Gold prices continue to struggle to hold gains above the psychologically important $1,300-an-ounce level, but one market analyst remains optimistic that is only a matter of time before prices push materially higher.

In a recent research report, Maxwell Gold, director of investment strategy at Aberdeen Standard Investments, said that low real rates should continue to support gold prices through 2019.

Real U.S. 10-year interest rates are currently trading at 54 basis points, down sharply from around 1% at the start of the year.

“This drop is the largest since the first half of 2016, which proved a strong catalyst for gold prices,” Gold said.

Gold also said that growing concern about an economic slowdown is another factor supporting the yellow metal. Earlier this week, the International Monetary Fund cut its global growth forecast to 2.3%, down from its previous estimate of 2.5%.

“It may only be a matter of time as concerns about rising levels of negative-yielding debt, an inverted yield curve, and the risk of a recession grow,” the strategist said. “Gold’s role as a potential risk hedge could grow if the market experiences a bout of volatility in response to these concerns.”

For 2019, the investment firm says its base-case scenario is for gold prices to trade in a range between $1,275 and $1,325 an ounce. However, in previous interviews, Gold has said that there is a growing probability that the firm’s bullish scenario plays out with prices pushing trading between $1,375 and $1,425 within the next 12 months.

Currently the gold market is seeing some strong technical selling pressure after prices push to nearly a two-week high. June gold futures last traded at $1,298 an ounce, down 1.2% on the day.

Along with gold prices, Gold said that he also remains positive on silver.

“Silver is often caught in the shadow of gold in the headlines, but investors interested in gold may do well not to overlook its current attractiveness,” he said. “Overall, silver remains cheap relative to gold with an improved speculative sentiment among futures positioning in 2019. Given its 0.8 correlation to gold, silver may still surprise to the upside driven by a positive gold outlook.”

The prospect of a full trade deal between the U.S. and China as early as this month helped shore up stocks around Asia but pushed down gold.

Gold futures for April delivery on the Comex division of the New York Mercantile Exchange fell 0.13% to $1,297.45a troy ounce by Monday morning.

Gold has lost some of its shine for investors over the past couple of weeks as risk appetites returned, in no small part due to progress in trade negotiations between the U.S. and China.

The Wall Street Journal reported that the U.S. could move to lift most or all of its tariffs on Chinese imports and a meeting between Chinese President Xi Jinping and U.S. President Donald Trump to sign a trade deal could happen as early as this month.

The news lifted stock markets throughout the region, particularly in China.

The appetite for riskier assets pushed down gold and the U.S. dollar, also a safe-haven asset.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was also down on Monday morning 0.12% at 96.41.

Sources: investing.com. Kitco News

The gold market continues to move higher as strong market fundamentals and an improving technical posture fuel further buying. A variety of factors is behind the market rise and there are currently no indications that recent upside will end any time soon.

What’s Behind the Rally?

The gold market has several key factors working in its favor that may be fueling the current rally. The notion of increasingly-dovish central banks, including the Federal Reserve, is likely a primary catalyst. The latest Fed meeting minutes are set for release this Wednesday afternoon and markets will closely examine them for further clues regarding the central bank’s monetary policy plans. FED minutes may show just how dovish the central bank really is. Although Fed chief Jerome Powell seemingly caught markets off-guard with his last briefing, expectations for the minutes seem to be a little more mixed. The central bank has done quite the U-turn in recent months, going from hawkish to dovish, and investors may simply want to have a better read on its intentions.

Regardless of what the minutes do or do not say, the economy has clearly been showing some further signs of slowing that could keep the Fed on hold for the next several months or even the entire year. Any dovish remarks from the central bank may be construed by markets as the end of the rate hiking cycle and could potentially weaken the dollar while boosting hard assets such as gold.

Ongoing concerns over a global economic slowdown and U.S./China trade negotiations are also keeping a bid in the gold market. Trade negotiations last week in Beijing were reportedly productive and resulted in the framework for further talks. Talks are set to continue in Washington this week. Until an actual agreement is reached, however, a degree of risk aversion may be present in the marketplace.

