Gold, silver rally as Federal Reserve leans surprisingly easy

Gold and silver prices sharply up in midday U.S. trading Thursday, in the aftermath of surprisingly dovish rhetoric on U.S. monetary policy from the Federal Reserve. February gold was last up $56.50 at $2,054.00. March silver was last up $1.579 at $24.505. (Gold and silver futures prices had officially settled before the FOMC meeting concluded Wednesday afternoon. Thus, the big gains noted in today's prices.)

The marketplace got a dovish surprise from the Federal Reserve Wednesday. While the Federal Open Market Committee (FOMC) left interest rates unchanged, the committee and Fed Chairman Jerome Powell pivoted from their heretofore hawkish rhetoric of a tight monetary policy and toward loosening policy, including future interest rate cuts. The Fed's "dot plots" now indicate three interest rate cuts (totaling 0.75%) in 2024. Markets cheered the Fed news as the U.S. stock indexes hit new highs for the year, gold prices soared back above $2,000, the U.S. dollar index dropped sharply and Treasury yields declined. The benchmark 10-year note yield dropped below 4%. The now much-improved risk appetite in the general marketplace should work to support further gains in equities and commodity markets for at least the near term. A Barrons headline today reads: "Markets rejoice as Fed doves take flight…."

The Bank of England kept its monetary policy steady at its regular meeting Thursday, as expected. The European Central Bank also kept its policy steady, but ECB President Christine Lagarde still sounded a hawkish tone in her press conference.

A stronger-than-expected U.S. retail sales report this morning did not support the Fed's monetary-policy-easing rhetoric Wednesday afternoon, and that likely helped to push gold and silver prices down from their daily highs.

  Fed's Powell confirms FOMC believes terminal rate has been reached, says outlook reflects latest CPI and PPI data

U.S. stock index futures are firmer at midday and hit new contract highs and new highs for the year, when the New York day session begins. The Dow Jones Industrial Average set a record-high today.

The key outside markets today see the U.S. dollar index sharply lower and hit a four-month low, on follow-through selling pressure from Wednesday's sharp losses. Nymex crude oil prices are solidly up and trading around $72.00 a barrel, after hitting a 5.5-month low Wednesday. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 3.908%.

Technically, February gold futures prices Wednesday scored a bullish "outside day" up after hitting a three-week low early on. The bulls have the overall near-term technical advantage and have regained strength. Prices are in a nine-week-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 $2,062.90 and then at $2,072.70. First support is seen at today's low of $2,039.10 and then at $2,025.00. Wyckoff's Market Rating: 7.0

March silver futures prices Wednesday scored a big and bullish "outside day" up after hitting a three-week low early on today. The silver bulls have gained the overall near-term technical advantage and have regained power. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.00. The next downside price objective for the bears is closing prices below solid support at this week's low of $22.785. First resistance is seen at $24.75 and then at $25.00. Next support is seen at $24.00 and then at $23.75. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 1,060 points at 389.35 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage and gained power today. Prices are in a choppy, seven-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 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 today's high of 390.95 cents and then at the December high of 393.30 cents. First support is seen at 385.00 cents and then at today's low of 382.70 cents. Wyckoff's Market Rating: 6.5..

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

FOMC statement leans dovish, gold price rallies

Gold and silver prices aare solidly higher and hit new daily highs in the aftermath of the Fed's FOMC meeting conclusion. The FOMC statement was surprisingly dovish on U.S. monetary policy, which pushed the precious metals markets sharply up. February gold was last up $26.60 at $2,020.10. March silver was last up $0.434 at $23.425.

On the front burner of the marketplace is the just-concluded two-day Federal Open Market Committee (FOMC) monetary policy meeting of the Federal Reserve. The FOMC statement said U.S. economic growth has moderated but inflation remains elevated. Most FOMC officials now see rate cuts coming in 2024. 2025 and 2026. The marketplace is reading the FOMC statement as being surprisingly dovish on U.S. monetary policy. Now the marketplace awaits the press conference from Fed Chairman Jerome Powell. It's still expected Powell may lean at least a bit hawkish by saying the inflation fight is not yet finished.

