Category: Gold Price

Opinion: 7 reasons why investors should go for gold in 2018


MarketWatch/Jeff Reeves/01-03-18

The big story for investors in 2017 was the broad-based rally in stocks. Simply by owning equities of any shape or size, you likely made out very nicely.

…Amid this risk-on rally, many investors likely overlooked gold.

However, 2018 is increasingly shaping up to look like a breakout year for the precious metal. Here’s why:

• A new floor

• Short-term momentum

• Asset rotation

• Strong global demand

• Weak production

• Soft dollar

• Cryptocurrencies can’t compete

PG View: This is a good concise opinion piece that aligns nicely with our own view. While many investors may have indeed “overlooked” gold in 2017, it performed just fine thank you very much, posting its largest annual gain since 2010.


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Gold scores longest winning streak since 2011

MarketWatch/Myra P. Saefong & Rachel Koning Beals/1-04-18

Gold overcame earlier weakness Thursday to finish higher, expanding its winning streak to a 10th-session—the longest in more than six years.

Tight supplies, meanwhile, helped lift palladium futures to their highest levels on record.

…Expectations of higher U.S. interest rates later this year and the passage of the Republican tax bill have failed to give the dollar a lift, helping gold, in part because traders wonder how much the tax reforms will actually boost the economy.

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Morning Snapshot: Gold Retreats Into Range Following NFP Miss

USAGOLD/Peter Grant/01-05-18

Gold is down modestly, having been unable to sustain a post jobs report rebound, but is still on track for a fourth consecutive weekly gain. Silver was able to attain a new 6-week high before retreating into the range.

U.S. nonfarm payrolls rose just 148k in December, below expectations of +190k and well below the whisper of +225k, versus a positive revised 252k in November. The unemployment rate steady at 4.1%, in line with expectations.

Hourly earnings rose 0.3%, which was in line with expectations as well, versus a negative revised 0.1% rise in November. The average workweek held steady at 34.5 hours.

The technical outlook for gold continues to be favorable after the yellow metal reached new 3½-month highs earlier in the week. More than 61.8% of the correction from the September high at 1357.50 to the December low at 1235.90 has now been retraced and gold is well supported above key moving averages. This all lends credence to the underlying uptrend.

On the fundamental side, geopolitical tensions, a weak dollar and growing concerns over inflation are all expected to continue to provide a tailwind. Buying on short term dips has been evident of late.

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Gold recovers from modest corrective losses following NFP miss. Silver now up 10¢ on the day.

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Gold lower at 1317.52 (-3.75). Silver 17.17 (-0.02). Dollar higher. Euro lower. Stocks called higher. U.S. 10-year 2.46% (+1 bp).

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A gold ETF just did something it’s never done before

CNBC/Matt Maley/01-04-18

The SPDR Gold Trust ETF (GLD) just snapped its longest winning streak ever. It rallied for 11 straight days before dipping into the red on Wednesday, marking its longest string of positive sessions since its inception in 2004.

Of course, part of the reason for the recent rally is heightened geopolitical concerns, with unrest in Iran and the continuing issues with North Korea.

However, for the first time in a very long time, the expectation that inflation will become more pronounced in 2018 is also giving gold a bid.

PG View: This record may be indicative of a growing tailwind for the yellow metal. While the streak was snapped yesterday, gold is back on the rise today, extending to fresh 3½-month highs.

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The Daily Market Report: Gold Jumps to New 3½-Month Highs


USAGOLD/Peter Grant/01-04-18

Gold is up, trading at new 3½-month highs, having negated Tuesday’s high at 1321.47. The yellow metal is being buoyed by ongoing geopolitical tensions and renewed weakness in the dollar.

In what is perhaps a testament to gold’s growing favor as a portfolio hedge, the yellow metal is rising in the face of new record highs in stocks. Savvy investors realize that shares are now really overextended and are taking some profits and rotating the gains into gold.

Traders seem optimistic that tomorrow’s December jobs report will be a good one on the heels of today’s better than expected ADP employment survey. Median expectations for nonfarm payrolls is +190k, but the whisper is that we’ll see a print closer to +220k.

A significant payrolls beat would stoke confidence in Fed guidance that calls for three rate hikes in 2018, particularly if we see hotter than expected wage growth as well. That should keep bonds under pressure. Gold on the other hand seems to be shrugging it all off.

