Retail investors bullish on gold, but Wall Street analysts shift into neutral

Gold inched steadily higher this week, with prices seeing bumps following economic data releases, but after the strong and sudden moves of the past month or so, the precious metals’ price action was more orderly and less dramatic.

The latest Kitco News Weekly Gold Survey sees retail investors maintaining an overwhelmingly bullish bias going into next week, while the exact same proportion of market analysts have switched to a neutral assessment of the yellow metal’s near-term prospects.

Adrian Day, President of Adrian Day Asset Management, expects gold prices to be little changed during the coming week. “After the recent run, gold is vulnerable to bad news,” he said. “The medium-term fundamentals are very powerful: at some point, the Fed and other central banks will ease tightening before inflation has been conquered and that will be the firing gun for gold. But that’s not yet.”

Daniel Pavilonis, Senior Commodities Broker at RJO Futures, sees a period of prolonged consolidation for gold now that the geopolitical risk bid has subsided.

“We're right smack at the upper band of this trading range that we've been in for several weeks,” said Pavilonis. “Most likely we're not going to see any more rate hikes. We could possibly see some rate cuts in May of next year, but I doubt that's going to happen. I think we're really just going to stay where we're at for a while.”

Pavilonis said that while gold prices continue to react to economic indicators, they aren’t providing the precious metal with a clear direction. “I think that the market is just trading off of a mixed range of inflation data,” he said. “Housing starts, they’re still building houses, there's still demand. Employment reports still look relatively strong. The CPI numbers, the big drop was healthcare, supposedly. I would say next week we're still going to be range bound. I don't see anything that's going to break this thing out to the upside. I would imagine it's going to stay where we've been, trading within this 40, 50, 60-dollar range.”

“Gold is just going to have trouble moving higher if inflation data continues to weaken and we don't lower interest rates,” he said. “I don't know what the driver is going to be if geopolitics isn't there.”

This week, 12 Wall Street analysts participated in the Kitco News Gold Survey. Like last week, three experts, or 25%, expected to see higher gold prices next week, but this week only one expert, representing 8%, predicted a drop in price. The overwhelming majority, or 67%, were neutral on gold for the coming week.

Meanwhile, 595 votes were cast in Kitco’s online polls, and market participants were even more optimistic than they were in last week’s survey. 394 retail investors, or 66%, looked for gold to rise next week. Another 125, or 21%, expected it would be lower, while 76 respondents, or 13%, were neutral on the near-term prospects for the precious metal.

Next week will be a short one for trading and economic data releases, as Thursday’s U.S. Thanksgiving holiday means most of the action will be compressed into the first three days. Highlights include the release of the latest FOMC minutes and October Existing Home Sales on Tuesday, followed by October Durable Goods, University of Michigan Consumer Sentiment for November, and weekly jobless claims on Wednesday.

Everett Millman, Chief Market Analyst at Gainesville Coins, said he believes that the attention of gold investors is moving from the geopolitical sphere to macroeconomics.

“I think that we're seeing a shift in the focus of the gold market away from the war premium that we saw, that certainly drove gold higher in recent weeks,” he said. “I think that's becoming less of a central concern for the gold market, and now the attention is shifting more toward the macroeconomic picture and particularly, what Fed policy is going to be.”

Millman said the consensus now is that the Fed is most likely done hiking rates, and the gold market is really going to be focused on how soon the rate cuts will come. “Lower interest rates are basically the biggest bullish driver out there for gold, outside of a deep recession,” he said. “I think the economic data have been a bit mixed. I see so many takes about how strong the economy actually is, and yes, there's some data showing that. But then there's just as many examples or indicators you can look at on the other side.”

“I think that spells a period of sideways movement or consolidation for gold until we get some clearer pictures on economic conditions.”

Millman also said that under this Federal Reserve Chair, gold traders can’t afford to wait for interest rate cuts to get into their positions, unlike during Feds past.

“This is very different from the Greenspan era, where he basically was trying to cloak what the Fed was going to do so no one could front-run it,” he said. “Now the Fed does directly telegraph these things, and Powell has repeatedly acknowledged that these policy actions act with a lag, and traditionally that lag could be as long as 18 months. So I think it actually makes some sense that markets are going to go off of the signal rather than the action, because we do know that these changes in interest rates, or things like switching from QE to QT, that these types of policy decisions take 12 to 18 months to fully work their way into the economy and actually affect markets.”

