Gold has been 'shockingly stable': It's a long-term play as U.S. dollar rolls over, says Jeffrey Gundlach

Billionaire "Bond King" Jeffrey Gundlach sees inflation not returning below the 4% handle next year, and bond markets are already "sniffing out a weaker economy" coming. For gold, this means a long-term hold after a "shockingly stable" and "boring" year.

There are "rough waters" ahead for the financial markets in 2022 as the Federal Reserve looks to accelerate its tapering schedule and raise rates next year, said DoubleLine CEO Jeffrey Gundlach.

"Powell is going to double that pace of taper, which would get us out in March. It's quite likely that since the stock market and risk assets have been clearly supported for over a decade by balance sheet expansion, it is turning into rough waters," Gundlach said during the DoubleLine Total Return Webcast.

A hawkish Fed will drag the economy down. And as the central bank proceeds to raise rates in 2022, economic problems will follow, Gundlach pointed out.

"It's likely that we will see economic problems with just a few rate hikes from the Fed — four rate hikes or so. It's 1% or 1.5% on the Fed funds rate that breaks the economy," he said.

The bond market is already signaling red flags. "Since March of this year, the bond market seems to be sniffing out a weaker economy coming … One should expect economic problems sooner rather than later. My base case is we'll start to see trouble by the second half of 2022," Gundlach noted.

Canadian gold price holding steady as BoC leaves interest rates unchanged

The trigger behind a more hawkish Fed is inflation, which is not going anyway next year. Gundlach warned that the U.S. inflation pace may not decelerate below 4% on an annual basis for the whole of 2022.

"Inflation on autos may go away, the inflation on lumber may dissipate, inflation on some of the supply-chain bottlenecks may dissipate, but wage growth and shelter may replace it and keep. Looking out to the end of 2022, it's very possible that we don't see a reading that has a handle below 4% at any time in 2022.

Gundlach also projected that inflation could rise to 7% on an annual basis in the next couple of months.

When asked about gold, Gundlach said it has been "boring" and "shockingly stable" in light of the commodity inflation and the wild ride going on in bitcoin this year. "Gold and silver are kind of the orphans in the commodity market. They have not gone up at all," he said.

For gold to rally, the U.S. dollar needs to roll over. "The dollar has been a cap on gold. I do think that when the dollar heads down, gold will go up."

Gundlach continues to hold gold as a long-term play, adding that the last time he bought the precious metal was in September 2018 at around $1,180 an ounce level.

"But it certainly has not been rewarding at all this year compared to the other things from commodities," Gundlach commented.

Gundlach's long-term dollar view is "strongly bearish," with expectations of a weaker USD in the second half of 2022 or 2023 due to twin deficits in the U.S.

"When the dollar starts to slip, I think it's going to slip pretty mightily and take out that low of 2009. That'd be quite a drop from here. When the dollar starts to go down, you're going to see tremendous outperformance by non-U.S. stocks. Emerging markets will be a very strong performer," the billionaire money manager said.

DoubleLine CEO also projected that the Fed would step in to defend risk assets through money printing.

"The Fed will step in if the equity market declines by say 20% or more. Money printing and money giveaways are with us to stay. And, I predicted this years ago that we would send money to people and do it more broadly and at greater amounts," Gundlach stated.

 

By Anna Golubova

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

 

David

Gold price near steady as risk appetite growing

Gold prices are trading not far from unchanged in early U.S. dealings Wednesday. Buying interest is being limited in safe-haven gold and silver as trader and investor risk appetite seems to be growing keener by the day. However, selling interest in the metals is being squelched by the big rebound in crude oil prices recently, which suggests "black gold" and the leader of the raw commodity sector has put in at least a near-term bottom. February gold was last up $0.50 at $1,785.50 and March Comex silver was last down $0.093 at $22.425 an ounce.

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The Omicron fears seen over the past nearly two weeks have quickly faded as trader and investor risk appetite is robust at mid-week. Pfizer has just reported three vaccine doses neutralize the Omicron variant, while two doses likely still prevent serious effects from the variant.

As Omicron moves off the front burner of the marketplace, focus is on other matters such as new ideas the Federal Reserve will move even more quickly to end its bond-buying program, so it can start raising U.S. interest rates. The Fed's FOMC meets next week. The marketplace now expects the Fed to hike rates in May of next year. The Fed recently abandoned its notion that inflation is just "transitory."

In other news, China's stock markets have been pressured this week as property giant Evergrande missed a bond payment deadline Monday.

