Gold prices today rise for third day in a row, silver rates up

Gold prices may remain in a range in near term, say analysts

Silver prices also rose today, tracking gold

Gold and silver prices edged higher today in India, tracking muted gains in global markets. February gold futures prices on MCX were up 0.20% to ₹39,761 per 10 gram, extending gains to the third day. Tracking gold, silver also edged higher. On MCX, silver prices rose 0.28% to ₹46,550. Gold may see sideways movement in the near term on mixed fundamentals, says SMC Global in a note.

Gold can dip lower towards ₹39,600 while taking resistance near ₹39,800 while silver can test ₹46,200 while taking resistance near ₹46,700, the brokerage added.

Last week, gold prices in India had hit a record high of ₹41,300 per 10 gram as tensions between US and Iran escalated. But as tensions eased, prices have fallen from highs and have remained sideways in recent sessions.

In global markets, gold prices were flat today, hurt by higher appetite for riskier assets. Positive US retail data and optimism over a partial US-China trade deal lifted global equity markets. Data released today showed China's GDP growth last year was in line with estimates. Gold added 0.1% to $1,553.87 an ounce. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.13% to 879.49 tonnes on Thursday.

Holdings of the world's largest gold-backed exchange traded fund SPDR Gold Trust GLD rose 0.13% to 879.49 tonnes on Thursday.

Despite the signing of the US-China interim trade deal, "still many issues are not addressed in this deal, which was responsible for a slowdown in the global economy. Gold found support over this," said Abhishek Bansal, chairman of ABans Group of Companies.

Despite the signing of the interim trade pact between US and China, many analysts say that lower-for-longer interest rates, a weaker dollar and the US presidential election will provide multiple catalysts for gains in gold prices.

Gold prices had jumped 25% in India last year amid a global rally, triggered by US-China trade friction, weaker rupee and a hike in import duty. (With Agency Inputs)

 

Edited By Surajit Dasgupta
Updated: 17 Jan 2020, 11:21 AM IST

David

Gold prices rise after 2-day skid as U.S. and China make Phase 1 trade deal official

Gold futures marked their first gain in three sessions Wednesday, as U.S. benchmark stock indexes eased back from the day’s high following the official signing of the U.S.-China Phase 1 trade pact, and the U.S. House of Representatives’ vote to send articles of impeachment of President Donald Trump to the Senate.

As gold prices settled, the S&P 500 index SPX, +0.19% pulled back from its high and that appeared to “have given gold a further lift,” said Michael Armbruster, managing partner at Altavest.

“With the S&P 500 looking expensive at current levels, and the [Federal Reserve] continuing to add liquidity, it makes sense that investors would look to diversify into gold,” he said.

He expects gold to rally back above $1,600 in the months ahead.

On Wednesday, gold for February delivery GCG20, +0.12% on Comex rose $9.40, or 0.6%, to settle at $1,554 an ounce, after declining for a two straight sessions. Prices extended their gains into the electronic trading session, to stand at $1,555.80 shortly after the release of the Fed’s Beige Book, which said economic activity continued to expand “modestly” over the last six weeks of 2019.

March silver SIH20, -0.29% picked up 24.6 cents, or 1.4%, at $17.988 an ounce, after shedding 1.4% on Tuesday. March copper HGH20, -0.31%, meanwhile, edged down by less than a cent, or 0.3%, to $2.866 a pound.

Part of the recovery in gold prices is likely “the result of news that the US will leave tariffs in place until the US has proof of compliance with the Phase 1 agreement,” possibly after the November U.S. presidential election, analysts at Zaner Metals wrote in a daily report Wednesday.

According to the Wall Street Journal, the first phase of the trade deal will include roughly $200 billion in Chinese purchases of American goods and services over the next two years. However, tariffs on some $360 billion of annual Chinese goods will remain in place, with reports by Bloomberg News of that development on Tuesday causing the U.S. equity market to trim strong gains and some benchmark stock indexes to turn negative.

For now, “gold prices have retraced overbought levels and are finding a more stable footing around the mid-$1500s for the time being, with investors eager for details surrounding the expected rollback in tariffs,” wrote Han Tan, market analyst at FXTM, in a daily research note.

U.S. Treasury Secretary Steven Mnuchin during an interview on CNBC Wednesday morning said that additional rollbacks of tariffs on China goods are expected in the second phase of the trade talks but didn’t specify.

