Gold price correction This week won’t derail a broader rally as Fed looks to cut rates

Gold price correction This week won’t derail a broader rally as Fed looks to cut rates

The Federal Reserve has given the all-clear to gold after signaling it still wants to cut interest rates three times this year, even as inflation remains above the 2% target; however, some market analysts said that the precious metal could see a healthy correction next week and in the near term.

Following the Federal Reserve’s monetary policy meeting on Wednesday, gold prices rallied to a record high above $2,220 an ounce; however, the rally was short-lived, and prices are looking to end the week in neutral territory. April gold futures are currently trading around $2,164 an ounce, only a few dollars up from last week’s close.

Although the market looks a little heavy, a short trading week with markets closed Friday because of the Good Friday holiday could limit price volatility next week.

James Stanley, senior strategist at Forex.com, said that he expects gold prices to ultimately trend higher ahead of the Federal Reserve’s June monetary policy meeting when the central bank is expected to start its easing cycle.

He noted that gold remains well supported as the Federal Reserve signaled that it will ease interest rates even if inflation remains elevated.

“The Fed had every opportunity to strike a more balanced note, but they didn’t. If you look at the data, there is no reason for the Fed to look for three rate cuts this year. They don’t need to cut as the unemployment rate remains at the lowest point in my lifetime,” he said. “The fact that the Fed didn’t strike a more balanced tone raises a lot of questions for me and is a red flag for the economy that I think will continue to support gold.”

However, Stanley added that although he likes gold, he expects to see a correction in the near term. He said that investors should be cautious of chasing prices near record highs.

“Gold wants to go higher, but I think a pullback would be healthy. For investors who were long gold at the start of the month, this would be a good place to take some profits so we could see a short-term correction,” he said.

Looking at technical levels, Stanley said he is watching initial support at $2,146, as that was the December swing high. However, he added that he wouldn’t be surprised to see gold test support at $2,075 an ounce, representing a three-year resistance point before the early March breakout.

Lukman Otunuga, manager of market analysis at FXTM, said that although the Federal Reserve continues to signal rate cuts this year, the depth of the easing cycle will remain data-dependent. He explained that gold needs to see more disappointing economic data in the coming weeks and months to support the current rally.

“Although the Fed has signaled that three US interest rates remain on the cards in 2024, it’s all about economic data which could support or oppose the argument around rate cuts,” he said. “Gold bulls could return to the scene if incoming US data next week supports the case for lower rates. However, bears are also lurking and waiting for another opportunity to strike prices lower.”

Despite the bullish outlook, Otunuga said that, ahead of next week, the gold market “is looking a little tired.”

 

Although gold prices could see a correction next week, other analysts have said that investors should remain focused on the broader uptrend.

Naeem Aslam, Chief Investment Officer, said that although gold has seen a strong rally this month in anticipation of the Fed’s easing cycle, there is still significant potential for higher prices.

“We certainly haven’t hit high in terms of the gold price. We think that the important ingredient is the Fed’s definition of a normal interest rate, i.e., their target level,” he said. “We do think that the process has started as the Fed is sending a subdued signal that their pre-Covid level needs to be adjusted, and once they make it clean, we would expect the gold price to rally.”

While gold’s technical price action represents a short-term risk, the precious metal also faces some fundamental threats in the near term.

David Morrison, senior market analyst at Trade Nation, said that renewed strength in the U.S. dollar creates a headwind for gold. The greenback is ending Friday at a four-week high above 104 points.

“Could this sudden reemergence of dollar strength indicate that investors are less sanguine than the Fed over the prospect of rate cuts? Perhaps. But it also reflects that the latest round of central bank meetings have made it clear that rate cuts are coming from just about everyone,” he said in a note Friday. “In fact, the Swiss National Bank have already moved. That being the case, the US dollar is back in favour as it’s now the cleanest shirt in the laundry basket. It could be that this shake-out of the weaker holders of gold and silver can set the stage for a bigger rally. But that may be wishful thinking if the dollar continues to strengthen.”

