Strong losses for gold, silver following "goldilocks" U.S. jobs report
J Gold and silver prices are posting strong losses near midday Friday, in the aftermath of a U.S. jobs report from the Labor Department that suggests the U.S. economy is presently in a pretty good spot. Gold prices hit a two-week low today and silver a three-week low. Both markets are headed toward technically bearish weekly low closes on a Friday.
The U.S. Employment Situation Report for November appears to have fallen into the camp of the U.S. monetary policy hawks, who want the Federal Reserve to hold off on cutting U.S. interest rates anytime soon. Many analysts are calling today’s jobs data a "Goldilocks" report that is not too hot and not too cold for the general marketplace. The jobs report showed the key non-farm payrolls number up 199,000, which is just above market expectations for a rise of 190,000. However, the overall U.S. unemployment rate fell to 3.7% in November from 3.9% in October.
U.S. stock indexes sold off modestly on the jobs report, but then rebounded and are holding slight gains near midday. The U.S. dollar index rallied to post solid gains, while and U.S. Treasury yields rise significantly. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.241%. The stronger USDX and rising in bond yields are bearish "outside market" elements for the precious metals markets.
February gold was last down $32.80 at $2,013.60. March silver was last down $0.744 at $23.315.
Bitcoin price is up 100% year-to-date, Gareth Soloway charts the next level for Bitcoin
Bitcoin is up more than 100% year-to-date and 30% in the last two weeks, reigniting bullish sentiment. Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com and President of VerifiedInvesting.com, charts how far this recent rally can go.
Bitcoin hit a 17-month high of above $35,000 this week on optimism that a spot Bitcoin ETF will be approved within the next 4 months. At the time of writing, Bitcoin was trading at $33,981, down 2% on the day.
Bitcoin has been moving higher on spot Bitcoin ETF news, but once that approval officially comes through, that may trigger a sell off or a pause in the price, with some profits being taken off the table, Soloway told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.
"You'll probably get approval by year-end or early in 2024. If Bitcoin is still up here, you may not go higher," Soloway warned. "It may be already factoring in the approval. It's very possible it could be a sell on the news."
At one point last week, Bitcoin surged 10% on a false report that BlackRock's iShares Bitcoin ETF application was approved by the Securities and Exchange Commission (SEC). There have also been several comments that a spot Bitcoin ETF approval could come as early as the end of this year.
The maximum upside for Bitcoin in this bull run is $47,000, according to Soloway, stating that may be the next resistance level.
"Many of these ETF institutions have probably been accumulating for the last couple of months, knowing that eventually an approval will come. And so, there may not be as many buyers for the spot ETF," he described.
Bitcoin at $15k?
Going into 2024, Soloway is projecting a recession and a potential stock market selloff of 35%. He is also not taking off the table his previous call that Bitcoin could drop to the $15,000 level.
"What happens if the stock market goes down 35%? Fear and panic will take over, even in Bitcoin holders. Remember, there are a lot of people who hold Bitcoin that also have big stock portfolios. And if I'm down huge at some point, do I start to panic and start selling everything? That's the worry that could drive us back to $15,000 or even lower," Soloway described.
To find out what Soloway sees as the floor price for Bitcoin, watch the video above. Soloway also gives his long-term 2026 outlook.
Surging yields & unsustainable debt to trigger bank collapses
Soloway's macro outlook is gloomy, with credit card debt already at all-time highs and interest rates more than doubling to 25% this year.
"The consumer is being tapped, the government and our debt is in a position where it's unsustainable. And then you have this push where yields are going up, which will eventually cause banks to collapse," he warned.
Recession will be inevitable in the first quarter of 2024, Soloway added, with the banking sector looking very risky. A lot of financial institutions are "essentially zombie banks now," carrying "dead paper on their balance sheet," he said.
Gold is an outstanding asset
Soloway is bullish on gold, stating that a new all-time high is coming. "It's always about listening to the smarter money [central banks], and they're the ones that literally see the dollars and cents being printed, and they're the ones printing it. If they're loading the boat on gold, then it probably says we need to do the same," he said.
For Soloway's 2024 gold price prediction, watch the video above. He also revealed three key trading bets for next year. Watch the video above for details.
This interview is brought to you by Swan Bitcoin. Swan IRA – Start Saving Now
Gold sees routine corrective, profit-taking pullback
Gold prices are modestly down in midday U.S. trading Thursday. Silver prices are slightly up. Both metals are seeing some normal chart consolidation after hitting 12-month highs on Wednesday. Gold and silver bulls still have the strong near-term technical advantage to suggest the path of least resistance for prices remains sideways to higher. April gold was last down $6.30 at $2,014.90 and May silver is up $0.068 at $25.105.
Some upbeat U.S. jobless claims numbers rallied the U.S. dollar index briefly before it backed off later on. But this was enough to prompt a pullback in gold prices and some profit taking.
Global stock markets were mixed overnight. U.S. stock indexes are mixed at midday. Risk appetite this week has down-ticked. Reads a Wall Street Journal headline today: "Bank failures; high inflation; rising rates. Is the resilient jobs market about to crack?" A three-day holiday weekend for many markets likely has sellers in the gold and silver markets tentative, as both markets have seen their prices come up from their daily lows as midday approaches.
