Gold and silver slide lower leading into the EU open

Gold and silver are starting the EU session in the red after falling in the Asia Pac session. The yellow metal is down -0.26% while silver trades nearly 1% in the red below the $25/oz psychological handle. It was not much better in the rest of the commodities complex as copper lost 1% of its value and spot WTI fell 1.77%.

The risk sentiment overnight was mixed as the Nikkei 225 (0.71%) and Shanghai Composite (0.55%) both closed higher but the ASX dropped -0.36%. In the FX space, the dollar index (0.11%) was firmer and the biggest casualty was the Canadian dollar as USD/CAD traded 0.36% in the black.

In news from the Asian session, Suez Canal authorities confirm that Ever Given has been successfully refloated. This hopefully means that the ships stranded either side can start moving again.

In Australia, there has been another COVID-19 case and the State of South Australia will close the border with Queensland. This comes after the nation had been handling the pandemic extremely well and managed to open up its economy.

Germany is also struggling with a third coronavirus wave and Germany's Merkel says the country need curfews, may use Federal law to tighten restrictions.

US Trade Representative Tai says the U.S. isn’t ready to lift tariffs on Chinese imports soon. Tensions between the two economic powerhouses remain high especially as the plight of the Uighur Muslims still remains a hot topic.

ECB chief economist Philip Lane stated, “There is a clear risk of self-fulfilling adverse dynamics taking hold". He added “To counter these risk factors, it is essential that the ECB acts as a stabilising force and boosts confidence by committing to the preservation of favourable financing conditions”.

In the UK BoE's Tenreyro has stated he does not currently see any sustained pick up in demand or inflation. He then added that the BoE stands ready to take whatever action is necessary to achieve its remit.

The White House Press secretary Psaki has said that President Biden plans to split his "build back better" package into two separate proposals.

Looking ahead to the rest of the session highlights include the ECB PEPP purchases and comments from ECB's de Cos.

By Rajan Dhall

For Kitco News

Buy and Sell Gold and Silver with no storage charges

David

What’s the catalyst to take gold price to $1,900?

What's the catalyst to take gold price to $1,900?

Now that gold is sitting comfortably above $1,700 an ounce, is it ready for liftoff towards $1,900? Analysts remain optimistic but say that the precious metal needs a new catalyst to get it there.

After an eventful week, gold managed to stay above $1,720 an ounce. The precious metal even attempted to break the key resistance level of $1,750 on Thursday. And even though the move up failed, June Comex gold futures were last trading at $1,733.90, up 0.38% on the day.

"Factors that would normally weigh on gold, such as rising stock markets and the firm U.S. dollar, do not appear to be pressuring its price all that much at present," said Commerzbank analyst Eugen Weinberg.

This trading pattern could be a sign that it's time to start picking up gold, RJO Futures senior commodities broker Daniel Pavilonis told Kitco News.

"Market sentiment is low compared to where it was back in August. This is a good sign. It is probably the time to start picking up gold. Next week, we could see more of an up week for gold," Pavilonis said.

Gold is being pulled by two different outlooks — the short-term risk-on view, which is based on vaccinations and the economic recovery, and the long-term risk-off view, which is filled with uncertainty and an accommodative Federal Reserve.

"I'm not surprised we are not breaking to the upside yet. The U.S. dollar continues to be firm. It will be firm for the next little while as Europe is shutting down after failures with vaccine distribution. Flows of funds are likely to skew to the U.S.," said TD Securities head of global strategy Bart Melek.

In the long-term, however, there is uncertainty, Melek pointed out. "We happen to think we break out into $1,900 by year-end because we will see inflation and no action from the Federal Reserve," he said. "Also, we'll have more debt and more infrastructure spending."

Potential catalysts

Yet, gold is unlikely to surge until there is a new catalyst, according to analysts.

"Gold appears comfortable at current price levels. Physical demand offers a cushion on the downside, but a macro catalyst to drive upside risk is absent," said Standard Chartered precious metals analyst Suki Cooper.

One such catalyst could be gold's break from 10-year Treasury yields. Recently, gold has been dragged down whenever yields would go up. But that inverse relationship could break, which would help gold breakout, Pavilonis said.

"Rates are going up a bit today, and gold is holding well. It is a positive sign. Maybe we start to snap free of the correlation that if rates go up, gold has to go down. If we can deviate away from that with the announcement of Biden's new infrastructure package, it will be good for gold," he said. "When we see inflation, it is time to buy gold."

