Today's Gold and Silver News: 02-05-2024
Image Source: Unsplash
Silver Price News: Silver Falls to One-Month Low as Gold Slumps
Silver prices fell on Tuesday to their lowest since early April, taking a lead from a sharp drop in gold prices.
Silver prices dropped as low as $26.31 an ounce, from around $27.10 an ounce in late trades on Monday, moving in line with a consistent fall in the value of gold through the day.
The latest round of EU and US data on Tuesday suggested inflation was running higher than expected, bolstering the case for central banks to put off interest rate cuts until later in the year. This added to a recent decline in bets on the first US Fed interest rate cut happening in June, with the market now favouring September or November.
A higher-for-longer scenario for interest rates tends to dent the appeal of holding gold and silver as non-interest-bearing assets.
Moreover, US treasury yields rebounded strongly on Tuesday, recovering from a slump over the last few days, while the US dollar also strengthened against other major currencies, both of which contributed to the downward pressure on silver prices. Read More
Gold Price News: Gold Falls Sharply Below $2,300 as US Data Points to Inflation
Gold prices saw a sharp sell-off on Tuesday, pushing prices to their lowest level for a week, as economic figures pointed to high inflation, indicating lower chances of interest rate cuts any time soon.
It was one-way traffic on Tuesday, with prices consistently moving lower through the day, falling as low as $2,294 an ounce. That compared with around $2,335 an ounce in late deals on Monday – a loss of roughly $40 in a single day. The sharp slide has taken prices back to levels last seen on April 23.
Euro Area GDP figures for Q1 came out on Tuesday, showing stronger than expected growth, both on a quarter-on-quarter and year-on-year basis. Compounding this, the US employment cost index for Q1 released later in the day also came in above forecasts. Taken together, the latest figures indicate relatively high inflation, and this strengthens the argument for central banks maintaining interest rates at current levels.
The markets have been dialling back bets on the US Fed’s expected start of interest rate cuts, taking place as soon as June. The latest figures from interest rate traders shows that bets are roughly 50-50 on a continuation of existing rates in September or a cut. A slightly stronger majority favour the first cut in November. The US Fed’s FOMC is set to meet May 1, followed by subsequent meetings in June, July and September.
Eventual interest rate cuts are seen as supportive for gold prices because they reduce the opportunity cost of holding non-yield-bearing assets like gold and silver. Read More
Gold is the cornerstone of stability as government debt rises out of control – abrdn’s Minter
The gold market continues to see significant selling pressure as investors capitulate to the idea that the Federal Reserve will maintain its restrictive monetary policy longer than expected.
The gold market is testing critical support just above $2,300 an ounce and is down more than 2% on the first day of the Federal Reserve's monetary policy meeting. Gold has lost nearly 6% after hitting a record high above $2,448 an ounce three weeks ago.
The selling pressure comes as markets have priced out potential rate cuts in June and July; however, one analyst says that gold's bull rally is far from over.
In an interview with Kitco News, Robert Minter, Director of ETF Strategy at abrdn, painted a picture of a world turning to gold as a safeguard against fiscal imprudence and political volatility, suggesting a bullish outlook for the precious metal in the face of growing global uncertainties. Read More
U.S. & Canada’s capital gains tax hikes could cripple economic innovation – Daryl Ching
The proposed capital gains tax increases in the U.S. and Canada could significantly dampen economic vitality and stifle innovation, potentially altering the landscape for entrepreneurs and investors, according to Daryl Ching, a Chartered Financial Analyst and Managing Partner at Vistance Capital Advisory.
In a recent interview with Jeremy Szafron, Anchor at Kitco News, Ching detailed the complexities and potential economic impact of the proposed tax strategies.
"The 25% on unrealized gains is a much bigger issue," Ching explained while discussing Biden’s proposed tax changes for the US, "because what that means is even if you don't sell your investment in the short term, and you still hold on to it, but you have an unrealized gain, meaning the market value has gone up by a certain amount, you can still get taxed on it even though you haven't sold the asset yet." Read More
The Fed could still cut rates in July despite market’s ‘hawkish’ perception – Kristina Hooper
The Federal Reserve could still cut rates in July despite the market's hawkish expectations of higher-for-longer rates this year, said Kristina Hooper, Chief Global Market Strategist at Invesco.
In a recent interview with Jeremy Szafron, Anchor at Kitco News, Hooper noted that consumer financial health and increasing debt pressures are a significant concern.
"We are seeing more stress on consumers if we look at credit card delinquencies if we look at the percentage of those that are giving minimum payments in terms of servicing their credit card debt. Those all suggest that stress is increasing," Hooper said. Read More
Goldman Sachs says gold’s bullish momentum remains even if the Fed maintains restrictive rates
Gold prices have held critical support above $2,300 an ounce as markets look for the Federal Reserve to signal it will maintain its restrictive monetary status longer than expected.
Despite the recent selling pressure in gold, Goldman Sachs is doubling down on its recent bullish call, saying that gold can maintain its bullish momentum even if the Federal Reserve delays its easing cycle.
In a video commentary published Tuesday, Nicholas Snowdon, Head of Metals Research at Goldman, said that gold has less to worry about from the Fed as the inverse relationship between the asset and interest rates has broken down.
“We're seeing a surge in demand from emerging market central banks and from Asian retail investors. But a lot of this has been driven by fear. With geopolitical risk on the rise, central banks are fearful of sanctions and as a result, are buying more gold over dollars and securities,” he said. “Economic uncertainty and currency depreciation fears are driving Asian retail demand for gold.” Read More
Gold price holding firm gains as Fed sees lack of progress on 2% inflation target, leaves rates unchanged
The gold market is holding solid gains above $2,300 an ounce, but is not seeing any new momentum, as the Federal Reserve maintains its restrictive monetary policy stance and warns that inflation remains a stubborn problem.
As expected the U.S. central bank left its fed funds rate in a range between 5.25% and 5.50%. Although economic and inflation risks remain balanced, the central bank acknowledged persistent higher inflation.
“In recent months, there has been a lack of further progress toward the Committee’s 2 percent inflation objective,” the central bank said in its monetary policy statement.
The gold market is not seeing much reaction to the relatively neutral monetary policy stance. June gold futures last traded at $2,316.20 an ounce, up 0.57% on the day. Read More
Gold, silver firmer after FOMC statement with no big surprises
Gold and silver prices are posting decent corrective advances in early-afternoon U.S. trading Wednesday, following the just-released FOMC statement from the Federal Reserve that contained no big surprises to move the markets. June gold was last up $13.00 at $2,315.70. July silver was last up $0.231 at $26.88.
The highly anticipated Federal Reserve Open Market Committee (FOMC) meeting ended this afternoon with a statement, which left U.S. interest rates unchanged, as expected. The statement also said there has been a “lack of further progress” in recent months toward its inflation target of 2% annually. The statement said the Fed is “strongly committed” to returning inflation to 2%, adding that there will be no rate cuts until that time. Those are hawkish terms, but nothing the marketplace did not expect. Thus, the gold and silver markets bulls are seemingly breathing a sigh of relief the statement was not even more hawkish.
Technically, June gold futures prices hit another three-week low early on today. The bulls have the overall near-term technical advantage but they are fading. A 2.5-month-old uptrend on the daily bar chart has been negated and prices are starting to trend lower. Bulls’ next upside price objective is to produce a close above solid resistance at $2,364.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at today’s high of $2,321.50 and then at $2,350.00. First support is seen at today’s low of $2,291.70 and then at $2,275.00. Wyckoff's Market Rating: 6.5.
Image Source: Kitco News
July silver futures prices hit a four-week low Tuesday. The silver bulls have the slight overall near-term technical advantage, but are fading. A two-month-old price uptrend on the daily bar chart has been negated, and a downtrend line is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.00 and then at $27.50. Next support is seen at $26.50 and then at $26.25. Wyckoff's Market Rating: 5.5. Read More
Image Source: Kitco News
Fed Chair Powell maintains hawkish stance, tells reporters ‘I don’t see the stag or the flation’
Federal Reserve Chair Jerome Powell stuck to his guns at this afternoon’s post-FOMC press conference, telling reporters the central bank would maintain restrictive rates as long as necessary and refusing to offer specific triggers or timeframes for hikes, holds, or cuts to the benchmark interest rate.
After the FOMC held the Fed Funds rate unchanged at 5.5% as expected, Powell was asked whether cuts were still on the table this year after several recent high inflation readings.
“I would say my personal forecast is that we will begin to see further progress on inflation this year,” he said. “I don't know that it will be enough, sufficient. I don't know that it won't. We're going to have to let the data lead us on that.”
When asked whether elevated inflation warranted a rate hike, Powell demurred, though he stopped short of ruling one out. “I think it's unlikely that the next policy rate move will be a hike,” he said. “I would say it's unlikely.” Read More
Gold Rallies as Fed Signals Pause on Rate Hikes, Inflation "Progress Has Stalled"
Gold prices surged on Wednesday after the Federal Reserve left interest rates unchanged and struck a more dovish tone, acknowledging that progress on lowering inflation has stalled. The precious metal, often viewed as a hedge against inflation, benefited from the central bank's signal that further rate hikes are unlikely in the near term.
In his press conference following the Federal Open Market Committee (FOMC) meeting, Fed Chair Jerome Powell remarked, "I think it's unlikely that the next policy rate move will be a hike. I'd say it's unlikely." This statement contrasted with previous hawkish rhetoric from the Fed, which had been adamant about the need for continued rate increases to tame stubbornly high inflation.
Powell also admitted that the central bank is not gaining "greater confidence" in inflation's downward trajectory, a key condition for a potential pause in rate hikes. "I can just say that when we get that confidence, then rate cuts will be in scope. And I don't know exactly when that will be," he said, adding that the Fed did not see sufficient progress on inflation in the first quarter. Read More
Image Source: Kitco News
.png)
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
Thanks for visiting.