Rising U.S. yields should be supporting the dollar, but that doesn’t seem to be the case. In fact, the greenback appears poised to set 3-year lows against the euro. Something else seems to be afoot here, beyond geopolitical tensions and the weakness in the dollar.

Mounting concerns about over-inflated asset prices are surely part of the answer. There seems to be heightened talk about more general inflation as well, with commodity prices reaching levels not seen since 2014, when the oil market fell out of bed. Today, we saw palladium set a new all time high above $1100.

I read a great Grant William’s piece yesterday, that pretty clearly shows that the inflation the Fed has been trying to stoke for the last decade has been hiding in plain sight. If that inflation ultimately makes its way into broader prices, gold is likely to really shine as it is the classic hedge against inflation.

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Gold extends intraday gains to pressure the 3½-month high set on Tuesday at 1321.47.

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Gold soars despite December headwinds


Mining Journal/01-04-18

Gold saw a 12% rise year-on-year at the end of 2017, and has continued its run over $1,300 per ounce in the first days of 2018.

Hansen said the end of the year gains had made up for a 7.5% fall between September’s high of $1,350/oz and the mid-December trough below $1,250/oz.

“Following the strong sprint during the final couple of weeks of 2017, gold managed to finish more than 12% higher on the year,” he said.

…”Investors seeking protection against corrections in stocks from record levels and key government bonds from near-record low yield levels helped provide underlying demand.

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Morning Snapshot: Gold Rebounds to Keep Pressure on Upside

USAGOLD/Peter Grant/01-04-18

Gold is up in early U.S. trading, boosted by renewed weakness in the dollar and ongoing geopolitical uncertainty. A breach of the 3½-month high set on Tuesday at 1321.47, would keep focus on last year’s high at 1357.50. Beyond that, the high from 2016 at 1375.15 attracts.

The greenback was unable to sustain yesterday’s corrective gains and is now back on the defensive with scope for a short-term challenge of the 4-year low in the dollar index at 91.13. Below that, there’s not much in the way of support until 84.75/10.

This morning’s ADP employment survey came in stronger than expected at +250k. “The tight labor market will get even tighter, raising the specter that it will overheat,” warned ADP. Where’s the wage pressure though?

This may indicate some upside risk for tomorrow’s December jobs report, where median expectations for nonfarm payrolls are at +190k. The jobless rate is expected to hold steady at 4.1% and hourly earnings are anticipated to rise 0.3%.

We’ll hear Fedspeak from St. Louis Fed dove Bullard.

It’s worth mentioning that the price of my coffee refill this morning was up 30% over yesterday! Is inflation finally taking hold?

Silver is up a dime, pressuring yesterday’s high at 17.24. The technical picture looks bullish. Resistance at 17.38/47 is the key to unlocking further gains.

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Gold higher at 1314.77 (+3.51). Silver 17.18 (+0.04). Dollar lower. Euro higher. Stocks called higher. U.S. 10-year 2.47% (+2 bps).

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What does a North Korean ballistic missile have to do with the price of gold?


Washington Post/Thomas Heath/01-03-17

Stock prices were not the only investment to stage an impressive rally in 2017. Gold, too, found favor, and that’s rare.

The ageless metal has survived for millennia as a seemingly safe harbor for those wary about the future. But at a time when many are bullish about their economic prospects, it climbed just shy of 15 percent for 2017. That came on top of an 8 percent pop in 2016. Gold prices started 2017 around $1,150 per ounce. The metal was trading above $1,300 Tuesday afternoon.

…The apprehensions behind the gold surge include an ever-expanding federal debt, inflation fears, a steadily pricier stock market, rioting in Iran and the tinder box that is the rest of the Middle East.

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Gold makes a nice come-back in late trading, rising nearly $10 from the intraday low.

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The Daily Market Report: Gold Corrects from Yesterday’s 3½-Month Highs


USAGOLD/Peter Grant/01-03-18

Gold is down moderately, having turned more corrective as the U.S. session progress. Much of yesterday’s gains have now been retraced, as the dollar index moved back toward its earlier high.

However, the greenback was under considerable pressure in 2017, despite the gradual ratcheting higher of U.S. interest rates. That is likely to continue in 2018. Quite honestly, the dollar almost has to weaken given the current fiscal situation.

