Gold prices remain above $2,300 as investors bet on Fed rate cut

After hitting a new all-time record high of $2325.30 gold futures basis the most active June contract has experienced a slight price decline today. As of 5:05 PM EDT the June contract is currently fixed at $2308.50, down $6.50, or -0.28%.

Gold futures pricing was supported today as investors continued to bet on interest rate cuts by the Federal Reserve later this year. The precious metal's safe-haven appeal also received a boost amid growing geopolitical tensions.

Despite the modest pullback, expectations of the Fed lowering interest rates in the coming months remained elevated. In a speech at the Stanford Graduate School of Business, Fed Chair Jerome Powell confirmed the central bank's resolve to bring inflation back down to the 2% target, but emphasized that the overall economic landscape is still positive.

Powell highlighted the economy's robust growth, resilient labor market, and gradually moderating inflation, saying, "We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2%. Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy."

While the Fed chair and other officials stressed the need for more data before cutting rates, a move financial markets widely expect in June, investors remained convinced that rate reductions are on the horizon. Futures markets are currently pricing in around a 60% chance of a rate cut at the Fed's June meeting, with expectations for a total of 75 basis points of cuts by the end of the year.

The case for a more accommodative Fed policy stance was further bolstered by recent economic data, including an unexpected surge in U.S. jobless claims and slower services industry growth. Meanwhile, the European Central Bank's (ECB) latest meeting minutes showed officials saw a stronger case for beginning their rate-cutting cycle.

In addition to the rate-cut bets, gold prices found support from safe-haven demand amid heightened geopolitical risks. Strong central bank buying, particularly from emerging market economies, also contributed to the precious metal's appeal.

Looking ahead, all eyes will be on the U.S. jobs report for March, scheduled for release on Friday, April 5. Economists predict the economy added 200,000 jobs last month, with the unemployment rate dropping to 3.8% and hourly earnings rising 0.3%. A softer-than-expected report could further fuel expectations of an imminent Fed pivot

Wishing you as always good trading,

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

David

Gold Futures Breach and Close Above $2300 for the First Time

In a historic move, gold futures surged past the $2300 mark for the first time in history. As of 4:30 PM EDT, gold futures basis the most active June contract is currently at a record high of $2318.90. The June contract opened at $2301.70 and traded to an intraday high of $2319.70. The precious metal's rally showed no signs of slowing down, with the June 2024 contract currently fixed at $2319.10 after factoring in today’s gain of $37.30, or 1.63%, marking the seventh consecutive trading day of gains.

This remarkable surge has been fueled by a combination of factors, chief among them being the growing expectations that central banks, including the Federal Reserve, are preparing to lower interest rates as inflation cools down. Chairman Jerome Powell, in his address to the Stanford Business, Government, and Society Forum, hinted at the possibility of rate cuts, stating that a lower interest rate would likely be appropriate "at some point this year" if the economy develops as expected. This statement heightened expectations for a Fed rate cut in June.

Traders and investors alike are closely watching the Federal Reserve's moves, with the CME's FedWatch tool indicating a 63% probability of the central bank initiating its first rate cut in June. This potential shift in monetary policy has further fueled gold's appeal as a safe-haven asset and an inflation hedge.

The weakening U.S. dollar has also played a significant role in gold's ascent. The dollar index dipped 0.48% to 104.324.

Technical analysis also suggests that gold's rally may continue. A bullish pattern known as a “bull flag” was identified in mid-March, pointing to a potential target of $2327 for this current leg of the rally. The projection is based on measuring the price differential from the beginning to the end of the “pole”. The pole began on Thursday, February 29 when gold futures were fixed at $2058.20, and concluded on or about March 11 at $2215, for a price increase of $157. We then calculated from the bottom of the “flag” which occurred at $2170 on March 17, and we added $157 to get our target, the same distance as the “pole”.

Market participants and investors seek refuge amid economic uncertainties and central banks grapple with inflation, gold's status as a reliable store of value has once again been solidified. With its historic breach of the $2300 barrier, if you were not paying attention to gold before you probably are now.