This week's U.S. inflation data in the form of the consumer price and producer price indexes for November came in close to market expectations and suggest U.S. inflation continues to cool. The data somewhat assuaged the marketplace, at least for the moment, as the U.S. stock indexes this week hit new for-the-move highs amid a seasonal Santa Claus rally.

  Gold to outperform silver and platinum as weak growth forces the Fed to cut rates in 2024 – Heraeus

The key outside markets today see the U.S. dollar index lower and selling off after the FOMC statement. Nymex crude oil prices are up and trading around $69.75 a barrel after hitting a 5.5-month low overnight. The down-trending crude oil market is casting a pall over much of the raw commodity sector. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.092% and down from just before the FOMC statement was released.

Technically, February gold futures prices hit a three-week early on low today. The bulls have the overall near-term technical advantage but regained some momentum today. Prices are in a two-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $2,050.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,955.40. First resistance is seen at this week's high of $2,023.70 and then at the October high of $2,039.70. First support is seen at $2,000.00 and then at today's low of $1,987.90. Wyckoff's Market Rating: 6.0

March silver futures prices hit a three-week low early on today. The silver bears have the slight overall near-term technical advantage. Prices are now trending down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at $23.75 and then at $24.00. Next support is seen at $23.00 and then at today's low of $22.785. Wyckoff's Market Rating: 4.5.

March N.Y. copper closed down 30 points at 378.45 cents today. Prices closed nearer the session high today. The copper bulls have the slight overall near-term technical advantage. Prices are in a choppy, seven-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 December high of 393.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at this week's high of 383.60 cents and then at last Friday's high of 386.40 cents. First support is seen at today's low of 375.30 cents and then at last week's low of 372.90 cents. Wyckoff's Market Rating: 5.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold up, but loses altitude as FOMC meets

Gold prices are modestly higher and silver around steady near midday Tuesday. Both metals modestly extended overnight gains and hit session highs following a morning U.S. inflation report that was in line with expectations. However, prices have backed down from daily highs on position evening as the U.S. central bank will provide an update on its monetary policy Wednesday afternoon. Solidly lower crude oil prices are also a bearish daily outside-market element for the metals. February gold was last up $3.50 at $1,997.10. March silver was last down $0.008 at $23.05.

The U.S. economic data point of the day saw the consumer price index report for November come in at up 3.1%, with the core rate (minus food and energy) coming in at up 4.0%. Both figures are year-on-year and are the same readings as seen in the October report. The November year-on-year numbers came in right in line with market expectations. The modest rallies in gold and silver following the CPI data suggest traders were relieved inflation did not uptick in November. Recent economic data from the world's major economies has generally shown cooling inflation.

Focus is now squarely on the two-day Federal Open Market Committee (FOMC) monetary policy meeting of the Federal Reserve begins today and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace consensus is that the FOMC will leave interest rates unchanged. However, it's also expected the FOMC statement and Powell at his press conference will still lean a bit hawkish by saying the inflation fight is not yet finished. Still, many market watchers expect the Fed to cut U.S. interest rates by mid-year in 2024.

  Gold is poised for new all-time highs in 2024 – World Gold Council

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are solidly down, near the recent for-the-move low, and trading around $69.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.227%.

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $2,075.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,955.40. First resistance is seen at today's high of $2,012.50 and then at this week's high of $2,023.70. First support is seen at this week's low of $1,991.20 and then at $1,975.00. Wyckoff's Market Rating: 6.0

March silver futures bears have the slight overall near-term technical advantage. Prices are now trending down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at today's high of $23.45 and then at $23.75. Next support is seen at $23.00 and then at $22.75. Wyckoff's Market Rating: 4.5.

March N.Y. copper closed up 115 points at 379.20 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage. Prices are in a choppy, seven-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 December high of 393.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at this week's high of 383.60 cents and then at Friday's high of 386.40 cents. First support is seen at today's low of 376.65 cents and then at last week's low of 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 .

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold, silver down amid bearish daily outside markets

Gold and silver prices are down near midday U.S. trading Monday. A firmer U.S. dollar index and a slight rise in U.S. Treasury yields to start the trading week are bearish outside market forces for the metals markets. Both metals have also seen their near-term chart postures deteriorate recently, especially in silver. That’s inviting fresh technical selling. Gold and silver bulls are hoping for some friendlier fundamental news with this week’s batch of important economic data. February gold was last down $16.20 at $1,998.20. March silver was last down $0.226 at $23.04.

