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Gold will rise with dollar as ‘violent’ global debt crisis unfolds de-dollarization will take at least a decade – Brent Johnson

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Gold will rise with dollar as 'violent' global debt crisis unfolds, de-dollarization will take at least a decade – Brent Johnson

The dollar will gain strength relative to other currencies, along with gold, as a "violent" global debt crisis unfolds. That is according to Brent Johnson, Founder and CEO of Santiago Capital.

Johnson, who created the Dollar Milkshake Theory, said that "there is no alternative to the dollar" when it comes to international trade and debt agreements.

"I think that in that scenario [a global sovereign debt crisis], despite all the protestations to the contrary… the dollar will be seen as the cleanest dirty shirt," he told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "Investors and entities around the world will seek out dollars as a safe haven in that environment."

Johnson said that a global sovereign debt crisis is highly likely given "the growth of debt in the world," and the aftermath of a credit crunch.

He claimed that the combination of low global economic growth, high interest rates, significant debt burdens, and high inflation could trigger the crisis.

"Once a credit contraction takes place, then it can feed on itself, and you can get into a situation like we had in 2008," he suggested.

To find out when Johnson forecasts the global sovereign debt crisis taking place, watch the video above.

De-dollarization

The dollar's share in global reserves has fallen from 73 percent in 2001 to 58 percent today, according to the Royal Bank of Canada.

The trend toward de-dollarization is compounded by the BRICS alliance (Brazil, Russia, India, China, and South Africa), which is meeting in South Africa this August to unveil plans for a reserve asset to rival the dollar.

The Western response to Russia's invasion of Ukraine in 2022, which included banning Russia from the SWIFT international payments system, caused chills around the world. Many feared the "weaponization of the dollar," following these sanctions.

Although he agreed that there is a trend toward de-dollarization, Johnson forecast that it would take "at least" ten years for it to play out completely.

"I am not of the belief that the dollar gets inflated away and the dollar index falls versus foreign fiat currencies, and we go into a hyperinflation and the rest of the currencies stay strong," said Johnson.

He added that although foreign political leaders would seek to de-dollarize and negotiate bilateral trade agreements, there would be "pushback" from business leaders.

"Most of them [businessmen] want to be paid in dollars," he observed. "The dollar's purchasing power is better than the Brazilian real's purchasing power, or the Kenyan shilling's purchasing power, or the Turkish lira's."

Gold

As the dollar rises against other currencies, so will gold, according to Johnson.

"I think the dollar is going to get so strong that it wrecks the current [global monetary] system," Johnson predicted. "As the dollar rises, and the system comes under threat, and we have all this chaos and a new monetary system is proposed, gold will be trading at $5,000 or $8,000… Gold will go much higher as this chaos ensues."

To find out whether Johnson is adding more gold to his portfolio, watch the video above.

  Gold will reach $3k in market 'melt up' with S&P 500 up at least 36% by Q4 2023 – David Hunter

By

Cornelius Christian

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Will jobs and inflation data confirm the Fed’s stance on two more rate hikes? This is what gold price is watching

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Will jobs and inflation data confirm the Fed's stance on two more rate hikes? This is what gold price is watching

Gold is seeing its worst week since February as the Federal Reserve's outlook of two more rate hikes weighs on the precious metal. But some analysts don't see the macro picture supporting that hawkish view.

The gold market is down around $40 on the week, with August Comex gold futures last trading at $1,931.30 an ounce.

Federal Reserve Chair Jerome Powell remained fully committed to two more rate hikes during his testimonies before the U.S. Congress this week. And the gold space started to price out potential rate cuts at the end of this year.

Other central banks also joined Powell's hawkish stance. The Bank of England surprised by raising its main interest rate to 5% from 4.5% Thursday. Norway's central bank hiked by 50 basis points. And the Swiss National Bank raised rates to 1.75% from 1.5%.

Analysts pointed out that this renewed global hawkish stance could make the U.S. dollar a more attractive safe haven asset than gold.

"Gold prices have come under pressure following the June central bank decisions," said Standard Chartered precious metals analyst Suki Cooper. "The market is now expecting additional hikes, and macro headwinds have arisen as the USD has also strengthened again."

Gold's technical positioning is not looking good

On top of the macro picture, gold's technical position is not looking great after prices fell below their 100-day moving average of around $1,940 an ounce.

"Gold falling below its 100-day moving average is a signal that we still have lower to go," Gainesville Coins precious metals expert Everett Millman told Kitco News. "Aside from macro drivers pushing momentum against gold, the technicals are deteriorating."

The new resistance level is $1,940 an ounce, and support is at $1,900 and then $1,880, Millman added.

A lot of long positions also got out as rate cuts now seem off the table, said Phoenix Futures and Options LLC president Kevin Grady. "Gold is waiting to see the language from the Fed that they will back off. That is when bulls will come in," Grady told Kitco News.

ETF outflows have accelerated in June, and tactical positioning scaled back, Cooper pointed out.

"While we continue to believe there is an appetite for gold, price action is typically less supportive during a seasonally slow period for consumption," she said. "Net fund length was at its lowest – with the deepest net short positioning since 2018 – in September 2022; positioning is still relatively elevated compared to nine months ago, but overall investor interest is at its lowest since 2018."

This highlights a shift in sentiment, with summer known to be a seasonally slower period for demand, according to analysts.

Some view gold as close to a bottom at current levels. "The $1,900 to the downside is an important level to watch," TD Securities senior commodity strategist Daniel Ghali told Kitco News.

 

Can the Fed's hawkish view last?

In the next few weeks, the gold market will carefully monitor whether the macro data, especially labor and inflation reports, support the Fed's view of two more rate hikes.

"We think the data won't corroborate Fed's expectations to hike rates further," Ghali said Friday. "We see a good chance that the Fed concluded the hiking cycle last May."

The data to pay close attention to include jobless claims and employment reports, he added. "We expect a recession in the fourth quarter. And gold can rally towards $2,100 by early next year," Ghali noted.

Once the data starts to deteriorate, the market will price in a higher likelihood of cuts over the next 12 months. And since gold is a forward-looking financial asset, new investor flows will come in, supporting higher prices, the analyst explained.

It is reasonable to expect a pause until further notice, with options of hiking or cutting both on the table depending on the economic data, Millman added. Two more rate hikes are not "etched in stone like Powell has us believe," he said.

Also, it is historically uncommon for the Fed to raise rates after a pause. "After a pause, there has always been a cut. Even when Paul Volcker was the head of the Fed," Millman said.

 

Next week's data

Tuesday: U.S. durable goods orders, CB consumer confidence, new home sales,

Thursday: U.S. GDP Q1, jobless claims, pending home sales

Friday: U.S. PCE price index

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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US Crypto Upheaval Leads to Surprising Boon for Lucky Regions

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U.S. Crypto Upheaval Leads to Surprising Boon for Lucky Regions

The U.S. crypto space is in chaos. In recent years, the world has witnessed a rough journey for cryptocurrencies, with their popularity surging to unprecedented heights. However, once a hotbed of crypto innovation, the United States now grapples with a clear regulatory framework. It has become hostile that necessitates a crypto exodus in the country. As the U.S. SEC hostility becomes too much to bear, which other jurisdictions are poised to attract entrepreneurs, builders, and innovators in the FinTech and crypto space?

While causing concerns within the country, this crypto fiasco has inadvertently paved the way for other regions to emerge as potential beneficiaries of the evolving crypto landscape. In this article, we will explore the regions poised to experience Crypto Bliss in the wake of the U.S. crypto fiasco.

Europe's proactive regulations, Asia's crypto-friendly environment, and the global nature of decentralized finance collectively shape a new era of innovation and adoption. As the crypto landscape continues to evolve, these regions will likely play a pivotal role in shaping the future of cryptocurrencies and blockchain technology, opening doors to a world of new possibilities.

Implications of Strict U.S. Crypto Regulations

The implications of U.S. crypto regulations are far-reaching and complex. On the one hand, regulation can provide clarity and legitimacy to an industry plagued by Fear, Uncertainty, and Doubt (FUD). On the other hand, regulation can stifle innovation and limit access to new technologies.

One of the most significant implications of U.S. crypto regulations is that they have created a patchwork of laws that vary widely from state to state. This makes it difficult for companies dealing in cryptocurrency to operate across state lines. For example, New York has implemented BitLicense, which requires companies dealing in cryptocurrency to obtain a license from the state.

Alabama requires a license for selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission. Arizona, Arkansas, and Connecticut have no specific cryptocurrency laws but have issued guidance on the subject. California and Colorado have a licensing requirement for businesses that engage in virtual currency activities. 

The lack of uniformity in regulations hampers the growth and development of the crypto industry, as companies must navigate a maze of compliance requirements and legal frameworks. This adds complexity and costs to their operations and creates uncertainty for investors and consumers.

Moreover, U.S. crypto regulations directly impact the global crypto market. The United States is one of the largest cryptocurrency markets, and any regulatory changes or restrictions can have ripple effects worldwide. For instance, when the U.S. Securities and Exchange Commission (SEC) took a stringent stance on initial coin offerings (ICOs) and classified specific tokens as securities, it sent shockwaves through the industry and influenced regulatory decisions in other countries.

Another implication of U.S. crypto regulations is their effect on investor protection. While regulations aim to safeguard investors from scams and fraudulent activities, they can also restrict access to certain investment opportunities. For example, the SEC has imposed strict accreditation requirements for investing in certain crypto assets, which can exclude retail investors from participating in potentially lucrative ventures.

Furthermore, U.S. crypto regulations impact financial institutions and traditional banking systems. As cryptocurrencies gain mainstream acceptance, banks and financial institutions are increasingly exploring ways to integrate crypto-related services into their offerings. However, the regulatory landscape can be a significant barrier for traditional institutions looking to enter crypto. Complex compliance requirements, potential legal liabilities, and the risk of non-compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations pose challenges for banks, inhibiting their ability to embrace cryptocurrencies fully.

The U.S. crypto regulations' impact on the broader economy should not be overlooked. The crypto industry has the potential to drive economic growth, create jobs, and foster technological innovation. However, overly burdensome regulations can hinder these positive outcomes. By balancing regulation and fostering innovation, policymakers can create an environment that encourages responsible growth and positions the U.S. as a global leader in the crypto space. Still, unfortunately, the reverse is the case.

Uncertainty in the Crypto Space

It is quite notable that even before the emergence of Operation Chokepoint 2.0.pdf, the Securities and Exchange Commission (SEC) had not approved any Bitcoin Exchange-Traded Funds (ETFs). This lack of approval is significant, considering ETFs are key players in market liquidity.

Instead of approving such ETFs, regulators have chosen to drain liquidity. Crypto-friendly banks like Silvergate and Signature were the first to face repercussions. However, the circumstances surrounding their fall were viewed with suspicion, leading lawyers from Cooper & Kirk to suggest that it reflected regulatory overreach targeting the crypto industry.

Throughout 2023, the SEC has been taking aggressive action. The regulatory watchdog has filed complaints against Bittrex, Kraken, Gemini, and Paxos. Binance.US and Coinbase have also been targeted in a culmination of these actions. 

By charging Coinbase as an unregistered securities exchange, the SEC has opened up a wave of legal uncertainty. It is worth noting that the SEC had previously approved Coinbase's underlying business model, a prerequisite for the company to go public under the ticker COIN in April 2021. However, as Coinbase expanded its range of crypto offerings, the SEC now views some of them as "crypto asset securities."

Simultaneously, the SEC needed to provide clear guidance when previously requested, which appears to be a deliberate strategy to establish rules through enforcement in the absence of proper legislation. While Coinbase is taking the SEC to court to seek clarification on securities, the damage has already been done.

In response to the legal uncertainty, Robinhood has announced that it will delist major cryptocurrencies like Cardano (ADA), Solana (SOL), and Polygon (MATIC) on June 27, with the possibility of more delistings based on the SEC's interpretation. Binance.US has halted all USD deposits, and Crypto.com is closing its institutional exchange.

As a result of this legal uncertainty, there has been a significant outflow of liquidity, leading to a $55 billion shrinkage in the total cryptocurrency market cap. Given the increasing fear, uncertainty, and doubt (FUD) in the U.S. crypto space, it raises the question of which crypto-friendly regions will most benefit from this situation.

European Union (EU)

Despite officially entering a recession, the Eurozone is the first major region to establish a comprehensive legal framework for digital assets. Eurostat data reveals that the Eurozone accounts for approximately 14% of global trade, putting it alongside China and the U.S. as the top three players in the market.

The E.U.'s Market in Crypto-Asset (MiCA) regulations are set to come into effect between June and December 2024. This regulatory clarity has prompted Ripple CEO Brad Garlinghouse to identify Europe as a "significant beneficiary of the confusion that has existed in the U.S." in a recent CNBC interview.

Similarly, Paul Grewal, Coinbase's chief legal officer, views the U.S. crackdown on cryptocurrencies as an "incredible opportunity" for Ireland and Europe, as stated in an interview with the Irish Independent. Years in the making, MiCA embodies a balanced and proactive approach to crypto regulation. It encourages innovation while considering financial stability and consumer protection. Here are some key highlights of the MiCA regulations:

• Digital assets are categorized across a spectrum, including e-money tokens (EMT), asset-referenced tokens (ART), crypto-assets, and utility tokens.

• Requirements vary based on market capitalization. For instance, smaller-cap and utility tokens are exempt from providing a whitepaper covering liability, technology, and marketing.

• However, suppose an ART (stablecoin) or EMT exceeds certain thresholds, such as a €5 billion market cap, 10 million holders, or 2.5 million daily transactions with a volume exceeding €500 million. In that case, they are deemed "significant" gatekeepers and fall under the Digital Markets Act (DMA) regulation.

• All crypto companies are licensed as crypto-asset service providers (CASPs), with custodians and exchanges requiring a minimum liquidity threshold of €125,000 and trading platforms needing €150,000.

• CASPs must report user transactions to maintain licenses with the European Securities and Markets Authority (ESMA). This reporting includes transfers between CASPs and self-custodial wallets if the transactions exceed €1,000. CASPs must also record the senders and recipients for hosted wallets, following the "Travel Rule."

While the increased tracking may not be ideal, it represents a significant step towards legitimizing the crypto industry. In contrast, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler recently made blanket statements referring to crypto investors as "hucksters, fraudsters, scam artists."

It is also worth noting that Switzerland maintains its position as an innovation sandbox while interacting with the Eurozone. This is why many prominent crypto foundations, such as Tezos and Ethereum, are in Switzerland.

Within the E.U. itself, numerous crypto companies have gained global recognition. Notable examples include the Netherlands-based options trading platform Deribit, Finland's LocalBitcoins, Lithuania's DappRadar, and Ledger, a hardware wallet provider headquartered in France.

Switzerland

Switzerland, famous for its breathtaking landscapes and precision timepieces, is quickly establishing itself as a worldwide center for cryptocurrency businesses. What sets Switzerland apart is its regulatory environment, which plays a crucial role in fueling the growth of crypto enterprises. 

The Swiss Financial Market Supervisory Authority (FINMA) has taken proactive steps to establish clear guidelines for crypto companies, offering them the legal certainty they need to operate. A prime example of this progressive mindset is the "Crypto Valley" in Zug, where numerous blockchain and cryptocurrency startups have found a home.

In 2020, Switzerland solidified its reputation as a crypto-friendly nation by passing the Blockchain Act. This legislation provides a comprehensive legal framework for distributed ledger technology (DLT) and blockchain, ensuring businesses clearly understand their legal obligations and rights.

Another key factor contributing to the success of crypto businesses in Switzerland is the country's robust financial infrastructure. With some of the world's largest banks and financial institutions, Switzerland offers crypto enterprises access to a sophisticated and mature financial ecosystem. This infrastructure, combined with Switzerland's stable economy, makes it an ideal location for businesses operating in the volatile realm of cryptocurrencies.

Switzerland's dedication to innovation and education is also vital in driving the growth of crypto businesses. Swiss universities rank among the world's leaders in blockchain research, consistently producing talented individuals for the rapidly expanding industry. Prominent institutions such as the Swiss Federal Institute of Technology in Zurich (ETH Zurich) and the University of Zurich offer courses specifically focused on blockchain and cryptocurrency, equipping students with the necessary skills to propel the industry forward.

The future appears bright for crypto businesses in Switzerland. The country's forward-thinking regulatory environment, robust financial infrastructure, and commitment to innovation will continue to foster growth in the sector. Furthermore, the Swiss government's openness to new technologies and willingness to engage in dialogue with crypto businesses indicate that Switzerland will maintain its status as a global hub for cryptocurrency innovation.

Dubai

Dubai's government has been actively working to create a welcoming environment for crypto businesses. They understand the importance of regulation and have proposed a comprehensive framework through the Dubai Financial Services Authority (DFSA). They aim to balance addressing concerns like money laundering and terrorist financing while encouraging innovation and healthy competition in the crypto industry.

The Dubai International Financial Centre (DIFC) has also taken steps to foster a crypto-friendly atmosphere. They introduced the Innovation Testing License initiative, allowing fintech firms to test their ideas in a controlled environment before launching them to the public. This approach promotes a safer and more secure environment for businesses and consumers.

Dubai's commitment to technological advancement and its Smart Dubai initiative further enhance its appeal to crypto businesses. They have recognized blockchain technology's potential and implemented it in various sectors, such as real estate, healthcare, and transportation. This integration of blockchain applications demonstrates their dedication to creating an innovative and progressive city.

Furthermore, Dubai's solid internet infrastructure, widespread mobile usage, and extensive data centers provide a strong foundation for crypto businesses to flourish. These resources are essential for the seamless operation of crypto-related activities and ensure businesses can operate efficiently and effectively.

Dubai's strategic location as a bridge between the East and the West adds to its allure as a global crypto hub. It has attracted significant crypto industry players, including renowned exchanges like Binance and blockchain startups like ConsenSys. These companies contribute to the local economy and foster Dubai's vibrant and dynamic crypto ecosystem.

Looking ahead, the future of crypto businesses in Dubai appears promising. The government's commitment to embracing blockchain technology, a favorable regulatory environment, and advanced infrastructure establish a strong foundation for sustained growth in the crypto sector. Moreover, Dubai's status as a global financial hub and its strategic location continue to attract international crypto businesses. As more companies establish their presence in Dubai, the city is on track to becoming a renowned global crypto destination.

Hong Kong

A semi-autonomous region of China has come back into the world of cryptocurrencies. Despite mainland China's ban on cryptocurrencies to ensure the smooth implementation of the digital yuan, Hong Kong has been given the green light for retail crypto trading since June 1.

However, certain restrictions exist for Virtual Asset Service Providers (VASPs) in Hong Kong. They are required to block retail traders from mainland China, and the tokens they list must possess high liquidity, be included in two major indices, and have at least one year of trading history. VASPs must also adhere to various regulations, including segregating customer assets, setting exposure limits, following cybersecurity standards, and avoiding conflicts of interest.

The decentralized finance (DeFi) sector can also flourish in Hong Kong under the Securities and Futures Ordinance, specifically the Type 7 license, with their tokens classified as either futures or securities. As a result of the new regulatory framework, several exchanges, such as CoinEx, Huobi, OKX, Gate.io, and BitMEX, have hurried to obtain VASP licenses in Hong Kong.

Interestingly, Z.A. Bank, a subsidiary of the Chinese state-owned company Greenland and the most prominent digital bank in Hong Kong, has also participated in Hong Kong's e-HKD Pilot Programme initiative. This demonstrates China's full endorsement of Hong Kong's adoption of digital assets for the foreseeable future.

Moreover, Hong Kong's tax regulations on businesses are quite favorable. While individual taxpayers are exempted from the capital gains tax, companies are subject to a single-tier tax system where corporations are taxed at 16.5% on assessable profits.

Singapore

Singapore, a highly developed city-state, has emerged as a major cryptocurrency hub in the Asia-Pacific region. One of the key reasons for this is the absence of capital gains tax, which means that individuals trading or selling cryptocurrencies are not burdened with tax liabilities.

The Monetary Authority of Singapore (MAS) classifies cryptocurrencies as "intangible property" and allows their use as a medium of exchange for goods and services. This is facilitated by homegrown payment provider Alchemy Pay, making crypto transactions relatively easy in the country.

However, it's important to note that businesses in Singapore are subject to a flat corporate tax rate of 17%. Nonetheless, Singapore offers a three-year tax exemption for start-up firms, providing them with a favorable environment to establish themselves and build credit, especially when traditional funding opportunities are limited.

Singapore has attracted major cryptocurrency players thanks to its financial stability and favorable regulations. For example, OKCoin, Coinbase, Binance, and Crypto.com have all set up offices in Singapore. Crypto.com has obtained a Major Payment Institution (MPI) license from the MAS, freeing it from certain thresholds related to its Digital Payment Token (DPT) services. This strategic move safeguards the exchange's operations amidst the SEC's tough stance on similar platforms.

In addition to its crypto-friendly environment, Singapore has been proactive in integrating artificial intelligence (A.I.) and machine learning technologies. The Ministry of Education has already developed AI-powered student learning systems, demonstrating the country's commitment to leveraging game-changing technologies.

As A.I. continues to advance and intertwine with the crypto industry, Singapore is well-positioned to become a hotspot for innovative crypto projects. Singapore's favorable tax regime, supportive regulations, and embrace of transformative technologies like A.I. make it an attractive destination for the cryptocurrency industry, drawing major players and paving the way for future developments.

As the U.S. crypto fiasco unfolds, these favorable regions offer promising prospects for the crypto industry. These regions provide supportive regulatory frameworks, fair tax policies, and a commitment to embracing emerging technologies. By capitalizing on these opportunities, crypto enthusiasts, entrepreneurs, innovators, and businesses can find their version of Crypto Bliss in these forward-thinking destinations.

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.

 


 

 

 

About: Prince Ibenne. (Nigeria) Prince is passionate about helping people understand the crypto-verse through his easily digestible articles. He is an enthusiastic supporter of blockchain technology and cryptocurrency. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Tim Moseley

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Get PAID While DRIVING NEW MERCEDES To Financial Success

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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.

ecosystem for entrepreneurs

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.

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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

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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."

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Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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