With more money printing and more accommodative policies out there, inflation will kick in, and the February low could be the bottom in gold, Pavilonis noted. "The longer we see sideways price action in gold, the more the path of least resistance becomes to the upside," he said.

Another catalyst could be the U.S. dollar finally losing steam. "As the year unfolds, the USD resumes its downtrend, and real yields remain negative, prices are likely to regain traction," Cooper said.

Also, there are a number of risks that could flare up, affecting investors' risk appetite, said FXTM market analyst Han Tan.

"From signs that COVID-19 cases are making a resurgence globally to simmering U.S.-China tensions, amid the shifting expectations for the Fed's policy outlook, the relative calm in markets could yet be upended by the realization of such risks," Tan stated.

What to watch next week

The biggest data release is slated for Friday — the latest employment data. Market consensus is for the U.S. economy to have added 655,000 jobs in March. The U.S. ISM manufacturing PMI and jobless claims are scheduled for Thursday, while ADP employment data are going to be released on Wednesday.

Markets will also be watching the U.S. house price index on Tuesday and pending home sales on Wednesday. The U.S. markets will be closed for Good Friday.

Aside from macroeconomic data, investors will be keeping a close eye on the rhetoric from Washington, any new stimulus announcements, and the number of global COVID-19 cases.

"With the ink on the $1.9tn fiscal relief plan barely dry, next week sees President Joe Biden push ahead with the $3tn Build Back Better green energy and infrastructure plan," said ING economists. "The difficulty will be getting it passed by Congress, given the need for 60 Senators putting it forward for a vote … It may need to be broken up into smaller packages and diluted to some extent should Republicans put up stiff opposition. It is not going to be an easy sell."

By Anna Golubova

For Kitco News

Buy, Trade, Gold. Earn yields, free storage

David

Gold price fails attack on $1,750 as Fed’s Powell hints tapering

Gold price fails attack on $1,750 as Fed's Powell hints tapering

Gold shot up to a one-week high as it attempted to break the key resistance level at $1,750 an ounce after Federal Reserve Chair Jerome Powell praised economic progress and hinted at potential rollback of asset purchases.

"As we make substantial further progress toward our goals, we'll gradually roll back the amount of Treasurys and mortgage-backed securities we've bought," Powell told NPR's Morning Edition in a live interview. "We will very gradually over time and with great transparency when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times."

The Fed currently makes $120 billion in monthly bond purchases.

In response to the comments, gold jumped to a one-week high, with June Comex futures reaching $1,747.10 an ounce. However, the attempt to breach the $1,750 an ounce level has failed so far as prices retreated, and June futures were last at $1,735.20, down 0.02% on the day.

Powell also highlighted that the U.S. economy is recovering quicker-than-expected due to fiscal and monetary stimulus and vaccine progress. This will allow the Fed to taper at some point in the future, Powell said Thursday.

"In a nutshell, it's a combination of better developments on COVID, particularly the vaccines, and also economic support from Congress. That's really what's driving it," he said. "That's going to enable us to reopen the economy sooner than might have been expected."

The Federal Reserve was quick to respond to the COVID-19 pandemic, cutting rates near zero and making $120 billion in monthly bond purchases. On the fiscal side, Congress passed more than $4 trillion in stimulus in the past year.

In the last monetary policy announcement, Powell promised to keep the central bank's accommodative stance in place until the economy reaches full employment and inflation averages around 2%.

During the NPR interview, Powell reiterated that any rate hikes would only be considered "when the economy is all but fully recovered."

By Anna Golubova

For Kitco News

Buy Gold and Siver Free Storage

David

Gold and silver trade flat leading into the EU open

Gold and silver are trading flat this morning leading into the EU open. Gold is trading at $1727/oz while silver has moved near the psychological $25/oz area.

Risk sentiment overnight was mostly weak following the weak handover from the US. The Nikkei 225 (-2.04%) and Shanghai Composite (-1.30%) moved lower while the ASX closed 0.50% in the black.

In FX markets, it was the dollar that outperformed overnight. The weakest major currency was the pound which fell over half a percent. In the rest of the commodities complex, copper (0.80%) and spot WTI (1.95%) both trade higher.

Looking at some of the news stories, BOJ's Kuroda said the central bank is to continue with powerful monetary easing persistently.

There was a fall in aluminium prices overnight with some analysts citing the fact that China is considering a sale of around half a million tons of aluminium from state reserves as the reason for the move.

