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If you think gold had a brutal selloff this week just look at a silver chart

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If you think gold had a brutal selloff this week, just look at a silver chart

Gold prices this week had such a strong decline that they traded to a low not witnessed since the first week of March, declining by approximately $39 per ounce. Gold futures basis most active August contract opened at approximately $1969 on Tuesday and as of 5:25 PM EDT is fixed at $1930.30. This week’s price decline resulted in gold losing 1.96%.

The key factors that exerted extreme bearish pressure on both gold and silver were hawkish statements by the Federal Reserve, rate hikes by multiple central banks in Europe, and dollar strength.pic

Chairman Powell testified to the House and Senate’s Banking Committee this week and underscored the need for more rate hikes this year. Jerome Powell said that the majority of Federal Reserve officials believed that it was appropriate to continue to raise rates to address inflation.

On Wednesday, speaking before Congress he said that it was a “pretty good guess” that the central bank would hike rates twice more this year. Powell underscored the rationale for more rate hikes saying, “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go”.

This week the Bank of England raised its benchmark rate to 5%, the 13th straight increase by the BOE. Officials at the BOE warned that “further hikes might be needed”. The Bank of England’s Monetary Policy Committee (MPC) in a vote of seven to two voted in favor of a rate hike to reduce their country's Inflation. The BOE was not alone in its action with central banks in Norway, Switzerland, and Turkey also enacting rate hikes to slow their respective countries' inflationary pressures.

These factors also sparked a deep decline in silver resulting in a larger percentage decline than gold. Silver futures basis the most active July contract opened at approximately $24.25 on Tuesday and as of 5:25 PM is fixed at $22.45. The weekly price decline of $1.85 resulted in a percentage decrease of 7.42%. Silver’s selloff on a percentage basis was over 3 times greater than gold’s decline.

Gary S. Wagner

Time to Buy Gold and Silver

Tim Moseley

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Gold breaks below recent lows as central banks worldwide raise rates

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Gold breaks below recent lows as central banks worldwide raise rates

The Federal Reserve’s drumbeat signaling more rate hikes is loud enough to be heard on the other side of the world. In his second day of testimony to the House and Senate Chairman Powell is reiterating his message that a “strong majority” of Federal Reserve officials are strongly committed to raising rates twice for a total of 50 basis points by the end of the year. This would take the Fed’s benchmark Fed funds rate to a range of 5 ½% to 5 ¾%.

Today’s testimony to the Senate Banking Committee marks the third time Chairman Powell has underscored the Federal Reserve’s plan to implement two more rate hikes before the end of the year. He delivered this message during his press conference last week, to the House yesterday, and to the Senate today. When asked for a timeline when the Fed will raise rates again Powell responded by saying, at a “careful pace”.

He did however hedge this statement by adding that any further rate hike decisions will depend on how the economic data develops.

The resolute hawkish stance of the Federal Reserve has been heard overseas with multiple central banks following suit and raising their benchmark interest rates. The Bank of England raise its benchmark rate to 5%, the 13th straight increase by the BOE. Officials at the BOE warned that “further hikes might be needed”.

The Bank of England’s Monetary Policy Committee (MPC) in a vote of seven to two voted in favor of a rate hike. Inflation is running hotter in many parts of Europe than in the United States. A report on Wednesday revealed that the CPI in the U.K. came in above expectations. Economists were expecting the headline inflation (CPI) to ease to 8.4%. Wednesday's report revealed that inflation had come in hotter than expected at 8.7%.

The BOE was not alone in its action with central banks in Norway, Switzerland, and Turkey also enacted rate hikes to slow their respective countries' inflationary pressures.

The combination of Chairman Powell’s testimony and multiple central banks in Europe raising rates resulted in a strong decline in gold today. Gold futures traded to a low of $1922. As of 5:11 PM EDT, the most active August contract of gold futures is currently fixed at $1923.90 which is a decline of 1.08% or $21.

The strong decline of gold prices from its high of $2083 in May to current pricing can be directly tied to strong rate hikes in central banks worldwide with the Federal Reserve's strong restrictive monetary policy leading the way. That being said there is mild technical support for gold at $1906 and strong technical support at $1850 per ounce.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Thoughts on the Crypto Market

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Thoughts on the Crypto Market

The crypto market has been a hot topic in recent years, with many investors and traders eager to get in on the action. As the market continues to evolve, opinions on the future of cryptocurrencies vary widely. In this article, the author shares their thoughts on the current state of the crypto market and where it might be headed.

The author begins by acknowledging the recent volatility of the crypto market and the risks associated with investing in such a fast-paced and unpredictable space. However, they also note that there are many potential benefits to investing in cryptocurrencies, such as the potential for high returns and the ability to diversify one's portfolio.

Throughout the article, the author draws on their own experience and research to provide insights into the crypto market. They discuss topics such as the role of regulators in the space, the impact of market trends on crypto prices, and the potential for new technologies to disrupt the market. Overall, the article provides a thoughtful and nuanced perspective on the complex and ever-changing world of cryptocurrencies.

Understanding Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that use encryption techniques to regulate the generation of units of currency and verify the transfer of funds. They operate independently of a central bank and can be transferred directly between individuals without the need for intermediaries like banks or payment processors.

Decentralized Nature of Crypto

One of the key features of cryptocurrencies is their decentralized nature. Unlike traditional currencies, which are controlled by central authorities like governments or banks, cryptocurrencies are based on a decentralized ledger system called blockchain. This means that no single entity has control over the currency or its transactions, making it more resistant to censorship, hacking, and fraud.

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Keys and Security

Another important aspect of cryptocurrencies is the use of cryptographic keys to secure transactions and control access to funds. Each user has a public key and a private key, which are used to encrypt and decrypt transactions. The public key is like a bank account number, while the private key is like a password. It is important to keep the private key secure, as anyone with access to it can control the associated funds.

In addition to the use of keys, many cryptocurrencies also use other security features like multi-signature transactions and two-factor authentication to further protect users' funds. However, it is important to note that cryptocurrencies are not immune to security risks, and users must take care to protect their keys and follow best practices for securing their accounts.

Overall, cryptocurrencies are a complex and rapidly evolving technology with the potential to revolutionize the way we think about money and financial transactions. While there are still many challenges and uncertainties surrounding the crypto market, understanding the basics of how cryptocurrencies work can help individuals make informed decisions about their investments and participation in this exciting new field.

