Gold gains as Investors realign focus from the Fed to the Middle East conflict

Gold gains as Investors realign focus from the Fed to the Middle East conflict

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Featuring views and opinions written by market professionals, not staff journalists.

Gold gains as Investors realign focus from the Fed to the Middle East conflict teaser image

Gold futures hit an intraday low of $2004.60 yesterday and closed just off of that low at

$2006.50. The $23 decline was largely in response to the retail sales report which

revealed that consumer sales rose by 0.6% month over month in December. This would

be the second consecutive day of strong price declines in gold.

On Tuesday, January 16, gold futures declined by $21.40. The strong selloff was the

result of dollar strength a gain of + 0.75%, which occurred following comments made by

Governor Christopher Waller, one of the Fed’s twelve voting members at a speech at

the Brookings Institution. His speech reinforced what Chairman Powell said at his press

conference in December.

His statements spoke to counter the unrealistic optimism by many market participants

regarding the Fed cutting rates at the March FOMC meeting. He said that while interest

rate cuts are likely this year, the central bank can take its time relaxing monetary policy.

Furthermore, He addressed the fact during previous cycles the FOMC cut rates quickly

and often by large amounts adding that, “I see no reason to move as quickly or rapidly

as in the past”.

Today market participants shifted their focus from the Federal Reserve as they await

further clarity on the Fed’s future interest rate path and instead focused on the potential

that the Middle East conflict will continue to escalate. Continued attacks in the southern

Red Sea by the Houthis a military proxy of Iran, as well as yesterday’s military action by

Iran. Iran fired missiles into Iraq, Syria, and Pakistan killing at least six civilians.

The escalation of the conflict in the Middle East intensified the allure of the haven asset

gold. As of 5:35 PM ET the most active February contract is up $15.10 or 0.75% and

fixed at $2021.60. It seems that the current major support level at $2000 per ounce is

holding and is providing a price low that attracts investors.

For those who would like more information simply use this link.

Wishing you as always good trading

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

David

Fed rate cuts could push gold prices up 20% this year, but silver will jump 48% – AuAg Fund

Fed rate cuts could push gold prices up 20% this year, but silver will jump 48% – AuAg Fund

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

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Fed rate cuts could push gold prices up 20% this year, but silver will jump 48% – AuAg Fund teaser image

(Kitco News) – Although gold has started the new year on a quiet note as prices consolidate above $2,000 an ounce, one investment firm expects a sequence of new all-time highs as both gold and silver embark on a long-term bull market.

In their recently published 2024 outlook, analysts at AuAg Funds said they expect to see a 20% rally in gold prices this year, pushing the market past $2,400 an ounce.

The Sweden-based investment firm expects a shift in the Federal Reserve’s monetary policy to drive the rally in precious metals.

“We believe that central banks will shift away from rate hikes and adopt a more accommodative policy stance in 2024, which will catalyze a substantial upswing in gold prices for the foreseeable future,” the analysts said in the report.

The firm said that as the Fed leads the world in rate cuts this year, the U.S. dollar will weaken, creating another tailwind for gold.

However, gold has struggled in recent days, with prices testing support just above $2,000 an ounce as markets start to lower their expectations for a potential rate cut in March. So far gold prices have dropped about 3% since the start of the new year.

As bullish as the fund is on gold, they expect to see silver outperform this year.

“In this emerging bull market, expected to last many years, we predict the gold-to-silver ratio will drop below 30:1, setting an initial goal for 2024 at 70:1,” the analysts said. “Should gold appreciate by 20%, it would end the year at USD 2,475, and with a gold-to-silver ratio of 70:1, silver would close at USD 35, equating to a 48% return.”

As gold and silver are expected to rise, the firm said investors should also pay attention to the mining sector.

“Gold miners are historically undervalued relative to gold, a trend likely to reverse and overshoot during the forthcoming secular gold bull market,” the analysts said. “Gold miners are also historically undervalued compared to the S&P 500, presenting a unique and attractive entry point.”

