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Clearly, gold and silver prices lost upside momentum in the wake of a very active US economic report slate this week that has presented a mixed outlook for the US economy and surprisingly failed to markedly increase expectations for a US June rate cut.
Certainly, the markets have been disappointed by Fed dialogue seemingly playing down and or pushing back the prospect of rate cuts!
However, the gold and silver trade will likely remain sensitive and perhaps poised to rally if today's key nonfarm payroll reading is softer and the takeaway from US data shifts sentiment toward economic risk...[MORE]
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With a downside extension in the dollar, another new all-time high in June gold was to be expected this morning.
Apparently, the latest surge was ignited by a bullish interpretation of Fed commentary yesterday reiterating the likely prospects of rate cuts "this year". Surprisingly, the Fed's vagueness on timing for a cut and even less guidance on the number of potential cuts has not deterred gold buyers or dollar sellers.
Seeing gold ETF holdings rise by 78,610 ounces yesterday and silver ETF holdings jumping by 2.8 million ounces, the record run in gold appears to have finally gotten the attention of small investors...[MORE]
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Another day and another new all-time high in gold prices with the market managing the rally in the face of adversity from the dollar and US treasury yields.
According to overnight press coverage from Asia, gold prices are being lifted by inflationary pressures resulting in the purchasing of gold as a hedge.
However, we are suspicious of that argument as inflation data has softened and delays in cutting interest rates should reduce inflationary expectations...[MORE]
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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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