Gold and silver move lower heading into the European open

Gold is starting the session lower on Thursday following six straight sessions of gains. The yellow metal is just hovering around the $1800/oz psychological zone. Silver has fallen -0.85% and trades at just under $26/oz but the wave low on the daily chart looks vulnerable for a downside break. Elsewhere in the commodities complex, copper is -0.19% in the red but the current price action looks very sideways. Spot WTI is now -0.42% lower and is still retracing from lofty levels.

In the risk markets, only the ASX (0.20%) managed to take the lead from the U.S. overnight. The Nikkei 225 (-0.88%) and Shanghai Composite (-0.70%) both lost ground. Futures markets are indicating a negative cash open in Europe this morning.

In FX markets, commodities currencies have been hit pretty hard overnight. USD/CAD trades 0.44% higher while AUD/USD (-0.56%) and NZD/USD (-0.62%) suffered pretty heavy losses. BTC/USD is down a minor -1.88% at the moment.

Looking at the news from overnight, PBOC vice governor says that stablecoins may pose risks, challenges to global monetary, payment systems.

RBA Gov. Lowe says QE is likely to be needed in future business cycles, but there are limits.

There have been media reports that Australia's New South Wales reports the biggest daily rise in COVID-19 cases for 2021.

Japan economy minister Nishimura seeking a renewed Tokyo state of emergency due to COVID-19.

China's State Council promises increased support for the real economy, potential RRR cuts.

In yesterday's FOMC minutes the Fed noted it has not yet seen the standard of substantial progress as having been met yet. Some Fed members expect conditions for tapering to be met earlier than had previously been expected.

Sticking with central banks, there have been reports that the ECB is willing to accept an overshoot of its 2% inflation target.

Germany May trade balance €12.6 billion vs €15.4 billion expected.

Switzerland June unemployment rate 2.8% vs 3.1% prior.

Looking ahead to the rest of the session highlights include the ECB minutes, U.S. initial jobless claims, weekly DoE's and comments from German Buba's Wuermeling and ECB's Lagarde.

By Rajan Dhall

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold and silver move higher heading into the European open

Although gold closed higher during Tuesday's session it retreated from the high of $1815.05/oz and this morning the yellow metal has once again moved higher in the Asia Pac session to trade just above $1800/oz. Silver ($26.32/oz) has also moved higher but has not pared all the losses from yesterday's session. In the rest of the commodities complex, copper trades 1.47% higher at $4.30/lb and spot WTI is trading flat after a heavy session.

It was another mixed session in the Asia Pac area. The ASX (0.90%) and Shanghai Composite (0.73%) traded well but the Nikkei 225 lost -0.96%. Futures in Europe are pointing towards a positive cash open.

In FX markets, the dollar index trades just under flat and the biggest mover overnight was NZD/USD which rose 0.15%. In the crypto space, bitcoin trades marginally higher at $34,763 but remains in consolidation mode.

Looking at some of the news stories from overnight China's state media has said don't bet on further declines for the yuan.

On the COVID front, Sydney’s lockdown extension was officially confirmed for at least one more week.

In China, the PBOC stepped up its ban on cryptocurrency operations. The price of bitcoin held up well considering the news.

The San Rafael mine in Mexico is said to be reopening after unions and reps finally had some positive conversations following months of tough talks.

Germany May industrial production -0.3% vs +0.5% m/m expected.

UK June Halifax house prices -0.5% vs +1.5% m/m expected.

Looking ahead to the rest of the session highlights include the FOMC minutes, U.S. Jolts jobs data, Candian Ivey PMI and comments from Fed's Bostic, ECB's Enria. U.K. listed iron ore miner Ferrexpo also has earnings.

By Rajan Dhall

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold kicks off the week flat leading into the European session

After closing 0.39% higher last week gold kicks of the week flat. Overnight the yellow metal gapped lower to trade at $1767.20 but has since recovered to start the European session at $1786.31/oz. Silver is 0.20% higher at $26.50/oz and had no such problems at the open. In the rest of the commodities complex, copper has moved 1.59% higher and spot WTI hangs high at the lofty level of $75.22/bbl.

Risk sentiment in the Asia Pac area was mixed overnight as the Nikkei 225 closed -0.64% in the red but the ASX (0.09%) kept its head above water. The Shanghai Composite is currently 0.16% higher. Futures in Europe are pointing to a negative open.

In the FX markets, all of the major was relatively subdued. The dollar index trades 0.03% higher and this biggest mover was USD/CHF which rose 0.20%. In the crypto space, BTC/USD fell -2.72% to trade at $34,323.

Looking at the news from the weekend and overnight, a ransomware attack affected 200 companies in the U.S. and President Biden said if he found out Russia was responsible America would retaliate.