 

Economic data for next week

 

Monday: New home sales

Tuesday: Durable goods orders, consumer confidence

Thursday: Weekly jobless claims, US GDP, Pending home sales

Friday: Core PCE price index

Kitco Media

Neils Christensen

Time to Buy Gold and Silver

David

Gold a bit weaker as U.S. jobs report on deck

Gold a bit weaker as U.S. jobs report on deck

Gold and silver prices are modestly lower in quieter U.S. trading near midday Thursday. The markets are seeing some price consolidation after big moves earlier this week. Also, traders are awaiting a key U.S. data point on Friday morning. February gold was last down $4.40 at $2,043.50. March silver was last down $0.168 at $24.06.

Traders are awaiting the U.S. employment situation report on Friday morning—arguably the most important U.S. data point of the month. The November non-farm payrolls number is seen coming in at up 190,000 versus a rise of 150,000 in the October report. Wednesday’s ADP national employment report showed a modest rise of 103,000 in November, versus expectations for a gain of around 130,000.

In overnight news, China reported its November exports were up 0.5%, year-on-year, while its imports were down 0.6% in the period. The exports were just slightly better than expected, while the imports were a bit less than expected.

  Central bank gold purchases remained strong through October – World Gold Council

The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil prices are near steady and trading around $69.50 a barrel. Prices on Wednesday hit a five-month low. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.151%.

Technically, the gold futures bulls still have the overall near-term technical advantage but became exhausted to suggest a near-term market top is in place. Prices are still in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at the record high of $2,152.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at Tuesday’s high of $2,059.60 and then at $2,072.70. First support is seen at this week’s low of $2,027.60 and then at $2,015.00. Wyckoff's Market Rating: 6.0

The silver bulls still have the overall near-term technical advantage, but became exhausted to suggest a near-term market top is in place. Prices are still in a two-month-old uptrend on the daily bar chart but the bulls need to show fresh power soon to keep it alive. Silver bulls' next upside price objective is closing March futures prices above solid technical this week’s high of $26.34. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Wednesday’s high of $24.715 and then at $25.00. Next support is seen at today’s low of $24.10 and then at $24.00. Wyckoff's Market Rating: 6.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold needs to break above $2,010 for prices to have a chance at ATHs

Gold needs to break above $2,010 for prices to have a chance at ATHs

The gold market has managed to reclaim the $2,000 level as it looks to end its second consecutive week in positive territory. However, analysts have said that gold's momentum remains limited, and prices are unlikely to break current resistance levels as the Federal Reserve maintains its tight monetary policy bias.

Analysts noted that with Israel and Hamas agreeing to a limited cease-fire, weakening the precious metal's safe-haven allure, U.S. monetary policy is expected to be the most significant factor driving gold's near-term price action.

"Our economists only expect the first rate cut to be implemented in the middle of next year, so only then is the price of a troy ounce of gold likely to climb lastingly above $2,000," said Commerzbank commodity analyst Barbara Lambrecht in a note Friday.

However, while gold will likely be stuck below $2,000 an ounce, many analysts are not expecting to see much downside risk as seasonal factors start to kick in.

In a recent note, Nicky Shiels, head of metals strategy at MKS PAMP, said that in the last five years, gold has seen average gains of 2.7% between Thanksgiving and Dec.31.

Gold is above $2,000, but resistance continues to holdOle Hansen, head of commodity strategy at Saxo Bank, said that the biggest risk for gold will be rising bond yields that strengthen the U.S. dollar.

"Gold looks well supported and only a sharply higher dollar will change that," he said in a comment to Kitco News. "Whether or not it's ready to make a decisive push higher already is a bit doubtful unless a break/close above 2010 triggers [fear of missing out]."

With renewed focus on U.S. monetary policy, the gold market will be sensitive to U.S. GDP and inflation data. Although the U.S. economy is expected to see extraordinary growth in the third quarter, there are growing fears of slower activity in the fourth quarter. At the same time, slower growth is expected to continue to slow inflation.

Markets will also be paying attention to a slew of central bank speakers on Tuesday, while Federal Reserve Chair Jerome Powell will cap the week as he participates in a fireside chat titled "Navigating Pathways to Economic Mobility" at Spelman College in Atlanta.

