Category: Gold Price

We talked to an economist who predicted the Great Recession about the next financial crisis

BusinessInsider/Graham Rapier & Sara Silverstein/12-01-17

Instead of using traditional macroeconomic models, Rickards prefers to borrow one from physics: complexity theory. Using this framework, Rickards proposes a scenario in which the world shifts partially back to the gold standard, with an ounce of gold being valued at $10,000 per ounce.

PG View: The Rickards segment begins at 2:05 and ends at 11:13.

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Posted in Central Banks, Economy, Fed, Gold News, Gold Price, Gold Views, Markets, QE |

Gold inches up on weaker dollar; improved risk appetite weighs

Reuters/Vijaykumar Vedala/12-01-17

Gold edged higher on Friday as the dollar eased, but was still trading near the 3-1/2-week low touched in the previous session, with investors flocking to riskier assets amid a surge in U.S. equities.

…”There is a positive mood in the equity market. The U.S. dollar has been strong too (overall). So, it is not beneficial for investors to invest in the commodity market now,” said Dick Poon, general manager at Heraeus Metals Hong Kong Limited.

“People are focusing on stocks in the short-term and are also awaiting an interest rate hike by the U.S. Federal Reserve.”

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Remains Defensive Within Range

USAGOLD/Peter Grant/12-01-17

Gold is down slightly, but still well contained within the range that has dominated for the past 6-weeks. Risk appetite has been on the rise of late as GOP tax reform legislation makes its way through the process.

Stocks have been setting record highs in anticipation of a significant corporate tax cut that will increase profit margins. The dollar has rebounded somewhat as well, keeping the yellow metal under pressure.

Today’s U.S. calendar has manufacturing ISM and PMI, construction spending and auto sales. FedSpeak is due from Bullard, Kaplan, Harker and Quarles.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold steady at 1274.62 (-0.65). Silver 16.35 (-0.12). Dollar higher. Euro lower. Stocks called mixed. U.S. 10-year 2.38% (-3 bps).

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Posted in Gold Price, Markets, Silver Price |

The Daily Market Report: Gold Retreats Into Lower Half of Range


USAGOLD/Peter Grant/11-30-17

Gold is down today, slipping to a two-week low within the well defined range. The yellow metal is being weighed by building optimism that tax reform is going to get passed, which has pushed stocks to record highs.

However, the stock market seems to be largely ignoring the very small window to get the Senate and House tax bills reconciled ahead of year-end. There also is the impending threat of a government shutdown at the end of next week, as well as the growing threat of war between the U.S. and North Korea.

Efforts to kick the can on the budget and debt ceiling are already underway. A stop-gap spending bill in the House would keep the government funded through December 22. That would reportedly be followed by a second temporary measure to get the government to the end of January.

One thing is certain, regardless of the outcome on the tax plan, the debt ceiling is going to have to be raised or suspended and the inevitable march higher will continue. That raises the question, who is going to be the buyer of all that new debt? Especially when you consider that the Fed is trimming its balance sheet.

The PCE data that came out this morning was a bit of a mixed bag, but the important core inflation reading rose to 1.4% y/y; still well below the Fed’s target of 2.0%. The spin will be that the uptick portends higher inflation in the months ahead, but the truth is that the trend for the year remains unquestionably negative.

The market still sees a 90.2% probability of a December rate hike. That FOMC meeting is December 12-13.

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Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Inevitable Stock-Market Correction To Push Gold Out Of Range – Analyst


KitcoNews/Neils Christensen/11-30-17

Record-high equity markets remain the sector to watch as a correction could be the catalyst needed to push gold out of its narrow trading range, according to one market analyst.