Major Cryptocurrencies

When it comes to the crypto market, there are a few major cryptocurrencies that are worth paying attention to. These include Bitcoin, Ethereum, Ripple, and various altcoins. Each of these cryptocurrencies has its own unique features and benefits, which make them attractive to different types of investors.

Bitcoin

Bitcoin is the largest and most well-known cryptocurrency. It was created in 2009 and has since become a household name. Bitcoin is decentralized, meaning that it is not controlled by any government or financial institution. It operates on a peer-to-peer network, which allows users to send and receive payments without the need for intermediaries.

Ethereum

Ethereum is the second-largest cryptocurrency by market cap. It was created in 2015 and is a decentralized platform that enables smart contracts and decentralized applications (dapps) to be built and run without any downtime, fraud, or interference from a third party. Ethereum is also the platform that many other cryptocurrencies are built on.

Ripple

Ripple is a cryptocurrency that was designed for the banking industry. It operates on a decentralized network, but it is not as decentralized as Bitcoin or Ethereum. Ripple's goal is to provide fast and secure cross-border payments. It has partnerships with many major banks and financial institutions.

Altcoins

Altcoins refer to any cryptocurrency that is not Bitcoin. There are thousands of altcoins available, each with its own unique features and benefits. Some popular altcoins include Litecoin, Bitcoin Cash, and Dogecoin.

Investors should do their own research and due diligence before investing in any cryptocurrency. While the crypto market can be volatile, it has the potential for high returns. However, it is important to remember that cryptocurrencies are still a relatively new and untested asset class.

Crypto Market Dynamics

The crypto market is known for its dynamic nature, with prices fluctuating rapidly and unpredictably. In this section, we will explore some of the key dynamics of the crypto market, including volatility, valuation, and trading.

Volatility

One of the most notable features of the crypto market is its high level of volatility. Cryptocurrencies can experience significant price swings in a matter of minutes or hours, which can make them attractive to traders seeking to profit from short-term price movements.

However, this volatility can also make cryptocurrencies risky investments, as prices can quickly drop just as fast as they rise. It is important for investors to be aware of the risks associated with volatility and to take steps to manage their risk exposure appropriately.

Valuation

Another important dynamic of the crypto market is valuation. Unlike traditional financial assets, cryptocurrencies do not have a physical backing or underlying cash flow, which can make it difficult to determine their true value.

Instead, the value of cryptocurrencies is largely determined by market supply and demand dynamics. As more people buy and sell cryptocurrencies, their prices can rise or fall accordingly.

Trading

Trading is a key aspect of the crypto market, with many investors buying and selling cryptocurrencies on exchanges. However, trading cryptocurrencies can be complex, with different exchanges offering different features and trading pairs.

Investors should take the time to research different exchanges and trading strategies to find the approach that works best for them. It is also important to keep in mind the risks associated with trading, including the potential for losses due to price volatility or exchange hacks.

Overall, the crypto market is a complex and dynamic space, with many different factors influencing prices and trading activity. By understanding the key dynamics of the market, investors can make more informed decisions about their investments and manage their risk exposure appropriately.

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Investing in Crypto

Cryptocurrency has become a popular investment option for many investors, including retail investors. However, investing in crypto assets is not without risks. In this section, we will explore the potential for profit and associated risks of investing in cryptocurrency.

Potential for Profit

One of the main reasons investors are attracted to cryptocurrency is the potential for high profits. The crypto market is highly volatile, which means that the value of cryptocurrencies can fluctuate rapidly. This volatility can provide opportunities for investors to make significant profits in a short amount of time.

Additionally, some cryptocurrencies have seen significant growth over the years, such as Bitcoin, which has increased in value from just a few cents to thousands of dollars per coin. This growth has led many investors to believe that cryptocurrency has the potential to be a profitable long-term investment.

Associated Risks

While there is potential for profit, investing in cryptocurrency also comes with significant risks. The crypto market is highly volatile, which means that the value of cryptocurrencies can fluctuate rapidly. This volatility can lead to significant losses for investors who do not understand the risks involved.

Additionally, the lack of regulation in the crypto market can make it difficult for investors to make informed investment decisions. There have been instances of fraud and scams in the crypto market, which can lead to significant financial losses for investors.

Furthermore, the security of cryptocurrency wallets and exchanges is also a concern. Hackers can steal cryptocurrencies from poorly secured wallets and exchanges, which can lead to significant losses for investors.

In conclusion, investing in cryptocurrency can be a potentially profitable investment option for investors. However, it is important to understand the associated risks and to invest only what one can afford to lose.

Regulation of Crypto

Role of SEC

The Securities and Exchange Commission (SEC) plays a crucial role in regulating the crypto market. The SEC is responsible for enforcing federal securities laws, which includes regulating securities offerings, trading, and investment activities. In recent years, the SEC has increased its scrutiny of the crypto market due to concerns about fraud, manipulation, and investor protection.

The SEC has taken several actions to regulate the crypto market. For example, the SEC has issued guidance on whether certain crypto assets are securities and subject to federal securities laws. The SEC has also brought enforcement actions against companies that have violated securities laws in connection with their crypto offerings or activities.

Role of Congress

Congress also plays a role in regulating the crypto market. Congress has held hearings on the crypto market and has introduced several bills aimed at regulating the market. For example, some bills would require crypto companies to register with the SEC or to comply with certain anti-money laundering and know-your-customer requirements.

However, there is currently no comprehensive federal regulation of the crypto market. Some lawmakers have called for more regulation, while others have expressed concerns about overregulation stifling innovation in the market.

Role of Crypto

The crypto market itself also plays a role in regulating the market. Some crypto companies have formed self-regulatory organizations (SROs) to establish industry standards and best practices. For example, the Virtual Commodity Association (VCA) was formed by several crypto exchanges to establish standards for the industry.

However, the effectiveness of SROs in regulating the market is limited. SROs are not government agencies and do not have the same enforcement powers as regulatory agencies like the SEC. Additionally, not all crypto companies are members of SROs, and some may not follow industry standards.

In conclusion, the regulation of the crypto market is a complex issue that involves multiple entities, including the SEC, Congress, and the market itself. While there have been some efforts to regulate the market, there is currently no comprehensive federal regulation. As the market continues to evolve, it will be important for regulators and lawmakers to balance the need for investor protection with the need for innovation in the market.

Crypto and Traditional Financial Systems

Cryptocurrencies have disrupted traditional financial systems in many ways. In this section, we will discuss the differences between crypto and traditional financial systems, and how they interact with each other.

