Gold at $2010 or $1985 is a 'buying opportunity' and 2024 will be a 'golden year' for metals – Graceland's Stewart Thomson

Gold prices are likely to take a breather for the next week or two, but any pullbacks should be seen as opportunities to buy ahead of the 2024 bull market, according to Stewart Thomson, President of Graceland Investment Management.

“The key ‘thrill of victory and agony of very temporary defeat’ weekly gold chart,” Thomson wrote.

He said that broadening patterns are an indication of loss of control in markets. “The wild Sunday night and Monday gold price action is “textbook” for the huge broadening pattern in play,” he said.

Thomson said that while stochastics is now showing a crossover sell signal, RSI is not. “The most likely scenario now is a pause for a week or two, and then another more significant rally to above the immense $2080 ‘line in the sand’,” he said.

He said that investors looking for tactical moves in the current market should consider gold equities. “Gold stock enthusiasts who did some selling into the $2080 gold price area should now focus on buying at $2010, $1985, and $1928.”

Thomson also shared “key buy zones” for the precious metal itself which he said should be the focus for long-term accumulators.

“From the $2145 area high, a drop to support at $2010 is a $130/oz price sale,” he wrote. “A drop to $1985 support is a $155/oz sale, and the $217/oz drop to $1928 support would be a truly epic price sale but this last one is unlikely to happen.”

“I’m not a big fan of sloping trendlines in the gold market, but they are helpful at times,” he added. “Note the green trendlines defining the volatile uptrend. A drop to the lower trendline would put gold at the big $2010-$1985 support area. It’s a ‘must buy’ zone for most gold stock enthusiasts. I call it a golden stocking stuffer for Christmas 2023!”

Looking at the U.S. dollar, Thomson said the DXY chart is indicating “some minor inverse H&S action” which would support a one- to two-week pause for gold.

“US rates aren’t confirming the action in the dollar,” he warned. “There’s a dead cat bounce, but the weekly chart suggests a much bigger dip in rates lies ahead.”

“The bottom line is that 2024 is likely to be a ‘golden year’ for the metals, and rates may stay low until 2026 or 2027 before the US government creates the next massive wave of inflation with its drug-like addiction to fiat, meddling, spending, and debt,” he said. “From there, the Fed would start hiking again and gold would take an initial hit but it would happen from a much higher level than where it is now. How high? Probably $3000+, and at that point, most money managers would have a keen interest in the miners, a ‘here to stay’ interest.”

Thomson concluded with a look at those miners, in the form of “the stunning GDX chart.”

“A textbook inverse H&S pattern (with breakout) is now the head of what could be a much bigger pattern,” he wrote. “While the gold bullion market action is wild, GDX and most gold stocks look great! The right shoulder build could take GDX to just under $29, but it doesn’t need to go that low.”

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Spot gold price rockets through resistance on Sunday evening, setting new all-time highs

Spot gold opened the Sunday evening session with massive momentum, obliterating key resistance levels and the previous high to set a new all-time high of $2,148.99 within the first half-hour of trading.

Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com and President of VerifiedInvesting.com, told Kitco News that the move was driven by a powerful combination of rate cut expectations and technical levels.

“Gold surged through its all-time highs on the back of hopes for lower rates sooner (vs higher for longer), future money printing expectations and stops being triggered on the break of $2,100,” he said. “The inverse head and shoulder pattern has triggered (assuming a daily close above $2,080).”

Soloway said a “calculated target for 2024 sits at $2,534,” which would represent a completion of the inverse head and shoulders pattern breakout.

“Investors are likely to favor gold as a way to protect against recession, inflation, money printing and the classic safety trade,” he added.

Matt Simpson, Market Analyst at CityIndex and Forex.com, wrote on X that traders need to be cautious about what this move means for gold prices as it happened while liquidity was low.

“Gold just made minced meat out of the 2022 / prior record high, rising $75 at the open and smashing above its 1-week implied volatility band,” Simpson said. “Lots of gold headlines are to be expected. But I remain suspicious of the move, given it occurred during low liquidity trade.”

Simpson admitted that he completely missed the move, but he’s also “happy to sit on the side line and avoid the inevitable chop that could follow.”

After setting the new all-time high shortly after 6:30 pm EST, spot gold has ratcheted steadily lower, last trading at $2,091.48, but still up nearly 1.00% on the session.