While gold remains resilient with prices holding above its 200-day moving average, Fawad Razaqzada, technical analyst at Forex.com said that he can’t get excited about gold until it pushes above the October high at $1,306 an ounce. However, he added that it could only be a matter of time before this happens.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Remains Defensive Within Range

USAGOLD/Peter Grant/11-30-17

Gold is down, maintaining a defensive tone within the well defined range. The yellow metal is being weighed by heightened risk appetite, driven by tax cut optimism, which keeps focus on frothy stocks.

U.S. personal income rose 0.4% in October, above expectations of +0.3%. PCE also bested expectations, although moderated considerable from the negative revised +0.9% in September.

Core PCE inflation — the Fed’s preferred measure of inflation — rose to 1.4%, but remains well below the 2.0% target. Inflation has been trending lower this year, which prompted the central bank to pause the tightening cycle in September.

So, does this uptick signal a reversal of that trend, or merely a brief reprieve? That’s a question the FOMC will have to wrestle with in a couple weeks.

The dollar index was unable to sustain a probe above the 100-day moving average in earlier trading, keeping focus on the downside. Continued weakness in the dollar should help protect the low end of the range in gold as well.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold lower at 1280.10 (-4.31). Silver 16.48 (-0.09). Dollar better. Euro easier. Stocks called higher. U.S. 10-year 2.39% (unch).

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Posted in Gold Price, Markets, Silver Price |

The Daily Market Report: Gold Retreats To Midpoint of the Range


USAGOLD/Peter Grant/11-29-17

Gold fell back into the range in early U.S. trading, driven by heavy selling in the futures market after an upward revision to Q3 GDP. That puts the yellow metal back around the midpoint of the well defined 1260.10/1306.04 range that has dominated for more than a month.

Generally good economic data of late has reinforced expectations of a December rate hike, even though Janet Yellen continues to be surprised by “subdued” core inflation. Supposedly, that’s the main reason that the Fed decided to pause their tightening cycle back in September.

October PCE data are out tomorrow, so we’ll see if the central bank’s preferred measure of inflation picked up at all last month. While Yellen continues to think the weakness is transitory, one has to wonder how long this must go on before she changes her tune.

Also weighing on gold is ongoing strength in the stock market, which has been bolstered by optimism about the GOP tax overhaul, which includes a substantial cut to corporate taxes. If the Senate votes along party lines the legislation will clear the Senate, but the Republicans can ill afford any defectors or abstentions.

Senators Ron Johnson (R-WI) and Steve Daines (R-MT) they oppose the legislation in its present form. There are also at least four Republican Senators that have legitimate concerns about how this legislation will impact deficits and the national debt, and even more on the fence for various other reasons.

Nonetheless, the market likes the fact that the legislation continues to move through the process. Whether something gets to the President’s desk before year-end is still very much in doubt.

Perhaps further complicating the matter is the fact that Congress needs to come up with a budget plan by the end of next week, and raise or suspend the debt ceiling. “I don’t see a deal,” said President Trump via Twitter yesterday. Or of course, they could kick that can yet again.

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Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold ‘breakout’ coming soon to ‘eerily quiet’ market, metals expert says


CNBC/Stephanie Landsman/11-29-17

Gold’s trading activity has been unusually calm this year, but that may be about to change.

…”It’s tough with the events coming up — whether it’s the Fed or tax reform which is very, very important. I think that could lead to volatility,” Dudas said Tuesday on CNBC’s “Futures Now.”

…His 2018 year-end target calls for gold to hit $1400, an 8 percent gain from current levels. According to Dudas, higher inflation expectations in 2018 should be strong enough to push gold prices even higher.

PG View: Dudas sees a 19-20 handle for silver.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Retreats Into Range After Q3 GDP Revision

USAGOLD/Peter Grant/11-29-17

Gold is down in early U.S. trading after Q3 GDP was revised higher. The dollar rose, pushing the yellow metal back into the recent range as stronger growth provides further justification for a rate hike in December.

U.S. Q3 GDP was revised up to 3.3%, in line with expectations, versus 3.0% previously and 3.1% in Q2. However, it is widely expected that growth is slowing in Q4. We saw some downward revisions yesterday on the surge in the trade deficits.