In recent comments, Powell has been fairly straightforward that interest rates will remain in restrictive territory as inflation still isn't under control.

However, energy prices and next week's OPEC+ meeting could be a potential wildcard for inflation.

It is expected that the oil cartel will announce new production cuts, but if these underwhelm expectations, then oil prices would continue their current downtrend.

Daniel Ghali, senior commodity strategist at TD Securities, said that counter-intuitively, lower oil prices could provide some near-term support for gold. He explained that lower energy prices will give the Federal Reserve some room to ease its current tightening bias.

However, Ghali said he doesn't see gold prices breaking new ground anytime soon. He noted that Asian and emerging market demand continues to provide support for the precious metal, but added that gold remains stuck as Western investors continue to avoid it.

"We expect Western investors to continue to ignore the gold market until the U.S. falls into a recession in the first half next year, which forces the Federal Reserve to aggressively cut interest rates," he said.

  Gold and silver prices stuck, waiting for a catalyst – Quant Insight's Huw Roberts

Gold is above $2,000, but resistance continues to hold

Looking at gold's technical picture, analysts have said that investors and traders need to keep an eye on initial resistance at $2010.

"Should buyers achieve a close above $2009, the price could extend the bullish run towards $2050, the April high, before bringing $2082, the all-time high, into focus," said Fiona Cincotta, senior market analyst at City Index.

On the downside, analysts have highlighted initial support between $1,945 and $1,930 an ounce.

"If we see gold prices go back below $1,940, then this new uptrend is done and we will have to wait for another buying opportunity," said Phillip Streible, chief market strategist at Blue Line Futures.

However, Streible said he remains bullish on gold as the market appears to be setting itself up for a Christmas rally.

Economic data for next week:

Monday: U.S. new home sales

Tuesday: U.S. Consumer Confidence

Wednesday: Preliminary U.S Q3 GDP

Thursday: OPEC meeting, U.S. CPE Index, personal income and spending, weekly jobless claims, pending home sales

Friday: ISM manufacturing PMI, Powell fireside chat

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

Gold to hit $2k by end of 2023, reach $2,200 an ounce in 2024 as dollar weakens – SocGen

Gold to hit $2k by end of 2023, reach $2,200 an ounce in 2024 as dollar weakens – SocGen

While French Bank Société Générale has slightly reduced its exposure to the precious metal, it still remains positive on the precious metal as inflation remains stubbornly elevated amid plans by the Federal Reserve to end its tightening cycle.

Despite gold's lackluster performance through the summer, SocGen is optimistic that prices have a path back to $2,000 an ounce.

"Headline inflation continues to cool, but core inflation remains stubbornly high, and the Fed is near its cyclical peak. As the timing of a potential US recession recedes, these developments give the Fed the opportunity (and the obligation) to keep rates higher for longer to fight inflation. This should keep real rates elevated, and – combined with the strong dollar – creates headwinds that should cap gold prices at or below $2,000/oz to the end of this year, in our view," the bank's commodity analysts said in their latest outlook report.

Looking to the new year, the analysts said that they see gold prices pushing to $2,200 an ounce by the end of 2024 as investors realize how difficult it will be for central banks to bring core inflation down to their 2% targets.

"With the low-hanging fruit in the inflation fight already picked, we think the gold market will have to price in higher forward CPI projections. As a result, we see gold appreciating to $2,200/oz in lumpy moves by end-2024, as the market adjusts its forward inflation expectations with the macro newsflow. Further, in our anticipated scenario of moderating US rates, we see the USD weakening – an additional bullish driver that should buoy gold, together with other USD-denominated assets," the analysts said.

Although SocGen is bullish on gold, they noted that the precious metal will face a bumpy road. They said that there is still room for investment demand to weaken. The comments come as holdings in the world's biggest gold-backed exchange-traded fund have fallen to their lowest levels since January 2020.

"Despite 139t of gold being withdrawn from ETF coffers since early June, the current value, at 2,789t is more than 20% above the average holding in 2016-20 (before large inflows due to COVID panic). These elevated holdings open the door for further outflows from ETFs in the short term if no bullish catalysts galvanize investors to diversify further into gold," the analysts said.