With higher gold prices driving margins, the analysts noted that mining companies have healthy balance sheets. In the current environment, AuAg expects smaller and mid-cap producers to outperform the mega-cap companies.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold, silver down as USDX sharply up, Treasury yield rise

Gold, silver down as USDX sharply up, Treasury yield rise

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Gold, silver down as USDX sharply up, Treasury yield rise teaser image

(Kitco News) – Gold and silver prices are lower in midday U.S. trading Tuesday, pressured by strong gains in the U.S. dollar index and a rise in U.S. Treasury yields. February gold was last down $15.60 at $2,035.90. March silver was last down $0.214 at $23.115.

U.S. stock index futures are lower at midday. As U.S. traders get back from a long holiday weekend (U.S. markets were closed Monday for the Martin Luther King holiday.) they found elevated risk aversion in the marketplace following weekend Houthi attacks on vessels in the Red Sea, and U.S. and U.K. retaliatory air strikes in Yemen. That helped to push the U.S. dollar index sharply higher today.

In other news, China’s central bank leaving its monetary policy unchanged disappointed those looking for more stimulus amid recent downbeat economic data from the world’s second-largest economy.

The key outside markets today see the U.S. dollar index sharply higher and hitting a four-week high. Nymex crude oil prices are near steady and trading around $72.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.043%.

Technically, February gold futures bulls still have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at $2,050.00 and then at today’s high of $2,062.80. First support is seen at today’s low of $2,034.60 and then at $2,025.00. Wyckoff's Market Rating: 6.5.

March silver futures bears have the overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.895. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. First resistance is seen at today’s high of $23.50 and then at last week’s high of $23.72. Next support is seen at $23.00 and then at last week’s low of $22.63. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed up 320 points at 377.25 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 390.00 cents. The next downside price objective for the bears is closing prices below solid

technical support at 365.00 cents. First resistance is seen at last week’s high of 384.05 cents and then at 388.00 cents. First support is seen at last week’s low of 373.50 cents and then at the December low of 372.90 cents. Wyckoff's Market Rating: 4.0.

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 .

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David

Hedge funds are selling their gold, but they are not bearish

Hedge funds are selling their gold, but they are not bearish

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Hedge funds are selling their gold, but they are not bearish teaser image

Volatility surrounding U.S. interest rates is taking its toll on gold prices as hedge funds liquidated their bullish bets but remain hesitant to make any significant bearish bets, according to the latest trade data from the Commodity Futures Trading Commission.

Although gold prices have managed to hold solid support above $2,000 an ounce, some analysts note that shifting momentum in the marketplace could weigh on prices in the near term.

In an interview with Kitco News, Craig Erlam, senior market analyst at OANDA, said that he sees the price action in the precious metal as a “tossup” as the market lacks a catalyst to drive prices higher.

The CFTC's disaggregated Commitments of Traders report for the week ending Jan. 6 showed money managers decreased their speculative gross long positions in Comex gold futures by 20,051 contracts to 134,333. At the same time, short positions increased by only 639 contracts to 45,874.

The latest selling pressure has pushed gold’s net length to a two-month low. The precious metal is net long by 88,459 contracts. However, the market has been reasonably stable as prices have traded in a range between $2,000 and $2,050 an ounce.

Some analysts note that gold is consolidating as the market has no clear guidance regarding the Federal Reserve’s monetary policy. Markets see a more than 70% chance of a rate cut in March; however, some central bankers have pushed back on that timing, even as they prepare for eventual easing.

Commodity analysts at TD Securities noted that economic data has not provided any clear indication and is adding to the market volatility and uncertainty.

“Investors reduced length as Fed funds futures sold off and doubts emerged surrounding the early timing and magnitude of the pending policy rate reductions. Strong labor markets are associated with continued inflation pressures. And with core CPI much above the two percent target, the market concluded that a very early Fed easing is not in the cards,” the analysts said in a note Friday. “But with the most recent production prices coming in at below expectations, the market is once again going long, as it anticipates an early end to restrictive policy. It is likely that there will be data-driven volatility as gold trends to our $2,200/oz Q2 target.”

Commodity analysts noted that although $4.1 billion flowed out of the gold market last week, the selling pressure has firmly pushed the market outside of overbought territory.

Although the gold market appears to be running out of steam, waiting for the Federal Reserve’s long-expected pivot, analysts note that investors are reluctant to take any major short position in the precious metal.