While the uptick in growth is encouraging, Janet Yellen will reiterate today before the JEC that core inflation “has remained surprisingly subdued.” According to her prepared testimony, released earlier this morning, she will go on to say “the recent lower readings on inflation likely reflect transitory factors.”

It seems like we’ve been hearing that for an awfully long time. We’ll get the latest inflation reading tomorrow with the release of October PCE data tomorrow. If inflation remained steady or increased in October, the market will remain convinced that the hike is on. If inflation slowed, rate hike expectations will be tempered.

Later this morning we get the October Pending Home Sales Index and EIA crude stocks for last week.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold lower at 1287.88 (-6.34). Silver 16.72 (-0.18). Dollar higher. Euro lower. Stocks called higher. U.S. 10-year 2.37% (+4 bps).

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Posted in Gold Price, Markets, Silver Price |

The Daily Market Report: Gold Remains Firm Near 6-Week Highs


USAGOLD/Peter Grant/11-28-17

Gold is up slightly, despite some robust economic data and some hawkish FedSpeak from Jerome Powell. The yellow metal remains underpinned and within striking distance of yesterday’s 6-week high at 1299.30 as a result of political and geopolitical uncertainty.

Both consumer confidence and the Richmond Fed index significantly beat expectations. U.S. home prices continued to rise in September as well, as indicated by the Case-Shiller and FHFA indexes. All of this bodes well for the highly anticipated December rate hike.

However, an unexpected surge in the trade deficit in October has prompted some negative revisions to Q4 GDP expectations. Goldman Sachs trimmed their outlook from 2.6% to 2.3%, while BofA cut their forecast from 2.3% to 1.8%.

Fed chair nominee Jerome Powell said, “The case for raising interest rates at our next meeting is coming together,” during testimony before the Senate Banking Committee. I’d say the case hasn’t really been made until there is some real evidence of rising inflation. PCE is out on Thursday.

Powell contends that it’s time for normalizing interest rates, but it’s pretty clear that old concept of “normal” no longer applies. I don’t believe anyone asked him at what level Fed funds would be considered “normalized.” Nonetheless, and largely as expected, this testimony seems to verify that Powell is inclined to continue the gradual tightening cycle started by Janet Yellen.

On the political front, President Trump tweeted this morning that he was pessimistic about reaching a deal with Congressional Democrats to fund the government beyond December 8th (that’s just a little more than a week away!). Chuck Schumer and Nancy Pelosi quickly pulled out of a meeting with the President that was scheduled for today. “We believe the best path forward is to continue negotiating with our Republican counterparts in Congress instead,” they said in a joint statement.

While Rand Paul has said he will vote for the Senate tax overhaul, there are still a couple of Republican holdouts. A vote may happen as early as Thursday, but Goldman Sachs sees passage before year-end as about a 50-50 proposition. Certainly if a funding deal isn’t reached by the end of next week, those prospects are likely to dim considerably.

North Korea has reportedly conducted a ballistic missile test. The Japanese Coast Guard has apparently reported that that the missile fell into the sea near Japan. This news is breaking as I write and there will be further updates.

This latest provocation comes after South Korea Unification Minister Cho Myoung-gyon warned that the DPKR is “developing their nuclear capabilities faster than expected and we cannot rule out the possibility Pyongyang may declare the completion of their nuclear program in a year.” This is rather ominous as both the Trump administration and military leaders have declared such a situation as unacceptable.

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Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold Flirts With $1,300


Bloomberg/Susanne Barton/11-27-17

Gold futures climbed above $1,300 an ounce for the first time in six weeks as the dollar wavered and investors braced for an onslaught of economic data and political news.

Bullion rose for the third time in four days as a gauge of the dollar traded close to the lowest since September. A report later this week is forecast to show the Fed’s preferred gauge of inflation slowed in October, after Chair Janet Yellen cautioned last week that raising rates too quickly risks stranding inflation below the central bank’s target.