“Obviously, if there is that long a lag, then market participants have to go off of the signal and work ahead, because if you're waiting to react to the actual consequence, like that lagged result, then you're going to be so far behind the eight ball,” Millman said. “They know that this 500-basis-point change in interest rates occurred in a very short span of time, but we're still not the full year and a half out, we're getting close. I think that definitely factors into the calculus here.”

Ole Hansen, head of commodity strategy at Saxo Bank, said he doesn’t see any big moves for gold in the near term. “Having been so ‘lucky’ to hit it spot-on last week, I’m now looking for additional consolidation next week, so the call is NEUTRAL.”

Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, is also neutral on gold for the coming week. “My reasoning is that between the usual late month drop-off in economic news and next week’s US Thanksgiving holiday, markets in general are likely to be quieter for the next ten days.”

Darin Newsom, Senior Market Analyst at Barchart.com, is bullish on gold’s prospects next week. “Dec gold’s short-term uptrend firmed this past week, with the contract hitting a high of $1,996.40 early Friday,” he said. “If the contract closes lower Friday, based on the Benjamin Franklin Fish Analogy (Like guests and fish, markets start to stink after three days of moving against the trend), Dec gold could move lower Monday and Tuesday as well.”

“Using Elliott Wave Theory, this would be considered Wave 2 of the 5-wave short-term uptrend pattern,” Newsom said. “Ultimately, the contract would be expected to take out the Wave 1 high.”

Marc Chandler, Managing Director at Bannockburn Global Forex, has a neutral bias for the coming week. “Gold bottomed near $1931 in the spot market on Monday and reached almost $1993.50 today, ahead of the weekend,” he said. “The main drivers appear to be the drop in US rates and the dollar. It is not inflation but the decline in inflation (US and UK reported in recent days) that presses rates lower and knocks a leg from under the dollar.”

“Lighter economic calendars next week and the market is pricing in 100 bp of Fed cuts next year,” Chandler added. “So, I look for some consolidation throughout the capital market and this could see the yellow metal consolidated. I see initial support in the $1970-75 area.”

And Kitco Senior Analyst Jim Wyckoff expects gold prices to make gains next week. “Higher, as charts have turned friendlier, and so has U.S. monetary policy after this week’s tamer inflation reports,” Wyckoff said.

Spot gold is currently flat on the day, but up 2.17% since Monday as market participants prepare for the weekend. The precious metal last traded at $1,980.43 per ounce at the time of writing.

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

David

Massive divergence – Kai Hoffmann on why gold stocks should be trading higher

Generalist investors are still on the sidelines when it comes to gold, noted Soar Financial CEO Kai Hoffmann.

On Thursday Hoffmann spoke to Kitco. Hoffmann is hosting Deutsche Goldmesse in Frankfurt, Germany. The 2023 fall event kicks off November 24. Headliners include Lobo Tiggre, Thorsten Polleit and Michael Howell.

Hoffmann said the gold sector needs a spark. The metal has had high sustained prices through 2023, but the GDX, an index of gold companies, is still down for the year.

"It needs a bit of a trigger…to get generalists back into the market," noted Hoffmann. "It'd be great to see like a $50 to $100 move in a day, which is massive for a 5,000-year-old relic. Mainstream media might jump back on it."

Mining has been enjoying a lift from energy transition and all the metals needed for building fleets of electric vehicles, but Hoffmann likes beaten up precious metal companies.

"What's more contrarian than being a gold mining stock investor right now? If you look at how the stocks have performed and look at the gold price, there is a massive divergence. The stocks should be trading a lot higher."

While sentiment towards the resource sector has soured, Hoffmann described financings as mixed. He said the Oreninc index, which measures investment flows in the resource sector, is at a near average.

"We've seen way worse," said Hoffmann. "The index is including a lot of the flow through financings right now. In November half the money raised went straight into flow-through financings."

Hoffmann noted that early-stage companies are having a tough go of it.