Looking ahead, the World Gold Council said in a report issued Wednesday that the “interplay between market risk and economic growth,” particularly financial uncertainty and lower interest rates, as well as weakening global economic growth and gold price volatility, will drive gold demand this year. Net gold purchases by central banks, meanwhile, will likely “remain robust.”

Also on Comex Wednesday, platinum futures settled above $1,000 an ounce for the first time since 2018 and palladium futures notched another record finish.

April platinum PLJ20, -0.21% tacked on $38.30, or 3.9%, to $1,025.60 an ounce and March palladium PAH20, +0.92% rallied by $41.80, or 2%, to $2,165.10 an ounce.

“While the palladium market did not immediately launch higher following strong Chinese import export news, it ultimately forged another new all-time high,” said analysts at Zaner Metals. China’s exports rose 5% in 2019 from a year earlier in yuan terms, according to official data released on Tuesday.

“It should also be noted that platinum prices have now forged a breakout up overnight and have reached the highest level since February of 2018 and that suggests the market has finally caught lift from palladium,” the Zaner analysts added.

 

MYRA P SAEFONG
MARKETS/COMMODITIES REPORTER
Published: Jan 15, 2020 2:15 p.m. ET

David

Gold prices rise today after two-day fall, silver rates jump

Gold prices in India are still down about ₹1,600 per 10 gram in about a week

Gold rates hit a record high last week

Gold and silver prices rose today in Indian markets, snapping their recent declining streak. On MCX, gold futures rose 0.63% to ₹39,695 per 10 gram, after declining over in the past two days. Silver also followed a similar trend. On MCX, silver futures rose 0.82% to ₹46,278. Gold had surged to record high of ₹41,300 per 10 gram in the previous week and as US-Iran tensions subsided rates in domestic markets came off the highs.

"A week ago Iran-US news caused a pretty significant rally in gold; and now that has subsided." SMC Global said in a note.

Back in India, the government has mandated jewellers to sell only hallmarked jewellery and artefacts made of 14, 18 and 22 carat gold from today. Jewellers have been given one year time to register with the Bureau of Indian Standards (BIS) and implement the mandatory hallmarking of gold jewellery.

Gold prices rose on Wednesday as investors sought safer assets amid uncertainty about the effectiveness of the U.S.-China Phase 1 trade deal after a top U.S. official said tariffs on Chinese goods would stay in place even after the agreement is signed.

Investors remained cautious ahead of US-China Phase 1 trade deal signing later today. Just a day before the world's top two economies prepared to sign a Phase 1 trade deal, US Treasury Secretary Steven Mnuchin said tariffs on Chinese goods will be in place until the completion of a Phase 2 agreement. This uncertainty helped boost the safe-haven appeal of gold. Spot gold, in global markets, rebounded 0.3% to $1,551.38 per ounce.

Analysts say that concerns of trade friction in US-China ties still remain and this will provide support to gold on the lower side. "I struggle to see gold trading below $1,500 for a sustainable period of time, over the next year or so, largely as a result of this trade uncertainty," Reuters quotes a ING analyst as saying.

Last year, gold prices rose 25% in India and 18% in global markets as US-China trade friction spurred concerns over global economy.

"Gold fell sharply in last few days as US-Iran toned down threats against each other reducing expectations of a major escalation of tensions in the Middle-east. US-China trade deal optimism also reduced gold’s safe haven allure. Price however stabilized today as market players position for signing of US-China trade deal today. The phase 1 of trade deal is set to be signed today however there is uncertainty about terms of the deal as well as timeline for future talks," Kotak Securities said in a note.

Among other precious metals, silver prices rose 0.3% to $17.83 per ounce, while platinum advanced 0.6% to $989.03.

 

Edited By Surajit Dasgupta
Updated: 15 Jan 2020, 10:35 AM IST

David

Don’t panic about Iran – but don’t sell your gold either

“Gold has had one of its more excitable runs since the start of the year. It surged so much in the wake of the Iran airstrikes that it even drew the attention of the broadsheet financial press. So naturally, the price was bound to tank shortly afterwards. Which is precisely what happened this morning. If you’re a gold investor, you might be fretting that gold’s high point for 2020 has already come and gone. I wouldn’t worry.”