U.S. stock indexes are slightly up near midday. It’s a quieter start to the trading week, but at mid-week the Federal Reserve will announce its latest monetary policy meeting (FOMC) results. Key U.S. inflation data is also due out this week. The European Central Bank holds its regular monetary policy meeting Thursday.

Traders this week will also keep a closer eye on big U.S. Treasury bond and note auctions on Monday and Tuesday. The U.S. government will sell over $20 trillion of its debt this year. Some market watchers wonder how much longer the U.S. can keep selling more and more of its debt to the marketplace, without serious disruption.

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $71.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.26%.

Technically, February gold futures prices hit a three-week low today. The bulls still have the slight overall near-term technical advantage but are fading fast. Prices are still in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,075.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,955.40. First resistance is seen at today’s high of $2,023.70 and then at the October high of $2,039.70. First support is seen at $1,990.00 and then at $1,975.00. Wyckoff's Market Rating: 6.0

March silver futures prices hit a three-week low today. The silver bulls have lost their overall near-term technical advantage. A two-month-old uptrend on the daily bar chart has been negated. 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 October low of $21.17. First resistance is seen at $23.50 and then at $24.00. Next support is seen at $23.00 and then at $22.75. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 385 points at 379.20 cents today. Prices closed nearer the session low today. The copper bulls still have the slight overall near-term technical advantage. Prices are in a seven-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 December high of 393.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 362.60 cents. First resistance is seen at today’s high of 383.60 cents and then at Friday’s high of 386.40 cents. First support is seen at today’s low of 377.55 cents and then at last week’s low of 372.90 cents. Wyckoff's Market Rating: 5.5.

By

Jim Wyckoff

For Kitco News

Contact jwyckoff@kitco.com

www.kitco.com

Time to Buy Gold and Silver

David

Analysts turn bearish on gold, while retail investors remain bullish

Gold gave up much of its recent gains during the first full week of December trading. After posting its first-ever monthly close above $2,000 last Friday, then opening Monday's Asian trading session with a new all-time high of $2,150 per ounce, the precious metal trended steadily downward in the following days, and was clinging to support around the $2,000 level on Friday afternoon.

The latest Kitco News Weekly Gold Survey shows most retail investors are still expecting price gains next week, while the overwhelming majority of market analysts have turned bearish or neutral on the yellow metal's near-term prospects.

Mark Leibovit, publisher of the VR Metals/Resource Letter, has moved from bullish to neutral on gold for next week. "With the US Dollar upticking and following last week's blow-off to the upside, I think we have to be cautious here," he said. "So, I am voting NEUTRAL for now."

Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, said he's bearish on gold prices for the coming week.

"The market reaction to today's nonfarm payrolls and wage inflation data pushed up treasury yields and USD while knocking gold back a bit," he said. "I think the Fed is going to be less dovish than the street is hoping which may continue the correction in Gold that started after the overnight spike that started this trading week."

James Stanley, senior market strategist at Forex.com, sees gold prices rising next week. "Gold has had a tendency to set bear traps this year and the reversal seen earlier in the week may be setting up something similar," he said. "If the weekly bar of spot Gold closes below $2k that's going to look like an aggressive reversal candle. But, really, I'm not sure the risk backdrop supports such a thesis at the moment, and there are two major drivers next week with CPI and FOMC, so matters can change quickly."

"What we have seen so far was bulls showing up with support at or around that $2k level even after the massive reversal move to open the week," Stanley said.

Adrian Day, President of Adrian Day Asset Management, has switched his stance on the precious metal from neutral to negative. "Though the fundamental longer-term outlook is very positive, gold is vulnerable to bad news after such a strong run up, as I wrote last week. And we seem to have got that bad news with a stronger-than-expected official U.S. jobs report, destroying the optimism of other recent reports, and mitigating expectations of rate cuts any time soon."