Traders are also monitoring the Russia-Ukraine border situation, where Russia has amassed troops. U.S. President Biden and Russian President Putin discussed the matter on the telephone Tuesday, but no progress was made on a de-escalation of the apparent Russian intentions of invading Ukraine and even annexing it. It appears this situation will get more tense before it gets better, and that means safe-haven assets are likely to come more into favor in the near term, including gold, silver, the U.S. dollar and U.S. Treasuries.

The key "outside markets" today see Nymex crude oil prices lower and trading around $71.00 a barrel. This week's strong gains in crude oil suggest the market last week put in a near-term bottom. The U.S. dollar index is slightly lower. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.461%.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Technically, February gold futures bulls have the slight overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at the overnight high of $1,794.30 and then at $1,800.00. First support is seen at this week's low of $1,772.40 and then at last week's low of $1,762.20. Wyckoff's Market Rating: 5.5

The March silver bears have the firm overall near-term technical advantage. Prices have been trending down for nearly three weeks. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at this week's high of $22.635 and then at $23.00. Next support is seen at last week's low of $22.035 and then at $22.00. Wyckoff's Market Rating: 2.5.
 

By Jim Wyckoff

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

David

Gold slightly up as crude oil rallies

Gold prices are up just a bit in midday U.S. trading Monday. Solid gains in crude oil prices to start the trading week (bullish) are slightly trumping better trader/investor risk attitudes (bearish). February gold was last up $1.50 at $1,785.40 and March Comex silver was last down $0.136 at $22.34 an ounce.

It was a quieter trading day Monday. Global stock markets were mixed to firmer. U.S. stock indexes are higher at midday. There is less risk aversion in the global marketplace to start the trading week. Early reports say the Omicron strain of the coronavirus appears to be a milder strain than Delta, but may be more contagious.

In other weekend news, Bitcoin and other crypto currencies saw their prices plunge, with Bitcoin losing over 10% in value at one point. Ideas of a tighter U.S. monetary policy sooner apparently helped to sink the cryptos.

Asian shares were pressured by a big drop of 20% in property giant Evergrande, as that firm warned it could default on some debt payments.

Gold is stuck between these two forces, prices to climb towards $1,900 in Q1 2022 – Standard Chartered

China's central bank has eased its monetary policy slightly by reducing the reserve requirement ratio for its banks.

The key "outside markets" today see Nymex crude oil prices solidly higher and trading around $68.25 a barrel. The U.S. dollar index is higher. Meantime, the yield on the U.S. Treasury 10-year note is presently fetching 1.388%.

Technically, February gold futures bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Bulls' next upside price objective is to produce a close above solid resistance at $1,840.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,761.00. First resistance is seen at today's high of $1,789.00 and then at $1,800.00. First support is seen at $1,775.00 and then at last week's low of $1,762.20. Wyckoff's Market Rating: 5.5

March silver futures bears have the firm overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the September low of $21.46. First resistance is seen at today's high of $22.635 and then at $23.00. Next support is seen at last week's low of $22.035 and then at $22.00. Wyckoff's Market Rating: 2.5.

March N.Y. copper closed up 460 points at 4310.25 cents today. Prices closed near the session high today. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 451.15 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 420.00 cents. First resistance is seen at 435.15 cents and then at last week's high of 438.15 cents. First support is seen at today's low of 425.35 cents and then at the November low of 420.00 cents. Wyckoff's Market Rating: 4.5.
 

By Jim Wyckoff

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

 

David

Gold starts the session flat heading into the European open

Gold is trading 0.08% higher leading into the European open at $1784/oz. On the contrary, silver has fallen 0.44% and starts the session at $22.44/oz. In the rest of the commodities complex, copper is trading just under flat, while spot WTI is up around 2%.

On the risk side, the Nikkei 225 (-0.36%) and Shanghai Composite (-0.50%) fell overnight, while the ASX (0.05%) managed to keep its head above water. Futures in Europe are initiating a positive cash open is on the cards.

In FX markets, the dollar index is up 0.19% and AUD is the only major currency to gain against the greenback. In the crypto space, BTC/USD had a dismal weekend falling through $50K to trade at $48,117.

Major headlines:

Talk of an RRR cut from China. China Securities Daily says cut could come as soon as this month.

U.K. ministers announce new COVID-19 restrictions for travellers entering the U.K..

Biden and Putin are to have a phone call this Tuesday (one for the diary).

Japan PM Kishida says to shorten waiting period between vaccine and booster shot.