USAGOLD note: We mentioned this insightful opinion piece from MoneyWeek’s John Stepek in yesterday’s DMR. We revisit it here for those who might have missed it. Stepek offers some helpful perspective on the gold market’s volatility over the past several days then takes an in-depth look at why “there should always be a bit of it in your portfolio.

 

MoneyWeek/John Stepek/1-9-2020

Posted on January 10, 2020 by Opinion

David

Stocks are now more overvalued than ever per this measure

“Therefore, looking at the ratio of market valuations to overall profits suggests ‘P/E ratios are some 80% above the long-term norm,’ [Ned]Davis wrote.”

USAGOLD note: Ned Davis is a highly-respected Wall Street analyst. The 80% figure takes into account overvaluation resulting from corporate stock buybacks. The investing public will largely ignore the astute Mr. Davis like all others who issue warnings about the stock market overvaluation. (Please see the post immediately below.) That said, for those who tend to be more open-minded, the article linked above is worth the time spent.

“I know this because anytime I go on Twitter, the financial pundits are tweeting about stocks. They usually don’t tweet about bonds or commodities or FX. I follow one or two oddballs that tweet about volatility. But it’s usually wall-to-wall stocks. Mostly Farmers’ Almanac stuff about how ‘9 of the last 11 Decembers have been positive,’ and ‘60% of the time it works every time.’”

USAGOLD note: In the internet age, stocks have become an obsession bordering on mania. Dillian makes reference to “popular delusions.” The pros are getting out – hedging their bets with the full understanding that ‘trees do not grow to the sky’, as Dow Theory Letter’s Richard Russell used to put it. The investing public is still gung-ho on stocks. Dillian suggests diversification.

“Have you ever seen in some wood, on a sunny quiet day, a cloud of flying midges — thousands of them — hovering, apparently motionless, in a sunbeam? …Yes? …Well, did you ever see the whole flight — each mite apparently preserving its distance from all others — suddenly move, say three feet, to one side or the other? Well, what made them do that? A breeze? I said a quiet day. But try to recall — did you ever see them move directly back again in the same unison? Well, what made them do that? Great human mass movements are slower of inception but much more effective.” – Bernard Baruch, Wall Street financier (1870-1965)

 

MarketWatch/Chris Matthews/1-8-2020

Posted on January 9, 2020 |

 

David

Gold's $1,500 level is 'looking like the new 2020 floor' – Scotiabank

(Kitco News) Gold's strong start to the year has put prices well above the precious metal's previous hard floor of $1,450 an ounce, said Scotiabank.

“$1450 was the new hard floor but gold is now firmly in a spot where the risk/reward in being directionally short is not favorable — $1500 is increasingly looking like the new 2020 floor…,” wrote Scotiabank commodity strategist Nicky Shiels last week.

Overnight gold prices neared seven-year highs as February Comex gold futures hit $1,613.30 following an Iranian missile strike near U.S. troops in Iraq.

In the latest move, gold retreated around 1% on the day to $1,558.30 as U.S. President Donald Trump said Iran “appears to be standing down” in a speech on Wednesday.

The consequences of the escalating U.S.-Iran tensions could be in the form of “a tit-for-tat retaliation cycle that ultimately argues for larger supply-side risks to be priced into Oil and for a larger geopolitical premium into gold,” the strategist pointed out.

Gold is “smart,” noted Shiels when talking about the metal’s year-end strength and trading patterns.

“Gold’s repricing was aligned with a shift in the Fed in 2H'2019, but elevated pricing also incorporates the potential threat of 'fear drivers' such as trade, political/ geopolitical & growths risks re-emerging, which markets have learned can play out at the drop of a tweet at any point,” she highlighted.

The yellow metal’s trading patterns and drivers help when looking at gold long-term.

“The ability for gold to consistently adapt from internalizing old drivers (escalating trade rhetoric, negative risk appetite and moves in rates in Q3'19) to new drivers (falling US$, upping of inflation expectations, curve steepness, EMFX & commod FX strength in Dec 19), back again to internalizing its haven qualities (today) is a constructive development for the longer-term outlook,” the commodity strategist said.

Gold is also starting to see strong seasonal investor inflows that will likely continue into 2020, Shiels added.

“Fresh geopolitical risks will to be appropriately priced into relatively fairly priced havens (there’s a rethink around negatively yielding European debt undermining their safe haven role) and global markets are only fully 'back to school' next week – mid January,” she wrote.