Risk appetite in China was affected by the latest crackdown on the tech sector. Ride-hailing app Didi was removed from "app stores" due to safety concerns.

China Caixin/Markit PMI for June Services 50.3 (vs. expected 55.7) Composite 50.6 (vs. prior 53.8). New Zealand – ANZ Commodity Price index for June: 0.8% m/m (prior +1.3%).

Chinese President Xi is said to have a call with German Chancellor Merkel and French President Macron

Bank of Japan Governor Kuroda once again reiterated the BoJ won't hesitate to ease further if necessary.

Saudi Arabia's energy minister says to UAE he wants "compromise and rationality" on OPEC oil deal. The UAE rejected a proposal to extend the deal and increase production and it seeks a review of baseline production levels.

ECB's Schnabel says an overshoot of inflation is necessary and proportionate.

China's largest steel-making city Tangshan has begun implementing a 30% output cut. The reduction is said to be in place for the rest of the year.

Chile's Codelco copper mine production rose 5.8% to 152.55 tonnes in May. BHP's Escondida mine production (May) fell 9.2% to 84,800 tonnes. Lastly, Chile's Collahuasi copper mine production fell 3.7% to 57,900 in May.

ECB's Knot flags phase-out of coronavirus support beginning March 2022. Knot then added he is wary of the potential for accelerating inflation.

Looking ahead to the rest of the session highlights include composite and services PM's from the major nations and comments from ECB's Lagarde, Enria, de Guindos and Buba's Buch. Remember the U.S. could be quiet as the nation is off for Independence Day.

By Rajan Dhall

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

After the worst June since 2013, is gold price ready to rebound?

After dropping more than 7% in June, gold is trying to rebound. Can the precious metal see $1,800 an ounce breached next week as higher inflation continues to worry industry experts? Here's a look at Kitco's top three stories of the week:

!. Gold saw its worst June since 2013

2. Is recession next? El-Erian is concerned the 'Fed is falling behind' on inflation story

3. Higher inflation for the next 5 years: 'be overweight stocks, gold, and commodities,' says WisdomTree's research head

By Anna Golubova

For Kitco News

Contact agolubova@kitco.com

www.kitco.com

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold price has a chance to break out next week, here’s why â analysts

Gold price has a chance to break out next week, here's why – analysts

Gold could see a significant rally above the $1,800 an ounce level next week after the release of the Federal Reserve's June monetary policy meeting minutes, analysts told Kitco News.

One of the biggest events to watch next week will be the Federal Reserve's monetary policy meeting minutes. The meeting, which took place in mid-June, triggered a significant selloff in gold.

"Markets are expecting a hawkish tilt, and anything that tells us there is no hawkish tilt is a little bit less than people were pricing in. You can get a big rally in gold," TD Securities head of global strategy Bart Melek told Kitco News.

Market participants will be closely monitoring whether the hawkish comments made by some of the Fed members during the last few weeks match up with the notes from the meeting minutes.

"FOMC meeting minutes are interesting in the event if they contradict anything that we've heard from the Fed so far, especially from some of the more hawkish Fed members," said Gainesville Coins precious metals expert Everett Millman.

Gold is ending the week on a strong note as prices are once again trying to breach the $1,800 an ounce level following a mixed U.S. employment report.

"We got 850,000 new jobs added to the economy in June, but the unemployment rate went up to 5.9%. The participation rate was also still very weak, which means there is no particular impetus for the Fed to tighten monetary policy anytime soon. And that is good for gold," Melek said. "We are also seeing wage growth slowing, and that implies that inflation is likely transitory and there is no big reason for the Fed to start raising rates."

It is still not clear whether there is enough momentum to propel gold much higher next week, but Melek does see prices returning to $1,900 an ounce in the next six months.

Another driver to watch is the movement in the oil price, added Millman, noting that any additional price hike will end up working in favor of gold.

"I'm interested in what happens at the OPEC+ meeting. Uncertainty around oil could have big implications for inflation, and that is still one of the main drivers for gold," he said. "If they come to an agreement to limit output, that should push oil prices higher."

Higher oil prices feed into higher inflation, and that is positive for gold, Millman elaborated. "It's interesting in the case of Russia too, which is such a big OPEC+ player. Russia is reliant on energy markets for its economy, and it hasn't been buying gold lately. If oil rises, the country could see extra funds and possibly start purchasing gold again," he said.

Some analysts noted that it'd been a frustrating time for the gold bulls.

"It's been one step forward and two steps back," said Walsh Trading co-director Sean Lusk. "Gold couldn't hold $1,800 and went down to mid-April lows of around $1,760s. Now we are popping back up on unemployment data. Everything screams inflation, but the problem has been the rally in the U.S. dollar."

Lusk is optimistic for July because of gold's seasonality coming back. "We are coming back into traditional gold buying pattern in mid-July. The wedding season takes hold. There is a buying bias. Cyclical trade is entering back into the market," he said.

A breakout above $1,820 next week would open the door for another rally in gold, said RJO Futures senior commodities broker Daniel Pavilonis. "If we close above it, gold could go much higher and even make new highs."

Data to watch

It will be a fairly light data week due to the U.S. celebrating Independence Day. Aside from the Fed's meeting minutes on Wednesday, markets will be paying close attention to the ISM non-manufacturing PMI on Tuesday and jobless claims on Thursday.

"The ISM services index is probably the premier number and should show the sector is growing very strongly with increased business opportunities thanks to the reopening," said ING chief international economist James Knightley.

By Anna Golubova

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

The last trading day of the first half of 2021 concludes, and gold incurs losses

Now that the last trading day has concluded for the second quarter or first half of 2021, it is clear that gold had a difficult time incurring lower pricing over the last six months. Gold futures opened at $1954 on the first trading day in January and closed today at $1770.60, suffering a drawdown of $184. That means that gold lost 9.416% in value over the first half of 2021.

Headwinds from dollar strength, a flight into the cryptocurrencies during the first quarter of 2021, higher yields in U.S. debt instruments, and a strong U.S. equities markets all contributed to gold’s price demise during the first half of this year.

The U.S. dollar index traded at 89.85 on the first trading day of 2021 and is currently fixed at 92.345, gaining 2.495 points in the first half of 2021. This is an increase of approximately two ½% in the value of the U.S. dollar when compared to a basket of six major currencies.

Both the NASDAQ Composite and Standard & Poor’s 500 were extremely strong, closing at or near record levels by the close of trading today. The S&P 500 closed at a record high, with the NASDAQ composite closing slightly lower on the day after hitting a record high close earlier this week. According to Dow Jones data, the three major U.S. stock indexes recorded the best two-quarter performance since 2019.

ADP report shows that 692,000 jobs were added in June

The precursor to Friday’s U.S. Labor Department’s jobs report is the ADP (Automatic Data Processing) private sector came in today, indicating that 690,000 private-sector jobs were added from May to June. Economists polled had forecasted that the ADP report would indicate between 550,000 and 600,000 new jobs created. Obviously, the actual numbers came in well above economic forecasts. Concurrently the May numbers were revised down to 886,000 jobs from the original number of 978,000. The service sector was the primary recipient of new jobs with gains of 624,000, with good producing jobs coming in at 68,000.

It is currently believed that the ADP numbers are quite in line with expectations for the U.S. Labor Department’s nonfarm payroll, which will be released on Friday. Currently, the forecast for Friday’s jobs report is an additional 706,000 new jobs added. If the jobs report comes in in line with economic forecasts, it would indicate an uptick from the 559,000 new jobs reported by the Labor Department in May 2021. The forecast for the unemployment rate is looking for a downtick from 5.8% to 5.6%. Considering that the unemployment rate in June 2020 was at 11.1%, a large part of our unemployed workforce has returned after finding gainful employment.

While the ADP jobs report is a precursor to Friday’s U.S. Labor Department report, it is not always a great indicator of the numbers that will be revealed on Friday. However, it has been more than just jobs filled in the United States that has pressured gold pricing lower over the first half of this year. As we spoke about at the beginning of this letter, it has been a combination of multiple fundamental factors that resulted in an almost 10% decline in gold pricing. What will occur over the second half of 2021 is hard to estimate. A main factor and focus will be how hot inflationary pressures get. Although the CPI has grown to a 5% inflationary rate, and the PCE is now almost double the mandate of the Federal Reserve at 3.9%, inflationary pressures could most certainly be sustained and not temporary as the Fed continues to insist they will.

Wishing you, as always, good trading and good health,

By Gary Wagner

Contributing to kitco.com

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold and silver start the European session mixed

Gold and silver are trading mixed this morning. The yellow metal suffered from more losses on Tuesday after hitting a low of $1750.78/oz and this morning the price is around $9 higher. Silver on the other hand trades at $25.81/oz 0.28% higher overnight after also dropping in yesterday's session. In the rest of the commodities complex, copper has moved to $4.25/lb 0.14% higher and spot WTI is trading just under flat at $73.40/bbl.

Indices in the Asia Pac area were slightly mixed. The ASX (0.16%) and Shanghai Composite (0.30%) closed higher while the Nikkei 225 dropped -0.07%. Futures are pointing towards a negative open in Europe.

In the FX markets, the antipodeans were the best performers overnight as AUD/USD (0.14%) and NZD/USD (0.15%) both traded higher. The dollar index lost 0.08% in value. In crypto markets, BTC/USD has dropped -2.48% after a decent session on Tuesday.

Looking at the news from overnight, Japanese industrial production (MoM) (May) hit -5.9% vs the analyst expectations of -2.4%.

ECB's Villeroy thinks inflation should go up a bit this year then down again in 2022, 2023.

U.K. prelim Q1 GDP printed at -1.6% vs expectations of -1.5% q/q.

China official PMIs for June. Manufacturing 50.9 (vs. expected 50.8), Services 53.5 (expected 52.7).

Fed's Waller says the U.S. jobs market has not quite come back to pre-COVID. Waller added he has a very optimistic outlook for the economy and he is not ruling out a 2022 rate hike.

There are newspaper reports that double-vaccinated people in the U.K. will not have to isolate if they come into contact with someone who has COVID-19.

Looking ahead to the rest of the session highlights include German employment numbers, EU CPI, U.S. ADP jobs numbers, Canadian GDP, U.S. pending home sales and weekly oil DoE's. We could also hear from Fed's Barkin, Bostic, BoE's Haldane and ECB's Panetta.

By Rajan Dhall

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold, silver price unleashed – Will this summer be as explosive as 2020’s?

Gold, silver price unleashed – Will this summer be as explosive as 2020's?

It's going to take gold until the end of the year to rally to $2,000 an ounce, said Phil Streible, chief market strategist of Blue Line Futures.

"I really believe [gold] could get going. $2,000 would capture some headlines on the upside. I think it has the right dynamics for it. You need the Fed to backpedal. You need growth to kind of stall," Streible told David Lin, anchor for Kitco News.

However, it's unlikely that the rally will start this summer and mirror last summer's explosive price action, Streible said.

"You've got two different things. The 10-year [U.S. Treasury bond yield] hit its all-time low last August," he said. "We don't have the Treasury dynamic in there, so what happened then is different from now."

Additionally, investors from traditionally large gold markets, like India, need to shift their capital back into gold.

Indian crypto investments grew from an aggregate holding of $200 million last year to $40 billion this year, according to data from Chainalysis

A shift back into gold from cryptocurrencies in India would provide a huge boost to the price, Streible said.

For more information on key price levels to monitor, watch the video above. Follow David Lin on Twitter @davidlin_TV.

By David Lin

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Basel III to take gold to record highs?

After an unexpected selloff last week, gold is busy building support. But the $1,800 level is proving to be a struggle.

Here's a look at Kitco's top three stories of the week:

1. The Yellen-Powell duo keeps the markets on their toes as they talk down the Federal Reserve's hawkish June monetary policy meeting.

Federal Reserve Chair Jerome Powell' comments

U.S. Treasury Secretary Janet Yellen's comments

2. Bitcoin drops below $30,000, briefly erasing all the year-to-date gains.

3. Many investors underestimate the impact of Basel III on the gold market, says Goldex CEO Sylvia Carrasco.

By Anna Golubova

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David

Gold and silver are trading higher ahead of the European open

Gold and silver are trading higher leading into the European session on the last trading day of the week. On Thursday gold had another tricky session hitting a high of $1788.1/oz before closing lower and finishing the session at $1775.22/oz. Silver on the other hand has had two days worth of gains and has made a good start so far this morning. In the rest of the commodities complex, copper has used 0.28% higher and spot WTI trades 0.10% in the black.

Looking at risk sentiment overnight the major bourses all moved higher. The Nikkei (0.66%), ASX (0.45%) and Shanghai Composite (1.19%) followed the positive lead from Wall St. Futures in Europe are also pointing towards a positive open.

In FX markets, the biggest mover overnight was once again NZD/USD which rose 0.31%. The dollar index is starting today's session 0.08% lower. In the crypto space, after a daily decent rally yesterday BTC/USD trades 1.62% in the red.

Looking at the major news from late yesterday and overnight, Biden and Co looked to have finally secured the infrastructure spending bill.

US Senate's McConnell says infrastructure framework an 'encouraging sign of progress'China's Bitmain has halted sales of cryptocurrency mining machines to ease selling pressure.

Fed says banks pass stress tests – to lift pandemic restrictions on share buybacks, dividends after June 30

Fed's Barkin says the current rise in inflation is clearly due to temporary factors. He added he doesn't think the U.S. is at max employment yet.

Germany's Altmaier said expects US, EU can agree on steel, aluminum tariffs before the end of the year

U.K. GfK Consumer Confidence (Jun) -9 vs exp -7 prev -9

GfK German Consumer Climate (Jul) -0.3 vs exp -4.0 prev -6.9

Tokyo Core CPI (YoY) (Jun) 0.0% vs exp -0.1% prev -0.2%

Looking ahead to the rest of the session highlights include EZ money supply, U.S. PCE data, Michigan Consumer Sentiment data and the weekly Baker Hughes oil rig count data.

By Rajan Dhall

For Kitco News

Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage

David