At the same time, the bank sees some downside risks in gold's speculative positioning.

  Hedge funds still neutral on gold, silver as economic uncertainty supports prices

"While money managers' long positioning has remained elevated in 2023, we noted a strong increase of short positions in August. Gold is close to being overbought on both the 1-year and 2-year windows, according to our OBOS model. Despite the large increase in short contracts held by money managers in August, short positioning remains average. This means the highest risk for gold in terms of positioning would be a long liquidation," the analysts said.

Although the bank remains bullish on gold, last week, it announced it was lowering its exposure to the precious metal in its Multi-Asset Portfolio Strategy. Heading into the fourth quarter, SocGen now holds 5% of its portfolio in gold, down from 6% in the third quarter.

Gold represents 50% of its commodity strategy, as it holds another 5% in broader commodities, with a focus on oil.

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

It was a disappointing week for gold prices this past week.

It was a disappointing week for gold prices this past week.

Sure, the precious metal just barely pulled off a gain of +0.3%. However, XAU/USD reversed most of its upside progress in what could have been a 1.8% rally. Let us take a closer look at the price action.

On the daily chart below, gold was seen struggling to hold a push above the 23.6% Fibonacci retracement level of 1971.63. The breakout was false at the conclusion of last week. That is now placing the focus on support. This is a combination of the 1936 inflection point as well as the 50-day Simple Moving Average.

Prices remain above the 50-day SMA, which is offering a cautious upside technical bias. From here, this line may hold as support, reinstating an upside focus. Otherwise, extending lower places the focus on the 38.2% Fibonacci retracement level at 1903, as well as the former falling trendline from May.

In the event of a turn higher, keep a close eye on the 14.6% level at 2013 before retesting the 2048 – 2080 zone.

Chart Created in TradingView

It was a slightly worse story for silver prices last week. XAG/USD finished -1.4% over the past 5 trading days. Like gold, there was a false breakout above the 23.6% Fibonacci retracement level of 24.66 as prices were unable to push through the 14.6% point at 25.22. A turn lower from here leaves silver facing the 20-day SMA, which may maintain the near-term upside bias.

But, getting there entails clearing the 38.2% level at 23.75. Clearing both this point and the SMA would offer a stronger bearish conviction, placing the focus on lows from June. Otherwise, extending higher places the focus on highs from April 2022. The latter makes for a range between 25.85 and 26.21.
 

Silver Daily Chart

Chart Created in TradingView

— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

David

Gold, silver back off after better-than-expected U.S. manufacturing reports

Gold, silver back off after better-than-expected U.S. manufacturing reports

Gold prices are moderately lower and silver has lost all the big early price gains in midday U.S. trading Monday. Some upbeat U.S. economic data and positive remarks from the head of the largest U.S. bank worked to pressure the two precious metals markets. June gold was last down $8.10 at $1,990.90 and July silver was down $0.006 at $25.25.

(By the way, I encourage you to check out my new daily item, "Kitco daily macro-economic/business digest." If you need to be up to speed quickly on the latest news that's impacting or has the potential to impact the general marketplace, this report can be your one-stop shopping. Check it out and let me know what you think.)

The gold and silver markets saw selling pressure develop at mid-morning, right after the U.S. ISM April manufacturing purchasing managers index (PMI) and U.S. construction spending reports came in better than market expectations. Also, JP Morgan chief Jamie Dimon said in a conference call after JP Morgan took over the failed First Republic Bank that the U.S. banking sector is now very healthy. Earlier, some safe-haven demand in gold and silver was seen following the weekend news the FDIC shut First Republic in the second-largest U.S. bank failure ever.

On tap this week is the Federal Reserve's Open Market Committee (FOMC) meeting that begins Tuesday and ends Wednesday afternoon. Gold and silver traders today reckoned fresh on the FOMC members' minds will be today's better U.S. manufacturing data, which favors the monetary policy hawks. The FOMC is expected to raise the key U.S. interest rate by 0.25%. The European Central Bank also meets Thursday. The ECB is also expected to raise its main interest rate by a quarter-point. Also, on Friday comes the U.S. employment situation report from the Labor Department. Corporate earnings reports continue to flow out this week, including Apple's results.