The ongoing Brexit debacle is also keeping some investors risk averse. The deadline for a deal at the end of March is quickly approaching, and key issues still stand in the way of a deal.

The gold market, in addition to several bullish outside influences, also seems to be seeing a significant increase in overall demand. The market has been able to move higher despite stronger stocks and a stronger dollar which oftentimes have a tendency to weigh on the metal.

Source: goldprice.org

Silver was up 1.5% at $16.165 an ounce, with prices up around 4% for the month.

The Federal Reserve on Wednesday left a key U.S. interest rate at a range of 2.25% to 2.50% and Chairman Jerome Powell said the central bank would be “patient” about further interest-rate moves, adding that it was open to slowing the pace of the runoff of its $4 trillion balance sheet if needed. Of particular note to market participants, the Fed removed a reference to “further gradual rate increases” in its policy statement, leaving many to believe that future rate hikes were on hold until further notice.

The policy update marked a decidedly dovish shift for the Fed, even if the market had anticipated a more moderated stance on the pace of monetary normalization. This position has put downward pressure on the U.S. dollar, which skidded lower late Wednesday, providing a runway for commodities priced in the currency to trade higher.

“Rate hike expectations for the remainder of the year have completely disappeared, with the market pricing in a greater chance of a cut as the next move,” wrote Edward Moya, market analyst at Oanda, in a Thursday research note.

Source: Marketwatch

2019 American Eagle bullion coins went on sale yesterday.

Would you believe the Mint can sell in one day more than half of all Eagles sold in 2018?

It can.

Platinum Eagles’ first-day sales totaled 18,000 pieces.

Only 30,000 were sold all of last year.

This information seems less dramatic when put into context.

Last year, no platinum Eagles were sold until February. Then 20,000 were sold.

Only 10,000 more were sold during the rest of 2018. All of these occurred in the month of May.

Naturally, we don’t look to platinum American Eagles for a sign of market strength or weakness.

We look to gold and silver.

First-day gold one-ounce Eagle sales totaled 29,500 yesterday.

Only two months in 2018 had a higher total. And this is a one-day number.

January 2018 saw sales of 36,000 one-ounce gold Eagles.

For July 2018, the total was 31,500.

While you are thinking about whether this portends a strong 2019, let’s look at the silver American Eagle numbers.

Yesterday saw buyers grab 2,521,000.

That equals 16 percent of all silver Eagles sold in 2018.

Like gold, only two months of 2018 had higher monthly sales totals.

January 2018 registered 3,235,000 silver Eagle sales.

September 2018 came in at 2,897,500.

It seems like a slam dunk certainty that January 2019 gold and silver Eagle sales will greatly exceed what was sold in January 2018.

Source: numismaticnews.net

Dave Harper

Gold scaled a six-month peak on Friday, supported by a weaker dollar, worries over global economic growth and stock market tumult, for a second consecutive week of gains.

Spot gold was up 0.27 percent at $1,278.58 per ounce as of 8:18 a.m. ET, and up 1.8 percent so far this week.

Earlier it had peaked at $1,282.09, its highest since June 19. U.S. gold futures were steady at $1,280.90 per ounce.

“Gold prices rose as market sentiment soured anew, weighing on bond yields and cooling U.S. Federal Reserve rate hike bets. That buoyed the appeal of non-interest-bearing bullion,” said Ilya Spivak, a currency Strategist at DailyFx.

“From here, follow-through buying seems unlikely as traders withhold conviction ahead of the long weekend and New Year holiday liquidity drain.”

The dollar index, a gauge of its value against six major peers, fell 0.1 percent, adding to gold’s appeal by making it cheaper for holders of other currencies.

Financial markets are expecting U.S. growth to slow next year due to rising interest rates. A measure of U.S. consumer confidence posted its sharpest decline in more than three years in December, emphasizing the possibility.

A darkening outlook for global economic growth, a simmering trade war between the United States and China, as well as Brexit-linked uncertainty may trigger renewed risk aversion and help lift gold prices in 2019, Spivak said.

Gold is often used by investors as a hedge against political and financial uncertainty.