UK medical firm AstraZeneca says it will release up-to-date results from the final stage trial of its vaccine, responding to criticism from a U.S. science agency.

On the data front, Japan (Jibun Bank) Markit preliminary manufacturing PMIs for March came in at 52.0 (prior 51.4), Australia preliminary March Markit PMIs manufacturing it 57.0 vs the prior reading of 56.6 and services printed at 56.2 vs the prior 54.1.

Elsewhere in the Asia Pac area, the Australian Treasury Secretary said he expects a spike in long term unemployment following the COVID-19 pandemic.

On the central bank front, BoC Gravelle said he sees a smoother recovery and Fed's Bullard says he sees the target rate staying near zero through 2023. Fed's Bullard looking for 6.5% GDP growth, unemployment down to 4.5% this year and lastly, Fed's Brainard says she expects to see transitory increases in inflation.

US President Biden says the US will have 600m doses of vaccine by the end of May. Sticking with the US President Biden's first fiscal 2022 proposals will be released on Friday and a full budget is expected in Spring.

On the geopolitical front, South Korean military officials confirmed that North Korea fired 2 missiles off its west coast on Sunday.

Looking ahead to the rest of the session highlights include PMI's from the major nations, DoE's, EZ consumer confidence and comments from Fed's Powell, Barkin, Williams, Daly Evans, ECB's Lagarde and US treasury secretary Yellen.

By Rajan Dhall

For Kitco News

Kinesis Money System free Storage and earning opportunities

David

Gold and silver trade marginally lower leading into the EU open

Once again gold and silver trade lower this morning but only marginally. The yellow metal is just under flat at $1737/oz while silver over around half a percent into the red at $25.64/oz.

After inheriting a positive close from Wall Street, the bourses in the Asia Pac area struggled. The Nikkei 225 (-0.61%), ASX (-0.11%) and Shanghai Composite (-0.93%) all closed in negative territory.

In FX markets, the dollar once again reigned supreme. This time it was the commodities currencies that suffered as CAD, NZD and AUD all traded lower against the greenback. NZD/USD was the worst-performing major down -1.09%.

In the rest of the commodities complex, there was more weakness. Copper and WTI are both down 0.77% but nickel was the only one to buck the trend and traded 1.14% higher.

We had some comments from ECB's Lane who said, PEPP purchases will show a substantial increase in a consistent way over several weeks.

Over in Asia, China says will promote the use of a safe travel pass between China and Russia.

This comes after, the U.S., Canada, U.K. and EU sanction China over the treatment of Uyghurs. China responded by adding 10 more EU individuals to their travel ban list.

On the plus side, China's Premier Li Keqiang says again economic growth this year could exceed a target of above 6%.

It has been reported that there are signs that North Korea is deploying multiple rocket launchers on a western border island.

In the UK, there are some vague reports that AstraZeneca may have provided outdated data about its COVID-19 vaccine trial, according to the NIH.

On the vaccine front, the Biden administration is concerned Johnson & Johnson may miss vaccine goal.

Sticking with the President, there are reports that Biden's Economic Advisors are ready to present the President with the $3 trl next phase of the stimulus plan.

Adding to this on the stimulus front, Japan's MoF announces stimulus spending to support firms, workers.

Overnight Fed head Powell said the Fed will continue to support the economy 'for as long as it takes'.

As the house prices continue to rise in New Zealand, the government announces new measures to curb the rises. NZ housing agency can borrow NZ$2bnb for land purchases. The government are looking to boost housing supply, infrastructure with NZ$3.8bn fund. The administration has also extended the horizon for tax on investment property sales.

Looking ahead to the rest of the session highlights include the UK labour market report, ECB purchase data, US new home sales, NZ trade data, BoJ minutes and comments from BoE's Bailey, Cunliffe, Fed's Powell, Bullard, Bostic, Barkin, Williams and Brainard.

By Rajan Dhall

For Kitco News

How to Use your gold and silver everyday and earn money

David

Can the government confiscate your gold? E.B. Tucker on ‘the war against your wealth’

Can the government confiscate your gold? E.B. Tucker on 'the war against your wealth'

Ray Dalio, co-chief investment officer of Bridgewater Associates, recently wrote that policy makers short on money will likely raise taxes and prevent capital flows into “other assets” like gold and Bitcoin. E.B. Tucker, director of Metalla Royalty and author of “Why Gold, Why Now” said that the government already has the tools to do this.