Day said he sees "further downside" for the yellow metal. "Gold could easily fall back under $2,000, to support around $1975," he said. "However, the fundamental premise is that the Fed and other central banks will stop tightening in the face of deteriorating economies and unmanageable debt burdens while inflation remains stubborn, and this scenario is very bullish for gold."

This week, 15 Wall Street analysts participated in the Kitco News Gold Survey, and only three experts, or 20%, expected to see higher gold prices next week. Eight analysts, or 53%, predicted a drop in price, while the remaining four experts, representing 27%, were neutral on gold for the coming week.

Meanwhile, 729 votes were cast in Kitco's online polls, and market participants are maintaining their bullish outlook for the coming week despite this week's decline. 428 retail investors, or 59%, looked for gold to rise next week. Another 167, or 23%, expected it would be lower, while 134 respondents, or 18%, were neutral on the near-term prospects for the precious metal.

Kitco Gold Survey

Wall Street

Bullish20%

Bearish53%

Neutral27%

VS

Main Street

Bullish59%

Bearish23%

Neutral18%

The latest survey shows that retail investors expect gold prices to trade around $2,056 per ounce next week.

Central banks will once again take center stage in the coming week, with the FOMC rate decision on Wednesday, followed by the ECB and Bank of England decisions on Thursday. All three are expected to hold interest rates unchanged, though investors will still be watching to see if there is a shift in their tightening biases and projections.

Other noteworthy data releases include U.S. CPI on Tuesday, U.S. PPI on Wednesday, and the Empire State manufacturing survey and Flash PMI on Friday.

Daniel Pavilonis, Senior Commodities Broker at RJO Futures, said the pause in the gold price rally this week coincided with the pause in the slide in yields. "The yields stopped going down, and are starting to look like maybe they're overdone," he said. "I think gold as a market is questioning whether or not this thing can have the momentum to go higher."

Pavilonis believes the catalyst for the spike to all-time highs was geopolitics, "the Red Sea situation, aircraft carriers, some U.S. vessel was shot at," he said. "Then it sold off pretty quick, and now we're just range-bound."

"This market has so many reasons to trade at a much higher level, and it just really hasn't, although it has stayed at elevated levels," he added. "I think now you have another competing force with Bitcoin. The cryptocurrencies have started to take off again, and we've seen this last time cryptos took off. Are cryptos stealing some of that purchasing power away from gold?"

"My call for next week would be range-bound sideways," Pavilonis said. "It just seems like $2,000 is a magnet. We fall below it, we get back up there. We thought we'd rise above it, we fall back down to $2,000. I think it's the target, that's where the market is comfortable right now."

Adam Button, head of currency strategy at Forexlive.com, believes gold can move higher next week. "The weak hands have been shaken out of gold after the squeeze to start the week, but the fundamental picture remains intact," he said.

"I like gold lower next week," said Marc Chandler, Managing Director at Bannockburn Global Forex. "The massive key reversal on Monday sets the technical tone. A break of $2006 could see $1985. Moreover, five G10 central banks meet next week, and most will likely push against the aggressive rate cuts and early timing the market is discounting."

Darin Newsom, Senior Market Analyst at Barchart.com, has joined the bears for the near term. "February gold completed a bearish key reversal on its daily chart Monday, December 4, and did it in a big way," he said. "The contract consolidated for much of the rest of the week, but still remains in a short-term downtrend."

Heading into next week's trading, Newsom pegs initial short-term support at Tuesday's low of $2,027.60. "A break below that mark could trigger a selloff to test the next downside target of $1,997.40, the 50% retracement level of the previous uptrend from $1,842.50 (October 6 low) to $2,152.30 (December 4 high)," he said.

Frank McGhee, head precious metals dealer at Alliance Financial, also expects to see lower gold prices over the coming week, as the precious metal is "still reacting to the High Volume, Exhaustion Highs @ 2150+/-."

And Kitco Senior Analyst Jim Wyckoff expects gold prices to trade in a range next week. "Sideways and choppy as bears have gained some technical momentum late this week," Wyckoff said.

After kicking things off with a bang, gold prices slid steadily lower during the week, with spot gold falling 3.29% since Monday. The precious metal traded below $2,000 between Noon and 1:30 pm EST on Friday, but has since pulled back above that level, last trading at $2,001.71 per ounce, down 1.32% on the day at the time of writing.

