Gold News

Gold Tests $1,900 as Dollar Strength, Prospect of Fed Hikes Outweigh Geopolitical Fears

Gold finds itself flirting with $1,900 an ounce as the strength of the US dollar and the expected upward trajectory of Federal Reserve interest rate hikes outweighs the latest escalation in the Ukrainian conflict with Russia cutting off gas supplies to Poland and Bulgaria. This latest measure from Russia, an effective weaponization of energy supplies, has pushed up oil and gas prices and pointed to a negative day for European equity markets amid concerns that other countries, notably Germany, may find themselves forcibly weaned off Russian gas with the associated knock-on effect that would have on its economy. Live Gold Price Chart - $/g Yet despite this bearish sentiment on equity markets, gold finds itself looking downward and is now testing the key psychological level of $1,900 an ounce. A failure to hold above this level, even with the Ukrainian-Russian war providing a clear investment reason for the ultimate haven asset, would illustrate how much the action of the Federal Reserve drives markets. With interest rate hikes all but guaranteed by the US central bank in May and June and highly likely in July too, gold’s lack of yield has seen it fall out of favour with investors. Considering gold was above $2,000 barely a month ago, the precious metal’s fall from grace has been pretty sharp. That said, $1,900 remains a very high level for gold historically and given the fragile state of markets currently, it wouldn’t take much for renewed fear trading to push its price upward once again. Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience inwriting about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News. As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewableenergy and the challenges of avoiding greenwashing while investing sustainably. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis

Rupert Rowling
Rupert Rowling

27/04/2022

Drop on Equity Markets Fails to Boost Gold as Fed Outlook Continues to Weigh on Price

Markets have started the week on a negative tone after being rattled by concerns that the ongoing lockdown in China, as the country seeks to control its latest wave of coronavirus, will have a significant impact on global growth and supply chains. Equity indices across the world are a sea of red given these worries over the growth outlook for the world’s second largest economy and a key supply hub for so many of our everyday items. Yet while negative moves on equity markets are typically met with the reverse reaction on gold, the precious metal also finds itself being pulled downward to be trading a little above $1,900 an ounce at its lowest level for about three weeks. Live Gold Price Chart - $/g Gold’s inability to benefit from falling stock markets is a reflection of how difficult it will be for gold to make significant gains given the interest rate outlook outlined by the Federal Reserve last week. With hikes by the US central bank now all but guaranteed in both May and June and highly likely in July too, this has given support to the US dollar and made gold a much less attractive asset to hold given its lack of yield. Finally, Emmanuel Macron’s victory in the French presidential election has taken one big potential risk to markets off the table with his pro-European, pro-business outlook a positive for markets while a win for his rival Marie Le Pen could have seen a rush to gold with investors fearing the consequences of a right-wing takeover of one of Europe’s largest economies. Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience inwriting about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News. As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewableenergy and the challenges of avoiding greenwashing while investing sustainably. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis

Rupert Rowling
Rupert Rowling

25/04/2022

Gold Gets Short-Term Boost But Prospect of Rate Hikes Likely to Cap Gains

Equity markets look set to end the week on a downward note after Federal Reserve Chair Jerome Powell indicated that US interest rates could rise as much as 50 basis points in May and the central bank is “committed to using our tools to get 2% inflation back.” This negative outlook for equities has given gold a small boost and pushed the price back above $1,950 an ounce. However, the Federal Reserve’s “front-end loading” of its implementation of measures to try and wrestle back under control will put gold under pressure in the medium term. Live Gold Price Chart - $/g Investors are now anticipating a half-point rate hike in both May and June with the likelihood of a third consecutive increase in July becoming ever stronger. In this environment of fast-rising interest rates, gold is likely to come under pressure as its lack of yield versus other asset classes reduces its appeal. Gold’s upside and downside moves now look firmly capped with rising interest rates capping gold’s upward potential with the war in Ukraine, which looks to be worsening rather than any sign of peace in the short-term, providing a strong support. As such, gold is likely to trade in the $1,900 to $1,950 an ounce range over the medium term. Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience inwriting about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News. As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewableenergy and the challenges of avoiding greenwashing while investing sustainably. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis .

Rupert Rowling
Rupert Rowling

22/04/2022

Gold Pulled Down Below $1,950 as Equities Show Surprising Resilience

The fragile optimism on equities amid a resilient earnings season has seen European indices edge higher on Wednesday and put downward pressure on gold, pushing the price down below $1,950 an ounce. The small increase on stocks reflects the large number of bearish factors that are offsetting the bulk of the bullish ones. The near-flattening of the Ukrainian city of Mariupol starkly illustrates how damaging and long-lasting Russia’s invasion of Ukraine is likely to be with any hope of peace looking increasingly remote. Live Gold Price Chart - $/g Add in the cost of living crisis as a result of ever-rising inflation and now the International Monetary Fund’s slashing of its forecast for global growth and it is difficult to see where traders are finding the current positive drivers. In this environment, with fear over the possible escalation of the war in Ukraine an ever-present concern, gold still retains upside potential and could easily spring back above $2,000 an ounce as it achieved last week. And while the war and negative inflationary and growth outlook are providing strong support for gold, the backdrop of central banks likely to continue raising interest rates over the course of the year will cap its upside. Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience inwriting about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News. As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewableenergy and the challenges of avoiding greenwash while investing sustainably. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis

Rupert Rowling
Rupert Rowling

20/04/2022

New Inflation High Boosts Gold

At the end of 2021, many investment banks forecasted that inflation would start to slow down from Q2 2022. The data published yesterday proves just the opposite: a new increase in prices on both a monthly and a yearly basis. The monthly data saw an increase of 0.3% (below analysts' average forecast of 0.5%), while the YoY figure jumped to an impressive +8.5% (+0.6% compared to the +7.9% of February 2022). Of course, the massive rise in commodity prices – particularly oil and gas – was a crucial catalyst in last month's price rally but there is no certainty that this scenario will change in the short term. Live Gold ($/g) Price With just three weeks to go before the next Federal Reserve meeting, investors are pretty sure that the U.S. Central Bank will increase rates by 50 basis points (from the current 0.50% to 1%). Indeed, according to the CME FedWatch tool, markets are pricing a probability of 86.6% of a 0.50% rate hike in May. Only 30 days ago this percentage was just above 40%. In this scenario, the gold price is continuing to show strength, remaining above the key support level of $1,950/1.960. A sustained move above this threshold could open the way for further recoveries, with the key level of $2,000 that seems much closer than a few days ago. Even if the U.S. rates rise in the next few months, the surge in prices and the potential risk of hyperinflation is still boosting investors’ interest in gold as a prospective hedge against inflation. Looking at the price in dollars per gram, bullion is now traded above 63, while its price in euros per gram is above 58. Monitor the Gold Price with Kinesis' Live Charts Click Here Carlo Alberto De Casa is an external Market Analyst for Kinesis Money. He also writes as a technical analyst for the Italian newspaper La Stampa. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis

Carlo Alberto De Casa
Carlo Alberto De Casa

13/04/2022

Gold Price Close to $1,950 While Inflation Pressure Remains a key Theme for the Metal

U.S. inflation reached a record figure of 7.9% in February and tomorrow the U.S. Bureau of Labor Statistics will publish the data related to March. Analysts are forecasting price growth of 0.5% on a monthly basis, while the YoY figure is expected to post a fresh multi-decade record between 8.3% and 8.5% (up from the 7.9% figure released last month). Live Gold ($/g) Price Later this week, the European Central Bank will hold its meeting, followed by the traditional press conference. Inflation, which jumped last month to 7.5% on an annual basis, is progressively changing the dovish stance of the ECB. Investors are predicting rates to remain steady, while forward guidance could be more hawkish, reflecting the rally of inflation seen in the last few months. In this case, the euro could recover against the greenback and this could represent a positive element for the gold price. Moreover, we should note that the technical scenario for gold is improving. The new week started with the gold price jumping above the key resistance of $1,950 an ounce and trying to leave the lateral trading range between $1,890 and $1,950 over the last few sessions. This positive movement is confirming the growing bullish pressure already seen in the last few trading sessions when gold approached the $1,950 threshold without being able to remain above it at the end of the day. Therefore, this movement can be read as an improvement of the momentum and a clear surpass of the $1,950 mark could open space for further recoveries, confirming the bullish trend. Of course, the war between Russia and Ukraine – which is becoming a long-term problem – will remain a key catalyst while the sanctions against Russia could further exacerbate inflation. Monitor the Gold Price with Kinesis' Live Charts Click Here Carlo Alberto De Casa is an external Market Analyst for Kinesis Money. He also writes as a technical analyst for the Italian newspaper La Stampa. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis

Carlo Alberto De Casa
Carlo Alberto De Casa

11/04/2022