"The grassroots explorers are hurting right now. There is no money for them. It doesn't matter what commodity. Unless you have a sexy project and an amazing management team, you're not getting any money from the market right now."

By

Michael McCrae

For Kitco News

Time to Buy Gold and Silver

David

Gold price up amid weakening USDX, down-tick in U.S. bond yields

Gold and silver prices are moderately higher in early U.S. trading Friday, with silver hitting a 2.5-month high. The precious metals are supported on this last trading day of the week by a lower U.S. dollar index and a decline in U.S. Treasury yields. The near-term technical postures for gold and silver have improved this week, which is inviting chart-based bulls to the long sides of those metals. December gold was last up $6.10 at $1,993.40. December silver was last up $0.207 at $24.14.

It’s been an extra important trading week that is just winding down. U.S. inflation data was tamer, as was that from the U.K. Reads a Wall Street Journal headline today: “Global inflation fight turns a corner.” Trader and investor risk appetite was boosted this week, evidenced by the U.S. stock indexes hitting multi-week highs. After the tame U.S. inflation data earlier this week, the marketplace now expects the Federal Reserve has finished its interest-rate-increase cycle. There are growing notions the Fed will even lower interest rates in the spring. Lower global interest rates are bullish for the metals, suggesting better consumer and commercial demand amid lower borrowing costs.

Asian and European markets were mixed in overnight trading. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins.

In overnight news, the Euro zone October consumer price index was reported up 2.9%, year-on-year, which was in line with market expectations.

Nymex crude oil prices are higher and trading around $73.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.406%.

U.S. economic data due for release Friday is light and includes new residential sales.

Technically, the gold futures bulls have the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in December 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 $1,996.40 and then at $2,000.00. First support is seen at the overnight low of $1,983.90 and then at $1,975.00. Wyckoff's Market Rating: 5.5.

The silver bulls have the overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at the overnight high of $24.22 and then at $24.50. Next support is seen at the overnight low of $23.805 and then at Thursday’s low of $23.35. Wyckoff's Market Rating: 6.0.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Investors will want to own gold as ‘America faces a debt reckoning' – Maison Placements Canada's John Ing

One of Toronto’s oldest boutique investment firms is warning investors that gold could be a good asset to own as the world faces significant threats in the coming months and years.

In his latest research report, John Ing, president and CEO of Maison Placements Canada, said he is looking for gold prices to rally to $2,200 an ounce as the chickens, raised on decades of uncontrollable spending, come home to roost.

Ing said in his latest commentary that they believe “mounting inflation, de-dollarization, heightened geopolitical risks, global debt and the rise in populism” provide a positive backdrop for gold: “it is a good thing to have.”

According to Ing, the biggest factor behind most of the global economic threats comes down to growing debt problems in the U.S. Ing noted that since 2008, the supply of Treasuries has risen five-fold to more than $25 trillion.

This fiscal year saw deficit spending in the U.S. rise by $1.7 trillion, pushing the debt past $33 trillion. “America faces a debt reckoning,” Ing warned.

Despite the growing threat, Ing noted that the U.S. government continues to spend money at a record pace as it pushes the transition to green energy to meet global carbon dioxide reduction targets. He described the green energy transition as a black hole: “Once you are in it, it is impossible to get out.”

“[President Joe] Biden’s Green Deal is something between a mirage and boondoggle as high interest rates, permit delays and supply problems become the new reality,” he said.

Ing also noted that the U.S. government’s debt makes it more challenging for America to provide a stable force as the world starts to fracture in the face of two major conflicts.

“As America's military arsenal runs low, it is an inconvenient fact that arming itself will prove very costly,” he said. “The strength of the American economy was one of the main reasons the US won the Cold War with Russia, allowing them to build a global defense behemoth which the Soviet Union could not match. America’s overconfidence led to arrogance and now complacency.”

America’s massive debt is also taking its toll on the U.S. dollar as the deglobalization trend is also prompting nations to diversify away from the greenback.

“The biggest threat to the dollar comes not from others but from the US government itself,” he said. “And that is a worry because the burden of debt is America’s Achilles heel.”

At the same time, Ing said that the selloff in bond markets has only begun as investors are reluctant to expose themselves to more U.S. debt.