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

David

The gold market has a big hill to climb as prices lose 3% after hitting all-time highs

 According to some analysts, next week will be an important test for the gold market as a hawkish Fed could put downward pressure on a market that is already sensitive following Monday's blow-off top.

After hitting a record high around $2,150 an ounce at the start of the week, gold prices are heading into the weekend down more than 3%, testing critical support just above $2,010 an ounce. With a $141 swing this week, the gold market saw the most volatility since mid-August 2020, just after gold established its previous record high.

Ole Hansen, head of commodity strategy at Saxo Bank, said that Monday's rally and subsequent selloff was not helpful for gold's long-term price action.

"Technically, gold has a lot of work to do to make up for the damage that was done," he said

Along with overbought momentum, Hansen said the gold market has run too far ahead regarding potential rate cuts in 2024, which could keep prices below $2,050 an ounce in the near term.

Some cold water was poured on a potential rate cut in March after employment data on Friday showed that the U.S. economy created 199,000 jobs last month, beating expectations. At the same time, the unemployment rate dropped to 3.7%, down from 3.9% in October.

"At the very least, we are going to see volatile markets and the room for a positive surprise for gold will be limited," Hansen said.

Craig Erlam, senior market analyst at OANDA, said he is also expecting to see elevated volatility in gold in the near term.

"It really has been quite the week for the yellow metal and with US inflation and the Fed interest rate decision to come next week, the volatility may not be going anywhere," he said.

Phillip Streible, chief market strategist at Blue Line Futures, said that he is expecting to see some downward pressure on gold. He added that after Friday's employment report, it is unlikely Federal Reserve Chair Jerome Powell will shift his hawkish stance, even as the central bank is expected to leave interest rates unchanged.

Gold could be sensitive to updated dot plots

It's not just a hawkish Powell that threatens the gold market. Along with its monetary policy decision, the Federal Reserve will release its updated economic projections, including its interest rate forecast, also known as the dot plot.

In the last update in September, the central bank signaled that it sees only two potential rate cuts in 2024. However, markets are pricing in more than 100 basis points of easing next year. According to the CME FedWatch Tool, markets see a nearly 60% chance that the first cut comes in March.

"There is going to be a clash between the Fed and market expectations unless we see a major adjustment in the dot plots," said Hansen.

Along with the Fed meeting, analysts have said that November's Consumer Price Index data could also add to the market volatility. Some analysts have said that if core inflation remains above 3%, it will force the Federal Reserve to maintain its tightening bias.

Keep an eye on BOE and ECB

While the Federal Reserve is in the spotlight next week, the Bank of England and the European Central Bank will be releasing their monetary policy decisions, with markets expecting rates to remain unchanged. However, investors are still anxious to see if there is a shift in their tightening biases.

Although gold prices could struggle next week, some analysts note that the market is still in good shape.

In a recent interview with Kitco News, Joseph Cavatoni, North American market strategist at the World Gold Council, said that he doesn't see Monday's failed rally as very harmful. He said that the rally shows how much potential the precious metal has when it sees the right market conditions.

Streible said that although prices may go lower, he thinks the current price is an attractive entry point.

"Here is where you start to dip your toe in the market," he said. "The downside is limited in gold. Although Powell won't be ready to cut rates in March, a slowing economy means that interest rates are ultimately going lower and that is what will propel gold higher."

Hansen said he is watching to see if gold prices will hold support at $2,010, adding that a break of that level could trigger some essential stops in the marketplace and create new selling momentum. He said that if 2,010 breaks, investors should keep an eye on the 200-day moving average of $1,959 an ounce.

Streible said that he is looking for support to be tested around $1,980 an ounce.

Economic data to watch next week:

Tuesday: U.S. CPI

Wednesday: U.S. PPI, FOMC monetary policy decision

Thursday: Bank of England monetary policy decision, European Central Bank monetary policy decision

Friday: Empire State manufacturing survey, Flash PMI

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

Gold at $2010 or $1985 is a 'buying opportunity' and 2024 will be a 'golden year' for metals – Graceland's Stewart Thomson

Gold prices are likely to take a breather for the next week or two, but any pullbacks should be seen as opportunities to buy ahead of the 2024 bull market, according to Stewart Thomson, President of Graceland Investment Management.