Some analysts note that renewed chaos in the Middle East as U.S. and U.K. militaries U.S. and UK militaries bomb Houthi militants in Yemen. The U.S. continued its bombardment through the weekend.

Some analysts note that geopolitical safe-haven demand should continue to support gold prices above $2,000 an ounce.

While investors are reluctant to short gold, there is more give and take in the silver market, as investors increase their bearish bets while liquidating their long positions.

The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures fell by 6,032 contracts to 32,392. At the same time, short positions rose by 1,677 contracts to 24,044.

Silver’s net length now stands at 8,348 contracts, down sharply from the previous week, falling to a two-month low.

Along with gold, silver is also struggling due to market volatility surrounding the Federal Reserve’s monetary policy; however, analysts also note that silver is also struggling as concerns over the global economy continue to grow.

During the survey period, silver prices traded in a fairly tight range between $23.00 and $23.50 an ounce.

Many commodity analysts have said that a potential global recession could weaken silver’s industrial demand, which has been a significant support for prices.

At the same time, analysts also see limited downside as the green energy transition and unprecedented demand for solar energy will remain a solid pillar of strength for silver, even in the face of a recession.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Will Bitcoin ETF follow in gold’s footsteps?

Will Bitcoin ETF follow in gold’s footsteps?

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Will Bitcoin ETF follow in gold’s footsteps? teaser image

(Kitco News) – The gold market continues to hold its own early in the new year as geopolitical turmoil in the Middle East supports safe-haven demand. However, it’s not gold that is attracting a lot of attention.

We saw history made this week after the Securities Exchange Commission approved 11 spot Bitcoin exchange-traded products. What makes the announcement so interesting is that it was preceded by significant confusion. A day before the SEC announced its decision, its social media account was hijacked and a fake announcement was released.

Interestingly, the new ETFs haven’t provided any new momentum for the digital currency. Bitcoin prices are ending the week pretty much where it started. However, most analysts recommend investors look past the short-term price action and if you want to know where cryptocurrencies are headed, you only have to look at gold.

The first gold ETF was launched back in 2008, and it completely transformed the market, creating new opportunities for a wide range of investors. By 2011, gold prices hit its first record highs above $1,800 an ounce. To this day, ETF investor demand remains an important pillar of the marketplace.

The new Bitcoin ETFs will create new opportunities and attract a wider variety of generalist investors. These new ETFs are backed by the world’s biggest asset management firms, including BlackRock, VanEck, and Grayscale, to name just a few. Bitcoin is no longer a fringe asset.

Some analysts have said this could impact the gold market as the market continues to digest the latest evolution in cryptocurrencies. When it comes to accessible alternative assets, gold has always been at the top of the list; it’s liquid, a store of value and has low correlations to the broader marketplace; however, Bitcoin also meets this criteria and now there is a new dimension that puts it on par with gold: it’s accessible.

In an interview with Kitco News, Joy Yang, Global Head of Index Product Management at MarketVector Indexes, said the approval of a Bitcoin ETF could keep gold prices range-bound near $2,000 an ounce through most of the year as the cryptocurrency becomes an attractive alternative asset.

“A Bitcoin ETF will be the shiny new thing in the market, and a lot of investors like shiny new things,” she said.

We have already seen how solid demand for Bitcoin has impacted the gold market. In 2021, gold prices were affected by roughly 3%, as FOMO (Fear of Missing Out) drove Bitcoin prices to record highs of nearly $69,000 per token.

A lot has changed in the last four years and it's unlikely we will see that big of an impact this time around. While Bitcoin ETFs are shiny and new, we have seen in the last couple of years that when uncertainty is high, investors continue to prefer investments that they can hold that have tangible value. Gold has thousands of years of history as being a store of wealth and value right now.

While investment demand may remain sluggish, central banks continue to buy gold nearly as fast as it can be mined out of the ground. This past week The People’s Bank of China bought nine tonnes of gold in December. The buying frenzy has slowed, but it hasn’t disappeared.

Official sector demand has become another important pillar for the gold market and according to many analysts, this sector should continue to support gold above $2,000 an ounce through 2024.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold will be sensitive to USD strength, $ 2,000 might not hold – HSBC

Gold will be sensitive to USD strength, $ 2,000 might not hold – HSBC

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Gold will be sensitive to USD strength, $ 2,000 might not hold – HSBC teaser image

(Kitco News) – Weakness in the U.S. dollar helped to propel gold prices to record highs in the final month of 2023. While gold remains above $2,000 an ounce, currency analysts at HSBC are warning investors that this level might not hold in the new year.