Wishing you as always good trading,

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

David

Multiple factors combined takes June gold futures to a new benchmark, $2300

As of 4:55 PM EDT the most active June contract of gold futures is fixed at $2300.60, up $28.100. This marks the sixth consecutive day of gains for the precious yellow metal, with the last four trading sessions culminating in new record closes.

During the past five days, gold managed to overcome the headwinds of four days of dollar strength, which typically dampens the appeal of the yellow metal. Also, gold was able to overcome rising yields in U.S. Treasuries, which also lessens the allure for gold.

The dollar's strength today can be attributed to a recent report revealing that U.S. manufacturing grew for the first time in 1 ½ years in March. Data from the U.S. showed that the country's factory orders rebounded more-than-anticipated, and the number of job openings slightly beat estimates in February, indicating the strength of the U.S. economy and narrowing the window for the Fed to start reducing interest rates.

Gold's recent gains also occurred as the CME's FedWatch tool lowered the probability of a rate cut in June from 60% to 58%. Last week the probability of a rate cut in June was at 70%, highlighting the shifting expectations surrounding the Fed's monetary policy stance.

Geopolitical tensions have also played a role in accelerating the demand for gold as a safe-haven asset. Growing conflicts in the Middle East, particularly an Israeli airstrike on Iran's embassy in Syria, have heightened concerns. Iran has vowed to retaliate against Israel for the attack on the Iranian embassy compound in Damascus, further elevating geopolitical uncertainty.

Supply constraints have also contributed to gold's recent surge. Central banks globally have been actively adding gold bullion to their reserves, diminishing available supply. Additionally, momentum hedge funds have been actively taking long positions in gold futures, further fueling the rally.

Moreover, rising oil prices have added to the demand for gold, as higher energy costs translate to heightened inflationary pressures down the road, making the precious metal an attractive hedge against inflation.

With a confluence of factors driving its ascent, gold's resilience and appeal have taken the most active June future’s contract above $2300 for the first time in history.

Wishing you as always good trading,

Kitco Media

Gary Wagner

Time to Buy Gold and Silver

David

Gold price hits new record highs as the West loses price-setting powers: Frank Giustra & Pierre Lassonde on new geopolitical reality & resource nationalism

As gold set another record high, Canadian mining legends Frank Giustra, CEO of Fiore Group, and Pierre Lassonde, Chairman Emeritus at Franco-Nevada, say the West has lost its power to set the price of gold. Giustra and Lassonde also warn that in the new geopolitical reality of resource nationalism, Canada is failing its economy and citizens.

With gold futures hitting another record high of above $2,264 an ounce at the start of the second quarter, Giustra and Lassonde pointed to a major shift in the gold market.

"The world hasn't woken up yet. The marginal buyer of gold is no longer the U.S. It's no longer Europe. It's China. Between the country's central bank and the Chinese public, China takes up over two-thirds of all the annual production. They are the new marginal buyer. That's where the gold price is set," Lassonde told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, during Kitco Insights Interactive Mining Titans' Power Panel.

For what this means for the U.S. dollar and gold this year and beyond, watch the video above.

BRICS Plus, which now includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, Ethiopia, Iran, and the United Arab Emirates, can get up one morning and say they are going "to back their collective new currency with gold," which they can now set to create more credit and reserves, Giustra pointed out.

A coordinated move by the BRICS Plus against the U.S. dollar could lead to violent results, he warned.

"No one wants war, but here's the problem — the U. S. is facing an existential threat. It's a national security issue," Giustra said. "If there's a sudden move towards replacing the U.S. dollar, meaning perhaps a BRICS announcement of a new currency [backed by] gold, I think then it would react quite violently.

Giustra also outlined the top geopolitical risks for 2024. For insights, watch the video above.

Has Canada lost the battle for resources?

Securing critical metals for the energy transition has become a matter of national security for many countries. However, Canada is losing this battle, according to Giustra and Lassonde.