 

By Anna Golubova

For Kitco News

Wednesday January 08, 2020 14:28

David

Gold, silver gain as traders step in to buy the early dip

Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It’s a showdown of global proportions, so don’t miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.

(Kitco News) – Gold and silver prices are moderately higher in midday U.S. futures trading Tuesday. Downside price corrections overnight were viewed as a buying opportunity and prices pushed higher in the day session, after gold hit a nearly seven-year high Monday and silver notched a more-than-three-month high. February gold futures were last up $4.60 an ounce at 1,573.30. March Comex silver prices were last up $0.201 at $18.375 an ounce.

It appears risk aversion in the global marketplace has at least temporarily subsided following last week’s geopolitical shockwave that occurred when a U.S. drone strike killed a leading Iranian general in Baghdad, Iraq. It could be that many traders and investors figure Iran will not execute a major retaliation against the U.S. and its vaunted military, knowing such a move would invite a likely massive and devastating counter-attack from the U.S.—as was threatened by President Trump in a weekend tweet. Other veteran market watchers reckon Iran will retaliate against the U.S. but not right away. However, virtually all market participants agree the U.S. drone strike further stokes and already volatile Middle East.

The key “outside markets” today see crude oil prices lower and trading around $62.50 a barrel. Meantime, the U.S. dollar index is higher.

Technically, Monday’s high of $1,590.90 in February gold futures is still strong overhead technical resistance for the bulls to overcome. The bulls do have the solid overall near-term technical advantage amid a seven-week-old price uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,590.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,530.00. First resistance is seen at $1,580.00 and then at $1,585.00. First support is seen at $1,556.60—the bottom of Monday’s upside price gap on the daily bar chart–and then at 1,550.00. Wyckoff's Market Rating: 8.0

March silver futures prices closed at a 3.5-month high close today. The silver bulls have the firm overall near-term technical advantage amid a four-week-old price uptrend in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.50. First resistance is seen at this week’s high of $18.55 and then $18.75. Next support is seen at $18.00 and then at last week’s low of $17.83. Wyckoff's Market Rating: 7.0.

March N.Y. copper closed up 30 points at 279.30 cents today. Prices closed near mid-range today. The copper bulls have the overall near-term technical advantage. However, a four-month-old uptrend on the daily bar chart is now in jeopardy. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 290.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at today’s high of 280.40 cents and 283.00 cents. First support is seen at last week’s low of 275.95 cents and then at 273.00 cents. Wyckoff's Market Rating: 6.5.

  By Jim Wyckoff For Kitco News Tuesday January 07, 2020 13:01

David

Why precious metals make sense for your IRA in the age of low to negative real rates of return

The warnings from financiers and analysts on the impact of low to below zero interest rates on investment planning come almost daily. Reuters’ Toby Sterling recently told the story of a Dutch pension fund that was actually reducing monthly payouts to its subscribers by 8% directly the result of Europe’s negative interest rate environment. “The planned reductions,” writes Sterling, “due to take effect from January 2020, have shaken a country renowned for having one of the world’s strongest pension systems, and are an early warning to others about the impact of record-low interest rates.”

Negative interest rates are a reality in both the European Union and Japan. Alan Greenspan recently said that it is “only a matter of time” before they spread to the United States. One of the arguments against gold over the years has been that it costs money to own it. Now it costs money to own euros and yen, and before too long it might cost money to own the dollar as well. “One of the reasons,” Greenspan added in that same CNBC interview, “the gold price is rising as fast as it is – you know, at $1500 a troy ounce . . . What that is telling us is that people are looking for resources they know are going to have a value 20 years from now, or 30 years from now, as they age and they want to make sure they have the resources to keep themselves in place.”

The advent of negative rates is perhaps one of the more profound differences between this gold rally and rallies in the past. It might also prove to be the most enduring. If you have an interest in hedging your IRA with precious metals, we can help.

 

Posted on January 6, 2020 by USAGOLD

David

Gold Surges Due To Troubled Fed Repo & U.S. Treasury Market

Gold continues to move higher due to trouble in the Fed Repo and U.S. Treasury Market. In the first hour of business today, the Fed has already injected $57 billion in the Repo Market. While the Fed’s Repo Market injections didn’t spike during the last few days of 2019, as many analysts forecasted, there’s still BIG TROUBLE ahead.