Although gold has managed to hold its own in the first two weeks of 2024, HSBC noted that its precious metals team sees the market as overstretched and is expected to decline as higher prices take their toll on physical demand, weighing on jewelry and bullion sales.

At the same time, the bank’s currency analysts expect to see renewed momentum in the U.S. dollar, which will also weigh on prices. The biggest driver for the greenback remains the Federal Reserve’s restrictive monetary policy.

The currency analysts said markets could be too aggressive in pricing in expected rate cuts this year. If the market proves to be too optimistic on easing, it could provide new bullish momentum for the U.S. dollar.

“Market expectations of Fed rate cuts amounting to 138bp are well above what the Fed’s dot plot implies, as well as our economists’ forecast for 75bp worth of cuts,” the analysts said. “Should the scale of these anticipated cuts not fully materialize, then the price of gold may backtrack.”

At the same time, HSBC analysts note that a few rate cuts this year will also support higher real interest rates, creating another headwind for the precious metal.

“Gold is historically sensitive to US real rates, and while there has been a significant disconnect in this relationship, our precious metals analyst thinks that positive real rates could be a headwind for gold this year,” HSBC said in the report.

So far, markets haven’t given up on the idea that the Federal Reserve will start to cut rates in March, even as inflation pressures remain stubbornly elevated. HSBC’s note was published ahead of December’s Consumer Price Index, which showed core consumer prices in the U.S. rising 3.9% in the last 12 months, coming in hotter than expected.

Despite stubborn inflation, markets still see a more than 68% chance of a rate cut at the March meeting.

While gold could be vulnerable to some selling pressure in the next few months, HSBC does see a limit to the downside.

“A number of bedrock factors will sustain the price of gold at what would still be a historically high level,” HSBC said. “For example, geopolitical and trade risks are elevated and may stay high in 2024, as 75 nations hold elections, lending underlying support to gold prices. And central bank demand remains historically strong, triggered by geopolitical risks and portfolio diversification needs, but may not be fully sustained at price levels above $2,000 per ounce.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold, silver tread water ahead of key U.S. inflation data

Gold, silver tread water ahead of key U.S. inflation data

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Gold, silver tread water ahead of key U.S. inflation data teaser image

(Kitco News) – Gold and silver prices are not trading too far from unchanged levels on the day in midday dealings Wednesday. Traders are awaiting the U.S. data points of the week: the December consumer price index report on Thursday and the December producer price index report on Friday. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report. February gold was last down $1.80 at $2,031.00 and March silver was last down $0.056 at $23.04.

The Federal Reserve has been pleased with cooling U.S. inflation—to the point of hinting of no more interest rate increases and possibly interest rate cuts in 2024. The Fed would like to see annual U.S. inflation rates of around 2%.

Most of the marketplace expects the CPI and PPI numbers late this week to be tame on inflation. If the numbers are printed as expected look for the stock, financial and commodity markets to view that as friendly, as traders would reckon that would allow the Fed to ease its monetary policy sooner—meaning better demand for goods and services, and better consumer confidence. It’s my bias, too, that this week’s U.S. inflation numbers will not contain markets-moving surprises. There is presently an outlier group of markets watchers that believes deflationary price pressures could come into play later this year.

Importantly, inflation reports in the coming few months may be more worrisome for the marketplace and for central bankers. The heightened Middle East tensions include Iranian-backed Houthi attacks on shipping vessels in the Red Sea. The Red Sea is one of the world’s major shipping routes. Some shippers have opted to avoid the Red Sea altogether and instead traverse the much longer route all the way around the African continent. Of course, that means longer supply chain delivery times and higher shipping costs. Reads a Dow Jones Newswires headline today: “Importers face surging shipping costs, delays as Red Sea diversions pile up.”

The shipping delays and higher costs could push up producer price inflation in the coming months, and in turn raise costs to the consumer. You can bet the world’s central bankers are watching this situation closely.