“We are seeing good amount of selling from the producers to take advantage of higher prices, which has stopped gold’s rally on the upside,” said Afshin Nabavi, senior vice president at MKS SA.

“As long as the U.S. government continues to remain shut, it may invoke some safe-haven bids and help gold to touch new highs.”

Both chambers of the U.S. Congress convened for only a few minutes late on Thursday, but took no steps to end a partial federal government shutdown before adjourning until next week.

Meanwhile, stocks in Europe and Asia rose cautiously after Wall Street ended a volatile session with big gains, but fears of further price swings and worries about U.S. politics kept safe-haven currencies such as the yen and Swiss franc in demand.

Among other precious metals, silver rose to a near-five-month high at $15.364 per ounce and at 8:18 a.m. was up .9 percent at $15.35. It was on track for its biggest weekly gain since August 2017, up 4.9 percent so far this week.

Platinum fell .5 percent to $791.99 per ounce, and palladium dipped 0.9 percent to $1,263.52. Palladium has gained about 3 percent this week.

Source: CNBC

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Gold futures retreated Monday, sending prices to their lowest finish in more than a week as Treasury yields remained elevated and a leading dollar index firmed.

“Gold’s weakness is not just due to the stronger dollar, but the rising yields, too,” said Fawad Razaqzada, technical analyst at Forex.com. “Together, these factors are proving to be a toxic mix for the noninterest-bearing and buck-denominated commodity.”

“Unless at least one of these influences are not put right, gold will struggle to sustain any rally,” he told MarketWatch in emailed comments. “In the short term, the path of least resistance would remain to the south so long as that $1,205-15 resistance area remains intact.”

December gold GCZ8, +0.21% fell $17, or 1.4%, to settle at $1,188.60 an ounce, its lowest finish since Sept. 27. Despite its wavering price action over recent sessions, Friday’s gain was enough to hand the metal a roughly 0.8% advance for last week, according to FactSet data.

Gold’s sister metal December silver SIZ8, +0.43%  dropped by 32 cents, or 2.2%, to $14.329 an ounce Monday, after a weekly loss of about 0.4%.

“The crash in Chinese stock markets has added to the fall in gold prices,” said Chintan Karnani, chief market analyst at Insignia Consultants. Stocks in China, which is among the biggest buyers of gold, saw broad weakness Monday.

Still, from a technical perspective, Karnani pointed out that gold has managed to trade over $1,181, “which is a positive sign. If gold manages to trade over $1,181 till tomorrow, then chances of $1,214.80 will be very high.”

On Monday, the ICE U.S. dollar index DXY, +0.24% rose 0.1% to 95.762; it was up roughly 0.6% last week and remains nearly 4% higher this year so far, contributing to a roughly 9% drop for gold over the same stretch.

The 10-year Treasury note yield TMUBMUSD10Y, +0.71% ended last week near 3.23%, off last week’s steepest levels but still hovering near multiyear highs. U.S. bond markets were closed Monday for the Columbus Day holiday.

Because precious metals usually used as a haven by investors  don’t offer a yield, the commodity is vulnerable to a slump in a rising-rate environment. That climate also tends to lift the dollar, in which gold is primarily priced. The Federal Reserve has already increased rates three times in 2018 and is expected to lift benchmark rates a fourth time in December, moves which can drive risk-free Treasury yields higher and undercut appetite for the yellow metal by comparison.

Gold’s negative reaction to higher yields from a competing asset could reach a tipping point, however, some analysts note, meaning that eventual fears that high rates could sink stocks or the economy could revive interest in the hedging asset.

“The dollar strength is clearly a key factor on the price of gold still, with the negative correlation at play. However, with Treasury yields blowing higher, there is an added market fear factor that means that gold gets a degree of safe haven bid as well. This may help to restrict a gold selloff,” said Richard Perry, market analyst at Hantec.

Investors were also watching developments in Europe, with the EU signaling in a letter Friday to Italy’s economic minister, Giovanni Tria, that Italy’s budget targets are a source of concern for the trading bloc, setting up a potential market-disrupting clash, which can offer underlying support to haven gold.

Source: Marketwatch

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