data shows that BTC OI across major exchanges reached an all-time high of $36.8 billion on June 6th,” they said. “And despite [Friday’s] correction in price, OI is currently sustained above $36 billion levels.”

“We believe the drop on Friday was more of a ‘leverage flush’ where an extreme amount of leveraged longs on altcoins (as well as majors to some extent) is wiped out and funding rates neutralised,” the analysts suggested. “However, we do not expect a major decline to follow immediately, even though the leverage wipeout/liquidations were quite significant on altcoins.”

“This is mainly because the amount of BTC liquidations was relatively small,” they said. “While we had more than $360 million in long liquidations and over $410 million total liquidations on June 7th – the highest since April 14th and more than when BTC went sub $57,000 – this time around only $50 million of the long liquidations came from BTC.”

“Most were on altcoins, which explains the severity of the decline in altcoins last week relative to majors,” the analysts said. “Such liquidation events are usually not followed by further severe drops and hence the next week will be pivotal, given the forthcoming Consumer Price Index inflation report on June 12th is expected to be a major market catalyst, with the price expected to continue to range in a tight environment as derivatives positions get built up again.”

“In the current environment, holding the local lows around $68,000-$68,500 would be pivotal for bulls, whereas failure to move past range highs remains a cause for concern,” the analysts said.

Addressing the tough situation the Fed finds itself in regarding interest rates, Bitfinex analysts said keeping rates higher for longer is a double-edged sword that will need to be navigated with deftness.
 

“On one hand, the strength and adaptability of the US economy could enable it to thrive even in a high-interest-rate environment driven by robust labour demand and rising wages,” they said. “This scenario would support continued economic growth, solid consumer spending, and overall economic resilience.”
 

“However, there is also a significant risk that maintaining elevated interest rates for too long could stifle economic activity, leading to reduced investment, slower job creation, and a potential downturn,” they warned. “The Fed faces the delicate task of balancing these opposing outcomes.”

They also suggested that the recent rate cuts by the European Central Bank and the Bank of Canada, done to “shift towards more accommodative monetary policies to boost economic growth, suggest that the Fed may need to re-evaluate its own monetary policy.”

“With the Fed adopting a cautious approach, the actions of its global counterparts may influence its decisions in the coming months, particularly if inflation trends and economic conditions warrant a shift,” they said.

Kitco Media

Jordan Finneseth

Time to Buy Gold and Silver

Tim Moseley

Gold Price News: Gold Climbs to Two-Week High Above $2,370 An Ounce

Gold prices rose for a second day on Thursday to reach their highest since May 23, taking support from data showing a higher-than-expected rise in US jobless figures.

Gold climbed as high as $2,378 an ounce on Thursday, and prices were quoted at around $2,370 to $2,375 an ounce by late afternoon. That compared with around $2,355 an ounce in late deals on Wednesday.

KAU/USD 1-hourly Kinesis Exchange

Thursday’s move represented a second straight day of gains for the yellow metal, after a lacklustre first half of the week, taking prices to a two-week high.

S initial jobless claims figures released Thursday showed a larger-than-expected increase in the number of Americans seeking unemployment benefits, coming in at 229,000 in the week to June 1, compared with market expectations of 220,000. Any signs of a weaker economy suggest increased pressure on the US Fed to cut interest rates – a bullish factor for non-yielding gold.

US 10-year treasury bond yields were broadly steady on Thursday, hovering at a two-month low, and this downward move has provided an additional supportive element for gold prices.

Elsewhere, the European Central Bank cut interest rates by 25 basis points to 4.25% as expected on Thursday, after nine months of steady rates. While the move is less significant for gold than a US Fed rate cut, it nevertheless highlights that recent expectations over the start of an interest rate-cutting cycle have started to materialise among major central banks.

Looking ahead, all eyes will be on the monthly US non-farm payrolls figures for May on Friday as well as the US unemployment rate for May, for further signals on possible interest rate changes in the coming months. ECB President Christine Lagarde is also set to give a speech on Friday afternoon, following Thursday’s decision to cut interest rates to 4.25%.

Kitco Media

Frank Watson

Time to Buy Gold and Silver

Tim Moseley

Gold prices will set new record highs in the second half of 2024 – Metals Focus

Gold prices will set new record highs in the second half of 2024 – Metals Focus teaser image

Gold prices are once again flirting with resistance near $2,400 an ounce, and one research firm expects that it's only a matter of time before the precious metal sets fresh all-time highs.

In their weekly note published Thursday, analysts at Metals Focus said that the eventual monetary policy easing from the Federal Reserve will drive gold prices higher in the second half of the year.

“Later this year, we expect prices will rise again, with a new all-time high likely,” said Neil Meader, Director of Gold and Silver at Metals Focus. “After all, the recent $2,450 peak is lower, in real terms, than the 1980 one, which would have been around $3,000 in today’s prices.”

With a new record peak in sight, Metals Focus expects gold prices to average around $2,250 an ounce for the year, a 16% increase from last year’s record average price.

The comments come as disappointing economic data and growing slack in the U.S. labor market have raised market expectations for the U.S. central bank to start the new easing cycle in September.

Even if the Federal Reserve maintains its aggressive monetary policy stance, Metals Focus does not see much downside for gold through the rest of the year.

The analysts at the UK-based precious metals research firm noted several factors supporting gold’s breakout rally this year, even as the Federal Reserve has hesitated to lower interest rates.

Insatiable appetite from global central banks, a dire global fiscal outlook, geopolitical uncertainty, and China’s weakening economy have all boosted gold prices, helping them to weather headwinds generated by persistent strength in the U.S. dollar and higher bond yields.

“Whether they start this year or next, US rate cuts are coming,” Meader said. “It’s also hard to see the Middle East and Ukraine conflicts being resolved any time soon, and US/China tensions remain high. Lastly, as physical markets become more accustomed to higher prices, gold’s fundamentals should improve.”

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

Tim Moseley