Crypto vs Stocks

One of the main differences between cryptocurrencies and stocks is that stocks represent ownership in a company, while cryptocurrencies are digital assets that can be used for transactions. Additionally, stocks are regulated by the Securities and Exchange Commission (SEC), while cryptocurrencies are not.

Crypto and Central Banks

Central banks play a crucial role in traditional financial systems, as they are responsible for regulating the money supply and setting interest rates. Cryptocurrencies, on the other hand, are decentralized and not controlled by any central authority. This has led to concerns among central banks about the potential impact of cryptocurrencies on monetary policy.

Crypto and the U.S. Banking System

The U.S. banking system is heavily regulated, and banks are required to follow strict rules and regulations. Cryptocurrencies, on the other hand, are not subject to the same regulations, which has led to concerns about their use in illegal activities such as money laundering.

Despite these differences, cryptocurrencies and traditional financial systems are becoming increasingly intertwined. Many banks and financial institutions are now offering crypto-related services, and some are even investing in cryptocurrencies themselves. This suggests that cryptocurrencies are here to stay, and that they will continue to play an important role in the financial markets.

Overall, the relationship between crypto and traditional financial systems is complex and constantly evolving. While there are certainly differences between the two, they are not necessarily mutually exclusive. As the crypto market continues to mature, it will be interesting to see how it interacts with traditional financial systems, and what impact it has on the broader economy.

Crypto Exchanges and Products

When it comes to trading cryptocurrencies, there are many exchanges and products available in the market. Here are some of the most popular ones:

Binance

Binance is one of the largest cryptocurrency exchanges in the world. It offers a wide range of trading pairs and has a reputation for low fees. Binance also has its own cryptocurrency, Binance Coin (BNB), which can be used to pay for trading fees on the platform. Binance has a user-friendly interface and offers a wide range of trading tools for both beginners and advanced traders.

Coinbase

Coinbase is a popular cryptocurrency exchange that is known for its user-friendly interface and high level of security. It is a regulated exchange and is available in many countries around the world. Coinbase offers a wide range of trading pairs and also has its own cryptocurrency, Coinbase Coin (COIN). Coinbase also offers a mobile app that allows users to trade cryptocurrencies on the go.

Stablecoins

Stablecoins are cryptocurrencies that are designed to maintain a stable value. They are often pegged to a fiat currency, such as the US dollar, and are used to hedge against the volatility of other cryptocurrencies. Some popular stablecoins include Tether (USDT), USD Coin (USDC), and Dai (DAI).

Overall, there are many cryptocurrency exchanges and products available in the market. It is important to do your research and choose an exchange or product that meets your needs and fits your trading style.

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Challenges in the Crypto Market

The crypto market has been growing rapidly in recent years, but it is not without its challenges. In this section, we will explore some of the key challenges that the crypto market faces.

Security Issues

One of the biggest challenges facing the crypto market is security. With billions of dollars worth of cryptocurrencies being traded every day, hackers are constantly looking for ways to steal them. In fact, according to a report by CipherTrace, losses due to crypto theft, hacks, and frauds amounted to $1.9 billion in the first quarter of 2022 alone.

To combat this, many crypto exchanges and wallets have implemented various security measures, such as two-factor authentication, cold storage, and multi-signature wallets. However, these measures are not foolproof, and there have been several high-profile hacks in recent years, such as the $600 million hack of Poly Network in 2021.

Price Manipulation

Another challenge facing the crypto market is price manipulation. Due to the lack of regulation and oversight, it is relatively easy for large players to manipulate the price of cryptocurrencies. This can be done through various means, such as spreading false rumors, creating fake news, or using trading bots to artificially inflate or deflate the price.

This can have a significant impact on the market, as it can cause investors to panic and sell their holdings, leading to a sharp drop in prices. In extreme cases, it can even lead to market crashes, as we saw in the winter of 2022 when the crypto market lost more than half of its value.

Money Laundering

A third challenge facing the crypto market is money laundering. Due to the anonymity and decentralization of cryptocurrencies, they have become a popular tool for criminals to launder money. This can be done by converting dirty money into cryptocurrencies, which can then be transferred to other accounts or exchanged for other cryptocurrencies, making it difficult to trace the source of the funds.

To combat this, many governments and regulatory bodies have introduced various measures, such as KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. However, these measures are often criticized for being too strict and hindering the growth of the crypto market.

In conclusion, the crypto market faces several challenges, including security issues, price manipulation, and money laundering. While various measures have been implemented to address these challenges, they are not foolproof, and the market will need to continue to evolve to meet these challenges head-on.

The Future of Crypto

As the crypto market continues to evolve, it's important to consider what the future holds for this new asset class. There are several factors that will likely shape the future of crypto, including adoption trends, the influence of tech giants, and the impact of economic factors.

Adoption Trends

One of the most significant drivers of the future of crypto is adoption. As more people become familiar with crypto and its potential uses, adoption is likely to continue to grow. This could be driven by a number of factors, including increased awareness of crypto's potential uses, more accessible and user-friendly platforms, and the continued development of blockchain technology.

Influence of Tech Giants

Another factor that could shape the future of crypto is the influence of tech giants like Microsoft and Apple. These companies have significant resources and expertise that could be leveraged to drive adoption and innovation in the crypto space. For example, Microsoft has already announced plans to integrate blockchain technology into its Azure cloud platform, which could make it easier for developers to build and deploy decentralized applications.

Impact of Economic Factors

Finally, the future of crypto will also be influenced by broader economic factors, such as interest rates, inflation, and the strength of the U.S. dollar. These factors could impact the value of crypto assets and the overall demand for crypto as an investment. For example, if inflation continues to rise, investors may turn to crypto as a hedge against inflation.

Overall, the future of crypto is likely to be shaped by a complex interplay of factors, including adoption trends, the influence of tech giants, and broader economic factors. While it's impossible to predict exactly how these factors will play out, it's clear that crypto is here to stay and will continue to play an increasingly important role in the global financial system.

Frequently Asked Questions

What are the latest trends in the crypto market?

The crypto market is constantly evolving, and new trends emerge regularly. One of the latest trends is the growing adoption of non-fungible tokens (NFTs), which are unique digital assets that are authenticated on a blockchain. Another trend is the increasing interest in decentralized finance (DeFi), which refers to financial applications built on a blockchain that operate without intermediaries.

