The record run in gold prices continues and has pulled silver prices up seemingly against headwinds.
Utilizing typical market interactions, the gold run seems to be unfolding in a virtual vacuum. In fact, the gains in gold and silver prices yesterday took place in the face of heavy headwinds from a strong dollar and rising US interest rates.
While the reduced probability of three rate cuts may create economic uncertainty and a measure of anxiety, thereby providing flight to quality interest in gold, that theory is squashed by the lack of anxiety in equities and the lack of upside action in Bitcoin...[MORE]
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The views that gold prices are being pulled higher by Bitcoin are dealt a blow this morning with gold at times trading nearly $40 an ounce higher and bitcoin at times trading $2000 lower.
Another potential myth regarding the record run in gold is talk that global central bankers are dumping the dollar in favor of long gold positions.
While we suspect central bankers have investment plans in motion to buy gold, the dollar has not suffered from a massive rotation.
On the other hand, hedge fund managers continue to build their long positions...[MORE]
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We are surprised the gold market is tracking in positive ground this morning considering the sharp upside breakout extension in the dollar, slightly higher US treasury yields, and perhaps most importantly in the face of comments from the Fed's Waller indicating he needed at least two more months of favorable inflation data to be comfortable cutting rates.
However, Waller's comments do not preclude a June rate cut considering the two-month qualifying statement, with [Friday's] PCE readings for February.
This morning the CME Fed watch tool pegs the odds of a June 12th rate cut at only 55.4% compared to 64% yesterday...[MORE]
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Even though June gold has managed to build consolidation low support just under $2200, the dollar charts show residual bullishness which in turn offers overhead resistance for gold and silver.
Today's US economic report slate presents minimal news from weekly mortgage applications and a seven-year note auction at midsession.
With June gold flaring sharply higher and giving up those gains quickly yesterday, the market has given off another blowoff top signal on the charts. However, the gold market also forged a blowoff top last week and at times yesterday had recovered $42 of the $66 slide...[MORE]
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With a weaker US dollar and an initial higher high for the move in Bitcoin, outside market forces favor the bull camp in gold and silver.
Certainly, gold will continue to draft support from the long list of flight-to-quality issues, but signs of an overbought condition in the Indian gold market is concerning.
With growing concerns of exploding gold loans, the Reserve Bank of India has instructed the country's largest gold loan non-bank finance company to halt fresh gold loans, and there are reports that Indian buyers are experiencing price shock...[MORE]
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With Israel preparing for an attack on Rafah against the will of the international community, that is likely to give way to increased terrorist attacks on shipping in the Red Sea area and perhaps elsewhere in the world. In fact, a tanker was hit over the weekend, but the fire was contained.
It also appears that Russia and Ukraine are stepping up attacks on energy-related facilities and that could also yield sudden flight to quality lift for gold and bitcoin.
Unfortunately for the bull camp, the US dollar showed significant strength at the end of last week and appears to have entered an uptrend pattern and that is likely to provide consistent headwinds for precious metal prices...[MORE]
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After a strong start to Thursday post-FOMC, precious metals fell back from early highs with gold finishing with a moderate gain while silver had an outside-day lower close and a reversal from a 3 1/2-month high, and both metals have followed through to the downside early in today's action.
Going into the weekend and with one holiday-shortened week left in the first quarter, both metals are vulnerable to profit-taking and additional long liquidation today.
The FOMC meeting results maintained the Fed's projection of 75 basis points in rate cuts by the end of this year, and that has increased the chances for a June rate cut which in turn provided a boost to the precious metals...[MORE]
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