While many countries are facing massive metal shortages, Canada is distracted with overseas investments. For example, Canadian pension funds that represent CAD$2.7 trillion of Canadian savings have more invested in China than they do in Canada, which is unforgivable, Giustra and Lassonde told Kitco News.

More specifically, Canadian pension funds have less than 3% of their total assets invested in Canadian public companies, down from 28% in 2000.

"When you look at the mineral sector in Canada, it's been totally ignored by the government for the last 40 years. Our politicians, both at the federal and the provincial level, couldn't care less about the mining industry," Lassonde said. "Frank says we could lose the race. We've already lost the race."

Giustra pointed out that bold action is required to solve this crisis, but Canada lacks visionary leadership.

"Canada is endowed as one of the most prolific mineral countries on the planet, the second largest landmass in the world, and largely unexplored. [However], there is almost zero investment in the Canadian mineral sector. It's worrisome. Canada's in danger of losing out in this race for critical minerals," he said.

On what this all means for Canada's economy and some of the irreversible consequences, watch the video above.

This panel is brought to you by Eagle Plains Resources.

Eagle Plains is a mineral exploration company operating for 30 years with over 50 projects in Western Canada. The company has over $7M cash, generates significant revenue, has only 115M shares outstanding, and has never been rolled back.

Kitco Media

Michelle Makori

Time to Buy Gold and Silver

David

Gold price solidly up, very near all-time highs

Gold prices are sharply up in midday U.S. trading Thursday, near the daily highs, and are closing in on the recent record highs. Silver prices are modestly higher. More technical buying is featured in both metals, amid bullish charts. June gold was last up $27.10 at $2,239.90. May silver was last up $0.198 at $24.95.

It was a very busy U.S. data release schedule Thursday, but none of the data contained big surprises and the markets showed no major reactions. U.S. markets are closed Friday for the Good Friday holiday but personal income and outlays, including PCE inflation data, will be released that day.

Today is the last U.S. trading day of the week, of the month and of the quarter, which makes it an important trading day from a technical chart perspective. Gold today is set to close at a very bullish weekly, monthly and quarterly high close today, as well as a record high close in futures markets.

U.S. stock indexes are mixed at midday. The U.S. stock indexes continue on a slow and steady rise and are near their recent record highs.

Federal Reserve Governor Christopher Waller said Wednesday recent stronger-than-expected U.S. inflation data is “disappointing” and said that he wants to see “at least a couple months of better inflation data” before cutting, Bloomberg reported. “In my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data,” Waller said.

The key outside markets today see the U.S. dollar index slightly higher but down from the daily high. Nymex crude oil prices are higher and trading around $82.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.2%.

Technically, the gold futures bulls have the solid overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the contract high of $2,246.60. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $2,170.80. First resistance is seen at the contract high of $2,246.60 and then at $2,250.00. First support is seen at today’s low of $2,207.50 and then at $2,200.00. Wyckoff's Market Rating: 9.0.

The silver bulls have the overall near-term technical advantage but have faded recently. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at last week’s high of

$25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week’s high of $25.055 and then at $25.50. Next support is seen at this week’s low of $24.445 and then at $24.22. Wyckoff's Market Rating: 6.0.

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Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David

U.S. Core PCE rises 0.3% in February, in line with expectations

Gold investors, with nothing else to do, can at least breathe a sigh of relief as inflation pressures rise in line with expectations.

Friday, The U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.3% last month. The data rose in line with economist expectations.

However, as a sign that inflation pressures aren’t going away, the report also noted an upward revision for January, with core inflation rising by 0.5%.

For the last 12 months, consumer price pressure continued to ease, rising 2.8% in February. Although inflation is still well above the Federal Reserve’s target of 2%, it continues to trend lower.

The report said headline inflation rose 0.3% last month, a tick lower than expected. Economists were looking for a 0.4% increase. For the year, headline inflation rose 2.5%, in line with consensus projections.

Markets are closed for Good Friday, so there has been no reaction to the latest inflation data.