How has the Morgan Stanley cryptocurrency report impacted the market?

Morgan Stanley released a report in March 2021 that was bullish on Bitcoin and predicted that it could become a mainstream asset class. The report helped to legitimize Bitcoin in the eyes of institutional investors and contributed to the current bull run. However, it's worth noting that the report was just one factor among many that have influenced the market.

What factors are driving the current rise in crypto prices?

There are several factors driving the current rise in crypto prices, including increased institutional adoption, growing mainstream acceptance, and a low-interest-rate environment. Additionally, the limited supply of some cryptocurrencies, such as Bitcoin, has contributed to their appreciation in value.

What are some potential risks and challenges facing the crypto market?

The crypto market faces several potential risks and challenges, including regulatory uncertainty, security risks, and the potential for market manipulation. Additionally, the volatility of the market can make it difficult for investors to manage risk.

How can investors best navigate the volatility of the crypto market?

Investors can best navigate the volatility of the crypto market by diversifying their portfolios, investing only what they can afford to lose, and staying up-to-date on market trends and news. Additionally, setting clear investment goals and having a long-term strategy can help investors weather short-term fluctuations in the market.

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What are some long-term predictions for the future of cryptocurrency?

The long-term future of cryptocurrency is difficult to predict, but many experts believe that it will continue to grow and evolve. Some predict that cryptocurrencies will become more mainstream and widely accepted, while others believe that they will remain a niche asset class. Additionally, the development of new technologies, such as blockchain, could lead to new use cases and applications for cryptocurrencies.

Tim Moseley

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Powell’s testimony helps take gold futures to the lowest value since March 17th

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Powell's testimony helps take gold futures to the lowest value since March 17th

Chairman Powell testified before the House Financial Services Committee today. This is part of his semiannual report which will conclude tomorrow when he appears before the Senate Banking Committee. His opening statement was close to a word-for-word repeat of his opening statement at last week’s press conference. Most importantly, the chairman did little to convey any new information regarding upcoming rate hikes and inflation that was not said last week.

The key takeaway from last week’s press conference and today’s testimony was twofold. First, he and other Fed officials agree that there should be further interest rate hikes. Secondly, he expects rates to remain elevated throughout the remainder of this year.

Speaking before Congress he said that it was a “pretty good guess” that the central bank would hike rates twice more this year. Powell underscored the rationale for more rate hikes saying, “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go”.

Although the probability of a rate hike at the July FOMC meeting has declined slightly the CME’s FedWatch tool sees a 71.9% probability of ¼% rate hike at next month’s meeting.

A weaker U.S. dollar was not enough to support any increase in gold pricing today, rather gold futures traded to the lowest value since March 17. Gold futures traded to a low today of $1929.30. As of 5:37 PM EDT, the most active August contract is currently fixed at $1943.50 after factoring in a decline of $4.20 or 0.22%. The dollar lost 0.42% in value today taking the index to 101.695.

A similar decline occurred in the pricing of spot gold. According to the Kitco gold Index (KGX), dollar weakness added $8.10 of value and concurrently selling pressure resulted in a decline of $12. Spot gold is currently fixed at $1932.60 after factoring in today’s decline of $3.90.

Silver declined by 2.3% or $0.53 which took the most active July contract to $22.70. Just as silver has had a larger percentage gain when both gold and silver traded to higher pricing it has had a steeper percentage decline during price corrections.

Gary S. Wagner

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Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Gold silver sink as USDX rallies crude dips Powell on deck

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Gold, silver sink as USDX rallies, crude dips; Powell on deck

Gold and silver prices are solidly lower in midday U.S. trading Tuesday, feeling the pressure of a higher U.S. dollar index and lower crude oil prices on this day. August gold was last down $23.40 at $1,947.90 and July silver was down $0.891 at $23.235.

The marketplace awaits Fed Chair Jerome Powell’s latest thoughts. He will provide his semi-annual monetary policy report to Congress on Wednesday and Thursday. Powell is widely expected to repeat comments from his post-Fed meeting press conference, which had a hint of caution but still opened the door to higher rates down the road. The marketplace will be closely watching the testimony for any fresh clues on the timing of the rate increases. Should Powell strike a hawkish note, this could boost the U.S. dollar and U.S. Treasury yields. But if he is more downbeat and fails to provide fresh clues, this may weaken the greenback and lower yields.

Part of the U.S. dollar’s strength today can be attributed to a much-stronger-than-expected U.S. housing market report showing May housing starts up 21.7% and building permits up 5.2%.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The S&P 500 and Nasdaq stock indexes are not far below last week’s 10-month highs.

In overnight news, China again slightly eased its monetary policy by lowering two key lending rates by 10 basis points. The rate reductions were deemed by China watchers as less than expected.

  Gold price is stuck in neutral, but that is its strength now

The key outside markets today see the U.S. dollar index solidly higher on a corrective bounce from recent selling pressure. Nymex crude oil prices are lower and trading around $70.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.711%.

Technically, the gold futures bulls and bears are on a level overall near-term technical playing field. However, the bears have re-established a price downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,971.80 and then at $1,987.80. First support is seen at the June low of $1,936.10 and then at $1,925.00. Wyckoff's Market Rating: 5.0

The silver bulls have lost their overall near-term technical advantage amid sideways and choppy trading. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at the June high of $24.62. The next downside price objective for the bears is closing prices below solid support at the May low of $22.785. First resistance is seen at $23.50 and then at $24.00. Next support is seen at $23.00 and then at the May low of $22.785. Wyckoff's Market Rating: 5.0.

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Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Gold price is stuck in neutral but that is its strength now

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Gold price is stuck in neutral, but that is its strength now

Although gold is struggling to attract bullish momentum, analysts note that its strength now relies on how much support is in the marketplace, even as speculative interest starts to drop.

In its latest trade data, Commodity Futures Trading Commission noted that speculative interest in the gold market dropped to its lowest level in three months as investors ditched their bullish bets and increased their bearish positioning.

The CFTC's disaggregated Commitments of Traders report for the week ending June 13 showed money managers dropped their speculative gross long positions in Comex gold futures by 10,473 contracts to 110,512. At the same time, short positions rose by 8,312 contracts to 35,869.