Congress successfully kicked the can on the budget and debt ceiling right before Christmas, so the new deadline is January 19. One thing is for certain, the level of debt is going to continue to rise and by many accounts, the recently passed tax reform is going to make it worse.

Perhaps the historic correlation between gold and the national debt is finally getting back on track. If that is the case, gold has some serious catching up to do.

And as we discussed in yesterday’s DMR, silver has some serious catching up to do versus gold. Even with the recent gains, there are definitely some opportunities in this market.

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Germans invest heavily in gold in 2017, Deutsche Boerse says

Reuters/Tom Sims/01-03-18

Gold is seen as a safe haven for investors during times of uncertainty. Spot gold prices gained about 14 percent during 2017.

…“The increase is due above all to the high demand from institutional investors,” said Michael Koenig, managing director of Deutsche Boerse Commodities GmbH. “However, an increasing number of asset managers, family offices and retail investors are becoming interested in gold as an asset class.”

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Gold hits three-and-a-half-month highs before dipping on dollar recovery


Reuters/Sethuraman N R/01-03-18

Gold prices edged down on Wednesday after hitting a 3-1/2-month high, as the dollar recovered from its lows and technical indicators pointed to a short-term correction.

…The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1 percent at 91.964 after falling to a more than three-month low Tuesday.

The dollar posted its biggest annual drop since 2003 in 2017, helping gold to an annual increase of more than 13 percent. Bullion surged $55 an ounce in the last three weeks of 2017 alone.

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Gold extends win streak to trade at highest since mid-September

MarketWatch/RACHEL KONING BEALS/01-03-18

Gold firmed for a ninth consecutive session Wednesday, trading at its highest since the middle of September, as haven demand for the precious metal supported prices even as a bruised dollar stabilized.

February gold, the most-active contract on Comex, rose $1.40, or 0.1%, to $1,317.50 an ounce. It settled Tuesday at $1,316.10 an ounce. That was the highest most-active futures contract settlement since Sept. 20, according to FactSet data. Gold futures had recorded a 2017 gain of about 14%.

…Gold looks “to stay supported following a much-needed correction. Dollar weakness and raised inflation expectations following the December U.S. rate hike and tax deal have supported the best run higher in gold since 2011,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a commentary.

Geopolitical uncertainty has helped to prop up gold prices.

PG View: Spot gold has not exceeded yesterday’s high yet, but is in the process of recovering from overseas lows.

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Morning Snapshot: Gold Corrects Modestly, But Uptrend Remains in Favor

USAGOLD/Peter Grant/01-03-18

Gold is down modestly this morning, weighed by a bit of corrective bounce in the beleaguered dollar. However, the solid gains into year-end 2017 and yesterday’s follow-through to fresh 3½-month highs continues to bode well for the dominant uptrend.

With more than 61.8% of the entire decline off the September high at 1357.50 retraced, that peak is looking increasingly attractive from a technical standpoint. The move back above the 100-day moving average last week gives further credence to the uptrend.

The U.S. economic calendar has December manufacturing ISM, November construction spending and December auto sales. The minutes of the December FOMC meeting will also be released. Friday is the December jobs report. Median expectations for nonfarm payrolls is +185k. The unemployment rate is expected to hold steady at 4.1%.

Silver remains well bid above $17. The white metal remains attractively undervalued, but the consolidation band at 17.38/47 likely needs to be cleared to put silver in catch-up mode. Such a move would shift focus to 18.00/18.21 initially, but potential would be toward $20 and beyond. See Mike’s Gold, Silver Predictions 2018.

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Gold lower at 1316.19 (-4.31). Silver 17.16 (-0.04). Dollar higher. Euro lower. #Stocks called higher. U.S. 10-year 2.45% (-2 bps).

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The Daily Market Report: Gold Starts the Year Off Right


USAGOLD/Peter Grant/01-02-17

Gold is up in the first trading day of 2018. The yellow metal posted a solid 13% gain in 2017 and is up nearly another 1% intraday. Gold is garnering support from heightened geopolitical tensions, as well as continued weakness in the dollar.

With 61.8% of the decline off the 1357.50 peak from this past September now exceeded and gold trading comfortably above all the major moving averages, considerable credence has been returned to underlying uptrend. This is a rather pretty technical picture:

The broader commodity sector is also helping gold. The CRB index is engaged in a challenge of important resistance above 194 and penetration would bode well for a near-term push above 200, a level last seen in 2015.