Many reasons have been attributed to the break-down in the U.S. Repo Market that started on September 17th when the daily repo rate spiked to 10%. Several readers have sent me very interesting information and youtube videos on the subject matter. I thought it was a good time to sift through all the information and present my analysis on what the hell I believe is going on.

First and foremost, while there are many reasons given for why the Fed Repo rate spiked, forcing the Fed to provide hundreds of billions of dollars of short-term liquidity in the market, these are “ALL SUPERFICIAL” reasons. The major factors causing wide-spread havoc throughout the financial system are the Falling EROI- Energy Returned On Investment of oil and the Thermodynamics of oil depletion. While these are two different energy analyses, they come to the same conclusion. The financial analyst community and market are still ignoring these key energy factors.

Second, the main “SUPERFICIAL” reason that caused the Fed Repo rate to spike is that there weren’t enough buyers for the increasing amount of U.S. Treasury issuance.

After the 2008-2009 financial crisis, U.S. Government deficits ballooned, forcing the “Net Issuance” of more U.S. Treasuries. In the chart above, the net issuance of U.S. Treasuries spiked to $1,585 billion ($1.58 trillion) in 2010. However, after the economy started to recover, the net issuance of U.S. Treasuries continued to decline to only $534 billion in 2017. But, the very next year, in 2018, something changed as the U.S. Treasury net issuance surged to $1,104 billion. This was bad news… but why?

We have to remember that the Fed started reducing its balance sheet by selling U.S. Treasuries and Mortgage-Backed Securities into the market in early 2018:

So, get this… the Fed was a net seller of U.S. Treasuries and Mortgage-Backed Securities in 2018 right at the very same time, the U.S. Government’s net issuance of U.S. Treasuries doubled from $534 billion in 2017 to $1,104 billion in 2018. This had a profound impact on the U.S. Treasury rates, especially the 10 Year/3 Month Spread.

Now, to make this easy to understand, the 10-Year/3 Month Treasury rate spread shows how much more demand there is for either the shorter-term Treasuries or the longer-dated ones. If the 10-Year/3 Month spread falls, then there is more demand for the 10 year Treasury, which suggests investors are worried about an upcoming recession. The 10-Year/3 Month U.S. Treasury spread has been steadily falling since 2010 and is now only 0.02 compared to 3.08 in 2010:

According to SIMFA, the Securities Industry & Financial Markets Association, the average rate for the 10 Year U.S. Treasury (Jan-Nov) was 2.17 versus 2.15 for the 3 Month Treasury Bill. Thus, there is a positive 0.02 Spread. However, there were some real problems starting in June when the 10-Year/3 Month Treasury spread went NEGATIVE:

There is no coincidence that the Gold Price began to take off in June 2019 when the 10-Year/3 Month Treasury spread went negative… for the first time since the 2007 financial crisis began. As the 10-Year/3 Month, Treasury spread went further negative until August, the gold price continued higher to reach a peak of $1,560 at the end of the month. Then what happened in September and October?? You got it, the Fed came in and started the Repo Operations in mid-September and then announced the $60 billion a month in U.S. Treasury purchases in mid-October:

The GREEN arrow shows where the 10-Year/3 Month Treasury spread started to go negative, and over the next three months, as the spread reached a low of -0.36 in August, the gold price increased $300. The RED arrows show that when the Fed came in to save the day in September with its Repo Market operations, providing short-term liquidity, and then again in October to buy $60 billion a month, the 10-Year/3 Month spread moved higher.

If we look at the U.S. Treasury Net Issuance chart again, we can see that the U.S. Government is in trouble as it has to finance a lot more of its annual deficits:

With the global economy stalling and some regions heading into a recession, there are fewer surpluses available to be able to buy the increasing amount of U.S. Treasuries, not including the amount that is continuously rolled over.

Even though there may be a BIG PROBLEMS with individual banks that caused the Fed Repo rate to spike on September 17th, the main issue is that the U.S. Government is issuing more Treasuries than the market can absorb. Thus, the Fed had to start buying U.S. Treasuries, which helped push the 10-Year/3 Month spread back into positive territory. However, the problem isn’t over as the market mistaken assumes… IT’S JUST BEGINNING.

I believe the September 17th Fedo Repo rate spike to 10% was the CRISIS and will only get worse as time goes by.

 

by: Steve St. Angelo

Money Metals News Service

January 3rd, 2020

David