The gold market is now net long by 74,643 contracts, dropping to its lowest point since March 14. At the same time, the precious metal saw its biggest drop in gross bullish positioning since early February. During the survey period, gold prices traded in a tight range, with support around $1,950 and resistance around $1,980 an ounce

The decline in speculative positioning came after weeks of a relatively stable trading environment. According to some analysts, the shift in the gold market was not surprising as investors and hedge funds squared their positioning ahead of the Federal Reserve's monetary policy decision.

Last week the Federal Reserve left the interest rate unchanged but maintained its hawkish bias and signaled that it sees potentially two more rate hikes this year. The hawkish pause caused gold prices to drop to a three-month low, testing support at $1,930.

However, the gold market did not stay down for very long, as it was back in its previous $30 trading range before the end of the week. Analysts have noted that the price action shows there is still plenty of interest in gold; however, investors are being more tactical as they build a position.

"We have established that there is still a strong bid in the gold market," said Ole Hansen, head of commodity strategy at Saxo Bank, in a recent interview with Kitco News. "But we just don't have a trigger for a bigger rally to $2,000. I think we need to get back above $1,985ish before some bullish conviction returns to gold."

Commodity analysts at TD Securities said that gold remains supported as the market is starting to doubt the Federal Reserve's optimistic outlook on rate hikes. The analysts said that it's more likely the central bank's next move will be to cut rates.

"While gold initially traded lower, the market is looking past the Fed messaging and the yellow metal was little changed after the rate decision. But since the spread of members' dots is so wide, ranging from 3.625% – 5.875% for next year, the median estimate is not all that relevant as far as we are concerned and future rate decisions will very much be driven by inflation and economic data," the analysts said. "We suspect that data and inflation will weaken in the not-too-distant future, with the Fed likely lowering rates before hitting its inflation target. As such, we expect gold to do quite well in the months ahead.

In a comment on Twitter, Fred Hickey, creator of the High-Tech Strategist investment newsletter, noted that gold's net positioning has dropped 20% from the previous week; however, gold prices were virtually unchanged.

He added that the selling pressure comes at the start of gold's seasonal weak period, which he noted remains the perfect buying opportunity.

"Bears/computers tried to smash gold following Wed. FOMC, & extremely "hawkish" commentary & build-in of 2 more rate hikes, but then gold put in an impressive reversal to upside (even surprised me). Now mid-June – start of seasonally best time to buy gold (mid-June to early-July).

While investors are reluctant to take a bullish position in gold, hedge funds are starting to test the waters in the silver market for the second consecutive week.

The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures rose by 1,442 contracts to 38,968. At the same time, short positions fell by 1,560 contracts to 25,971.

  The green hydrogen economy is real, but it might not define platinum's role in the global green energy transition

Silver's net length now stands at 12,997 contracts, up 30% from the previous week. During the survey period, silver prices continued to trade on either side of $24 an ounce.

According to some analysts, silver is outperforming gold in the near term as optimism picks up regarding the global economy. Last week the Federal Reserve increased its forecast for 2023 Gross Domestic Product; it now sees the economy growing 1% this year, up from the previous forecast of 0.4%.

Optimism over the global economy can be seen in base metals as copper sees a surge in short covering, pushing to a one-month high.

Copper's disaggregated report showed money-managed speculative gross long positions in Comex high-grade copper futures rose by 5,653 contracts to 48,023. At the same time, short positions fell by 12,224 contracts to 43,023.

After a month stuck in a net short position, the global copper market is now back in bullish territory with a speculative net long of 5,600 contracts.

During the survey period, copper prices pushed back above $3.80 per pound.

Although copper has seen a significant bounce off last month's lows, analysts at TD Securities said that the rally could be running out of momentum.

"We see risks that the rally in the red metal may now be running on fumes. After all, we see few risks of subsequent CTA buying activity until prices break the $8900/t mark, whereas discretionary traders are running out of dry-powder for short-covering," the analysts said. "Chinese officials appear to have little appetite for a large-scale stimulus package, suggesting that participants could be in for an unpleasant surprise. In turn, without a game-changing stimulus package announcement, the set-up for a consolidation in copper markets is firming."

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Crypto Regulations: The WEF Want In Recommending A Global Approach For The Crypto Industry

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Crypto Regulations: The WEF “Want In” Recommending A Global Approach For The Crypto Industry 

The World Economic Forum (WEF) is notorious for having a far-reaching and perplexing influence over companies and institutions in many countries worldwide. This influence extends to the crypto industry and crypto regulations. The WEF published a crypto regulation white paper in May 2023, which is significant, so we’ll take a look at what they have to say and how it could influence the crypto legislation being proposed worldwide. We’ll also examine how it could affect the crypto market if implemented.


Image source: Weforum.com

The WEF white paper summarized in this article is titled “Pathways to the Regulation of Crypto-Assets: A Global Approach.” The white paper begins with a brief preface by a member of WEF’s Center for the Fourth Industrial Revolution. For context, WEF founder and chairman Klaus Schwab conjured up the Fourth Industrial Revolution. This concept involves replacing all of us so-called serfs with AI and Automation. Another component of the Fourth Industrial Revolution is controlling the population with technology. 

In the preface, the question is asked of how governments can control a borderless, open-source, and decentralized technology. Naturally, the only solution is a globally coordinated approach to regulation. The author of the preface reveals that the WEF has been engaging in “multi-stakeholder consultations” to understand how to roll out global crypto regulations. 

For reference, a stakeholder is a term the WEF uses to describe powerful individuals and institutions, not ordinary people like us. In this case, the author of the preface specifies that the white paper was put together with “significant contributions from members of the Digital Currency Governance Consortium.” (DCGC)

For those unfamiliar, the DCGC was formed in January 2020, including multiple crypto companies. The complete list of DCGC members is private. Still, research on the WEF reveals that Ripple, also the Ethereum company, Consensus, and USDC issuer Circle are all part of the DCGC, as are dozens of prolific personalities in the crypto industry. 

The DCGC has published five reports so far, and the WEF website notes that it is currently in phase two of its master plan, which involves assessing the economic effects of crypto, stablecoins, and central bank digital currencies. (CBDCs) 

The Key Takeaways

The next section of the white paper provides a summary of the key takeaways. Here, the authors argue that global crypto regulations are not only desirable but “necessary.” They seem to suggest this is because of the increasing connections between crypto and traditional finance. The authors explain that many things are standing in the way of global crypto regulations, including: 

  • A lack of universally accepted definitions for different types of cryptos, 
  • A lack of coordination between Regulatory Agencies 
  • Regulatory Arbitrage, meaning some countries are too pro-crypto. 