With commodity prices on the rise, investors and consumers are becoming increasingly concerned about inflation. Gold is of course the classic hedge against inflation.

We’ve seen oil trade above $60 today, for the first time in 2½-years. However, the star of the sector is arguably palladium, which is up around $30 (2.5%) today after posting a whopping 56% gain in 2017. The industrial metal is zeroing in on all-time high of $1110 from Jan 2001.

Copper was another impressive performer in 2017, gaining 31.7%. All of this screams that silver, which bridges the precious metal/industrial metal sectors, is really undervalued! Silver was up just over 6% in 2017, having spent much of the year consolidating around $17.

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Gold tiptoes higher, on track for longest winning streak ever


FT/Nicholas Megaw/01-02-18

Gold is heading for its longest winning streak since the end of the gold standard in 1971, building on the positive trend that provided its best annual gains in seven years in 2017. But if you hadn’t noticed, that’s likely because it’s a markedly shallow rally.

The metal was up 0.9 per cent for the day in mid-afternoon trading on Tuesday, at $1313.91 per ounce. If held, that would mark its 12th successive day of gains, according to Reuters data, which would mark its longest positive run on record.

Gold gained 13 per cent in 2017 even as global stocks hit record highs, belying its sometime reputation as a haven asset.

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Gold Rallies Most in Seven Years, But Fed, Dollar Uncertainty Loom

WSJ/Amrith Ramkumar/01-02-18

Gold rallied 14% in 2017, the best annual performance since 2010, as a weakening dollar and political tensions around the world helped lift prices.

The gains are striking given how U.S. stocks soared last year, and cryptocurrencies like bitcoin became more mainstream—potentially stealing investor dollars away from bullion. On top of it all, the Federal Reserve raised interest rates three times in 2017. When interest rates rise, gold often struggles to compete against yield-bearing assets like Treasurys.

…“Gold has been unbelievably resilient given everything that’s being thrown at it,” said Mark Lacey, head of global commodities and resource equities at Schroders.

PG View: The resilience of gold last year was a recurring theme on these pages. If some of the headwinds dissipate in the new year, the upside potential could be considerable.

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Gold Is on Its Best Run Since 2011


Bloomberg/Ranjeetha Pakiam & Jasmine Ng/01-02-18

Gold is starting the new year on the front foot. Bullion advanced for an eighth session to head for the longest stretch of gains since mid-2011, building on an annual surge.

…Last year, the commodity climbed 14 percent, the best performance in seven years. The Bloomberg Dollar Spot Index lost 8.5 percent in 2017.

…Gold’s strong run in 2017 came even as U.S. stock markets surged to records and the Federal Reserve increased interest rates three times amid signs of an improving economy. Fed policy makers are projecting another three hikes in 2018 . . .

“As global complacency over the trajectory of U.S. rates continues to be astoundingly low, precious metals in general should continue to benefit,” Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore, said in a note.

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Morning Snapshot: Gold Extends Gains to 3-Month Highs

USAGOLD/Peter Grant/01-02-18

Gold is up in early New York trading, reaching levels last seen in mid-September. The yellow metal is being buoyed by heightened geopolitical tensions and a weak dollar.

Gold ended 2017 up more than 13%, driven largely by these two factors. U.S. political uncertainty was another driving force. The dollar index posted a 9.4% loss in 2017, its biggest annual decline since 2003.

Mounting political unrest in Iran has sparked additional haven interest in gold. The rise in oil prices to a 2½-year high above $60 is also stoking inflation concerns.

The technical picture improved significantly in the final week of 2017. The yellow metal is now trading comfortably above the 20-/50-/100- and 200-day moving average complex, which has returned considerable confidence to the underlying uptrend that dominated last year. This morning, the 61.8% retracement level of the decline off the early-September high at 1357.50 was exceeded.

Silver has eked out a 5-week high, returning to the consolidative range that dominated trading in October/November last year. Focus is now on resistance at 17.38/46.

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Gold higher at 1313.49 (+6.51). Silver 17.12 (+0.11). Dollar lower. Euro higher. Stocks called higher. U.S. 10-year 2.43% (+2 bps).