Swiss National Bank (SNB) vice chairman Zurbrügg to step down at the end of July 2022.

US to fast-track revamped vaccine in battle against omicron.

Germany October factory orders -6.9% vs -0.5% m/m expected.

Looking ahead to the rest of the session highlights include EZ sentix data, Riksbanks minutes, comments from BoE's Broadbent, Riksbank's Skinglsey and the Eurogroup meeting.

By Rajan Dhall

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

David

Gold price wants clarity after Powell's hawkish stance – analysts

As markets come to grips with a more hawkish Federal Reserve and omicron fears, can gold find its safe-haven appeal next week? The focus in December will be the Federal Reserve's monetary policy meeting, according to analysts.

After a turbulent week in gold and the U.S. equities, the markets were hit with a mixed employment report from November. Despite the big miss in the headline number, the details were quite optimistic. The latest data showed the U.S. economy only adding 210,000 jobs last month versus the expected 535,000.

"Algorithms first saw the big headline miss, and gold popped. But as analysts read the report, it was fairly positive. Minority employment rose, and the participation rate increased. That showed labor market recovery heading in the right direction. Overall, the report was still in line with the Fed's goal to accelerate tapering," OANDA senior market analyst Edward Moya told Kitco News.

Next week, the inflation report will be the critical data point determining just how aggressive the Fed could get.

Fed Chair Jerome Powell told the U.S. Congress this week that the central bank will be considering wrapping up tapering a few months earlier, citing more problematic inflation. Powell also retired his "inflation is transitory" phrase, noting that the threat of persistently higher inflation has grown.

Gold market is ugly with no clear price direction

"Inflation number next week could see the Fed increase pace by $5-$10 billion. This is why a lot of traders are anticipating some dollar strength to last a little bit longer, and that's why gold is stuck below $1,800 an ounce," Moya said.

Also, the Fed meeting on Dec. 15 looms large, especially considering that the U.S. central bank could be making a policy mistake, said Gainesville Coins precious metals expert Everett Millman.

"Gold has been up and down because of the uncertainty that the Fed has introduced with a more aggressive in tapering stance. Markets are unsure that it is the right expectation. Everything seems to be coming back to the Fed. There's widespread volatility across markets," Millman told Kitco News. "I've been talking a lot about the Fed potentially making a policy mistake. And Powell commenting on accelerating tapering might have already been that mistake. Gold is on its back foot trying to react."

Important to keep in mind that the last month of the year is challenging to trade, noted Moya, warning of thin trading and unexpected catalysts.

"We are coming to year-end, and we could see some major repositioning as far as profit-taking and thin conditions. You might see investors really lock in some of their profitable trades. There is fear that when you are beyond peak monetary and fiscal support, you will see a pullback. That could lead to a major stock market selloff," Moya said.

Millman also reminded investors that the expiration of the December gold futures contract is approaching, stating that "any time we are near that, we can expect more volatility."

Both Moya and Millman anticipate that gold will be able to sustain a more convincing rally at the beginning of next year, as the Fed situation clarifies.

"Longer-term, you are not seeing real yields really improve. The gold market is going to have a major move once there is a strong consensus on when that first rate hike will happen and whether it will be two or three within the first year. Once that is priced in, that is when you'll see gold attract some flows," Moya explained.

 

Levels to watch

Gold is ending the week relatively flat, with February Comex gold futures last trading at $1,783.90, up 1.20% on the day.

Looking at the technical picture, support is at $1,770 and then at $1,750 an ounce. And resistance remains at the $1,800 an ounce level.

"If the price of gold breaks below $1,750, we could see further losses. The $1,680 could come into play. That is the low for this year," Millman said. "The key is to watch whether or not gold can keep making those higher lows. That is one thing I am encouraged by — gradual building of positive momentum."

For now, the market is in the wait-and-see mode in terms of inflation and the omicron variant, noted Moya.

"It is going to be a choppy period. There is still a lot of optimism that we won't have the same number of lockdowns as at the beginning of the pandemic, but some states will struggle. Gold might consolidate between $1,750-$1,800 leading up to the inflation report and the Fed meeting," he added.
 

Next week's data

On the radar next week will be the U.S. jobless claims on Thursday and the inflation report on Friday.

"The most important data point will be November consumer price inflation. Rising gasoline, housing and second-hand car prices will be the big movers, but growing evidence of rising corporate pricing power is also likely to be evident," said ING chief international economist James Knightley. "This is likely to leave annual rates close to 7% for headline inflation with the potential for core inflation to beak above 5%."