The authors highlight that many unaccountable and unelected international organizations have been working on global crypto regulations. This includes the Financial Stability Board (FSB) and the Financial Action Task Force. (FATF) The authors admit that the WEF has been in contact with these organizations but insist that academia, civil society, and crypto users will also have a say in global crypto regulations. Of course, the authors don't put a timeline on when we will have a say in this matter; but we have yet to have a say in anything. 

Why Are Global Crypto Regulations Required?

The first part of the report is about why global crypto regulations are required. The authors start by explaining what crypto assets are and include stablecoins under the definition of a crypto asset. Note that these reports seldom refer to cryptos as currencies; they believe cryptos are not currencies. That said, the authors do acknowledge that cryptos have some financial use cases. They say that this is why regulatory scrutiny around crypto has increased. 

As you might have guessed, they refer to the crash of Terra last May and the crash of FTX last November as examples of why regulatory scrutiny is justified. The authors then explain that different jurisdictions have since introduced different crypto regulations. They claim that this increases the risk to the global financial system and benefits bad actors in the crypto industry. 

They also highlight the inconsistency in crypto definitions. The authors then suggest that smart contracts could be one way of ensuring regulatory compliance. This is not surprising considering that the WEF is a massive fan of programmability in payments. Again, the WEF and its affiliates ultimately want to control what people do, and programmable payments are one way to do just that.
 
When it comes to regulating cryptocurrencies, the authors say the first step is identifying where the crypto activity is taking place, if possible. The second step is to determine who is engaging in the crypto activity, and the authors say that privacy coins, personal wallets, and DeFi protocols make this problematic. This is a worry because it implies that personal wallets will be a target of global crypto regulations. 

Although, in fairness, the authors of this white paper don't seem to be that opposed to personal wallets. That's because they know that if you buy your crypto through an exchange with KYC, it's easy to identify which wallet belongs to who with the help of blockchain analytics companies like Chainalysis.  According to the authors, the third step to regulating crypto is determining who is responsible for any crypto activity. They admit this is sometimes difficult, mainly when dealing with decentralized protocols. They note that this will become easier if DAOs become regulated entities.

Crypto And Traditional Finance Connections

In the next section, the authors dig deeper into the connections between crypto and traditional finance. They start by saying that the crypto market’s correlation to BTC's price is a sign of maturity. Now this is arguably incorrect; a decoupling between different crypto categories would be a sign of maturity. What the authors do get right, however, is that institutional interest in crypto has been on the rise. 


Image source: Finoa

They cited a series of statistics from pro-crypto sources, which should be taken with a grain of salt. Genuine institutional interest and investment will come once crypto regulations are introduced everywhere. The authors also note that retail interest in crypto is on the rise and imply that this could cause problems for financial stability. This could explain why some countries, such as Canada, closely aligned with the WEF, have started introducing restrictions on retail investors in crypto. 

Besides contagion risks, the authors correctly underscore concentration risks as another concern. The crypto market relies on a handful of stablecoins, a handful of exchanges, and even a handful of cryptos. Oddly enough, the authors claim that Layer 2s on Ethereum lower this concentration risk. This is odd because many Layer 2s still rely on Ethereum for their security, which logically increases concentration risk, never mind that many of these Layer 2s are highly centralized and backed by the same investors. 

Challenges To Global Regulation 

The second part of the white paper is about the challenges to global crypto regulation. The authors start by reiterating that the absence of universally accepted crypto definitions is the biggest problem. They propose a potential taxonomy but admit that there are exceptions to every crypto definition. They then explain that this is a problem because it makes consensus about specific crypto regulations impossible. It increases the cost of crypto compliance worldwide, making it difficult to protect consumers. 


Image source: Weforum.com

According to the authors, regulatory arbitrage is the second challenge to global crypto regulation. They take issue with the fact that crypto developers can relocate wherever they want. It’s becoming all too clear that the WEF would like nothing more than to control the movement of people. 

On a related note, did you know that the WEF is also trying to turn almost every major city into a Smart City? More about that in an upcoming article. Meanwhile, Smart technology is already causing issues for consumers. 

The authors admit it might still be too soon to push for global crypto regulations. Most governments are still trying to wrap their heads around the technology. Some jurisdictions are further along than others, such as the EU, which recently passed its MiCA crypto regulations. 

The authors then reveal that these early crypto regulations, including MiCA, will come into force starting early next year. This is significant because this could make institutional investors comfortable allocating to crypto again. It means the crypto market could rally starting early next year. And this, coincidentally, corresponds with the next Bitcoin halving. 

The authors also take issue with so-called crypto hubs. They seem to imply that the crypto hub is code for ‘less crypto regulation’ and appear to blame them for causing regulatory arbitrage. If the WEF starts pulling the strings, this could be awkward for places like the UAE, Dubai, Hong Kong, and Singapore. 

Geopolitics

This ties into another vital angle the authors raised regarding crypto regulations – Geopolitics. International relations are deteriorating, making it difficult for certain countries to comply with global crypto regulation recommendations. It's safe to say that this trend will continue. 

The above relates to the third challenge to global crypto regulation: "Fragmented monitoring supervision and enforcement.” The authors reiterate that a lack of international cooperation is one of the core causes of this fragmentation, coupled with the rapid evolution of crypto-related technologies. 

The authors then provide the FATF's infamous travel rule as a case study. The travel rule requires all transactions above a certain threshold to be tracked and KYC’d. The authors complain about the fact that compliance with the FATF's travel rule has been slow when it comes to crypto. 

While we’re on that topic, you should know that the FATF has reportedly been pressuring countries to restrict or even permanently ban crypto to get off its grey list. Any country on this so-called naughty list is refused bailouts from the IMF, so a clean report from the FATF may be a political priority. If there is any truth to this, crypto hubs could face financial sanctions if they don't comply with the FATF’s crypto recommendations; perish the thought. 

Approaches To Regulating Crypto Globally

The third part of the white paper is about the possible approaches to regulating crypto on a global scale. The authors provide a de facto list of regulations the WEF wants to see. 

  • Crypto-specific 
  • Stablecoin-specific
  • Know Your Customer (KYC) /Anti Money Laundering (AML) 
  • Consumer protection, including restricting retail access to crypto 
  • Strict regulations around crypto marketing 
  • Regulation of DeFi and DAOs 

The authors then detail the five primary approaches to crypto regulation. 