  S&P 500 will crash 20% as 'panic' sets in and gold hits $2,300 in 2023, Fed will cause 'more tremors' in banking sector – Gareth Soloway

Global stock markets were mostly higher overnight. Some European markets were closed for a holiday. U.S. stock indexes are mixed at midday. The U.S. stock index bulls had a good week last week, including the S&P 500 and Nasdaq indexes on Friday closing at technically bullish weekly and monthly high closes.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.551% and up today. These three markets were daily bearish elements for the gold and silver markets.

Technically, June gold futures bulls have the firm overall near-term technical advantage. However, a price uptrend on the daily bar chart has been negated. Bulls' next upside price objective is to produce a close above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,000.00 and then at today's high of $2,015.40. First support is seen at $1,980.90 and then at $1,965.90. Wyckoff's Market Rating: 7.0

July silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.435. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.80 and then at $26.00. Next support is seen at $25.00 and then at last week's low of $24.735. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed up 495 points at 394.00 cents today. Prices closed near mid-range. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 418.65 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 372.45 cents. First resistance is seen at today's high of 400.50 cents and then at 405.00 cents. First support is seen at today's low of 387.05 cents and then at the April low of 381.65 cents. Wyckoff's Market Rating: 5.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

The Fed, US dollar may stop gold’s record run next week

The Fed, US dollar may stop gold's record run next week

With so much uncertainty dominating financial markets, most analysts expect it's only a matter of time before gold prices hit new record highs above $2,000 an ounce.

However, with the market looking slightly overstretched, it might be challenging for gold to hit its new target next week. The cautious outlook for gold and silver comes as the precious metals saw significant breakout moves above $2,000 and $25 an ounce, respectively.

The gold market is looking to end the week up nearly 2% as the June contract last traded at $2,023.70 an ounce; meanwhile, silver continues to outperform, with prices ending the shortened trading week up more than 3% as the May contract trades at $25.04 an ounce.

This past week, gold and silver have significantly benefited from a sharp drop in bond yields, which in turn has weighed on the U.S. dollar. The U.S. dollar Index is looking to end Thursday at critical support around 102 points.

According to some analysts, if the U.S. dollar finds some momentum, it could prompt investors to take some profits on their bullish gold bets.

"It again looks like the U.S. dollar is trying to establish a short-term uptrend on its daily chart while June gold looks a bit top-heavy. We've seen this story before, though, and it usually ends with the greenback falling and gold strengthening," said Darin Newsom, senior market analyst at Barchart.com.

The U.S. dollar's and gold's future could be determined by just a handful of reports next week, starting with Friday's March Nonfarm payrolls report. Markets will be closed Friday for the Easter long weekend; however, the U.S. government will be open and will release the report.

Analysts note that investors and traders will have to wait until markets open Sunday before they can react to the data. According to consensus forecasts, economists expect the economy to create 288,000 jobs last month. Analysts note that anything better than expected will be bullish for the U.S. dollar and gold negative.

"As gold fires, long signals on all gauges of momentum, the upcoming jobs report could be of notable importance. On the one hand, a weak number could be a catalyst to see if the macro investors, who have thus far held notable dry-powder during the latest rally, add to their long positions. On the flip side, a strong report could bolster Fed expectations, and could see CTAs modestly reduce their positions if prices don't hold above $2026/oz," said commodity analysts at TD Securities.

   Retail Investors and analysts remain bullish on gold, but the precious metal might need a rest

While the U.S. labor market has been surprisingly resilient since early 2022, economists note that there are signs the tide is starting to shift, highlighting weakness and raising recession fears.

"If tomorrow's NFPs follow on the steps of recent data releases, showing signs of weakness in the US labor market, then I would expect further dollar weakness and the corresponding upside for the precious metal," said Ricardo Evangelista, senior analyst at ActivTrades. "I can see gold breaking through the previous maximum of $2069 touched during the summer of 2020."

Craig Erlam, senior market analyst at OANDA, said that because of current market conditions and sentiment, Friday's employment data would have to significantly surprise to the upside.