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What to watch in metals market in 2018


FT/Neil Hume & Henry Sanderson/12-21-17

With a gain of almost 10 per cent, gold has had a decent year even if its gains were overshadowed by those for US stocks. After rising above $1,350 a troy ounce in early September, the highest in just over a year, the precious metal has since retreated to about $1,260.

…As we go into 2018, gold bulls will take some comfort from data that suggest investors have remained loyal to the precious metal.

PG View: I would anticipate that that loyalty will be reward once broad investor complacency is challenged and volatility returns to markets. That may happen in 2018 . . .

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Morning Snapshot: Gold Consolidates Gains Notched Earlier in the Week

USAGOLD/Peter Grant/12-21-17

Gold is down slightly after having established a new 2-week high at 1268.29 overseas. A slightly firmer dollar and continued strength in stocks may be limiting the upside for the yellow metal, but political and geopolitical uncertainties continue to support.

This morning’s data has had little impact on the market. U.S. Q3 GDP was revised down slightly to 3.2%. The Philly Fed index for December jumped significantly. U.S. initial jobless claims jumped 20k to 245k last week, above expectations of 232k.

Later this morning, we’ll get November leading indicators. Median expectations for LEI is +0.4%.

Market action is likely to taper heading into the long Christmas weekend, but remember that tomorrow is the deadline for a budget deal (temporary or otherwise) to avert a government shutdown. Eleventh-hour negotiations last night reportedly did not go well. There are some risks heading into the weekend.

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Gold easier at 1264.20 (-2.76). Silver 16.13 (-0.07). Dollar better. Euro higher. Stocks called higher. U.S. 10-year 2.49% (-1 bp).

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The Daily Market Report: Gold Sets Two-Week High, Nears Important Resistance


USAGOLD/Peter Grant/12-20-17

Gold is trading at two-week highs, buoyed by a softer dollar and persistent political and geopolitical uncertainties. Limiting the upside is continued strengths in stocks and yields at the long-end of the curve in anticipation of tax reform legislation getting passed.

The House is presently taking a second vote on the tax plan, over a procedural issue that arose yesterday, but it is widely anticipated that the votes needed are still there. At that point, the bill will be sent to the President for his signature.

President Trump is already planning a press conference for later this afternoon, despite reports earlier in the day that he might delay signing the bill into law until after the first of the year. This potential delay revolves around the deficits that are likely to result from tax cuts that would trigger automatic spending cuts. Mr. Trump would like to see those budget rules waved.

Stocks and the dollar slumped in reaction, helping gold to notch fresh intraday highs. The next tier of resistance is 1267.60/1269.36, where the 200-day moving average and the halfway back point of the decline from late-November converge.

Both the U.S. and China appear to be escalating preparations for war on the Korean peninsula, according the BusinessInsider. “We’re not committed to a peaceful resolution — we’re committed to a resolution,” said National Security Advisor H.R. McMaster.

Meanwhile, President Trump continues to rattle the saber as well. “America and its allies will take all necessary steps to achieve a denuclearization and ensure that this regime cannot threaten the world . . . It will be taken care of,” said the President.

In times of geopolitical uncertainty, gold is a favored safe-haven. Along with North Korea, Iran, Russia and China are deemed to be geopolitical hot spots.

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Cramer’s charts reveal bitcoin is not replacing gold anytime soon

CNBC/Elizabeth Gurdus/12-19-17

…the $2.4 trillion global gold market is very deep. Millions of investors own a piece of the pie in the form of bullions, jewelry, coins or other investments. In comparison, the entire digital currency market is worth $600 billion, with bitcoin only accounting for about half.

…Garner was skeptical that gold is falling because bitcoin is soaring. Gold pulled back below $1,250 an ounce four times this year and managed to bounce back, and no one blamed the declines on bitcoin, she said.

Moreover, gold’s charts suggest its value could go higher. Historically, gold tends to decline in early December, then buyers come in and drive the precious metal to rally until March.

PG View: Garner also cited COT data and the dollar chart as further evidence of upside potential in gold.

“…gold is not being supplanted by bitcoin as the go-to alternative to actual currency, and the charts, as interpreted by Carley Garner, suggest that gold might be ready to make a comeback. And while I won’t discourage anyone from buying bitcoin — just know the risks, know your limitations — I’m with Carley when it comes to the precious metal, not the precious keystroke.” — Jim Cramer
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