Blog posts of '2024' 'May'

While there was continued divergence between gold and silver yesterday, gold was able to hold its ground in positive territory and finished Thursday with a mild gain.

In contrast, silver was the weaker market as it closed with a heavy loss. The declines in silver were outsized and were likely the result of profit-taking by aggressive Asian buyers over the prior two weeks.

It should be noted that Chinese silver prices reached a significant premium to spot prices recently resulting in Chinese buying international silver and reducing their risk to the weakness in their currency...[MORE]

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With the dollar overnight breaking out to the highest level since May 14th, US treasury yields nearing the highest levels of the month and critical US inflation data from the quarterly PCE report to be released tomorrow, traders should expect an expansion of volatility in gold.

Divergence between gold and silver extended yesterday with silver remaining strong, gold showing weak, and silver adding to its recent show of sector leadership.

However, we suspect strength in the dollar and rising global interest rates undermined sentiment and might have prompted some gold longs to exit ahead of tomorrow's US PCE data...[MORE]

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We expect gold and silver to continue to chop roughly in line with yesterday's price action until the first of two significant US inflation reports is released tomorrow.

However, bullish fundamental information justifies silver's recent relative strength versus gold as reports of heavy Chinese buying of international silver (because domestic prices are significantly higher) suggest a major demand source has emerged.

The bullish theme behind significant Chinese interest is the surging demand for silver in solar energy applications. Along those lines Shanghai spot silver prices last week were 2% above the 13% Chinese import tax or 15% above international silver prices...[MORE]

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While gold and silver are tracking higher early today the charts still favor the bear camp from last week's sharp range-down failures which in turn should make the Thursday/Friday lows key pivot point pricing to start the new trading week.

Key pivot point pricing in June gold begins at $2328.10 and at $30.265 in July silver.

Adding to the negative track in gold and silver prices early today is news that Chinese April net gold imports plunged 38% from March which we think was largely the result of historically high pricing...[MORE]

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Good morning. The precious metals are lower in early U.S. trading.

U.S. calendar features Case-Shiller Home Price Index, FHFA Home Price Index, Consumer Confidence, Dallas Fed Index, M2.

FedSpeak due from Mester, Bowman, & Kashkari.

What goes up aggressively and makes a chain of new record highs holds the prospect of aggressive corrective action. In fact, if gold finishes the week at current levels, it will have dropped the most in a single week since last October!

In retrospect, the pendulum shift on US interest rate policy back toward the hawks, combined with a higher high in the dollar and a pulse higher in treasury yields, provides a bearish environment for gold and silver into the end of the week.

However, if recent gains were partially the result of flight to quality issues, we suspect some bargain-hunting buying will surface before the close today, but perhaps after additional declines...[MORE]

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