Gold, silver prices gain as coronavirus fears quickly return

Gold and silver prices are higher, with silver posting solid gains, in early U.S. futures trading Thursday. Marketplace focus Thursday is right back on the coronavirus outbreak that is spreading. February gold futures were last up $7.10 an ounce at 1,577.50. March Comex silver prices were last up $0.263 at $17.75 an ounce.

The U.S. economic data point of the day Thursday saw the advance estimate of fourth-quarter GDP come in at up 2.1% on an annual basis, which is in line with market expectations. Markets showed little reaction to the report.

Asian and European stock markets were mostly lower overnight. Mainland China markets remain closed for the Lunar New Year holiday. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins.

After Tuesday and Wednesday shrugging off the coronavirus outbreak that is still not at all contained and apparently escalating, the marketplace on Thursday is again on edge and risk averse regarding the matter. The latest reports say over 7,700 Chinese are afflicted and over 170 have died. Global businesses located in China are closing their doors there and worldwide flights to China are being cancelled. The coronavirus outbreak is now being deemed more expansive than the SARS outbreak that occurred in Asia over 15 years ago.

U.S. traders are wondering if the seriousness of the coronavirus situation in China will give China a legal “out” on its recent signed trade-deal pledge to buy significantly more U.S. agricultural products in the next couple years.

At his press conference after the FOMC meeting conclusion Wednesday afternoon, Fed Chairman Jerome Powell said the coronavirus outbreak could have consequences for global economic growth and said the Fed is monitoring the situation closely. That comment along with other less upbeat remarks on the U.S. economy from Powell, including saying U.S. business investment and U.S. exports are weak, boosted the gold and Treasury markets and pushed U.S. stock indexes off their daily highs. Crude oil prices also sunk at the same time. There is now talk in the marketplace that the Fed will be forced to lower U.S. interest rates later this year.

The FOMC at this week’s meeting held U.S. interest rates steady during its first policy meeting of the year and of the new decade, as expected. The benchmark federal funds rate remains in a range between 1.5% to 1.75%, where it has been for the past few months. The FOMC statement said the U.S. economy and labor market are growing moderately amid inflation that is non-problematic. Annual U.S. inflation remains below the 2% level that the Fed would like to see.

The key outside markets today see crude oil prices lower and trading around $52.25 a barrel. Meantime, the U.S. dollar index is slightly lower on a corrective pullback after hitting a two-month high earlier this week.

Technically, the gold bulls have the overall near-term technical advantage, but the January spike high is still strong chart resistance to overcome. A price uptrend is in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,613.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,550.00. First resistance is seen at today’s high of $1,582.40 and then at this week’s high of $1,588.40. First support is seen at the overnight low of $1,574.90 and then at $1,570.00. Wyckoff's Market Rating: 6.5

March silver futures bears have the slight overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $18.375 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $17.85 and then at $18.00. Next support is seen at the overnight low of $17.52 and then at this week’s low of $17.28. Wyckoff's Market Rating: 4.5.

By Jim Wyckoff
For Kitco News
Thursday January 30, 2020 08:38

David

Gold prices jump today. Now, just ₹700 away from record highs

Gold and silver prices have jumped amid coronavirus scare

Demand of gold in India may take a hit in near term due to a rally in prices

Gold and silver prices in India edged higher today as global rates firmed amid the coronavirus scare. On MCX, gold futures prices were up 0.66% to ₹40,618 per 10 gram, extending gains to the second session. Gold prices are now just ₹700 shy of record highs of ₹41,293, hit earlier this month. Silver rates today saw a sharper gain, rising 0.83% to ₹45,931 per kg. Gold can move higher towards ₹40,700 while taking support near ₹40,250 while silver can test ₹46,300 while taking support near ₹45,700, SMC Global said in a note.

In global markets, gold prices inched up on Thursday after the US Federal Reserve said the new coronavirus outbreak could hurt China's economy in the short term.