“A meltdown in Treasuries now ranks among the worst Treasury crashes in history with 10-years collapsing 46% in the last three years while the 30-year bond erased 53% of gains. The meltdown has just begun,” he said. “America’s addiction to low rates and profligate spending debases the dollar, eroding its dominance, central to America’s credibility in financial markets.”

“We believe this fiscal unsustainability will show up in even higher yields and pain, from the shopping cart to corporate balance sheets, to taxpayers, as those chickens are only coming home to roost.”

In this environment, Ing said that gold remains a buying opportunity as it will help investors preserve their capital.

 

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

Gold price pauses Wednesday after solid gains Tuesday

Gold prices are just a bit weaker and silver higher in midday U.S. trading Wednesday. Gold is seeing some routine profit-taking from the shorter-term futures traders, following this week’s gains. A rebound in the U.S. dollar index and an uptick in U.S. Treasury yields at mid-week are negative daily outside market influences for the yellow metal. Silver is seeing good follow-through strength after posting solid gains Tuesday. December gold was last down $1.80 at $1,964.80. December silver was last up $0.398 at $23.53.

Trader and investor attitudes are more upbeat at mid-week following Tuesday’s U.S. consumer price index report for October that came in at up 3.2%, year-on-year. CPI was forecast at up 3.3%, year-on-year, versus a gain of 3.7% in the September report. U.S. producer price index data for October, released this morning, corroborated Tuesday’s tamer CPI data. October PPI was down 0.5% from September versus expectations for a rise of 0.1% in the period. The CPI and PPI data fall into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve halt its interest-rate-tightening cycle. Now, more Fed market watchers believe the U.S. central bank will continue to pause on raising interest rates in the coming months.

The U.K. also got some better inflation news today. Consumer prices were 4.6% higher in October, year-on-year, following a rise of 6.7% in September. The October rise in CPI was the slowest in the U.K. in two years. Some analysts are now saying the better U.K. inflation data will end the Bank of England’s interest-rate-increase cycle.

U.S. stock indexes are higher and at multi-week highs in midday trading, following the strong gains posted Tuesday.

On tap today, U.S. President Joe Biden and Chinese leader Xi Jinping are meeting during the Asia-Pacific Economic Cooperation summit in San Francisco. The White House wants a resumption of U.S./China military communications. Iran is also on the agenda, including the question of Iran’s nuclear program. A potential thawing of heretofore icy U.S.-China relations also has traders and investors with more upbeat attitudes this week.

U.S. lawmakers are once again scrambling to pass a measure to fund the federal government. This time the deadline is midnight Friday. This is “old hat” for the marketplace and markets are so far not reacting much to a potential U.S. government shutdown. U.S. congressional leaders are presently working on a plan to avert the shutdown.

The key outside markets today see the U.S. dollar index firmer on a corrective bounce after careening to a nine-week low on Tuesday. Nymex crude oil prices are lower and trading around $77.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.531%.

Technically, December gold futures bulls and bears are on a level overall near-term technical playing field. 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 $1,900.00. First resistance is seen at today’s high of $1,979.20 and then at $1,985.00. First support is seen at today’s low of $1,958.80 and then at $1,950.00. Wyckoff's Market Rating: 5.0.

December silver futures bulls and bears are back on a level overall near-term technical playing field but the bulls now have momentum. A price downtrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.05. The next downside price objective for the bears is closing prices below solid support at this week’s low of $21.925. First resistance is seen at today’s high of $23.71 and then at the October high of $23.88. Next support is seen at today’s low of $23.095 and then at $23.00. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed up 355 points at 371.90 cents today. Prices closed nearer the session high today and closed at a 2.5-month-high close. The copper bears still have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 351.95 cents. First resistance is seen at the November high of 372.55 cents and then at 378.60 cents. First support is seen at today’s low of 366.80 cents and then at 365.00 cents. Wyckoff's Market Rating: 4.5.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold prices can fall 4% in the near term, but its long-term outlook remains bullish – Natixis

Weak inflation pressures have pushed gold prices solidly back above $1,950 an ounce; however, despite Tuesday’s gains, one international bank is looking for lower prices through the end of the year as the fear trade continues to fade.