Bullion is up almost 13 percent since Dec. 31, on course for the best year since 2010, as geopolitical uncertainty underpins demand for the metal as a haven and divisions among U.S. central bankers persist over the path of rate policy.

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Posted in Gold News, Gold Price, Gold Views |

Gold eases from six-week high ahead of Fed chair confirmation

Reuters/Jan Harvey/11-28-17

Gold eased back on Tuesday from the previous day’s six-week high as the dollar edged up ahead of a confirmation hearing for U.S. Federal Reserve chair nominee Jerome Powell.

In prepared remarks for the hearing released by the Fed on Monday, Powell defended the Fed’s use of its crisis-fighting powers, suggesting a broad extension of current Chair Janet Yellen’s stance on monetary policy.

However, there is some risk around the event which is supporting the dollar after its slide to two-month lows on Monday, analysts said.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Remains Firm Near $1300

USAGOLD/Peter Grant/11-28-17

Gold is up slightly in early U.S. trading. The yellow metal is holding up pretty well in the wake of yesterday’s push to 6-week highs, just shy of $1300. A firmer dollar and modest stock market gains are perhaps limiting the upside at this point.

U.S. advance trade gap widened to -$68.3 bln in Oct, outside expectations of -$65.5 bln, vs -64.1 bln in Sep. Home prices continue to rise with the FHFA index gaining 0.3% and the Case-Shiller 20-city index gaining 0.4% in September.

Later this morning we’ll see November consumer confidence and the Richmond Fed index. Fed chair nominee Powell appears before the Senate and we’ll hear FedSpeak from Dudley and Harker.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold better at 1296.27 (+1.43). Silver 17.10 (+0.02). Dollar higher. Euro easier. Stocks called higher. U.S. 10-year 2.32% (-1 bp).

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Posted in Gold Price, Markets, Silver Price |

The Daily Market Report: Gold Jumps To 6-Week High Near $1300


USAGOLD/Peter Grant/11-27-17

Gold is up, having reached a 6-wwek high of 1299.30 in earlier U.S. trading. While gains stalled just shy of $1300, the bias remains to the upside and further challenges of this critical level seem likely.

Gold us being helped by recent weakness in the dollar. The dollar index fell through important support at 92.80 (12-Oct low) to establish fresh 9-week lows. More than 61.8% of the bounce off the September low at 91.13 has now been retraced, making that level a logical target. The DX is now well below the 20-, 50-, 100- and 200-day moving averages, lending credence to the bearish scenario.

Dollar losses gained momentum last week after the FOMC minutes from the November meeting came in more dovish than expected. There also seemed to be heightened concerns about asset valuations.

“In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances. They worried that a sharp reversal in asset prices could have damaging effects on the economy.” — Minutes of the Federal Open Market Committee, October 31-November 1, 2017

In that respect, the Fed has sort of painted themselves into a corner: The stock market seems to like everything the Fed does these days. Tighter policy and the implications of an improving economy have lifted stocks, while a more dovish Fed (September pause) has also buoyed stock because it means cheap liquidity.

At this point, the market still believes a December rate hike remains baked in the cake. At this point, if the Fed wanted to prick the stock market bubble they would likely have to turn much more hawkish than the market is presently expecting and I think they are disinclined to do so.

With the über-accommodative policy stance over the past decade, the Fed is very much responsible for pushing investors out along the risk curve. Pensions should be of particular concern, because if stocks seriously correct, the already underfunded situation of many public pensions is only going to get worse.

Stocks however will ultimately correct, perhaps as a result of a central bank miss-queue, but more likely due to some external factor outside the control of the central banks. When the next crisis comes, financial writer and publisher John Mauldin believes “central banks and governments will react in ways that are even more unthinkable” than the measures they employed during the financial crisis.