Spot gold prices were up marginally to $1,578.05 per ounce, after strong gains in the previous session. Among other precious metals, palladium rose 0.7% to $2,305.21 an ounce, silver gained 0.3% to $17.58, while platinum climbed 0.2% to $975.70.

Overnight, the US Federal Reserve, as expected, held rates steady but its Chair Jerome Powell said the coronavirus outbreak is may have some some effects on the Chinese economy, at least in the short term.

The World Health Organization is meeting again today to decide whether the new virus from China constitutes a global emergency as the death toll touched 170.

Indicative of the risk-averse sentiment across the gold, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.45% to 903.50 tonnes on Wednesday.

Back in India, high prices have hurt gold demand and it may not show any significant growth as consumers will take time to adjust to higher prices, a top official of World Gold Council told Bloomberg.

High prices, a slowdown in the domestic economy and weak consumption across sectors saw consumers shying away from gold markets last year. Gold prices had rallied 25% in India last year. (With Agency Inputs)

 

Edited By Surajit Dasgupta
Updated: 30 Jan 2020, 11:25 AM IST

David

PRECIOUS-Gold dips as stocks recover, dollar gains ahead of Fed meeting

* Dollar rises to highest since Dec. 2

* Overall U.S. durable goods orders rise 2.4% vs 0.4% consensus

* New orders for key U.S.-made capital goods drop most in 8-months

* Fed’s two-day policy meeting starts later in the day

Jan 28 (Reuters) – Gold fell on Tuesday as equity markets rebounded following positive U.S. economic data while the dollar scaled a near two-month peak ahead of the U.S. Federal Reserve’s policy meeting.

Spot gold was down 0.8% at $1,568.90 per ounce by 2:16 p.m. EST (1916 GMT), having touched its highest since Jan. 8 on Monday. U.S. gold futures settled down 0.5% at $1,569.8.

The S&P 500 rose over 1%, while U.S. 10-year Treasury yields rebounded from a near four-month low. The dollar rose to its highest since Dec. 2.

“There seems to be a little bit of a risk-on tone here. The fears of the coronavirus are still lingering in the market, (but) regardless of these fears there is going to a contingent that is willing to bargain hunt,” said Ryan McKay, a commodity strategist at TD Securities.

“The durable goods number was better-than-expected, so that could be increasing the chances that the Federal Reserve would not be dovish in the FOMC meeting and that is weighing on prices.”

In December, overall orders for durable goods rebounded 2.4% against an expected increase of 0.4%.

However, new orders for key U.S.-made capital goods dropped by the most in eight months, while shipments were weak suggesting that business investment contracted further in the fourth quarter.

The Fed’s first policy meeting of the year is scheduled to start later in the day, where it is widely expected to keep the benchmark interest rates unchanged.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

However, concerns that the coronavirus outbreak could hinder the global economy persist, underpinning overall demand for gold, Julius Baer analyst Carsten Menke said.

Reactions to the spreading virus had been very different across markets and the decline in oil prices suggested a slowdown of economic activity in China.

 

The death toll from the virus reached 106 in China and some health experts are questioning whether Beijing can contain it.

 

Elsewhere, palladium gained 1.2% to $2,295.53 per ounce, after falling about 7% on Monday.

“We assume that the correction will continue, as the upswing beforehand was exaggerated in our opinion,” Commerzbank analyst said in a note.

Silver dropped 3.5% to $17.45, while platinum rose 0.4% to $986.91

 

Reporting by K. Sathya Narayanan and Eileen Soreng in Bengaluru Editing by Marguerita Choy and Tom Brown

David

Gold prices fall today for first time in 3 days, silver rates decline

Investors booked some profit after the recent run-up in gold prices

Both gold and silver prices have moved sharply higher this month

 

Gold and silver prices edged lower in Indian markets today as higher rupee, and profit-taking after the recent run-up pushed prices lower. On MCX, February gold futures prices were down 0.18% to ₹40,511 per 10 gram, their first decline in three days. Tracking gold, silver prices also moved lower today. Silver futures on MCX were down 0.33% to ₹46,850 per kg.