In overnight news, reports said that as the price of gold is back above $2,000 an ounce the countries of Brazil, Russia, India, China and South Africa all plan to increase their gold reserves. This is due to "an increasingly bipolar geopolitical world—exacerbated by the war in Ukraine, says an ING analyst. He added such is a "structural positive for gold and structural negative for the U.S. dollar."
Bank of America is looking for $2,100 gold price by Q2
The U.S. data point of the week is Friday's U.S. employment situation report for March from the Labor Department. The key non-farm payrolls number is seen coming in at up 238,000, compared to a rise of 311,000 in the February report. The U.S. markets will have to wait until Monday to react to the data, as they are closed on Friday for the Easter holiday.
The key outside markets today see the U.S. dollar index slightly down after hitting a two-month low Tuesday. Nymex crude oil prices are slightly down and trading around $80.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.28% and has fallen this week.
Technically, April gold futures prices hit a 12-month high Wednesday. Bulls still have the strong overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80, scored in March of 2022. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,950.00. First resistance is seen at today's high of $2,033.30 and then at this week's high of $2,033.80. First support is seen at $2,000.00 and then at Tuesday's low of $1,979.00. Wyckoff's Market Rating: 8.0
May silver futures prices hit a 12-month high Wednesday. The silver bulls have the strong overall near-term technical advantage. Prices are in a steep uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at this week's high of $25.295 and then at $25.50. Next support is seen at today's low of $24.695 and then at $24.50. Wyckoff's Market Rating: 8.0.
May N.Y. copper closed up 220 points at 400.85 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage but have faded recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 417.45 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 382.20 cents. First resistance is seen at today's high of 403.15 cents and then at Tuesday's high of 407.15 cents. First support is seen at today's low of 397.10 cents and then at this week's low of 392.60 cents. Wyckoff's Market Rating: 5.5.
Gold rally loses steam as Powell warns inflation fight far from over
Gold prices are slightly higher but off daily highs in afternoon U.S. trading Tuesday. The gold and silver markets got a brief lift and hit daily highs by a speech from Federal Reserve Chairman Jerome Powell, in which he initially produced no surprises on U.S. monetary policy. However, at the end of his speech he warned that more strong U.S. economic data may force the Fed to remain hawkish for longer—prompting the precious metals prices to back off their highs. April gold was last up $1.90 at $1,881.40 and March silver was down $0.102 at $22.14.
The focal point of the marketplace today was a midday speech to an economics club in Washington, D.C. by Fed Chairman Powell. Powell reiterated that U.S. inflation has started to come down but has a long way to go to meet the Fed's inflation objectives. Powell was pressed on last Friday's strong jobs report possibly changing Fed policy to more hawkish, but Powell brushed that notion off, at first. However, at the end of his remarks he said more strong U.S. economic data could force the Fed to raise rates more than it expects at present. Traders and investors were extra anxious to see what Powell had to say after last week's surprisingly strong U.S. jobs report that many believe could indeed force the Fed to remain hawkish on U.S. monetary policy for longer.
Global stock markets were mixed overnight. U.S. stock indexes are mixed in afternoon trading and have lost the gains seen when Powell began his speech.
Croatia buys nearly 2 tonnes of gold to transfer to the ECB as it becomes the latest eurozone member
The key outside markets see the U.S. dollar index modestly lower and but up from its daily low that came after Powell started speaking. The yield on the benchmark U.S. 10-year Treasury note is presently fetching around 3.63%. Meantime, Nymex crude oil futures prices are solidly up and trading around $76.50 a barrel.
Technically, April gold futures prices hit a four-week low Monday and saw short covering today. Bulls still have the overall near-term technical advantage. However, a three-month-old uptrend on the daily bar chart has been negated, to suggest a near-term market top is in place. Bulls' next upside price objective is to produce a close above solid resistance at the February high of $1,975.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at $1,915.50. First support is seen at this week's low of $1,873.20 and then at $1,850.00. Wyckoff's Market Rating: 6.5
March silver futures prices hit a two-month low early on today. The silver bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Prices have seen a bearish downside "breakout" from a sideways trading range at higher levels. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at this week's high of $22.635 and then at $23.00. Next support is seen at today's low of $22.125 and then at $22.00. Wyckoff's Market Rating: 5.5.
March N.Y. copper closed up 275 points at 406.10 cents today. Prices closed nearer the session high. The copper bulls have the overall near-term technical advantage but are fading. A four-month-old uptrend on the daily bar chart has been at least temporarily negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 435.50 cents. The next downside price objective for the bears is closing prices below solid technical support at 380.00 cents. First resistance is seen at 410.00 cents and then at 420.00 cents. First support is seen at this week's low of 399.30 cents and then at 390.00 cents. Wyckoff's Market Rating: 6.5.