At that time, as the world’s central banks pumped liquidity into the financial system, gold soared to record highs. I suspect the results the next time will be the same.

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Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Weaker dollar pushes gold prices higher


Reuters/Peter Hobson/11-27-17

Gold prices rose on Monday, helped by a weaker dollar, as investors looked ahead to congressional testimony by the nominee to chair the U.S. Federal Reserve and a meeting between U.S. President Donald Trump and
Senate Republicans on tax reform.

“We’ve seen a fairly firm recovery underpinned by a weaker dollar and some data readings from the U.S. and elsewhere that called into question the sustainability of growth,” said Mitsubishi analyst Jon Butler.

U.S. PMI and capital goods data missed expectations last week, helping to drive the dollar to its weakest in two months.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Sets 5-Week Highs, Buoyed by Weak Dollar

USAGOLD/Peter Grant/11-27-17

Gold is up to start the post holiday week, setting fresh 5-week highs above 1297.10. The yellow metal is getting a lift from continued dollar weakness in the wake of the more dovish than expected Fed minutes from last week.

While some doubts have been raised about the likelihood of a December rate hike, Fed funds futures continue to show a probability in excess of 90%. Later this week we’ll see the Fed’s preferred gauge of inflation for October, which has the potential to temper rate hike expectations if it remains weak.

Today’s economic calendar is light with October new home sales and the November Dallas Fed index. After the close we’ll hear Fedspeak from doves Kashkari and Dudley. Fed chair nominee Powell will testify before the Senate Banking Committee on Tuesday.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold higher at 1295.76 (+7.50). Silver 17.14 (+0.10). Dollar lower. Euro higher. Stocks called mixed. U.S. 10-year 2.34% (-1 bp).

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Posted in Gold Price, Markets, Silver Price |

Gold regains 1290.00 ahead of release of FOMC minutes.

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Posted in Gold News, Gold Price, Gold Views |

Gold inches up as dollar dips ahead of Fed meeting minutes

Reuters/Vijaykumar Vedala/11-22-17

Gold prices crept up on Wednesday amid a softer dollar, with investors remaining cautious ahead of the release of minutes from the U.S. Federal Reserve’s last meeting, which could offer hints on the outlook for the central bank’s monetary policy.

…”We are not really sure that this (Fed meeting minutes) will have much of an impact given that the decision to raise rates in December is pretty much a forgone conclusion,” INTL FCStone analyst Edward Meir said.

“Nevertheless, we suspect that investors will want to see what policymakers are thinking about the rate situation and how aggressive they will be on this front going forward.”

PG View: The market thinks a December rate hike is a foregone conclusion, but does the Fed? What if PCE data out next week reflects continued weakness in inflation? That’s the reason the Fed put the tightening cycle on pause back in September.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Firms Within the Range

USAGOLD/Peter Grant/11-22-17

Gold is up in early U.S. trading, lifted by a softer dollar. More than half of Monday’s sharp intraday sell-off has now been retraced, leaving the low end of the recent range well protected.

U.S. initial jobless claims fell 13k to 239k in the week ended 18-Nov, just below expectations of 240k. However, October durable goods orders really missed the mark, tumbling 1.2% on expectations of a rise of 0.5%. Septembers solid gain was trimmed to +2.0%, from +2.2% previously.

Core capital goods orders fell 0.5%. New orders plunged 5.1%. Nondefense aircraft orders -18.6%. Defense aircraft orders -11.3%.

It would seem the boost derived from recent aircraft orders and the hurricanes has come to an end. Look for some downward adjustments to Q4 GDP expectations. Rate hike expectations may get tempered as well, particularly if next week’s PCE data continues to reflect weak inflation.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold higher at 1286.08 (+4.77) Silver 17.02 (+0.02). Dollar lower. Euro higher. Stocks called higher. U.S. 10-year 2.36% (+1 bp).