SMC Global expects gold prices to remain sideways in near term as rising concerns over the fast-spreading coronavirus in China and its economic impact offset a firmer dollar. "Gold can move higher towards 40,800 while taking support near ₹40,450 while silver can test ₹47,300 while taking support near ₹46,700," the brokerage said.

In global markets, gold prices were steady today at $1,581.09 per ounce after their recent run-up as investors assessed the the economic and human impact of China’s deadly coronavirus. China's health authorities said that the death toll from the coronavirus rose to 106 and the total number of confirmed cases increased to 4,515.

"Gold’s safe haven demand may edge higher on expectations that the virus outbreak in China may pressure the already weakened global economy. Weaker global equities due to the large scale risk aversion may also assist the yellow metal. At the same time, a stable dollar and limited physical market activities may limit major gains in the overseas market," said Hareesh V, head of commodity research at Geojit Financial Services.

On the technical side, as long as gold prices stay above $1568 expect rallies to continue with strong resistance is seen at $1592 followed by $1610 levels, he said, adding: "A direct drop below $1548 would negate any bullish expectation."

In global markets, gold prices are up 4% in less than a month, benefiting from a flight to haven assets as investors are assessing the extent of the hit to growth in China, as well as in the other parts of the world.

The virus outbreak in China is expected to hurt the world's second-largest economy, as authorities step up preventive measures, impose travel restrictions and extend the Lunar New Year holidays to limit the spread of the virus.

The US and Canada have also warned against travel to China. Meanwhile, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.13% to 899.41 tonnes on Monday. (With Agency Inputs)

 

Edited By Surajit Dasgupta

David

PRECIOUS-Gold rises to over 2-week high as China virus spreads

Jan 27 (Reuters) – Gold prices climbed to a more than two-week high on Monday as rising concerns over the spread of a virus outbreak in China and its potential economic impact prompted investors to buy the safe-haven metal.

FUNDAMENTALS

* Spot gold rose to its highest since Jan. 8 at $1,586.42 and was up 0.6% at $1,579.94 per ounce by 0131 GMT. U.S. gold futures advanced 0.5% to $1,579.50.

* The new coronavirus in China has killed 80 and infected more than 2,000, as residents of Hubei province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak.

* Asian stocks slipped as investors remained wary of the virus outbreak in China, while the yen jumped.

* The coronavirus transmission ability is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday, and the country might extend Lunar New Year holidays due to the virus outbreak.

Investors are also keeping a close eye on the U.S. Federal Reserve’s first meeting of the year scheduled on Jan. 28-29.

* Canada’s Barrick Gold Corp signed a deal with Tanzania on Friday in which the government will take stakes in three gold mines, ending a long-running tax dispute.

* Armenia’s prime minister called for environmental protesters to end their 18-month-old blockade of a foreign-owned gold mine on Saturday, saying the protest was not in the national interest.

* Physical gold demand was subdued in major Asian hubs last week on account of the Lunar New Year holidays, with growing fears the virus outbreak in China could further dampen activity.

* Hedge funds and money managers cut their bullish positions in COMEX gold contracts in the week to Jan. 21, data showed on Friday.

 

David

Precious Metals Weekly Round-Up – Gold Reacts to Pandemic Fears

On Thursday, gold hit its highest price for the week at US$1,566.80 as cities outside of China began reporting cases of the flu-like virus.

The precious metals sector performed flatly this week despite gold experiencing a slight uptick in relation to concerns that the coronavirus may be a global pandemic.

On Thursday (January 23), gold hit its highest price for the week at US$1,566.80 per ounce as cities outside of China began reporting cases of the flu-like virus. The novel respiratory illness has forced the Chinese government to quarantine 12 cities containing a combined 35 million residents.

Following a World Health Organization press conference Thursday during which officials eased fears that a pandemic was afoot, gold edged back.

By Friday (January 24) morning, the US dollar was making gains, which also weighed on gold’s growth, indicating that investors were again showing interest in riskier assets.

The precious metals sector has experienced increased interest in recent months due to heightened global tensions and broad economic uncertainty, which always seems to benefit the safe haven asset class.

Despite the weak performance the sector exhibited this week, experts are steadfast in their belief gold and the wider precious metals space are the smart investment for 2020.

“I think the easiest money in our sector will continue to be made in precious metals,” Rick Rule told the Investing News Network at the Vancouver Resource Investment Conference.

The CEO of Sprott (TSX:SII,OTC Pink:SPOXF) also sees value in gold’s sister metal.

“I think that if we keep going in the gold market, if the gold market continues to strengthen, we’ll see follow through in the silver market,” he said.

Gold exchange traded funds (ETFs) are also performing well and offer investors some diversity within the gold space. According to Commerzbank (OTC Pink:CRZBF,ETR:CBK), the holdings of gold ETFs have already grown by 16 tons for 2020 and are expected to continue to grow.

“In our opinion, the price should be well supported at roughly its current level, as ETF inflows also suggest,” the German bank pointed out. “Gold ETFs have seen inflows of 10 tons so far this week, and of over 16 tons since the start of the year.”

Spot gold was selling for US$1,566.08 an ounce at 10:15 a.m. EST on Friday (January 24).

After briefly breaking the US$18 threshold on Monday to trade for US$18.02 an ounce, silver spent the rest of the week locked just below US$18.

The metal had been steadily trending higher since early December, but has been hindered by gold’s poor showing this week as well as easing of tense relations between Iran and the US.

US trade deals with China and Canada have also quelled some of the appetite investors were exhibiting for safe haven assets and monetary metals.

Positive news in recent weeks may have prevented the precious metals sector from continued gains; however, analysts remain convinced that low interest rates, ongoing geopolitical risks and the presidential impeachment proceedings will result in price growth for precious metals.

Silver was selling for US$18.01 as of 10:29 a.m. EST, breaking back above US$18.

Following five consecutive weeks of price growth, platinum performed with volatility this session. The metal, which surpassed the US$1,000 an ounce mark on January 16 to trade for US$1,037, was able to maintain a range bound level, oscillating from US$1,001 to US$1,014.

An ounce of platinum was trading for US$1,011.88 at 10:39 a.m. EST.

The other platinum group metal, palladium, was also experiencing volatility this week, with a new high of US$2,422 on Monday.

The metal, which has industrial applications, has climbed 77 percent over the last 12 months and is expected to keep its pace as demand continues to climb from the automotive sector.

Earlier this week, analysts at Goldman Sachs (NYSE:GS) predicted the price may go as high as US$3,000 an ounce before a correction.

“The upside potential is significant as the market is now in a demand-rationing phase,” said Jeffrey Currie, head of global commodities research.

He went on to note that gains at that level would be sustainable and weigh on the demand, which would then make prices drop.

As of 11:05 a.m. EST, palladium was sitting at US$2,229.17 an ounce.
 

Georgia Williams – January 24th, 2020

David

Gold eyes $1,600 as Fed meeting, new virus threat in focus next week

Gold eyes $1,600 as Fed meeting, new virus threat in focus next week

Gold is well supported and has room to run higher next week as analysts point to the Federal Reserve meeting and the spread of the new coronavirus as the two key issues to keep an eye on.

The yellow metal battled against risk-on sentiment this week but managed to hold above $1,550 an ounce level and even rise about 0.8% on the week. February Comex gold futures were last trading at $1,572.40, up 0.45% on the day.

Next week, analysts are keeping a close eye on the Federal Reserve interest rate decision on Wednesday, the spread of the new coronavirus, and the possibility of any new geopolitical tensions.

The U.S. central bank meeting, which will be followed by the Fed Chair Jerome Powell’s press conference, is the main event to watch next week, according to TD Securities commodity strategists Daniel Ghali.

The consensus is that the U.S. central bank will keep rates on hold. The CME FedWatch tool is showing an 87.3% chance of rates staying at current levels, and a 12.3% chance of a 25-basis-point rate hike.

Some analysts see the Fed leaning towards the dovish side in its statement or during Powell’s press conference.

“If anything, [the Fed] is going to quell any lingering fears that it might be looking to take back its insurance cuts any time soon. And instead, it is probably going to reinforce the market’s lean on the dovish side. The market still has some cuts priced in for 2020. That should be supportive for gold prices,” Ghali told Kitco News on Friday.

TD Securities projects for the Fed to remain on hold for most of the year and then cut rates once by year’s end.

Not all, however, see the Fed meeting as the major event next week, noting that it might turn into a non-event as the market’s attention shifts to the spread of the coronavirus.

“It will be a bit of a non-event. It is pretty unlikely that the Fed makes any adjustment to its monetary policy at this point in time. We think the Fed will remain on hold for the foreseeable future,” said Capital Economics assistant commodities economist Kieran Clancy. “The main driver next week will probably be any headlines on this coronavirus outbreak.”

There are a lot of data releases next week as well, which are also likely to take a backseat to new virus news headlines, Clancy added.

“We don’t have any special insight into how the virus is going to spread. The only thing we can do is go back and see what previous outbreaks of viruses played out in the past. The most obvious one you can draw parallels from is the outbreak of SARS back in 2003. And if there is a similar run of play as back then, we will probably see a lot of the moves reversed as the virus is brought into control,” he said.

On Friday, the U.S. Centers for Disease Control and Prevention (CDC) confirmed a second U.S. case of the new coronavirus in Chicago. The CDC added that it is investing another 63 possible cases as the sometimes deadly virus is spreading into the U.S.

Gold has benefited from the virus fears due to the risk-off sentiment that the outbreak created, Clancy said, noting that its impact on the gold price is only temporary.

“It has already been a pretty strong factor supporting the gold price. It promoted a risk-off move in markets, which normally is very beneficial for gold. And if things get worse from here, there is no reason to suspect that we wouldn’t see the same thing happening again,” he noted. “Until we hear of any sort of concrete evidence that the virus has been contained, it will probably be one of the main drivers.”

Clancy is also watching geopolitical risks, which are still lingering in the background and could potentially boost gold once again soon.

"One of the most surprising things this week has been the lack of reaction in the oil market to the events in Libya and Iraq. Those factors could be positive for the gold price,” he said.

Chinese markets closed for Lunar New Year celebrations

The Chinese markets are closed for the Lunar New Year celebrations and will not re-open until late next week.

“Chinese markets are now closed. Technically it is a week, but it will take longer to get back into full swing. Made everything quieter,” said Rhona O’Connell, INTL FCStone’s head of market analysts for EMEA & Asia regions.

The preparations for the Lunar New Year have not boosted gold demand by much, said O’Connell. “With the rest of the physical market quiet, gold is holding up pretty well. Any upward momentum has to be generated by the professional market,” she noted.

There is a stark difference between what physical demand can do for gold prices versus increased professional market participation, O’Connell highlighted.

“Upward momentum in prices does tend to always come from the professional market,” she said, pointing to a lot of interest in gold during the U.S. market hours.

“The nature of the two different sides of the system is that physical demand at the retail level is never capable of driving prices higher. What it can do is cushion weakness. At the moment, there is good bargain hunting coming through between $1,550 and $1,555. That seems to be almost exclusively concentrated in the U.S. hours, which points to people continuing to look at all different professional parameters as opposed to underlying physical,” she said.

Important gold price levels

Analysts are watching a potential close above $1,568 an ounce, which is looking very probable as of Friday afternoon. A close above that level would indicate that gold might be ready for another rally, said Ghali.

“On the upside, we are watching $1,568. A close north of there would imply that gold has resumed its upward trajectory, he said. “On the downside, we are looking at $1,550 support.”

O’Connell said she is neutral on prices in the short-term, watching a tight range of $1,550-$1,570 an ounce.

Data next week

Some important macro releases next week, aside from the Fed interest rate announcement, include U.S. housing data — new home sales are out on Monday and pending home sales are out Wednesday.

The U.S. durable goods orders report and CB consumer confidence are scheduled for Tuesday. Followed by U.S. Q4 GDP numbers and jobless claims on Thursday. The PCE price index and personal spending are out on Friday.

In addition, the Bank of England (BoE) will also be making its interest rate announcement on Thursday, which will mark governor Mark Carney’s last monetary policy meeting. The market consensus is projecting for the central bank to remain on hold and keep rates at 0.75%.

By Anna Golubova
For Kitco News
Friday January 24, 2020 14:03

David

PRECIOUS-Gold inches lower as investors seek clarity on virus severity

* China gears up for Lunar New Year celebrations

* Spot gold may retrace range of $1,551-$1,554/oz- technicals

* SPDR Gold holdings rose 0.2% on Thursday

 

Jan 24 (Reuters) – Gold edged lower on Friday after the World Health Organisation stopped short of declaring the China virus outbreak a global emergency, though prices were still on track to post a weekly gain.

Spot gold fell 0.1% to $1,561.86 per ounce by 0356 GMT. For the week, prices were on track to gain 0.3%. U.S. gold futures slipped 0.3% to $1,561.50.

“There is not enough information out there in the street yet to be sure that we have a negative situation on our hand and that it would require a move into havens,” Jeffrey Halley, senior market analyst, OANDA, said.

“It is also the eve of the Chinese New Year, so mostly it’s just muted activity ahead of the holidays across Asia, with rising equities, earnings and stable U.S. data weighing on gold.”

Asian shares inched higher following the WHO statement on Thursday that the new coronavirus that emerged in China and spread to several other countries does not yet constitute an international emergency.

However, investors remained concerned about the spread of the virus ahead of the Lunar New Year, a peak period of travel and gold demand in the region.

Data on Thursday showed, the number of Americans filing for unemployment benefits increased less than expected last week, suggesting the labor market continues to tighten even as job growth is slowing.

Further weighing on bullion, the dollar against a basket of currencies, hovered near a one-month high hit in the previous session after the European Central Bank kept interest rates steady on Thursday.

Investors are now focused on the U.S. Federal Reserve’s first meeting of the year scheduled on Jan. 28-29.

“With a low interest rate environment, geopolitical risks and uncertainties such as U.S. President’s impeachment, the conditions are still quite conducive to further upside in gold,” ANZ analyst Daniel Hynes said.

Spot gold may retrace into a range of $1,551 to $1,554 per ounce, said Reuters technical analyst Wang Tao.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.2% to 900.58 tonnes on Thursday.

Elsewhere, palladium dipped 0.8% to $2,440.82 an ounce, and was on track to register its worst week in five, falling about 1.7%.

Silver was flat at $17.79 and platinum edged lower by 0.3% to $999.37. (Reporting by Sumita Layek in Bengaluru; Editing by Shailesh Kuber)

 

By Sumita Layek

David

Gold Weakens But Safe Haven Appeal Still in Focus

Gold prices are trading somewhat steady after having climbed to a two-week high during the previous trading session over rising concerns of the spread of the coronavirus across and beyond China. At the time of writing, GOLD is trading at a little above $1,551.

The safe haven appeal of gold was boosted by rising fears of an outbreak of coronavirus, which has spread across major Chinese cities like Beijing and Shanghai. With the upcoming Chinese New Year holidays which would see significantly higher travel in and out of China, markets are concerned that the epidemic could spread more rapidly, affecting more people across China and other countries and possibly even impact economic growth.

Gold prices also remain supported after rockets struck inside Baghdad’s Green Zone, a safe area where government buildings and foreign missions are located. In addition, the precious metal received additional bids after the IMF downgraded global economic growth forecasts for 2020 and 2021.

In addition to upcoming economic data releases, gold can be further impacted by latest developments at the World Economic Forum in Davos, Switzerland. Special focus will stay on the issue of international trade when world leaders converge to set the agenda for the upcoming year.

 

Posted Wednesday, January 22, 2020 by Arslan Butt

David