Gold declines after a solid 4th quarter GDP report is released by the BEA
As of 4:35 PM EST, the February contract of gold futures has fallen for the first time in six trading days. Currently, February gold is fixed at $1929.30, a decline of $13.30 or 0.68%. Gold traded to a high of $1949.80 overseas last night, which was before the release of the GDP report. Following the released GDP report gold traded to a low of $1918.40.
The key takeaway from today’s 4th quarter GDP report was that economic growth was strong at the end of 2022 and contributing factors were a strong jobs market and declining inflationary pressures.
According to the BEA (Bureau of Economic Analysis) GDP for Q4 2022 increased at an annual rate of 2.9% when adjusted for inflation. This is a decline from the 3rd quarter of 2022 whose GDP indicated growth of 3.2%. The report conveyed that consumer spending, which grew by 2.1% was the foundation of the strong growth in the United States.
The second half of last year greatly differed from the beginning of 2022 a time of economic contraction. The fact that the United States economy rebounded in the second half of the year reduced the speculation that the Federal Reserve’s rate hikes would lead to a recession. However, it must be noted that the average GDP of last year indicated growth at only 1%, an immense contrast compared to the 2021 annual GDP of 5.7%.
Today’s GDP report will strengthen the conviction of hawkish Fed officials to maintain their extremely aggressive monetary policy which includes more rate hikes and keeping those elevated rates for a longer time. This raises the probability that the Federal Reserve will continue to raise rates at the next two FOMC meetings. Market participants are expecting rate hikes of ¼% next week and at the FOMC meeting on March 22.
As long as the Federal Reserve raises rates no more than ¼% at the next two FOMC meetings this would continue the bullish market sentiment that has been prevalent in gold since the major rally began at the beginning of November 2022.
The caveat to the statement above is tomorrow’s PCE inflation index report. Currently forecast our predicting that tomorrow’s report for the core PCE will show a decline from 4.7% in November to 4.4% in December.
Many analysts including myself believe that inflation will continue to decline but become sticky at a certain level well above the Fed’s target of 2%. If this assumption unfolds it will create more challenges for the Federal Reserve to either raise its target of 2% or become more aggressive for a longer period.
I will be speaking at the VRIC 2023 on Monday, January 31st in Vancouver. Both Kitco News and I welcome you there if your available
Gold, silver see safe-haven and chart-based buying
Gold and silver prices are higher in midday U.S. trading Thursday, with gold sharply up and hitting a four-week high–now within easy striking distance of $1,800.00. Safe-haven demand is featured today as China-Taiwan-U.S. tensions have escalated this week. Short covering in the futures markets and some fresh chart-based buying are also featured today, as the near-term technical postures for both metals have improved this week. October gold futures were last up $29.80 at $1,796.00. September Comex silver futures were last up $0.226 at $20.12 an ounce.
The marketplace was a bit more nervous today after China fired several ballistic missiles around Taiwan, in apparent retaliation for U.S. House Speaker Nancy Pelosi’s visit to Taiwan on Tuesday. China is conducting aggressive military maneuvers around Taiwan.
The Bank of England’s monetary policy meeting conclusion Thursday saw the BOE raise its key interest rate by 0.5%, the largest since 1995. The BOE also warned of a long economic recession for the U.K. The dire economic outlook for the U.K. may also be prompting some safe-haven buying in gold and silver. Some are arguing the BOE is probably more on track on forecasting a longer recession, whereas the Federal Reserve does not like to look that far out—especially if the outlook is not rosy.
Geopolitical uncertainty has quietly supported gold prices, but now the volume has been turned up
The marketplace is looking ahead to Friday morning’s U.S. jobs report for July, which is expected to show non-farm payrolls job growth of around 260,000, compared to a rise of 372,000 in the June report.
The key outside markets today see Nymex crude oil prices lower, at a 4.5-month low and trading around $88.00 a barrel. The U.S. dollar index is lower in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 2.7%.
Technically, October gold futures prices hit a four-week high today. The gold futures bears still have the overall near-term technical advantage. However, a fledgling price uptrend is still in place on the daily bar chart to suggest a market bottom is in place. Bulls have momentum and their next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,720.00. First resistance is seen at $1,800.00 and then at 1,825.00. First support is seen at $1,775.00 and then at today’s low of $1,769.50. Wyckoff's Market Rating: 4.0.
September silver futures bears have the overall near-term technical advantage. However, a price downtrend has been negated to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.50. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at this week’s high of $20.51 and then at $20.75. Next support is seen at this week’s low of $17.75 and then at $19.40. Wyckoff's Market Rating: 3.0.
September N.Y. copper closed up 145 points at 348.15 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. However, a steep six-week-old price downtrend on the daily bar chart has been negated and prices are starting to trend up. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 313.15 cents. First resistance is seen at this week’s high of 359.70 cents and then at 365.00 cents. First support is seen at today’s low of 341.60 cents and then at 335.00 cents. Wyckoff's Market Rating: 3.0.
Bank of America is looking for $2,100 gold price by Q2
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Croatia buys nearly 2 tonnes of gold to transfer to the ECB as it becomes the latest eurozone member
Geopolitical uncertainty has quietly supported gold prices, but now the volume has been turned up.gif)
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