In his latest gold analysis, Bernard Dahdah, precious metals analyst at Natixis, said that gold prices could fall another 4%, pushing prices back below $1,900 an ounce as geopolitical tensions in the Middle East stabilize and Israel’s war with Hamas remains confined with Gaza’s borders.

However, despite his near-term bearish outlook, Dahdah said he sees long-term potential for the precious metal through 2024 and 2025.

Our view is that even if a correction takes place, gold prices are expected to find support as the Fed starts cutting rates, which we think will be as soon as May,” he said in the report. “Although we see gold prices retreating in the near term, the back of a long-term cease-fire that will eventually come, prices will still average $1,883/oz in 2024 and rise to an average of $1,918/oz in 2025.”

December gold futures last traded at $1,968.10 an ounce, up nearly 1% on the day as investors continued to digest the latest Consumer Price Index report.

Tuesday’s inflation data continues to support expectations that the Federal Reserve is done raising interest rates in this tightening cycle. October’s CPI showed inflation rose 3.2% in the last 12 months. This was the weakest increase since December 2021.

According to the CME FedWach Tool, markets see a nearly 100% chance that the Federal Reserve will leave interest rates unchanged next month. Markets see the first rate cut coming in May, with a total of three rate cuts through next year.

Although the Federal Reserve is done tightening interest rates, it has signaled that it will continue to maintain restrictive rates for the foreseeable future to make sure inflation is on track to fall back to its 2% target.

In comments made at an event hosted by the International Monetary Fund, Fed Chair Jerome Powell said that the committee is “not confident” it has done enough to bring inflation down.

“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” he said during the event. “We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data and the risk of overtightening.”

  Gold is still undervalued at $2,000, will hit $2,400 next year – IG Wealth Management's Petursson

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

Gold gains on short covering, bargain hunting

Gold prices are moderately higher near midday Monday, on some short covering by the shorter-term futures traders and some perceived bargain hunting after recent selling pressure. Gold and silver prices overnight hit four-week lows. December gold was last up $7.00 at $1,944.70. December silver was last down $0.061 at $22.215.

U.S. stock indexes are slightly lower so far today. Risk appetite has been slowly creeping back into the general marketplace recently, as there has been no major military escalation in the Israel-Hamas war, at least from the markets’ point of view. That’s been a bearish weight on the safe-haven gold and silver markets for the past couple weeks.

It was a quiet economic data day to start the U.S. trading week Monday. However, the pace picks up rapidly Tuesday with the release of the consumer price index report for October, which is forecast at up 3.3%, year-on-year, versus a gain of 3.7% in the September report. The core CPI rate is seen up 4.1% versus 4.1% seen in the September report.

Also on tap this week, U.S. President Biden and Chinese leader Xi Jinping will meet Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco. The White House cited a resumption of U.S./China military communications as a priority. Iran is also on the agenda, including the question of Iran’s nuclear program.

U.S. lawmakers are once again scrambling to pass a measure to fund the federal government. This time the deadline is midnight Friday.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are higher and trading around $70.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching around 4.64%.

Technically, December gold futures prices hit a four-week low early on today. The bulls and bears are on a level overall near-term technical playing field, but prices are starting to trend down. 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 $1,900.00. First resistance is seen at $1,950.00 and then at $1,965.00. First support is seen at today’s low of $1,935.60 and then at $1,925.00. Wyckoff's Market Rating: 5.0.

December silver futures prices hit a four-week low today. The silver bears have the overall near-term technical advantage. Prices are trending lower on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the October high of $23.88. The next downside price objective for the bears is closing prices below solid support at the October low of $20.85. First resistance is seen at $22.50 and then at $22.80. Next support is seen at today’s low of $21.925 and then at $21.50. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed up 670 points at 365.40 cents today. Prices closed near the session high today and hit a three-week low early on. Prices also scored a bullish “outside day” up on the daily bar chart today. The copper bears still have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 380.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 351.95 cents. First resistance is seen at 370.00 cents and then at the November high of 372.55 cents. First support is seen at 360.00 cents and ten at today’s low of 358.00 cents. Wyckoff's Market Rating: 3.0.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold prices need to see weak inflation as prices drop nearly 3% this week

Gold prices could continue to struggle next week as Federal Reserve Chair Jerome Powell has "closed the door" to stop any potential dovish bias from creeping into the marketplace.