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Posted in Gold Price, Markets, Silver Price |

The Daily Market Report: Gold Firms Intraday, Leaving Low End of Range Protected


USAGOLD/Peter Grant/11-21-17

Gold is up modestly in U.S. trading, buoyed by a softer dollar and seemingly ignoring the sharp rise in stocks. Yesterday;s low at 1273.90 provides an additional intervening barrier ahead of the range lows in gold at 1263.00/1260.10.

FedSpeak from Yellen after the close may provide some insight into the true prospects for a December rate hike. However, the minutes from the November FOMC meeting out tomorrow will likely be more valuable in that regard.

Decent to good U.S. economic data of late, reinforces market expectations that the Fed will indeed boost the Fed funds rate by another 25 bps on December 13. Fed funds futures indicate a 91.5% probability of such a move.

UBS is predicting that the dollar will have a rough 2018, particularly against the euro. This would be a perpetuation of the trend that developed this year, where the greenback fell more than 10% against the single currency.

If the dollar has a rough year, it bodes well for another good year for gold. The yellow metal is up 11.2% YTD and as we mentioned in Friday’s DMR, this is the first time in 4-years that such resiliency has been seen going into year-end.

Gold has sold off into year-end for the past 4-years, premised largely on expectations of Fed tightening (either QE tapering or actual rate hikes). This year — with another rate hike decidedly on the table — gold remains resilient. The yellow metal is a mere 4.7% off the high for the year at 1357.50.

The ECB has been talking out of both sides of its mouth in recent weeks, making rumblings about tapering and then saying it intends to keep its foot on the gas. The fact that it cut monthly asset purchases, but plans to do them for longer is reflective of these mixed signals.

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Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

“Foundation For A Rebound?” – Gold Jumps Above Key Technical Level On Heavy Volume

ZeroHedge/Tyler Durden/11-21-17

The last 3 days have been ‘noisy’ in precious metals markets with gold swinging from the best day in 5 months to the worst day in 4 months and now to another high volume surge, breaking the barbarous relic back [above] its 100-day moving-average…

It seems the 100DMA is a key level with heavy volume being used to push gold futures around it.

UBS asks “Is gold establishing a foundation for a rebound?”

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Posted in Gold News, Gold Price, Gold Views |

Gold advances, U.S Fed minutes in focus


Reuters/Zandi Shabalala/11-21-17

Gold rebounded on Tuesday as investors anticipated signals on the direction of U.S. monetary policy from the minutes of a November Federal Reserve meeting.

…”The Fed rate hike in December is roughly priced in and unless there are very hawkish minutes, its more that people are looking for direction about future moves,” said Georgette Boelle, a commodity strategist at ABN AMRO.

The minutes are due on Wednesday.

Gold was also profiting from a political crisis in Germany, Europe’s largest economy, boosting bullion’s safe-haven appeal.

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Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold Defensive Back in Lower Half of Range

USAGOLD/Peter Grant/11-21-17

Gold is down this morning, back in the lower half of the range after coming under selling pressure during the U.S. session yesterday. The bottom of the range is well defined at 1263.00/1260.10 and remains protected at this point.

The Chicago Fed national activity index for October came in better than expected. Later this morning we’ll get October existing home sales, which are expected to edge higher to a 5.410M pace.

After the close, Fed chair Yellen will speak at NYU along with former BoE Governor Mervy King. The minutes from the November FOMC meeting will be released tomorrow. The latter will perhaps provide a better window into the Fed’s thinking going into year-end. Is soft inflation still a concern? Is the Fed angling for another rate hike, regardless of the inflation outlook?

Thursday is of course the Thanksgiving holiday. Markets are open on Friday, but trading is historically very thin.

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Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold easier at 1278.20 (-1.25). Silver 16.95 (unch). Dollar better. Euro lower. Stocks called mixed. U.S. 10-year 2.36% (+1 bp).

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Posted in Gold Price, Markets, Silver Price |