"Any disappointing data or even numbers in line with expectations and we will see gold make a run to its record highs," he said.

Aside from the jobs report, analysts note that inflation data next week could also provide some support for the U.S. dollar. Economists have said that a strong jobs market and persistently high inflation could force the Federal Reserve to continue to raise interest rates.

There are growing expectations that the Federal Reserve's tightening cycle has ended. The CME FedWatch Tool shows that markets see a roughly 50/50 chance that the central bank will leave interest rates unchanged between 4.75% and 5.00%.

While another 25 basis point hike in May would create a headwind for gold, many analysts don't see it as a game changer for the precious metal. Many analysts note that in this environment, investors will just have to wait a little longer before record highs are seen again.

Sean Lusk, co-director of commercial hedging at Walsh Trading, said that even if gold is technically overbought at current levels, there is solid support in the market.

"There are solid reasons why we are trading at these levels. We are seeing significant diversification into precious metals because of major uncertainties in the world," he said.

Lusk added that if gold does test support around $2,000, investors might want to buy micro gold futures to test the waters.

Looking beyond U.S. interest rates, Lusk said the ongoing banking crisis would continue supporting gold as a safe-haven asset.

Next week's data

Wednesday: U.S. CPI, Bank of Canada monetary policy decision, FOMC minutes

Thursday: U.S. PPI, U.S. jobless claims

Friday: Retail Sales, preliminary University of Michigan consumer sentiment

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David

Gold price rallies, post-FOMC, as USDX, U.S. bond yields sink

Gold price rallies, post-FOMC, as USDX, U.S. bond yields sink

Gold and silver pricesare higher and near their daily highs in afternoon U.S. trading Wednesday, in the wake of a slight interest rate increase from the Federal Reserve that was widely expected. April gold was up $15.30 at $1,960.40 and March silver was up $0.199 at $24.03.

The U.S. data point of the week is the Federal Reserve Open Market Committee (FOMC) meeting that just ended. The FOMC raised its Fed funds rate range by 0.25%, as expected, following the last meeting’s 0.5% rate hike. The FOMC statement said U.S. inflation has eased a bit but remains too high, suggesting more rate hikes are coming. The press conference by Fed Chairman Jerome Powell saw the chairman maintain his vigilance at stomping out problematic price inflation. Yet during his remarks, the marketplace saw its mood improve markedly as the U.S. stock indexes rallied, the U.S. dollar index tanked, U.S. Treasury yields declined, and gold and silver prices rallied. It could be that the marketplace was just relieved Powell did not sound even more hawkish than he had in his recent remarks. The European Central Bank and Bank of England hold their monetary policy meetings Thursday.

Today’s ADP national employment report for January showed a rise of 106,000 workers, which was below the consensus forecast for a rise of 190,000. Gold prices up-ticked just very slightly following the report. The ADP report is a precursor to the more important employment situation report for January from the Labor Department on Friday morning. The key non-farm payrolls number in that report is forecast to come in at up 187,000 jobs.

 LBMA annual survey sees gold prices averaging the year around $1,859 an ounce, silver to hold around $23.65

The key outside markets today see the U.S. dollar index sharply lower and hitting an eight-month low. Nymex crude oil futures prices are sharply down and trading around $76.75 a barrel. A surprising weekly rise in U.S. liquid energy stocks in the latest reporting week pressured the energy markets today. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching around 3.404%.

Technically, April 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 $1,900.00. First resistance is seen at the January high of $1,966.50 and then at $1,975.00. First support is seen at $1,950.00 and then at today’s low of $1,936.10. 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 last week’s high of $24.415 and then at $24.67. Next support is seen at today’s low of $23.44 and then at this week’s low of $23.05. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed down 1,085 points at 411.85 cents today. Prices closed nearer the session low and hit a three-week low today. The copper bulls have the firm overall near-term technical advantage but are fading a bit. A four-month-old uptrend on the daily bar chart has stalled out. 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 395.00 cents. First resistance is seen at 420.00 cents and then at this week’s high of 424.90 cents. First support is seen at today’s low of 410.55 cents and then at 405.00 cents. Wyckoff's Market Rating: 7.0.

By Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold price will power to $7,400; Rally is far from over as ‘perfect storm’ brews – Chris Vermeulen

Gold price will power to $7,400; Rally is far from over as ‘perfect storm’ brews – Chris Vermeulen

While geopolitical tensions may provide a short-lived rally in safe haven assets like gold, there is no denying that the metal is still in a long-term technical bull cycle that mirrors the beginning of 2008, said Chris Vermeulen, chief market strategist of TheTechnicalTraders.com.

Vermeulen told David Lin, anchor for Kitco News that gold is set to hi $2,700 an ounce in one year, and up to $7,400 in five years.

“I think we’re coming into a pretty major supercycle in precious metals. I think we started back in 2019 and this is about a five-year cycle for gold, and it has been a very tough year for equities, we’ve had a very long bull market, I think things are getting a little long in the teeth in terms of the equities side,” he said. “When the stock markets get to the late stages, this is where we see commodities come to life.”

Vermeulen added that this year, commodities and gold miners are set to outperform the broad equity index.

“We need to see how this market sells off,” Vermeulen said, referring to a scenario in which equities decline. “If it goes into [a sell-off] like we saw in 2020 where it is a panic phase and it goes straight down, it is going to pull gold, it is going to pull miners down, most likely. They’ll probably hold up the best and do okay, compared to the other indexes, but they’ll probably get sold off. Now, if the market chops sideways, and kind of a slow grind lower, that’s the perfect scenario for precious metals.”

While the dollar index has traditionally held an inverse correlation to gold, in the last three weeks the DXY has rallied concurrently with the metal. Vermeulen sees this trend continuing.

“We can still see the dollar and precious metals rallying together. They’re both seen to me as a very defensive play, a kind of global asset. When people get nervous, doesn’t matter where they are in the world, they’ll liquidate, and they tend to move to the U.S. dollar. We’ve seen this happen all the time,” he said, citing the Great Financial Crisis of 2008 as an example.

For more information on gold’s perfect storm and Vermeulen’s outlook for gold miners, watch the video above.

 

By David Lin

For Kitco News

Time to buy Gold and Silver on the dips

David

Gold is more than just a safe-haven asset and can fit in all portfolios – WGC’s John Reade

Gold is more than just a safe-haven asset and can fit in all portfolios – WGC's John Reade

Safe-haven demand is pushing gold prices to a three-month high but will rising geopolitical tensions create a sustainable bid in the precious metal.

On Monday editor Neils Christensen recorded a podcast with Phillip Streible, chief market strategist at Blue Line Futures. The guest was John Reade, chief market strategist of the World Gold Council. The three talked about the health of the global marketplace.

Reade said safe-haven demand is positive for gold, but prices could see a sharp correction if the conflict is quickly resolved.

Instead of looking at short-term price volatility, Reade said that the World Gold Council's research shows that gold plays a vital diversification role for any type of portfolio.

"We've issued various editions of the strategic case for gold in the U.K. and Europe and Australia, Russia, Singapore. Looking at the benchmark of assets that might be in a typical portfolio for each of those countries, you find very similar result," he said. "Somewhere between 4% and maybe the higher 10%, of gold in your portfolio seems to be optimal for increasing the risk-adjusted returns," he said.

CRU's top five commodities for 2022 – spoiler gold, silver didn't make the list

The comments come as the gold market saw an interesting trend last year as investment demand in exchange-traded products lagged physical demand. In its annual analysis of the gold market, the WGC reported that physical demand for the precious metal rose 10% to 4,021 tonnes in 2021 as 173 tonnes of gold were liquidated from ETFs.

Looking through the rest of 2022, Reade said that he thinks the gold market is in a good place, even as the precious metal faces the prospect that the Federal Reserve could raise interest rates seven times this year.

"If there were one or two mikes priced into the curve, I'd be a lot more nervous," he said. "I think we're in for some very interesting times in markets over the next, well, two months to two years."

As for gold versus Bitcoin, Reade said that the two assets are entirely different. He explained that while digital currencies have improved a portfolio's return, it has also added risk and volatility.

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

 

David