Thursday, at an event hosted by the International Monetary Fund, Powell said that the central bank is not "confident" that monetary policy is restrictive enough to bring inflation down to the 2% target.

Powell also said that the central bank would not hesitate to raise interest rates again if inflation pressures continued to rise.

Lukman Otunuga, manager of market analysis at FXTM, noted that gold prices are seeing their worst week in six as Powell maintains his tightening bias. December gold futures last traded at $1,939.90 an ounce, down nearly 3% from last week.

"Powell stated that the Fed remained cautious but was willing to raise rates if needed," he said. "Although traders are still pricing in a 10% probability of a rate hike in December, the timings of the Fed's first-rate cut have been pushed to July from June next year. After failing to conquer the $2000 psychological level, gold has the potential to extend losses. A solid breakdown and daily close below $1945 may open the doors towards the 200-day SMA at $1934."

Bart Melek, head of commodity strategy at TD Securities, said that Powell's comments continue to support U.S. dollar strength and elevated bond yields, two significant headwinds for gold.

"Because of the Federal Reserve's tightening bias, there is no big impetus to buy gold right now," he said.

Gold investors have again turned their focus back toward U.S. monetary policy as the geopolitical uncertainty that drove prices to $2,000 continues to weaken. Although Israel continues its ground assault in Gaza in its new war with Hamas, the conflict remains contained for now.

Although gold could see lower prices next week, it is holding up much better than oil, which is also suffering as the geopolitical fear trade continues to unwind. West Texas Intermediate (WTI) crude oil is seeing its third week of losses, its worst losing streak since late April.

At the same time, some analysts have noted that lower oil prices could work in gold's favor as it helps to cool inflation fears, giving the Federal Reserve room to ease back on its hawkish rhetoric.

However, Melek said a renewed focus on U.S. economic data, with particular attention being paid to next week's Consumer Price Index, means inflation pressures still have a significant way to drop. According to consensus estimates, economists are looking for 12-month inflation to rise 3.3%, compared to September's annual increase of 3.7%.

"The Fed has clearly said that it needs to get inflation under control, so if gold is going to find any support next week, inflation needs to be much closer to 3%," said Melek.

Barbara Lambrecht, commodity analyst at Commerzbank, said that although hotter-than-expected inflation could weigh on gold next week, any significant drop could be seen as a buying opportunity.

Capital Economics sees gold prices rising to $2,100 by year-end 2024

"If US inflation figures were to surprise to the upside, the gold price could fall further in the short term. In principle, however, we are convinced that the US rate cycle has peaked and that the mid-term outlook is positive for gold," Lambrecht said in a note Friday.

Along with inflation data, some analysts have said that gold could catch a safe-haven bid if retail sales numbers come in weaker than expected, signaling to markets that consumers are starting to stumble and unable to support current economic activity.

U.S. government debt will also be on the radar next week as the U.S. faces another potential government shutdown if Congress doesn't pass funding legislation by Nov. 17.

There are signs that global financial markets have become saturated with U.S. sovereign debt. Not only has the Federal Reserve's aggressive monetary policy tightening driven bond yields to 16-year highs, but the supply of government bonds hitting the market is starting to overwhelm demand.

Thursday, the U.S. government auctioned off $24 billion in 30-year notes and it was a significant disappointment as higher yields were needed to entice investors to buy U.S. government debt.

Some commodity analysts have said that any potential turmoil in the bond market could be positive for gold in the near term.

"If we look at the past month or so, it was the flying of yields that seemed to help gold in a sell-treasuries,-buy-gold type of trade," said James Stanley, senior strategist at StoneX Group. "A deeper inversion in 2/10 could be a positive for gold, but normalization of the curve could remain a bearish factor."

Stanley added that he sees gold prices continuing to consolidate in its broader range between $2,000 and $1,800 an ounce.