“Everyone gets this idea that the [government] will raid your house and look for your gold. It’s not necessary. All you have to do is limit the ability to transact gold in the legal market, and then you assess an excise tax,” Tucker said.

By David Lin

For Kitco News

Protect your Gold use the kinesis money system

David

Gold, silver, platinum and palladium are ‘a form of currency’

Gold, silver, platinum and palladium are 'a form of currency'

Mar 20, 2021

Guest(s): Anna Golubova Social Media Reporter

A lot has happened in the gold space this week. And the tides may finally be turning for the precious metals. Here's a breakdown of the top three stories.

Start Using Gold and Silver as Currency with Kinesis

David

Bullish sentiment in gold is growing but focus remains on rising bond yields

Sentiment continues to improve in the gold market among both Wall Street analysts and Main Street investors. However, there is some concern that rising bond yields will cap gold at critical resistance below $1,750 in the near-term.

"Gold has had a nice bounce from its recent lows, but this just could be a short-term correction as prices appear to be contained as inflation still isn't a major story for investors," said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Although Cieszynski is bearish on gold in the near-term, he added that gold has room to move higher in this corrective bounce.

This week, 13 analysts participated in the survey. A total of 6 voters, or 46%, called for gold prices to rise next week. Meanwhile, four voters, or 31%, said they see gold prices falling next week. Three analysts, or 23%, saw prices moving sideways.

Both sentiment and participation in the weekly gold survey are improving among retail investors. This week, 1698 votes were cast in online surveys. Among those, 1,101, or 65%, said they were bullish on gold next week. Another 355 participants, or 21%, said they were bearish, while 242 voters, or 14%, were neutral on the precious metal.

The increase in bullish sentiment comes as the gold market ends the week with modest gains but down from a one-week high. June gold futures last traded at $1,740 an ounce, up 1% from last Friday.

This week the gold market saw a brief push to $1,750 an ounce after the Federal Reserve left its ultra-loose monetary policies unchanged. The central bank also signaled that it doesn't expect to raise interest rates until at least 2024.

While the Federal Reserve is expected to remain extremely patient as the U.S. economy recovers, the gold market still has to deal with rising bond yields. Federal Reserve Chair Jerome Powell indicated that he wasn't concerned with the recent selloff in the bond market that has driven yields to a 13-month high above 1.7%.

For a lot of investors, higher bond yields, which are also supporting the U.S. dollar, are the biggest challenge for the gold market. However, gold's positive moves this week could indicate that the bond market is having less impact on the precious metal.

Adrian Day, president of Adrian Day Asset Management, said that he is bullish on gold as bond yields might be close to peaking.

"The bond vigilantes may not have been defeated by Fed Chair Jerome Powell's assertions that the Fed would remain easy, but eventually, through more words or by action, the Fed will stop the rise in long yields, and that will be positive for gold," he said.

Sean Lusk, co-director of commercial hedging at Walsh Trading, said that he is also looking for bond yields to find a natural ceiling as the U.S. central bank is expecting to keep interest rates at the zero-bound range for the next three years.

However, Lusk added that it is a little too early to get excited about gold as the market remains in a solid downtrend.

"With interest rates at zero, bond yields can only go so high," he said. "But I want to see gold hold at least $1,740 and see some weakness in the U.S. dollar before I start getting excited about gold."

Ole Hansen, head of commodity strategy at Saxo Bank, said that he is also neutral on gold in the near-term, but he wants to see a break above $1,765 an ounce before he starts to become bullish.

He added that gold is "trying to reestablish its reflation credentials, something that has been sorely missing for the past four months."

By Neils Christensen

For Kitco News

Kinesis money system put gold and silver to use no storage fees

David

Traders continue to bid yields higher in spite of the Federal Reserve statement

“There’s something happening here, what it is ain’t exactly clear” – Stephen Stills

Immediately following the conclusion of the FOMC meeting yesterday, we saw gold stage a strong rally moving from roughly unchanged to close higher by double digits. Many analysts interpreted the gains as a direct result of the Federal Reserve statement, which included the most current “dot plot,” indicating that interest rates most likely will stay where they are through 2023.

However, in trading overseas, gold continued to climb higher as it opened in Australia on Thursday morning but then began selling under pressure as it moved into Hong Kong and London. The primary events that caused gold prices to weaken were dollar strength and higher yields in U.S, Treasury notes. In fact, the 10-year Treasury yield gained in excess of nine basis points, moving the current return to 1.73%. An absolute negative factor for gold placing bearish pressure on the metal.

This signals that even with the definitive tone of Chairman Powell once again conveying the Federal Reserve’s intent to keep interest rates where they are for a long time. While market participants looking at good economic data nonetheless continued to bid yields higher in anticipation of a rate hike disregarding the dot plot produced by the Federal Reserve as well as Jerome Powell statements during the press conference yesterday.

However, by the close of trading in New York gold basis, the most active April 2021 Comex contract gained significant ground. And although it closed well off of its high, which was $1754, it did gain $7.50, or 0.43%, and is currently fixed at $1734.60. Concurrently the uptick in gold occurred with extreme dollar strength, which was also up approximately .045%. That means if the dollar had been neutral today, we would have seen a gold rise by approximately $15.

Another interesting aspect was the negative correlation in terms of price change between spot or Forex gold and gold futures. Although spot gold is still slightly above the price of April’s futures contract, the net change on the day was a decline of nine dollars in spot compared to a positive gain of $7.50 in gold futures. According to the KGX (Kitco Gold Index), today’s decline of $9.00 is a combination of dollar strength and selling pressure. The vast majority of today’s change occurred because of dollar strength which accounted for $7.85 of the decline, with the remaining $1.15 resulting in spot gold at $1736.50.

At least for today, gold futures were able to overcome both dollar strength and higher yields on U.S. treasuries which rose to a 14-month high. Many analysts believe that unless the Fed intervenes to address the differential between short-term and long-term bonds and notes that the yield in the 10-year note could trade as high as 2%. That is only 0.02% off of the pre-pandemic yield, which was at 2.2%.

There is no doubt that analysts, market participants as well as traders are still gleaming through the statement released yesterday and working through the statements made by Chairman Powell, not only focusing on the words but the demeanor. Although he has been emphatic about keeping interest rates near zero for at least two years, it seems market sentiment does not agree with that assessment. There are those analysts that believe that if solid economic data continues to be forthcoming, it will force the hand of the Fed to raise rates sooner than they had anticipated.

This is contrary to the statements and determination of the Federal Reserve to not make the same mistakes that didn’t 2008 by raising rates too quickly. In the words of Chairman Powell, it will be the pandemic that dictates action by the Federal Reserve, and they will not act in a way that could hinder a full recovery in the fastest period of time.

By Gary Wagner

Contributing to kitco.com

Try Kinesis Money System Ex change Gold, Silver and CryptoCurrency

David

Gold and silver are mixed heading into the EU open

Gold and silver are trading mixed this morning with the yellow metal trading 0.29% down and silver moving 0.54% in the black. Gold has been impacted by some strength in the greenback today as the DXY trades 0.10% higher overnight. The US dollar is not up against all the major currencies with AUD, NZD and CAD all performing well.

After inheriting a positive close from the US, the Nikkei 225 (1.01%) and Shanghai Composite (0.51%) closed higher. Australia's ASX however struggled and fell 0.73% due to weaks in tech, financial, healthcare and property sectors.

The rest of the commodities complex struggled overnight as copper fell 1.32% and spot WTI dropped 0.67%.

Late during yesterday's session, the Fed kept rates and QE unchanged. There was no mention of SLR but the NY Fed RRP facility to $80 bln from $30 bln. Importantly, the dot plot still reflects no rate rises till the end of 2023. GDP and inflation forecasts were revised higher.

Overnight, Japanese media reported that the BOJ will widen its target yield band for 10 year JGBs to plus/minus 0.25%. This could be a reaction to the recent moves in the bond markets.

As the US and China meet in Alaska, US Sec State Blinken says China aggression poses challenge. China state TV says the country will not compromise with the US over sovereignty.

Australia February employment change rose a massive +88.7K (vs expected +30K) & the unemployment rate dropped to hit 5.8% (vs expected 6.3%).

Sticking with data, New Zealand GDP for Q4 2020 fell -1.0% q/q vs the expected reading of 0.2%.

Over in the Netherlands, PM Rutte looks likely to be returned for a fourth term but the results are not official yet.

Glencore have said that Mitsubishi are to acquire 30% stake in the Aurukun Bauxite project.

Looking ahead to the rest of the session highlights include CRBT, Norges Bank and BoE rate decisions, US initial jobless claims, Philly Fed data. We will also get comments from ECB's Lagarde, BoE's Bailey, ECB's Schnabel, ECB's de Guindos and ECB's McCaul.

By Rajan Dhall

For Kitco News

Try Kinesis Money System Ex change Gold, Silver and CryptoCurrency

David