By Anna Golubova

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

David

Powell is just stalling for time, gold and silver look attractive as inflation spiral starts – Degussa

Physical gold and silver will continue to be attractive assets as investors look to protect their wealth and purchasing power as one precious metals firm sees signs of an inflation spiral.

In his latest market report, Thorsten Polleit, chief economist of Degussa, said not only are consumer prices at multi-decade highs around the world but growing economic data points to elevated inflation pressure for years to come.

One sector Polleit said he is watching that highlights the growing inflationary trend is the housing market. This year U.S. home prices are up nearly 20%. Over in Europe, German home prices are up more than 13%.

Polleit said that rising home prices are good indications that sustained inflation across the board is "rearing its ugly head."

He added that the threat now is that inflation spirals out of control.

"If people expect goods price inflation to rise and remain high in the future, they will adjust their wage, rental and credit agreements. For instance, employees will demand higher wages, property owners will ask for more money for the right to occupy a home, and lenders will increase their lending rates," he said.

Ireland buys gold for the first time in 12 years

Polleit noted that so far, central bankers worldwide have been able to talk down the rising inflation threat. Earlier this week, Federal Reserve Chair Jerome Powell said in testimony before Congress that the central bank will be discussing speeding up the process to reduce the amount of bonds they purchase every month.

He also said it is time to "retire" the world "transitory." While Powell is striking a more hawkish tone on monetary policy, Polleit said that he is still maintaining dovish policies.

"Clearly, there is no desire to change the course immediately. What seems to be intended is that people expect the Fed to do something about the inflation at some point in the more or less far future and that this will suffice to keep them sitting still," he said. "So far, it seems to be working, as central banks are getting away with it. And while the money supply continues to expand at elevated rates, goods price inflation will likely remain high in the years to come, and people will probably get used to it – as they have become used to extremely low interest rates."

Polleit said that central banks have no desire to stop the growing inflation threat.

"The higher inflation has become, and the higher inflation expectations have risen, the more restrictive monetary policy must be," he said. "Unfortunately, central banks shy away from abandoning their inflationary policy course, fearing that stepping on the brakes would plunge economies into recession and crash financial markets."

The growing risk as central banks stall for time is that consumers get punished, Polleit said. He added that inflation would ultimately create winners and losers in the global economy.

"Owners of assets, which increase in price, benefit while the holders of money suffer: They can buy fewer assets for their money," he said.

Polleit said investors need to start looking at holding some physical gold and silver in their portfolios to protect themselves.

"For long-term oriented investors, holding physical gold and silver as part of their liquid portfolio should be particularly worthwhile, as in the coming years, especially when purchased at current prices – which we consider to be relatively cheap, appearing to promise a substantial upwards potential, they can be expected to be both risk-reducing and return-enhancing," he said.

 

By Neils Christensen

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

 

David

Gold price at $10k, silver at $500 due to 'a decade of shortage', says Goehring & Rozencwajg

his will be a "decade of shortage" defined by high inflation and a failed attempt to raise rates – the perfect combo to trigger a massive rally in gold, said Goehring & Rozencwajg Associates managing partner Leigh Goehring.

Next year, inflation could already be pushing 9%, and it could get a lot worse, Goehring told Kitco News in an interview.

"We're getting closer to the explosion of gold prices to the upside. I'm a big believer that inflation is not going away. It's going to continue to be a problem. We could be looking at a black swan event in inflation. It could be an oil shock, natural gas shock or agricultural shock," Goehring said.

Federal Reserve Chair Jerome Powell already shocked the markets this week by dropping the phrase that "inflation is transitory" and stating that the U.S. central bank will be discussing accelerating the pace of tapering at the upcoming December meeting.

An inflationary black swan event could kick-start that inflationary psychology, which has been missing despite annual U.S. inflation running hot at 6.2%.

"It is going to force the Fed to raise rates. The central bank will start, but that will create such havoc that the Fed will have to stop. In response, gold will first pull back. But that will be the final retreat before the massive gold bull market," Goehring described.

There are too many similarities between now and the late 1960s and early 1970s, and they cannot be ignored. Back then, inflation was going up about 5%-6% per year — the same as now. And then, in 1973, there was the black swan event — the oil embargo.

"Oil went from $4 a barrel up to $15 a barrel literally overnight. And that triggered a huge surge of inflationary psychology. And the Fed raised rates aggressively. Gold spent the next two years going down, bottoming in 1975," Goehring said. "This time around, however, the Fed will have to give up on raising rates because it will be too painful for everyone."