“The key ‘thrill of victory and agony of very temporary defeat’ weekly gold chart,” Thomson wrote.

He said that broadening patterns are an indication of loss of control in markets. “The wild Sunday night and Monday gold price action is “textbook” for the huge broadening pattern in play,” he said.

Thomson said that while stochastics is now showing a crossover sell signal, RSI is not. “The most likely scenario now is a pause for a week or two, and then another more significant rally to above the immense $2080 ‘line in the sand’,” he said.

He said that investors looking for tactical moves in the current market should consider gold equities. “Gold stock enthusiasts who did some selling into the $2080 gold price area should now focus on buying at $2010, $1985, and $1928.”

Thomson also shared “key buy zones” for the precious metal itself which he said should be the focus for long-term accumulators.

“From the $2145 area high, a drop to support at $2010 is a $130/oz price sale,” he wrote. “A drop to $1985 support is a $155/oz sale, and the $217/oz drop to $1928 support would be a truly epic price sale but this last one is unlikely to happen.”

“I’m not a big fan of sloping trendlines in the gold market, but they are helpful at times,” he added. “Note the green trendlines defining the volatile uptrend. A drop to the lower trendline would put gold at the big $2010-$1985 support area. It’s a ‘must buy’ zone for most gold stock enthusiasts. I call it a golden stocking stuffer for Christmas 2023!”

Looking at the U.S. dollar, Thomson said the DXY chart is indicating “some minor inverse H&S action” which would support a one- to two-week pause for gold.

“US rates aren’t confirming the action in the dollar,” he warned. “There’s a dead cat bounce, but the weekly chart suggests a much bigger dip in rates lies ahead.”

“The bottom line is that 2024 is likely to be a ‘golden year’ for the metals, and rates may stay low until 2026 or 2027 before the US government creates the next massive wave of inflation with its drug-like addiction to fiat, meddling, spending, and debt,” he said. “From there, the Fed would start hiking again and gold would take an initial hit but it would happen from a much higher level than where it is now. How high? Probably $3000+, and at that point, most money managers would have a keen interest in the miners, a ‘here to stay’ interest.”

Thomson concluded with a look at those miners, in the form of “the stunning GDX chart.”

“A textbook inverse H&S pattern (with breakout) is now the head of what could be a much bigger pattern,” he wrote. “While the gold bullion market action is wild, GDX and most gold stocks look great! The right shoulder build could take GDX to just under $29, but it doesn’t need to go that low.”

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

David

Spot gold price rockets through resistance on Sunday evening, setting new all-time highs

Spot gold opened the Sunday evening session with massive momentum, obliterating key resistance levels and the previous high to set a new all-time high of $2,148.99 within the first half-hour of trading.

Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com and President of VerifiedInvesting.com, told Kitco News that the move was driven by a powerful combination of rate cut expectations and technical levels.

“Gold surged through its all-time highs on the back of hopes for lower rates sooner (vs higher for longer), future money printing expectations and stops being triggered on the break of $2,100,” he said. “The inverse head and shoulder pattern has triggered (assuming a daily close above $2,080).”

Soloway said a “calculated target for 2024 sits at $2,534,” which would represent a completion of the inverse head and shoulders pattern breakout.

“Investors are likely to favor gold as a way to protect against recession, inflation, money printing and the classic safety trade,” he added.

Matt Simpson, Market Analyst at CityIndex and Forex.com, wrote on X that traders need to be cautious about what this move means for gold prices as it happened while liquidity was low.

“Gold just made minced meat out of the 2022 / prior record high, rising $75 at the open and smashing above its 1-week implied volatility band,” Simpson said. “Lots of gold headlines are to be expected. But I remain suspicious of the move, given it occurred during low liquidity trade.”

Simpson admitted that he completely missed the move, but he’s also “happy to sit on the side line and avoid the inevitable chop that could follow.”

After setting the new all-time high shortly after 6:30 pm EST, spot gold has ratcheted steadily lower, last trading at $2,091.48, but still up nearly 1.00% on the session.