Economic data to watch next week

Tuesday: U.S. CPI

Wednesday: U.S. PPI, Retail Sales, Empire State Manufacturing Survey

Thursday: Weekly jobless claims, Philly Fed Survey

Friday: U.S. housing starts and building permits

By

Neils Christensen

For Kitco News

Contact nchristensen@kitco.com

www.kitco.com

Time to Buy Gold and Silver

David

Bitcoin holds its ground while altcoins surge higher

Cryptos closed out the work week strong as Bitcoin (BTC) bulls managed to fend off an attempt by bears to push the top crypto into a deeper correction, while the altcoin market continued to trend higher as traders entered the market in full force.

Stocks also climbed higher to finish the week on a positive note despite the latest round of economic data showing that the American consumer is less confident about the state of the U.S. economy and expects inflation to continue to rise.

At the closing bell, the S&P, Dow, and Nasdaq were all in the green, up 1.56%, 1.16%, and 2.05%, respectively. The benchmark 10-year yield moved down to trade near 4.63%, which also helped put a bid under risk assets.

Data provided by TradingView shows that after a brief dip to $36,430 in the early hours on Friday, Bitcoin’s price climbed its way to a daily high of $37,485 near midday, and has since pulled back to support at $37,300.

BTC/USD Chart by TradingView

“November Bitcoin futures prices [were] higher in early U.S. trading Friday, after hitting a contract high Thursday,” said Kitco senior technical analyst Jim Wyckoff.

Bitcoin futures 1-day chart. Source: Kitco

“The BTC bulls have the solid overall near-term technical advantage,” Wyckoff said. “A price uptrend on the daily bar chart is firmly in place. The trend is indeed the bull’s friend. Look for more price upside in the near term.”

While many analysts also see a possible extension of the uptrend, Crypto trader Ali Martinez has warned that Bitcoin will likely soon undergo a short-lived market correction.

“Bitcoin is nearing $40,000, and the crowd couldn't be more excited. But one important rule in trading is that you cannot follow the herd,” Martinez wrote on X (formerly Twitter). “Although I'm not touching my spot BTC position until some time in 2025, I'm inclined to enter a short in the futures market.”

As for why he sees a correction imminent, Martinez said, “The TD Sequential presents a sell signal on the weekly chart as BTC approaches an important area of resistance between $38,500 and $42,000.”

BTC/USD 1-week chart. Source: X

“I believe this resistance wall could trigger a correction toward $33,000, where I plan to buy the dip before the uptrend resumes,” he said. “Invalidation would be a weekly candlestick close above $42,500.”

MN Trading founder Michaël van de Poppe said that if a correction does occur, “$31,000 is crucial and needs to hold in order to prevent further downward momentum (if any). In that aspect, the $31,000 area is comparable to what the markets have been eyeing in the 2017-2021 cycle at $6,000.”

BTC/USD 1-day chart. Source: MN Trading

That being said, Poppe thinks that BTC would “Most likely dip towards $32,000-33,000,” which is “where [long] bids should be placed as strong sentiment usually doesn't give the obvious retests.”

In the event of a push higher, Poppe identified “a clear monthly and weekly resistance [zone] between $38,000-40,000.”

“This level will break at some point, but currently, Bitcoin's price has been providing the first test at this level,” he said. “These first tests don't break [through resistance] at first sight, hence the correction the markets [saw] yesterday. Overall, the outlook is positive.”

He added that there is the potential for a new range to form where “Bitcoin's price goes sideways, and that's a strong indication of further upward momentum on altcoins.”

BTC/USD 1-week chart. Source: MN Trading

“During late November and December, most likely we'll see more hype into the markets as the odds of a potential approval of the spot Bitcoin ETF is going to provide more momentum towards the markets, hence why the expectations are that we are likely going to see $45,000-50,000,” Poppe concluded.

Altseason kicks off with triple-digit gains for FTT

Altcoin prices surged higher, with only a dozen tokens in the top 200 trading in the red on Friday.

Daily cryptocurrency market performance. Source: Coin360

FTT, the token for the FTX cryptocurrency exchange, saw its price catapult 146% higher on news that the SEC may allow it to reopen its trading desk. JasmyCoin (JASMY) recorded an increase of 32.6%, and Celestia (TIA) gained 30.2%.

The overall cryptocurrency market cap now stands at $1.41 trillion, and Bitcoin’s dominance rate is 51.4%.

By

Jordan Finneseth

For Kitco News

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