And that would be the perfect scenario for gold, Goehring added. "Once the precious metal bottoms from the Fed's tightening action, it will begin its massive bull market."

Yellen says stimulus only 'small contributor' to inflation, Powell sees Fed ready to adapt policy to higher price pressures

When Fed Chair Jerome Powell began his first term, he tried to raise rates, which backfired in the Treasury market. "That's why I think that Powell will have to give up on raising rates just like he did in October of 2018. And once he gives it up, the great bull market in gold starts," Goehring pointed out.
 

$10k gold and $500 silver?

How big of a bull market will it be? Goehring is expecting gold to reach $10,000 an ounce by the end of the decade. And for silver to eventually catch up and trade around $500 an ounce.

"By 2028, gold could be over $10,000. If gold is over $10,000 and we go back to the 20:1 gold-silver ratio. That's $500 silver," he said. "It will be the decade of shortages, and everyone's going to get poorer except for the people that own physical gold and silver."

Silver is another quintessential inflationary metal to buy and hold during the next decade. "I'm convinced that in this bull market, there's going to be another corner attempted at the silver market," Goehring said.

Inflation will get a lot worse during this decade of shortages. And the underinvestment in the resource sector will play a big role.

"When we look back on this decade and ask what happened. It's going to be looked upon as the decade shortage. It's going to be a shortage of everything. Over the last ten years, we've radically underinvested in our resource spaces relative to demand. Look at what's happening with Exxon and Chevron and the ESG concerns. They are not talking about replacing their resource base," Goehring stated.

This underinvestment in the resource sector will manifest itself and that is going to be highly inflationary, the Goehring & Rozencwajg managing partner said. "This year, inflation accelerated from under 3% to over 6%. At some point in 2022, we could approach 9%," he noted.

And the one key metric to watch is the bond market, which has so far largely dismissed the rising price pressures.

"We have inflation now, but we don't have inflation psychology. And that's what the bond market is saying too. However, what happens if the bond market changes its mind? We could see massive panic selling. And that's going to be a big problem for equities. In 2022, the bond market could finally incorporate inflationary expectations," Goehring described

.

Gold price sheds gains as Powell talks more aggressive tapering, wants to drop 'inflation is transitory' term

During the last month of 2021, gold is still in its corrective phase after hitting new record highs last year, but the long-term investors have been using this opportunity to buy.

"Gold hasn't been the place to be for performance reasons this year. And I think that performance discrepancy will continue for another six months. But for people that are looking to buy gold for the long term, they are buying now. Gold stocks too. They are the cheapest they've ever been."

Another big winner for next year will be the agricultural sector, especially fertilizer stocks, according to Goehring.

"The only thing that's done better than fertilizer prices in 2021 had been natural gas price. There are improving fundamentals in global fertilizer markets. Energy fertilizer is very energy intensive. China has already curtailed fertilizer production. Increased demand in light of supply-side constraints could make these stocks the super winners of 2022," he added.
 

By Anna Golubova

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

David

Gold price recovers, ASX tumbles

Australian markets opened lower after Friday's sell off due to new pandemic concerns.

The Australian Stock Exchange is down as of 10:30 a.m. Sydney time with the S&P/ASX200 off 57.60 points or 0.79% to 7,221.70. The exchange set a new 20-day low, according to an update on the ASX homepage.

Spot gold dropped $10 at open to trade as low as $1,783 a ounces before recovering.

Comex February gold futures are up +0.53% to $1,797.5 an ounce as of 6 p.m. ET.

Oil is up with WTI Crude gaining 3.23% to $70.35 a barrel.

On Saturday Britain, Germany and Italy detected cases of the new Omicron coronavirus variant, according to a report by Reuters. British Prime Minister Boris Johnson announced new social distancing measures. Nations are imposing travel restrictions on southern African states, where the variant was first detected.

On Sunday two cases of omicron COVID-19 variant were reported in Ontario. Other cases have been reported in Australia, the Netherlands, Denmark, United Kingdom, Germany, Israel and Hong Kong, according to CNN.
 

By Michael McCrae

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

 

David

Gold price remains well supported above $1,800 an ounce in 2022 – Scotiabank

Gold prices continue to languish below $1,800 an ounce as investors interpret the re-nomination of Jerome Powell to remain the head of the Federal Reserve as a hawkish development for monetary policy.

However, commodity analysts at Scotiabank said in a report Wednesday that the selloff in gold could be overdone and the precious metal price looks well supported in 2022.