Asian and European stock markets were mixed overnight. U.S. stock index futures are slightly up near midday.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are slightly down and trading around $72.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.019%.

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,046.20 and then at this week’s high of $2,053.30. First support is seen at this week’s low of $2,022.70 and then at $2,015.00. Wyckoff's Market Rating: 6.5.

March silver futures bears have the overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. First resistance is seen at this week’s high of $23.565 and then at $23.715. Next support is seen at last week’s low of $22.88 and then at the December low of $22.785. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 30 points at 375.55 cents today. Prices closed near the session low today and hit a three-week low. Prices also scored a bearish “outside day” down on the daily bar chart. The copper bears have the slight overall near-term technical advantage. A choppy, 2.5-month-old uptrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 397.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 365.00 cents. First resistance is seen at today’s high of 379.30 cents and then at this week’s high of 384.05 cents. First support is seen at the December low of 372.90 cents and then at 370.00 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 .

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David

Gold up a bit on still-friendly charts

Gold up a bit on still-friendly charts

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Gold up a bit on still-friendly charts teaser image

(Gold prices are a bit higher and silver a bit weaker in midday U.S. trading Tuesday. Technical-based buying is featured in gold as the charts still firmly favor the bulls. Higher crude oil prices are also bullish for the metals today. However, gains in the metals are being limited by a firmer U.S. dollar index and a slight up-tick in U.S. Treasury yields on this day. February gold was last up $3.50 at $2,036.90. March silver was last down $0.12 at $23.19.

U.S. stock index futures are mixed at midday.

In overnight news, reports said China’s central bank has indicated it may lower its reserve requirement ratio to boost lending and support economic growth, the head of the central bank’s monetary policy department told a local news agency. The PBOC official’s remark does not suggest an imminent cut but may indicate such action is on the table in the coming months, Bloomberg reported. Similar comments were made last July before the central bank reduced the reserve requirement ratio for major banks in September of last year. The metals markets may also be getting some support from this news, which could promote better consumer and commercial demand for metals from China in the coming months.

The U.S. data points of the week will be the December consumer price index report on Thursday and the December producer price index report on Friday. U.S. inflation has cooled in recent months, which has allowed the Federal Reserve to back off on its tighter monetary policy. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report.

The key outside markets today see the U.S. dollar index moderately higher. Nymex crude oil prices are solidly higher and trading around $72.75 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.011%.

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at this week’s high of $2,053.30 and then at last Friday’s high of $2,071.10. First support is seen at this week’s low of $2,022.70 and then at $2,015.00. Wyckoff's Market Rating: 6.5.

March silver futures bears have the overall near-term technical advantage. A five-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. First resistance is seen at today’s high of $23.565 and then at $23.715. Next support is seen $23.00 and then at the December low of $22.785. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 320 points at 377.80 cents today. Prices closed nearer the session low today and hit a three-week low. Prices also scored a bearish “outside day” down on the daily bar chart. The copper bulls have lost their slight overall near-term technical advantage. A choppy, 2.5-month-old uptrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 397.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 365.00 cents. First resistance is seen at today’s high of 384.05 cents and then at 386.60 cents. First support is seen at today’s low of 377.40 cents and then at 372.90 cents. Wyckoff's Market Rating: 5.0.

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 tomy new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David

Gold weaker as crude oil price slumps

Gold weaker as crude oil price slumps

Kitco News

The Leading News Source in Precious Metals

Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.

Gold weaker as crude oil price slumps teaser image

(Kitco News) – Gold prices are down in midday U.S. trading Monday but well up from their session lows. The yellow metal hit a three-week low early on today. Amid a lack of major fresh, fundamental news to start the trading week, precious metals traders are focusing on the outside markets, and raw commodity sector leader crude sees its price sharply down. February gold was last down $10.90 at $2,038.70. March silver was last up $0.065 at $23.385.

 

Asian and European stock markets were mixed overnight. U.S. stock index futures are mixed at midday.

In weekend news, U.S. congressional leaders have agreed upon a bipartisan federal budget plan for the next year. The House and Senate now have about two weeks to pass the measure, which may not be easy.
 

The U.S. data points of the week will be the December consumer price index report on Thursday and the December producer price index report on Friday. U.S. inflation has cooled in recent months, which has allowed the Federal Reserve to back off on its tighter monetary policy. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report.
 