With inflation pressures rising in line with expectations, investors could start to focus on a growing imbalance in the economy as consumers spent more than they made last month.

The report said wages increased less than expected last month, rising 0.3%. According to consensus forecasts, economists were looking for a 0.4% increase. Meanwhile, personal consumption jumped 0.8% in February. Economists forecasted a 0.5% increase.

According to some economists, the in-line inflation data could support the Federal Reserve's plan to begin its easing cycle in June, even as inflation remains elevated.

Last week, the Federal Reserve signaled it wanted to cut interest rates three times this year, even as inflation was holding around 2.4%.

An impending pivot in the U.S. central bank’s aggressive monetary policies has emboldened gold investors in recent days. Thursday, during the final trading day in March and the first quarter, June gold futures rose to a new all-time high of $2,256.90 an ounce and settled the session at $2,234.40 an ounce.

In an interview with Kitco News, Darin Newsom, Senior Market Analyst at Barchart, said that inflation could be one factor in why the gold market has been able to defy fundamental and technical logic.

Gold’s rally on Thursday came despite resilient strength in the U.S. dollar, which closed the session near a six-week high above 104 points.

“Gold could be telling us that inflation will stay around for a while. And that there's a real there's a real threat geopolitically,” he said.

Some analysts have also noted that gold doesn’t actually need a rate cut to maintain its upward trajectory. While higher inflation could keep the Federal Reserve from cutting rates this year, it is unlikely they will raise interest rates. This environment would still push real interest rates lower, which should weigh on the U.S. dollar, supporting gold prices.

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold appears unstoppable as it hits record highs above $2,250, capping off a solid month and quarter

The gold market continues to be an unstoppable juggernaut as it closes out the month and quarter near a record high, solidly above $2,200 an ounce.

Analysts note that gold’s performance on Thursday, which wraps up a shortened trading week ahead of the Easter long weekend, is even more impressive when compared to the U.S. dollar Index, which is trading near a six-week high above 104 points.

Gold prices last traded at $2,241 an ounce, up 2.7% from last week. For the month, gold is up 9%, and for the quarter, the precious metal is up 8%.

Gold’s further push into blue sky territory also comes ahead of important inflation data. Although markets are closed for Easter, it is not a recognized government holiday, so the U.S. Bureau of Economic Analysis will be releasing its Personal Consumption Expenditures (PCE) Index. According to consensus estimates, economists expect inflation to have risen 0.3% in February.

Some analysts have said that gold is attracting new momentum because inflation is less of a threat than it was. Last week the Federal Reserve signaled that it still looks for three rate cuts this year even as they see inflation holding above its 2% target.

Darin Newsom, Senior Market Analyst at Barchart said that the gold rally is a signal that investors are worried that the Federal Reserve won’t be able to get inflation under control as it starts to cut interest rates.

He added that he also sees gold well supported as a geopolitical risk hedge.

“Geopolitical fears are still out there and will only continue to grow as we approach the November U.S. election,” he said. “If the Fed starts cutting rates, bond yields will fall, which makes gold a more attractive safe-haven.”

At the same time, some analysts note that the U.S. dollar is losing its grip on the gold market as U.S. government debt continues to spiral higher.

“Gold is not expensive. The truth is that the U.S. dollar is cheap as the government floods the global economy with it,” said Julia Khandoshko, CEO at the European broker Mind Money, in an interview with Kitco News.

Although the Federal Reserve has been tightening its balance sheet as part of its aggressive monetary policy, some analysts have noted that the nation’s money supply continues to grow.

David Kranzler, precious metals analyst and creator of the The Mining Stock Journal said in a comment on social media that the U.S. The Monetary Base, as measured by Money Zero Maturity (MZM), is up nearly 10% since March 2023.

“Gold smells a massive money-printing program coming at some point. In fact, low-grade money printing has already occurred,” he said.

MZM represents money readily available within an economy for spending and consumption. and includes M2 money supply, less the time deposits, plus all money market funds.