The Canadian bank looks for gold prices to average next year around $1,850 an ounce, representing a 3% gain from current prices. U.S. markets are closed for the Thanksgiving holiday, but gold's spot price last traded at $1,788.30 an ounce, roughly unchanged on the day.

"The yellow metal lost almost $50/oz on Monday as news broke that U.S. President Biden would keep Jerome Powell as Chair of the Federal Reserve, which markets interpreted as a hawkish signal. Still, our forecast of above-target inflation and still-low U.S. interest rates into next year implies well-supported bullion values in 2022," the analysts said.

The gold market has struggled this week as markets start to price in more aggressive action from the Federal Reserve as inflation pressures remain at elevated levels. Wednesday Core PCE, the U.S. central bank's preferred inflation measure, saw an annual rise of 4.1% in October, the highest level since 1991.

Because of rising inflation, markets are expecting the Federal Reserve to raise interest rates as early as June with a total of three rate hikes priced in.

Although gold continues to face some headwinds, the bank sees more potential in the yellow metal compared to silver.

"Also perceived as a safe haven and an inflation hedge, the metal's value is influenced by many of the same factors as that of bullion. However, given silver's range of industrial applications and our expectations of some China-driven near-term slowdown in construction and manufacturing activity, we are less optimistic about its near-term prospects than we are for bullion," the analysts said.

The recent selling pressure in gold dragged silver down below critical psychological levels; however, the precious metal appears to be finding some support above $23.50 an ounce.
 

By Neils Christensen

For Kitco News

 

Buy, Sell Gold and Silver, with Free Storage and Month

David

Gold near steady, shows little initial reaction to FOMC minutes

Gold and silver prices are trading not far from unchanged in afternoon U.S. trading Wednesday, after huge day for U.S. economic data that produced not much markets reaction. December gold was last up $0.50 at $1,784.30 and December Comex silver was last up $0.04 at $23.475 an ounce.

The just-released FOMC minutes from the last meeting of the Fed's monetary policy-setting committee showed FOMC members getting more concerned about rising inflationary pressures and now believe that inflation will hang around longer than previously thought. Inflation will subside significantly in 2022, believes the committee members. Some Fed officials wanted a faster pace of “tapering” of the Fed's bond-buying program. Others were worried about elevated asset valuations. The members said labor participation would likely be lower in the coming months because of early retirements. Markets showed little initial reaction to the FOMC minutes.

It was a very busy day for U.S. data releases Wednesday. The big batch of data was a mixed bag, overall, but generally upbeat, and had little impact on the metals or other markets. Traders and investors in the U.S. apparently were more focused on the Thanksgiving holiday feasting.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are mixed in afternoon trading.

Rising Covid-19 cases in Europe and Asia continue to prompt risk aversion in the marketplace. Austria is on a virtually complete lockdown and German officials are warning Covid cases are rising at an alarming rate.

Traders are closely watching the Turkish lira this week, which has dropped sharply to a record low against the U.S. dollar. Turkey's president forced its central bank to lower its main interest rate recently despite rising inflation concerns. That sent the lira into a downward spiral. The lira did rebound a bit Wednesday.

The key outside markets today see the U.S. dollar index higher and hitting another 15-month high. Nymex crude oil prices are near steady and trading around $78.50 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.657%.

Technically, December gold futures prices hit a three-week low today. Bulls still have the slight overall near-term technical advantage but have faded badly this week and need to show fresh power soon to keep their edge. A seven-week-old uptrend on the daily bar chart has stalled out. Bulls' next upside price objective is to produce a close above solid resistance at this week's high of $1,850.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,758.50. First resistance is seen at today's high of $1,796.20 and then at $1,800.00. First support is seen at today's low of $1,777.40 and then at $1,758.50. Wyckoff's Market Rating: 5.5

December silver futures bears have the overall near-term technical advantage. A seven-week-old uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at the November high of $25.49 an ounce. The next downside price objective for the bears is closing prices below solid support at the November low of $23.045. First resistance is seen at $24.00 and then at Tuesday's high of $24.34. Next support is seen at this week's low of $23.28 and then at $23.045. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 390 points at 446.20 cents today. Prices closed nearer the session high today and hit a four-week high. The copper bulls have gained the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 460.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 419.15 cents. First resistance is seen at today's high of 449.10 cents and then at 455.00 cents. First support is seen at today's low of 439.15 cents and then at this week's low of 435.20 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

Buy, Sell Gold and Silver, with Free Storage and Monthly Yields

David