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are strongly lower and trading around $70.25 a barrel. Reports said Saudi Arabia has lowered the price of its oil to some of its customers, in a signal of a weaker demand outlook. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.974%.

Technically, February gold futures bulls have the overall near-term technical advantage but have faded a bit. Prices are still in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,053.30 and then at last Friday’s high of $2,071.10. First support is seen at today’s low of $2,022.70 and then at $2,015.00. Wyckoff's Market Rating: 6.5.

March silver futures bears have the overall near-term technical advantage. A five-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. First resistance is seen at Friday’s high of $23.715 and then at $24.00. Next support is seen $23.00 and then at the December low of $22.785. Wyckoff's Market Rating: 4.0.

 

March N.Y. copper closed up 130 points at 381.90 cents today. Prices closed nearer the session high today and hit a three-week low early on. The copper bulls have the slight overall near-term technical advantage but have faded. Prices are still in a choppy, 2.5-month-old uptrend on the daily bar chart, but just barely. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the July high of 404.45 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 372.90 cents. First resistance is seen at Friday’s high of 386.60 cents and then at last week’s high of 391.20 cents. First support is seen at today’s low of 378.95 cents and then at 372.90 cents. Wyckoff's Market Rating: 5.5.

 

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 .

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David

Gold stuck around $2,050 as markets look for guidance on Fed cuts next week

Gold stuck around $2,050 as markets look for guidance on Fed cuts next week

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Gold stuck around $2,050 as markets look for guidance on Fed cuts next week teaser image

According to many analysts, the gold market is off to a decent start after the first trading week of 2024 even as the price lost some ground as it consolidated at elevated levels between $2,000 and $2,050 an ounce.

February gold futures are ending the week around $2,050 an ounce, down 1% from last week.

According to some analysts, the market remains caught in a tug-of-war as investors try to anticipate the Federal Reserve’s next move. Markets are currently pricing in a 68% chance of the first rate cut at the March monetary policy meeting.

However, some economists have said that after December’s employment numbers, it is unlikely that the U.S. central bank will be ready to cut rates that early in the new year. The latest employment data shows 216,000 jobs were created last month and wages grew by 0.4%.

“The jobs report lends credence to the view that the Fed is likely to continue pushing back against the early rate cuts being priced in by the market until the signal becomes clearer,” said fixed income analysts at TD Securities. “With that said, we do expect inflation to continue softening over the next few reports, which should keep the door open for rate cuts in Q2.”

At the same time, Philip Streible, chief market strategist at Blue Line Futures, said that rate cut expectations remain elevated because some analysts believe the latest jobs report shows cracks in the labor market are starting to appear. He noted that a high number of government jobs in the December report appear to be skewing the data.

Streible added that with a March rate cut on the table, gold should be well supported above $2,000 an ounce; however, he added that he doesn’t know if there is enough momentum to push prices solidly above $2,050 an ounce.

“Right now is a coin flip and that will keep gold in this consolidation range,” he said.

James Stanley, senior market strategist at Forex.com, said that the price action this week indicates that gold is capped at $2,050 in the near-term; however, he added that the gold bears will find a difficult path on the downside as the Federal Reserve is still expected to lower interest rates this year.

“Think this resistance will hold long enough to give a dip… but that may take a month or two,” Stanley said. “When the Fed does formally pivot this thing can take off. But real rates will need to get higher first before they can declare a ‘W’ on inflation, and with an election year I think they'd want to have that pivot a little closer to November. Ideally [gold] should push below 2k and wash out some longs first. Then, more money on the sidelines could further propel higher.”

Although markets are back to a full five-day week next week, investors are expected to continue to digest December’s employment numbers. The main highlight comes late next week with December’s Consumer Price Index report. According to some economists, inflation data could solidify the Federal Reserve’s move in March.

Some economists have pointed out that although consumer prices have dropped from their 2022 highs, the Federal Reserve still has work to do to bring inflation down to its target of 2%.

The expectations are that headline inflation will remain around 3%; however, core inflation is expected to remain around 4%, double the central bank’s target.
 

Economic data for next week:

Thursday: US CPI, weekly jobless claims

Friday: U.S. PPI
 

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David