Gold investment potential remains healthy despite Fed’s hawkish stance – State Street’s Milling-Stanley

Gold investment potential remains healthy despite Fed's hawkish stance – State Street's Milling-Stanley

Although the gold market is suffering from a lack of momentum, the precious metal's investment potential remains healthy, with plenty of potential to grow, according to one market strategist.

In an interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that the key to growing investment demand could be further education on the benefits of holding gold as part of a diversified portfolio.

He added that despite the lack of momentum, gold's ability to hold solid support above $1,900 is a strong signal that the market is poised for a new uptrend when momentum picks up.

Milling-Stanley's optimistic comments on gold come as State Street releases an update to its gold investor survey published in June. The updated analysis looked at the role financial advisors can play in developing the gold market.

The survey showed that 20% of respondents said they held some gold. In further analysis, the report said that roughly one-third of investors didn't invest in gold because they didn't know enough about how to invest in the precious metal.

The survey also showed how important an advisor's role is when it comes to bringing investors into the gold market. According to the analysis, 91% of respondents who own gold ETFs indicated they were informed by their financial advisor about the different ways to invest in gold.

"The main message from the analysts is that the future of gold investment seems to be safe. That is very, very good news," said Milling-Stanley. "There is a job for the industry at large to do in terms of educating investors and potential investors."

Milling-Stanley said he expects investment demand in gold to pick up as investors realize the value it creates for a portfolio. He noted that despite gold's lackluster performance so far this year, the market has built a solid base more than $200 above last year's lows.

Gold has struggled to attract investor attention as the Federal Reserve has aggressively raised interest rates to 5.25%. Wednesday, the Federal Reserve left interest rates unchanged; however, Central Bank Chair Jerome Powell signaled that interest rates could remain in restrictive territory longer than anticipated.

  Gold shining against Swiss franc and British pound as both central banks leave rates unchanged

Although interest rates are expected to remain higher or longer, Milling-Stanley said it is not a significant threat to the gold rally, because Wednesday's decision is providing little new momentum for the U.S. dollar.

Milling-Stanley added that gold can still outperform against the U.S. dollar if equity markets start to weaken as the Federal Reserve's stance takes its toll on economic activity.

"At the start of the year, I said that equity markets have more to fear from the Fed than gold and I still believe that," he said. "Yes, the economy has been very resilient so far this year, but Powell said on Wednesday that they still need below trend growth to get inflation down to the 2% target. Investors should believe Powell when he says that because he means it."

Milling-Stanley said that despite the Federal Reserve's aggressive actions, core inflation, which strips out volatile food and energy prices, has only fallen 1% from its peak.

"I don't expect we will see a recession, but investors should prepare themselves for a period of slower growth and gold can provide some diversification in this environment," he said.

By

Neils Christensen

For Kitco News

Time to Buy Gold and silver

David

News Bites The U.S. and China are on ‘brink of war’ as gold touches record highs and banking sector troubles intensify

News Bites

The U.S. and China are on 'brink of war' as gold touches record highs and banking sector troubles intensify

Gold's price action was defined by major volatility this week. Gold Comex futures tested record highs as the banking sector troubles intensified. Markets also dissected Federal Reserve Chair Jerome Powell's messaging, while Friday's stronger-than-expected U.S. employment report weighed on gold.

Here's a look at Kitco's top three stories of the week:

3. Comex gold prices test record highs and touch $2,085 an ounce.

2. There's a new U.S. debt ceiling deadline.

1. Ray Dalio: The U.S. and China are on 'the brink of an economic resources war'

By

Anna Golubova

For Kitco News

Time to Buy Gold and Silver

David

Gold, silver up after traders buy the early price dips

Gold, silver up after traders buy the early price dips

Gold and silver prices are firmer in midday U.S. trading Tuesday, as traders stepped in to do some perceived bargain hunting on early-session price pullbacks. Trading action is more subdued just ahead of this week’s monetary policy decisions by major central banks. February gold was last up $7.10 at $1,930.00 and March silver was up $0.057 at $23.795.

The U.S. data point of the week is the Federal Reserve Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Most believe the Fed will raise the key U.S. interest rate by 0.25%, following the recent 0.5% rate hikes. Trading in stock and financial markets may be more muted just ahead of the FOMC statement and press conference by Fed Chairman Jerome Powell Wednesday afternoon. The European Central Bank and Bank of England hold their monetary policy meetings Thursday.

Global stock markets were mostly lower overnight. U.S. stock indexes are higher at midday. Another tamer U.S. inflation report this morning mildly boosted trader and investor sentiment. The U.S. fourth-quarter employment cost index rose just 0.1% and was up 5.1%, year-on-year. The U.S. stock indexes are still in price uptrends on the daily bar charts and the stock index bulls have the overall near-term technical advantage.

 Gold is vulnerable to a pullback as Powell prepares to signal 'seriousness', but will hit an all-time high in 2023 – Adrian Day

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil futures prices are up and trading around $78.75 a barrel. Oil traders are awaiting an OPEC-plus cartel meeting Wednesday. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.523%.

 

Technically, February gold futures bulls have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,885.00. First resistance is seen at this week’s high of $1,933.60 and then at the January high of $1,949.80. First support is seen at last week’s low of $1,912.50 and then at $1,900.00. Wyckoff's Market Rating: 8.0

March silver futures bulls have the overall near-term technical advantage. However, trading has been choppy and sideways for weeks. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $24.775. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.000 and then at last week’s high of $24.415. Next support is seen at last Friday’s low of $23.39 and then at today’s low of $23.05. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed up 110 points at 421.25 cents today. Prices closed nearer the session high today. The copper bulls have the solid overall near-term technical advantage. A four-month-old uptrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 440.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at this week’s high of 424.90 cents and then at last week’s high of 430.25 cents. First support is seen at today’s low of 411.85 cents and then at 405.00 cents. Wyckoff's Market Rating: 7.5.

By Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold price sinks on strong greenback, rising U.S. Treasury yield

Gold price sinks on strong greenback, rising U.S. Treasury yield

Gold and silver prices are down in midday U.S. trading Wednesday. The precious metals are being punished by a strong U.S. dollar index and rising U.S. Treasury yields. These two bearish elements continue to supersede any other potentially bullish factors for the metals. December gold hit a three-week low today and was last down $19.40 at $1,636.60 and December silver was down $0.235 at $18.365.

U.S. stock indexes are mixed at midday. Risk appetite is a bit more upbeat so far this week. U.S. corporate earnings reports are so far coming in better than expectations despite recession fears.

The Crypto Winter will end once innovation and these other key developments reignite – Sean Mackay

The key outside markets today see the U.S. dollar index solidly higher and not too far below its recent 20-year high. Nymex crude oil prices are modestly up and trading around $83.60 a barrel. The U.S. Treasury 10-year note yield is presently fetching 4.065%.

Technically,the gold futures bears have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,622.20. First resistance is seen at today’s high of $1,659.50 and then at this week’s high of $1,674.30. First support is seen at $1,630.00 and then at $1,622.20. Wyckoff's Market Rating: 1.5

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at the September low of $17.40. First resistance is seen at today’s high of $18.755 and then at $19.00. Next support is seen at this week’s low of $18.155 and then at $18.00. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed down 280 points at 333.35 cents today. Prices closed nearer the session low and hit a three-week low today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 369.25 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at 340.00 cents and then at this week’s high of 346.75. First support is seen at 330.00 cents and then at the September low of 324.30 cents. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

David