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

David

Gold starts December with all-time highs; but can continue to ignore a hawkish Fed – analysts

A record closing price in November wasn't enough for gold investors, as solid momentum has pushed prices to an all-time high ahead of the weekend.

February gold futures last traded at $2,091.90 an ounce, up more than 4% from last Friday's close. Gold's previous record was at $2,089.20 in August 2020.

Gold is seeing renewed buying momentum as markets continue to price in a potential rate cut as early as March. The precious metal's rally comes even as the central bank maintains its tightening stance. Friday, Federal Reserve chair Jerome Powell said that he is still not confident monetary policy is sufficiently restrictive enough to bring down inflation to 2%.

However, markets are paying little attention to what Powell is saying, as the CME FedWatch Tool shows that markets are now pricing in a more than 50% chance of a rate cut in the first quarter of 2024.

"The precious metal remains supported by Fed cut bets while technical factors continue to support the upside momentum,' said Lukman Otunuga, Manager of Market Analysis at Forexlive.com. "In the absence of any fresh fundamental catalyst, November's monthly close above $2000 could provide a foundation for bulls to send prices higher."

Naeem Aslam, chief investment officer of Zaye Capital Markets, said this could be the start of a bigger move for gold with "bright days ahead."

"We believe that the Fed has reached its peak of rate hike cycle regardless of what some members of the Fed continue to say," he said. "We believe that there are actual real chances that the Fed will cut the rate towards the back end of Q1 next year. However, the threat remains stubborn inflation. If we don't see CPI flirting with the 3% mark or even lower, the Fed may keep rates at the current level till the end of H1."

Although the Federal Reserve's aggressive monetary policy still poses a risk for gold, some analysts have said that a slowing economy means that, ultimately, the Federal Reserve's next move will be to cut rates, potentially sooner rather than later.

Robert Minter, director of ETF Investment Strategy at abrdn, said that cracks continue to appear in the U.S. commercial real estate market as the sector continues to feel the effects of the Federal Reserve's aggressive rate hikes and high vacancies as workers continue to work from home.

"If – that's a big ‘if,' but if we are seeing the beginning of commercial real estate bubble popping, there will be more money printing. That's part of what we are seeing with the gold price again today. Another part is the market pricing in no more rate hikes, and a higher potential for rate cuts in the near future. – then we could get a gold bull market like the last three times the Fed Funds rate cycle was in this spot," Minter said in a comment to Kitco News.

Minter added that the last three times the Federal Reserve has paused its tightening cycle, gold has rallied 57%, 235% and 69%, respectively. He pointed out that gold prices are so far up 5.4% since the Fed moved to a neutral stance.

Nicky Shiels, head of metals strategy at MKS PAMP, also noted that gold could be catching a safe-haven bid even as economic data remains fairly resilient.

"Gold is internalizing that people do not feel that way. Experts talk of a ‘rupture in our economic health and social fabric,' but less dramatically, people are simply feeling worse off than before and that's being expressed through havens," she said.

At the same time, analysts note that gold prices continue to move higher even as most retail investors shun the market. Analysts have said that gold prices will really move when this sentiment starts to shift.

Despite this optimism, some analysts recommend investors be cautious with gold at these levels and not to chase the market.

Barbara Lambrecht, commodity analyst at Commerzbank, said that gold prices could be limited ahead of next Friday's nonfarm payrolls report.

"This is because the current expectations of Fed rate cuts of 50 basis points by mid-2024 are more likely to be disappointed. Accordingly, we also envisage a correction in the gold market. This could be triggered by the US labor market report at the end of the week," she said.

Some economists have said that investors should also pay attention to the University of Michigan consumer sentiment survey as inflation expectations have been elevated in recent months.

Phillip Streible said he also thinks the market has gotten a little ahead of itself as a March rate hike seems unlikely. He noted that it is unlikely the Fed will cut rates until inflation is closer to its 2% target.

Economic data for next week:

Tuesday: ISM Service-sector PMI, U.S. JOLTS Job Openings

Wednesday: ADP private sector employment, Bank of Canada monetary policy decision

Thursday: Weekly jobless claims

Friday: nonfarm payrolls, University of Michigan consumer sentiment survey

  Gold prices to see a sustained push above $2,100 in 2024 – TD Securities

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David