1: The first is Principles-based regulation. This involves regulating around a series of broad principles rather than specific rules. The benefits of this approach are innovation and flexibility. The drawback is regulatory uncertainty. 

2: The second approach is Risk-based crypto regulation and involves applying the same risk/same regulation principle, meaning that crypto should abide by existing financial regulations. The benefit of this approach is regulatory certainty, and the drawback is difficulty in assessing risks. 

Notably, the WEF is a massive fan of this same risk/same regulation approach. It's why you see it in many existing regulatory recommendations for crypto. If that wasn't concerning enough, in this section, the WEF advocates for eliminating cash and going digital to ensure that KYC/AML is followed. 

3: The authors call Agile regulation the third approach to crypto regulation. This effectively allows regulations to evolve in response to new innovations. The benefit of this approach is that it is flexible. The drawback is that it requires much coordination and collaboration with the crypto industry. 

4: The fourth approach to crypto regulation is Self- and co-regulation. It involves allowing the crypto industry to set standards. The benefit of this approach is that it builds trust. The downside is that it can lead to capture; For instance, one company determines all the standards. 

5: The fifth approach to crypto regulation is one we’re all familiar with: Regulation by enforcement. It involves taking crypto companies and projects to court and using the precedent as de facto regulations. The benefit is accountability, and the drawback is zero innovation.

Interestingly, the authors asked their so-called stakeholders which regulatory approaches are best. The results can be seen in the image below. As one would expect, Risk-based regulation is the most popular, especially considering that the WEF is a fan of this particular approach. 


Image source: Weforum.com

The authors confirm that the other unaccountable and unelected organizations, such as the FSB and FATF, have been adhering to the WEF’s Risk-based approach to crypto regulation. It's preposterous to consider just how much influence the WEF has, and this is just the public stuff. 

WEF’s Recommendations for Global crypto regulations.

The fourth part of the report contains the WEF’s recommendations for Global crypto regulations. The authors explain that these recommendations are meant for international organizations, governments, and “industry stakeholders” who are presumably part of the WEF. 

In other words, these recommendations are what most crypto regulations will look like, regardless of what we, the people, say or do. The authors again claim that the average person will get the chance to give their input someday, but we’ll just have to wait and see if that happens. 

The first set of recommendations is specifically for international organizations. These are to;

  • Create definitions for different types of cryptos and crypto activities 
  • Set standards for how these cryptos and activities should be regulated
  • Share data about registered entities with all organizations. 

It brings into question whether ‘registered entities’ include the average crypto user. As it’s the WEF, the answer is probably, yes. After all, the endgame of these international elites is to create a global government with a global digital ID and a global centrally controlled digital currency. 

The second set of recommendations is specifically for governments. These are to; 

  • Coordinate regulations between jurisdictions.
  • Create regulatory certainty for the crypto industry.
  • *Use technology for regulation by design. 

*The latter means regulation at the blockchain level via Smart contracts. Remember, the WEF loves programmability. 

The third set of recommendations is specifically for the crypto industry. They are; 

  • To set standards 
  • To share best practices
  • Ensure “Responsible Innovation.” 

This seems to be code for adhering to ESG criteria, given that the term refers to environmental, social, and economic risks. 

If you've been following articles about ESG, you'll know it's an investment ideology to ensure the UN's sustainable development goals or SDGs are met. Every country is supposed to meet the UN's SDGs by 2030. My research suggests that all the dystopian stuff being pushed has its roots in the United Nation's SDGs, be it CBDCs, digital IDs, smart cities, or online censorship. 


Image credit: Markethive.com

What Affect Will It Have On The Crypto Market? 

So the big question is, how could the WEF’s global crypto regulation recommendations affect the crypto market if implemented? The short answer is that it would result in the crypto industry being absorbed into the existing financial system, which is precisely what the WEF wants. 

The practical effect of Risk-based regulation is that crypto is forced to comply with existing financial regulations. As the authors tacitly admit, these risks posed by crypto aren't always clear. Many argue that the risks are significantly different and justify different regulations. The WEF’s recommendations would make crypto worse than the existing financial system. That's because they would require information about all registered entities to be; 

  1. Shared with international organizations 
  2. Require regulations to be enforced via Smart contracts
  3. Require all cryptos to be ESG compliant 

These three unsuitable recommendations have one thing in common: Governance, more succinctly, control. This article about ESG and Bitcoin explains that the environmental aspect isn't the problem; it's the governance. Bitcoin can't be controlled because it has no traditional governance structure. In case you missed it, this is the core issue the WEF and its allies are trying to address. How do we control something that is designed not to be controlled? 

It's possible, if not likely, that the endgame of the environmental-focused attacks on Bitcoin is to track all Bitcoin miners and nodes. It’s something that the WEF’s global crypto regulations would prescribe because Bitcoin miners and nodes would presumably need to be registered. 

Their information would therefore have to be shared with all international organizations. At that point, it would become possible to control Bitcoin in theory. In practice, the WEF’s global crypto regulations will never come to pass, which the authors have also tacitly admitted. 

In addition to the geopolitical tensions, it's practically impossible to introduce the same crypto regulations in every single country simultaneously. This means that there's going to be some regulatory arbitrage, whether it's intentional or not. This regulatory arbitrage will exist for years, and in some countries, it will persist for decades. 

So long as there's a country out there that the WEF can't influence, it won't be able to entirely corrupt crypto. Also, because crypto innovation is essentially exponential, there's a high likelihood that it will evolve to the point that the WEF and its allies can’t control it. This is the most important takeaway – Crypto is too fast for the WEF. 

Klaus & Co will never be able to keep up, and crypto will eventually win the race. Right now, though, there are many hurdles facing the crypto industry, and the WEF’s white paper suggests that it played a role in putting those hurdles in place. The WEF's fingerprints are there, whether it's the FSB or the FATF. It’s also common knowledge that there are WEF allies in the crypto industry. 

Even so, many in the crypto industry who are on the right side of history, and we at Markethive, genuinely believe that the incentives of crypto are more robust than the WEF’s cronyism. Imagine helping to create a powerful crypto or protocol that allows the average person to preserve their purchasing power, grow their wealth, and maintain their financial freedom. In that case, you are rewarded in every possible way.  

As purchasing power, wealth, and financial freedom continue to erode, the incentive to create robust protocols with crypto will only increase. Eventually, the incentives will become so strong that the WEF’s hurdles will become irrelevant. The people will want freedom, and they will achieve it through crypto. 