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Gold starts December with all-time highs; but can continue to ignore a hawkish Fed – analysts

A record closing price in November wasn't enough for gold investors, as solid momentum has pushed prices to an all-time high ahead of the weekend.

February gold futures last traded at $2,091.90 an ounce, up more than 4% from last Friday's close. Gold's previous record was at $2,089.20 in August 2020.

Gold is seeing renewed buying momentum as markets continue to price in a potential rate cut as early as March. The precious metal's rally comes even as the central bank maintains its tightening stance. Friday, Federal Reserve chair Jerome Powell said that he is still not confident monetary policy is sufficiently restrictive enough to bring down inflation to 2%.

However, markets are paying little attention to what Powell is saying, as the CME FedWatch Tool shows that markets are now pricing in a more than 50% chance of a rate cut in the first quarter of 2024.

"The precious metal remains supported by Fed cut bets while technical factors continue to support the upside momentum,' said Lukman Otunuga, Manager of Market Analysis at Forexlive.com. "In the absence of any fresh fundamental catalyst, November's monthly close above $2000 could provide a foundation for bulls to send prices higher."

Naeem Aslam, chief investment officer of Zaye Capital Markets, said this could be the start of a bigger move for gold with "bright days ahead."

"We believe that the Fed has reached its peak of rate hike cycle regardless of what some members of the Fed continue to say," he said. "We believe that there are actual real chances that the Fed will cut the rate towards the back end of Q1 next year. However, the threat remains stubborn inflation. If we don't see CPI flirting with the 3% mark or even lower, the Fed may keep rates at the current level till the end of H1."

Although the Federal Reserve's aggressive monetary policy still poses a risk for gold, some analysts have said that a slowing economy means that, ultimately, the Federal Reserve's next move will be to cut rates, potentially sooner rather than later.

Robert Minter, director of ETF Investment Strategy at abrdn, said that cracks continue to appear in the U.S. commercial real estate market as the sector continues to feel the effects of the Federal Reserve's aggressive rate hikes and high vacancies as workers continue to work from home.

"If – that's a big ‘if,' but if we are seeing the beginning of commercial real estate bubble popping, there will be more money printing. That's part of what we are seeing with the gold price again today. Another part is the market pricing in no more rate hikes, and a higher potential for rate cuts in the near future. – then we could get a gold bull market like the last three times the Fed Funds rate cycle was in this spot," Minter said in a comment to Kitco News.

Minter added that the last three times the Federal Reserve has paused its tightening cycle, gold has rallied 57%, 235% and 69%, respectively. He pointed out that gold prices are so far up 5.4% since the Fed moved to a neutral stance.

Nicky Shiels, head of metals strategy at MKS PAMP, also noted that gold could be catching a safe-haven bid even as economic data remains fairly resilient.

"Gold is internalizing that people do not feel that way. Experts talk of a ‘rupture in our economic health and social fabric,' but less dramatically, people are simply feeling worse off than before and that's being expressed through havens," she said.

At the same time, analysts note that gold prices continue to move higher even as most retail investors shun the market. Analysts have said that gold prices will really move when this sentiment starts to shift.

Despite this optimism, some analysts recommend investors be cautious with gold at these levels and not to chase the market.

Barbara Lambrecht, commodity analyst at Commerzbank, said that gold prices could be limited ahead of next Friday's nonfarm payrolls report.

"This is because the current expectations of Fed rate cuts of 50 basis points by mid-2024 are more likely to be disappointed. Accordingly, we also envisage a correction in the gold market. This could be triggered by the US labor market report at the end of the week," she said.

Some economists have said that investors should also pay attention to the University of Michigan consumer sentiment survey as inflation expectations have been elevated in recent months.

Phillip Streible said he also thinks the market has gotten a little ahead of itself as a March rate hike seems unlikely. He noted that it is unlikely the Fed will cut rates until inflation is closer to its 2% target.

Economic data for next week:

Tuesday: ISM Service-sector PMI, U.S. JOLTS Job Openings

Wednesday: ADP private sector employment, Bank of Canada monetary policy decision

Thursday: Weekly jobless claims

Friday: nonfarm payrolls, University of Michigan consumer sentiment survey

  Gold prices to see a sustained push above $2,100 in 2024 – TD Securities

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Rally in gold and silver is far from over

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

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

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

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

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

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

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley