With a three-day high and a developing pattern of higher highs and higher lows, the technical picture for gold has improved.
However, with a stronger Dollar to start, the positive start in gold and silver might indicate the metals are embracing flight to quality uncertainty from China which saw a major property company forced by a Hong Kong Court to liquidate its assets.
The markets continue to see chatter regarding rate cuts from the ECB and stories suggesting the Fed is already acting which signal a pivot...[MORE]
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While the CME Fed watch tool pegs the probability of rate cuts in the January, March, and May Fed meetings at 2.6%, 48.1%, and 50.1% respectively we feel there is a slightly higher whisper expectation for a rate cut in the market.
However, with the Feds favored inflation measure (PCE) scheduled for release today and expectations calling for a +0.2%, the prospect of a near-term cut in US rates should remain very small.
In fact, to see a rate cut by the June meeting will likely require some contractionary monthly PCE readings...[MORE]
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With outside market forces of lower US rates and a weaker US dollar, both gold and silver started the Wednesday trade with a relatively strong bid.
In fact, as of this writing the dollar sat just above a downside breakout and a six-day low which could result in gold and silver adding to the early noted gains.
For a change, the silver market could take a leadership role with Fresnillo projecting 2024 silver production to be 7 million ounces below 2023. Unfortunately for the bull camp, Fresnillo also posted a 13% year-over-year increase in silver production for 2023...[MORE]
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Apparently, severe losses in Chinese equity markets has prompted Chinese officials to consider implementing a $278 billion rescue package.
Therefore, gold may see some limited flight to quality buying interest, but as mentioned many times over the last year, the gold and silver trade are not as sensitive to flight to quality events as in the past.
On the other hand, if the situation becomes dire and there is a chance of contagion that could pull in a noted measure of spec and fund longs...[MORE]
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