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

References: World Economic Forum, Coinbureau

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Also published @ BeforeIt’sNews.com; Steemit.com; Substack.com

 

Tim Moseley

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Gold’s new price base keeps record highs within reach says VanEck

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Gold's new price base keeps record highs within reach, says VanEck

Gold has formed a new base at the $1,900 an ounce level, and if that continues to hold, record highs  will be within reach, according to VanEck's latest analysis.

Gold has just spent the most time above $1,900 an ounce than ever before, forming a new base and averaging $1,933 per ounce year to date, said VanEck's deputy portfolio manager Imaru Casanova.

"Gold is showing resilience despite a strong stock market and recent U.S. dollar strength," Casanova wrote in a report Thursday. "Gold bullion exchanged traded products outflows have subsided this year, with net inflows, albeit small, resulting in a 0.38% increase in holdings year to date.

The all-time highs are within reach for gold as the Federal Reserve halts its most aggressive tightening cycle in decades.

"The $2,075 per ounce all-time high seems well within reach, in our view," Casanova said. "We see a macro backdrop that continues to be supportive of gold in the longer term."

As the Fed kept rates unchanged in a range of 5% to 5.25% following ten consecutive increases, central bank Chair Jerome Powell confirmed Wednesday that the median dot plot saw at least two more 25-bps rate hikes this year. But the market remained unconvinced, pricing in only one rate hike in July, according to the CME FedWatch Tool

May was a promising month for gold as the metal attempted to test record highs, but market optimism ended up weighing on sentiment. Since then, gold has been resilient, holding above $1,950 an ounce. At the time of writing, August Comex gold futures were trading at $1,970.10, flat on the day.

"Expectations that this past rate hike may be the last one in this tightening cycle supported gold in early May," Casanova wrote. "However, through most of the month, the U.S. dollar gained and gold fell as the narrative shifted to a more hawkish view and the probability of further rate hikes in 2023 increased."

In the meantime, miners significantly underperformed gold last month, with the NYSE Arca Gold Miners Index (GDMNTR) and the MVIS Global Juniors Gold Miners Index (MVGDXJTR) down 8.6% and 7.3%, respectively.

"The magnitude of the underperformance is a bit surprising to us … May was a relatively good month for gold equities on the news front, with companies reporting first-quarter results that were, generally, better than expected," the report said. "We view this reaction as overdone and further contributing to the current valuation gap between gold and gold equities."

The sector's overall health looks solid, with gold producers remaining committed to disciplined capital allocation, growth, shareholder returns, profitability, and healthy balance sheets, the report said.

"They are also responsible operators, running sustainable businesses aiming to deliver benefits to all stakeholders while carefully managing the impact on the environment," Casanova wrote. "A re-rating of the gold mining equities from historically low valuations at present is well supported by the industry's strong fundamentals."

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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A big move in gold price is coming after weeks of neutral stance – analysts

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A big move in gold price is coming after weeks of neutral stance – analysts

The gold market has been steady so far in June, trading between $1,940 and just under $2,000 an ounce. But analysts warn that after weeks of sideways price action, gold is ready for a more significant move.

The caveat is it could be in either direction, Gainesville Coins precious metals expert Everett Millman told Kitco News. "Gold has traded sideways long enough that we are due for a bigger move one direction or the other — retesting the $1,880 level or getting back up to around $2,000," Millman said.

The Fed confused the markets Wednesday with a "hawkish pause" and a promise of two more rate hikes.

"What the Fed did was neutral for gold. A pause is good for gold. But it was the most hawkish pause we could have gotten. And that is why gold has traded sideways," Millman explained.

Gold is holding up well in the face of the Fed's warning of two more rate hikes, OANDA senior market analyst Edward Moya told Kitco News.

"The Fed locked themselves into a hold since they signaled they were going to do that before the meeting," said Moya. "There was a communication mistake by Fed Chair Jerome Powell in weeks leading up to this decision. Otherwise, data supported the hike."

At the press conference, Powell did not commit to a rate hike in July, stating that the U.S. central bank will remain data-dependent, added Moya.

"Fed Chair Powell is trying to keep optionality on the table. There's a chance we could have continued softer inflation prints. He doesn't want to lock himself in," he said. "That's why gold is not at $1,900. If the Fed's dot plot was confirmed at the press conference, gold would be trading at $1,900."

At the time of writing, August Comex gold futures were trading at $1,968.20, down 0.13% on the day and largely flat on the week.

Markets are currently pricing in one more rate hike in July only. If that changes, gold will react, the analysts said.

In the meantime, gold is paying close attention to macro releases and the U.S. dollar. Also, precious metals investors are monitoring central bank gold buying activity, which has slowed in the second quarter.

"Even though it slowed down quite a bit," said Millman. "The World Gold Council survey said that one in four central banks planned to continue to buy gold. They buy in large volumes, and gold will respond to what central banks are doing."

 

Mixed signals and gold's price direction

There is still a risk of a significant selloff in the gold market because that would be symmetrical to what happened over the past two years when gold reached $2,000 an ounce, Millman pointed out. "The next most likely move for gold is lower," he said.

Markets are eyeing Powell's two-day testimony before the House and Senate next week, a lineup for Fed speakers, and more macro releases.

"Gold is going to be facing a lot of mixed signals next week," said Moya. "Fed speakers, flash PMIs, and more easing from China (commercial banks are cutting rates). In theory, we could still see risk appetite holding in there, which will keep gold choppy."

With the Fed largely data-driven into the July meeting, macro releases could become big market movers.

"Gold pricing is still searching for confirmation that the Fed is really done and/or a US$-negative catalyst," said MKS PAMP head of metals strategy Nicky Shiels. "Data will become more sensitive and important into a July meeting where a hike is pretty much guaranteed."

Gold's technical trading is also essential to monitor. The longer the precious metal remains steady in the face of this hawkish pressure, the more likely prices will rally, noted Shiels.

"On the surface, it's a bearish precious outcome, but the longer gold can't go down, [it] must go up. The thinking is that gold prices will read through their hawkish rhetoric/talk, and at the core is, the Fed has paused (and can pause again) = therefore, they're done," she said.

 

Data next week

Tuesday: U.S. building permits and housing starts,

Wednesday: Fed Chair Powell testifies

Thursday: Bank of England rate decision, Fed Chair Powell testifies, U.S. jobless claims, U.S. existing home sales

Friday: U.S. manufacturing PMI

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter