There is a reasonable probability the Fed will conclude its rate hikes this month

The CME Fed watch tool is predicting that there is a 99.8% probability that the Federal Reserve will implement a ¼% rate hike on July 26 when the next FOMC meeting concludes. It is also likely that this month's rate hike will conclude the series of hikes by the Federal Reserve that began in March 2022. The latest CPI (Consumer Price Index) and PPI (Producer Price Index) reports indicate that inflationary pressures are diminishing and getting closer to the Federal Reserve's target of 2%.

At its highest point, the CPI was at 9.1% and has now contracted to 3% in June. This combined with a decrease of 0.2% through June in the Producer Price Index (for all goods minus food and energy). A survey conducted by the University of Michigan revealed that consumer sentiment skyrocketed to 72.6% in July 13% above sentiment in June.

If the Fed is as they have long proclaimed "data dependent" then these recent reports demonstrate that the U.S. economy has contracted substantially bringing down the level of inflation.

The CME's probability indicator is forecasting an 87.9% probability that rates will be left where they are at the September FOMC meeting, a 71.8% probability in November, and a 64% probability in December.

An article penned by Avraham Shama an Opinion Contributor for THE HILL titled, "The Fed is raising interest rates again: it's a mistake that could spark a recession", warns that if the Fed wants the best serve the US economy it must stop raising rates to avoid a recession.

In his article, he addresses the fact that "the Fed and its Chairman Jerome Powell have been unable to recognize a heating or cooling economy in a timely fashion to take quarterly action to minimize the negative effects". He discusses a series of missteps beginning with monetary tightening by the Fed in 2019 prematurely which required a pivot to reverse that trend. He addressed the fact that the Federal Reserve waited too long before initiating the first rate hike in March 2022 when inflation was already above 8%.

Gold traded to its highest value this year during the first week of May when gold briefly touched $2083 and then corrected to a low of $1900 on June 20. Today gold futures basis the most active August contract is fractionally lower down $0.40 or 0.02% and fixed at $1980.40.

It is reasonable to assume that market sentiment will assume a much more bullish demeanor if it has clear knowledge that the series of rate hikes is over. More importantly, when the Federal Reserve does initiate its first rate cut which could occur as early as the first quarter of 2024 one would expect bullish market sentiment to return allowing gold to challenge the recent record highs just below $2100 per ounce.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and silver

David

Gold rallies as empowered bulls set sights on $2,000

Gold prices are sharply up and hit a 2.5-month high in midday U.S. trading Tuesday. Silver prices are also sharply up and hit a nine-week high. The charts have recently turned more bullish for both precious metals, which is inviting the technically based speculators to the long side of those markets. A weaker-than-expected U.S. retail sales report this morning is also supporting ideas the Federal Reserve can take its foot of the gas sooner, regarding its interest-rate-increase cycle. August gold was last up $26.40 at $1,983.00 and September silver was up $0.347 at $25.365.

June U.S. retail sales were reported up 0.2% versus expectations of a rise of 0.5%, month-on-month. This report, along with the U.S. employment report for June released in early July, seem to fall into the sweet spot for those market watchers looking for a soft landing for the U.S. economy. No U.S. and/or global recession setting in would be a scenario for better global demand for metals. Yet, global growth is not so strong as to prompt major central banks to continue tightening their monetary policies and raising interest rates, which would crimp demand for commodities.

Asian and European stock markets were mixed in quieter overnight trading. U.S. stock indexes are higher at midday and hit new highs for the year. The U.S. stock index bulls are enjoying price uptrends in place on the daily bar charts, also reflecting the upbeat trader and investor attitudes at present.

The U.S. dollar 'will die' with BRICS new currency, warns Robert Kiyosaki

The key outside markets today see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are up trading around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.777%.

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures prices hit a 2.5-month high today. Bulls have gained the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,900.60. First resistance is seen at today’s high of $1,988.30 and then at $2,000.00. First support is seen at $1,972.00 and then at today’s low of $1,958.10. Wyckoff's Market Rating: 6.0.

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures prices hit a nine-week high today. The silver bulls have the firm overall near-term technical advantage. A three-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.645. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at today’s high of $25.405 and then at $25.85. Next support is seen at this week’s low of $24.815 and then at $24.50. Wyckoff's Market Rating: 7.0.

September N.Y. copper closed down 85 points at 383.55 cents today. Prices closed nearer the session high today. The copper bulls and bears are on a level overall near-term technical playing field amid choppy trading. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 368.30 cents. First resistance is seen at 390.00 cents and then at the July high of 395.40 cents. First support is seen at today’s low of 380.30 cents and then at 374.25 cents. Wyckoff's Market Rating: 5.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

David

Gold, silver boosted on notions Fed tightening cycle near an end

Gold prices are modestly up and hit a three-week high, while silver prices sharply up and hit two-month high in midday U.S. trading Thursday. Another tame U.S. inflation report today has the marketplace thinking the Federal Reserve is likely nearer the end of its interest-rate-hiking cycle. That's bullish for commodity markets, including the metals. August gold was last up $3.30 at $1,965.00 and September silver was up $0.64 at $24.955.

The marketplace is basking in the glow of tame U.S. inflation reports that came out Wednesday and Thursday mornings. Today's producer price index for June also came in slightly lower than expected, following Wednesday tamer consumer price index for June.

Said analyst Nigel Green of the deVere Group: "The U.S. is now likely to pull off the perfect "soft landing,' with the world's largest economy avoiding a recession as the latest inflation data comes in cooler than expected. The U.S. CPI data raises hopes that the Federal Reserve is going to be able to bring down inflation without steering the U.S. economy into a recession. The battle on rising prices is being won, as the data suggests, meaning the pressure is off the Fed for future rate hikes. Cooling inflation and a strong and resilient labor market suggest that no recession will come in 2023.” That's a bullish scenario for commodity markets, suggesting better demand in the coming months.

Asian and European stock markets were mixed to firmer in overnight trading. U.S. stock indexes are firmer at midday.

In overnight news, China's exports in June fell a worse-than-expected 12.4%, year-on-year, following a drop of 7.5% reported in May. Imports in June dropped a worse-than-expected 6.8%, year-on-year. That dour news from the world's second-largest economy did not put a damper on raw commodity markets today, but it may in the near term.

  Silver prices are up 4%; Is this the start of the rally? TD Securities says it is still three months away

The key outside markets today see the U.S. dollar index solidly lower and hitting a 15-month low. That's bullish for the raw commodity sector, as most raw commodities on world trade markets are priced in U.S. dollars. The weaker USDX makes those commodities less expensive to purchase in non-U.S. currency. Meantime, Nymex crude oil prices are slightly up and trading around $76.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching around 3.8%.

Technically, August gold futures prices hit a three-week high again today. Bulls and bears are on a level overall near-term technical playing field but the bulls have momentum. A nine-week-old downtrend on the daily bar chart has been negated and prices are now in a fledgling uptrend. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,900.60. First resistance is seen at $1,975.00 and then at $1,985.00. First support is seen at $1,950.00 and then at Wednesday's low of $1,937.50. Wyckoff's Market Rating: 5.0.

September silver futures prices hit a two-month high today. The silver bulls have the overall near-term technical advantage and have momentum. A three-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.645. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.00 and then at $25.50. Next support is seen at $24.50 and then at today's low of $24.31. Wyckoff's Market Rating: 6.5.

September N.Y. copper closed up 900 points at 394.30 cents today. Prices closed near the session high and closed at a 2.5-month high close today. The copper bulls have gained the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 418.25 cents. The next downside price objective for the bears is closing prices below solid technical support at 368.30 cents. First resistance is seen at the June high of 396.40 cents and then at 400.00 cents. First support is seen at today's low of 384.20 cents and then at this week's low of 374.25 cents. Wyckoff's Market Rating: 5.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

David

Gold firmer; key U.S. inflation report on deck

Gold is higher and silver is slightly lower in midday U.S. trading Tuesday. Gold is supported by bullish daily outside market forces that see the U.S. dollar index a bit weaker, crude oil prices higher and U.S. Treasury yields down a bit. Trading action was more subdued today ahead of a major U.S. inflation report out Wednesday morning. August gold was last up $7.20 at $1,938.10 and September silver was down $0.02 at $23.325.

Trading so far this week has been quieter ahead of the U.S. data point of the week: Wednesday morning’s consumer price index report for June, which is expected to come in at up 5.0%, year-on-year, compared to a gain of 5.3% in the May report. Trading action in many financial markets, as well as the precious metals, may heat up in the wake of the CPI report, especially if it’s a miss from market expectations.

  Gold prices can still push to record highs at $2,100 an ounce by the end of the year – MKS' Shiels

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are up and trading around $74.75 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.988%.

Technically, August gold futures were up $6.50 at $1,937.30 in afternoon trading and near mid-range. Bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,975.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the February low of $1,846.80. First resistance is seen at today’s high of $1,944.50 and then at $1,950.00. First support is seen at today’s low of $1,929.80 and then at this week’s low of $1,918.00. Wyckoff's Market Rating: 4.0.

September silver futures were down $0.035 at $23.31 at midday and nearer the session low. Prices hit a three-week high early on today. The silver bears have the slight overall near-term technical advantage. However, a nine-week-old price downtrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $24.835. The next downside price objective for the bears is closing prices below solid support at the June low of $22.34. First resistance is seen at today’s high of $23.595 and then at $24.00. Next support is seen at $23.00 and then at last week’s low of $22.72. Wyckoff's Market Rating: 4.5.

September N.Y. copper closed down 230 points at 376.15 cents today. Prices closed nearer the session low. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 396.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen at today’s high of 382.25 cents and then at 385.00 cents. First support is seen at last week’s low of 372.25 cents and then at 368.30 cents. Wyckoff's Market Rating: 3.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and silver

David

Gold prices can still push to record highs at $2,100 an ounce by the end of the year – MKS' Shiels

Gold prices have room to move lower and retest support below $1,900 an ounce in the early part of the second half of the year; however, that doesn't mean investors should give up on gold, according to one market analyst.

In her mid-year outlook, published last week, Nicky Shiels, metals strategist at MKS PAMP, said that she is maintaining her 2023 year-end price average of $1,930 an ounce, even as prices could remain in a downtrend in the near term.

In what could be a volatile market, MKS sees gold prices trading in a range between $1,850 and $2,100 an ounce through the second half of the year.

"Stay core long Gold but remain tactically nimble, which hinges on the interplay between a relatively restrictive Fed & stronger US data," Shiels said in her latest report.

Shiels warned investors that gold could continue to struggle during the rest of the summer as the Federal Reserve looks to raise interest rates later this month. However, she added that there is a chance gold can still see record all-time highs by the end of the year.

"We do expect a bumpy 2H'23 as monetary policy starts to bite; Gold prices are then expected to print a new all-time-high in 2H'23 and pierce $2100/oz," said Shiels. "Our conviction lies in higher floors versus runaway upside repricing unless the Fed loses the inflation fight (not our base case) or breaks something more substantial in the economy."

Although the threat of a recession, caused by the Federal Reserve's aggressive monetary policies, is still in the marketplace, Shiels said that the fear has diminished, and investors are now chasing momentum in other assets.

"U.S. financial instability risks have materially subsided – there is just no macro fear – and fighting the Fed is usually a losing trade after they have, to-date, simply extremely complicated risks. However, underweight investors will continue to incrementally reengage in quality assets and safe havens like precious metals."

Bank of America downgrades gold, silver prices for 2023 as Fed rate hikes keep investors away

Along with gold, Shiels also remains bullish on silver, leaving her average price target unchanged at $24 an ounce. At the same time, MKS sees silver prices trading in a range between $21.50 and $27 through the second half of the year.

Shiels noted that silver's significant supply-demand imbalance continues to support the precious metal's long-term bullish outlook.

"Strong support lurks below $22/oz stemming from a mix of industrial & retail participation, which is expected to remain resilient into 2H'23 despite growing recession risks," she said. "There continues to be asymmetric upside risks in Silver which hinges on investor resubscription, the return of Chinese buying & restocking and the convincing rollover in the US$ once the Fed pauses and expectations shift to a consecutive rate cuts."

By

Neils Christensen

For Kitco News

Time to Buy Gold and silver

David

t's a 'tug of war' for gold price next week as attention turns to inflation report ahead of July Fed rate decision – analysts

Despite more than a $20 gain Friday, the gold market is yet to prove that its bearish downtrend is over, according to analysts, who are carefully monitoring next week's June inflation report as a potential trigger.

The gold market rebounded Friday on weaker-than-expected employment data from June, with the U.S. economy adding 209,000 new positions versus the expected 225,000. This marked the weakest gain since December 2020.

At the time of writing, August Comex gold futures were trading at $1,935.50, up 1.05% on the day, after trading at $1,915.4 earlier in the session.

Slowing employment growth is good news for gold as it could remove the need to hike twice this year — a promise made by Federal Reserve Chair Jerome Powell multiple times in June.

But last month's employment slowdown was not steep enough to prevent the Fed from hiking in July, which means that gold price gains could be limited in the short term.

"Although slowing employment growth will be welcomed by Fed officials – particularly following the alarming (and seemingly misleading) surge in the ADP measure reported yesterday," Capital Economics deputy chief U.S. economist Andrew Hunter. "It is unlikely to stop the Fed from hiking rates again later this month, particularly when the downward trend in wage growth appears to be stalling."

With just over two weeks remaining until the Fed meeting on July 25-26, the latest inflation numbers from June, scheduled to be released Wednesday, will be carefully monitored by markets.

The macroeconomics outlook is one of the biggest headwinds for gold in the short term, said Forex.com's senior technical strategist Michael Boutros.

"Markets are pricing a 92% chance of a rate hike in July," Boutros told Kitco News. "But only one rate hike is expected while the Fed telegraphs two. If that shifts, it may limit the upside for gold."

The U.S. dollar took a hit Friday, supporting gold prices at the end of the week, with the U.S. dollar index last at 102.27, down 0.87% on the day.

"It is going to be a tug of war for gold. Don't see a big downdraft," Boutros said.

The long-term outlook for gold is bullish as the labor market will weaken, ushering in a much weaker economy, OANDA senior market analyst Edward Moya told Kitco News.

"Eventually, it will turn bullish for gold. But with more rate hikes being priced in, it is difficult for gold right now," Moya said. "Next week's inflation report could be rather soft. Trading could be very choppy next week."

Gold price levels to watch

From a technical perspective, Boutros pointed out that gold can only break its bearish trend when it rises above $1,943 and $1,965 price levels.

The $1,903-10 range has been a rock-solid critical support zone. That level held on a close basis," he said. "The broader trend from April-May highs is still intact. But gold is not out of the woods until it gets a daily close above $1,943 and $1,965. Then, a broader uptrend can take root."

If gold sees a move lower, Boutros warned to keep an eye on $1,891. If that breaks, the gold market could see a major move down to $1,830, which would be just the initial support level, he added.

 

Data next week

Monday: Fed Vice Chair for Supervision Barr Speaks

Wednesday: U.S. CPI, Bank of Canada rate decision

Thursday: U.S. PPI, U.S. jobless claims

Friday: Michigan consumer expectations

By

Anna Golubova

For Kitco News

Time to Buy Gold and silver

David

The market was expecting delays' – Fastmarkets' William Adams on China's critical metals turnaround

China surprised the critical minerals industry by ramping up nickel production from Indonesia in a short period of time, noted William Adams, head of battery research at Fastmarkets.

On June 22, 2023, Adams spoke to Kitco at the 15th Lithium Supply and Battery Raw Materials 2023 in Henderson, Nevada.

Nickel prices are off nearly 30% year to date. Adams said nickel prices have been declining partly because of constrained electric vehicle sales in Europe. The continent's EV manufacturers prefer batteries with a higher nickel content. Indonesia has also been a supply surprise.

"We've seen a significant increase in supply from Indonesia," noted Adams, who said the Chinese started to partner with nickel miners in the country last decade. "They've brought on new nickel supply…in quite a surprisingly fast time.

"The market expected there would be delays, but even with COVID…they've still managed to push forward and get that new supply on the market."

Adam was asked to identify an under-covered metal in the critical minerals space.

"I think it's graphite," said Adams. "So much graphite is processed and produced in China. That's going to cause an issue. We're going to need to see much more diversification of supply within graphite."

pic

Why direct lithium extraction is the critical mineral sector's needed technology

By

Michael McCrae

For Kitco News

Time to Buy Gold and silver

David