Regardless of what is driving gold at its record highs, Adam Button, Chief Currency Strategist at Forexlive.com said that he expects this is only the start of the rally.

Despite gold’s historic rally, Button said that the precious metal sector continues to be ignored in the broader marketplace. He added that the mining sector, while off its lows is still significantly undervalued compared to gold prices.

“This quiet rally is extremely encouraging for gold investors,” he said. “This is not an exhausted bull market. The time to sell is when everyone is talking about gold and the miners are taking off.”

Although Button is bullish on gold, he added that investors should wait for a pullback before jumping in. He pointed out that there appears to be some initial support at $2,150 that could attract some buyers.

Ole Hansen, Head of Commodity Strategy at Saxo Bank said that he expects the gold market to have further upside potential. He added that it's more than just momentum that is pushing gold prices higher.

“Gold’s continued ability to withstand headwinds from dollar and yield movements is nothing but impressive and it highlights a market that continues to attract demand making it a relatively easy task for hedge funds to defend their huge long positions,” he said. “My main concern during the past couple of weeks has been the risk of weakness forcing a cascade of long liquidation, but with prices now above $2,200 that risk continues to fade.”

Although gold is ending a shortened trading week on a strong note, next week does present new risks. The economic calendar next week will focus on the U.S. labor market with March’s nonfarm payrolls report on Friday as the highlight.

The week also features a solid lineup of central bank speakers including Federal Reserve Chair Jerome Powell, who will be speaking at Stanford's Business, Government, and Society Forum.

Some analysts have said that stronger employment numbers, coupled with stubborn inflation may force the Federal Reserve to push back the start of its approaching easing cycle.

“Macro traders certainly still have scope to add to their gold length — but only if rates market expectations notably firm. This places the onus on upcoming data to corroborate the Fed's outlook for three cuts this year, but continued strength in the data with little change in tone from the FOMC also raises the risk of a buyer's strike in Treasuries, leading to higher rates that could mechanically weigh on the yellow metal through the re-accumulation of macro trader short acquisitions,” said commodity analysts at TD Securities.

Economic data for the week

Monday: ISM Manufacturing PMI

Tuesday: JOLTS job openings

Wednesday: ADP nonfarm employment change, ISM Service Sector PMI, Powell to speak

Thursday: Weekly jobless claims

Friday: Nonfarm payrolls

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold gains on technical buying, friendly outside markets

Gold prices are posting decent gains in midday U.S. trading Monday, supported by chart-based buying amid bullish technicals, and by friendly daily “outside market” forces that see the U.S. dollar index lower and crude oil prices higher. Silver prices are trading slightly up. April gold was last up $16.80 at $2,176.70. May silver was last up $0.042 at $24.885.

Broker SP Angel this morning said in an email dispatch that China and other central banks continue to buy gold. “Recent interest rate moves by major central banks of Japan, Taiwan and Turkey along with the expectations for U.S. rate cuts are making gold increasingly attractive. Investors also remain concerned at the level of high government debt supported by the U.S. and China.”

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are higher and trading around $82.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.25%.

Technically, April gold futures bulls have the solid overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the contract and record high of $2,225.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,149.20. First resistance is seen at the overnight high of $2,182.50 and then at Friday’s high of $2,188.00. First support is seen at today’s low of $2,164.40 and then at Friday’s low of $2.158.40. Wyckoff's Market Rating: 8.0.

May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at Friday’s high of $25.11 and then at $25.50. Next support is seen at last week’s low of $24.58 and then at $24.22. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 80 points at 401.55 cents today. Prices closed near mid-range. The copper bulls have the firm overall near-term technical advantage but appear tired now. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 416.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 385.00 cents. First resistance is seen at today’s high of 404.70 cents and then at Friday’s high of 406.65 cents. First support is seen at today’s low of 399.05 cents and then at 396.75 cents. Wyckoff's Market Rating: 7.0.

Kitco Media

Jim Wyckoff

Time to Buy Gold and Silver

David