Gold News

Gold Investors Await Crucial US Jobs Data Hoping Rally Doesn’t Fade

Gold is still holding above $1,700 an ounce as the markets await crucial US jobs data that will give the latest indication on the health of the world’s largest economy. This week’s unexpected rally for gold has been driven by expectations that the Federal Reserve may be less aggressive with its future interest rate moves following the publication of a couple of economic indicators that suggested that the US economy is starting to feel the pinch from the dual impact of persistently high inflation accompanied by sizeable interest rate hikes. Therefore today’s release of the September unemployment rate and the non-farm payrolls will provide further clarity on the true state of the US economy. Yesterday saw a host of senior Fed officials reiterating the need for further interest rate hikes so they will be hoping the jobs picture painted later today gives the US central bank sufficient breathing space to continue their hawkish stance. If this proves to be the case then gold is likely to reverse much of the week’s gains as it would mean further large rate hikes are likely, further reducing the appeal of the non-yield-bearing asset.  Gold’s main source of support continues to be the ongoing war in Ukraine. While the conflict continues, markets will remain jittery with gold’s value, as a safe-haven asset that has endured through centuries of wars, sought after. 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

07/10/2022

Gold Holds Above $1,700 on Expectation of Less Aggressive Fed

Gold has dropped back a fraction on Wednesday after its remarkable gains on Tuesday that saw it climb back above $1,700 an ounce, a move that looked highly unlikely just a matter of days ago. The significant gains were driven by economic data out of the US, namely September’s ISM Manufacturing PMI and August job opening figures, that came in below forecast, suggesting the world’s largest economy isn’t proving as resilient from the series of interest rate hikes implemented by the Federal Reserve after all. In this climate, it raises the prospect of the Fed having to be less aggressive with its upcoming interest rate moves. Given that it has been the hawkish stance of the US central bank that has been the main agent in gold’s multi-month decline, the potential for a more accommodative Fed going forward gave the precious metal a surprisingly strong boost. The fact that gold has been able to make such significant short-term gains demonstrates that there remains significant underlying support for the ultimate haven asset given the ongoing war in Ukraine as well as increasing fears of a global recession. It also shows the impact the recent strength of the US dollar, which has a typically inverse correlation with gold, has had on weighing down the price of gold. While gold investors will no doubt toast the recent upward move, it is driven more on rhetoric that the Fed may be less hawkish. Therefore for the move to be sustained it will take a smaller hike by the Fed to ensure the gains are held onto. In this backdrop, today’s speech by Raphael Bostic, President of the Federal Reserve Bank of Atlanta, will be even more closely scrutinised for any hints on a possible change in direction by the US central bank. 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

05/10/2022

Gold & Silver October Outlook – Monthly Review – 2022

Gold in October Gold investors will be hoping that the worst is now behind them after seeing the price of gold trend steadily down from above $2,000 an ounce as recently as March to barely above $1,600 an ounce during September. Macroeconomic Policy However, it is hard to see where these strands of optimism can be found with central banks, particularly the Federal Reserve, maintaining their rhetoric over the need for more significant interest rate hikes. Gold has suffered in this hawkish macroeconomic environment, with the precious metal less attractive at a time of rising rates, making interest-paying assets such as bonds or yield-paying, gold-backed currencies such as Kinesis Gold more favourable instead. Inflation is why central banks worldwide are hiking rates, with consumer prices rising much faster than the banks’ target of about 2%. Indeed, inflation has proven stubbornly high, far off the transitory shock regarded at last year's end. While gold has historically been seen as a hedge against inflation having retained its relative buying power over centuries, the impact of fast-rising interest rates has more than outweighed any potential price benefit that gold might have gained in previous highly inflationary periods, viewed through a dollar lens at least. It is worth noting that while gold’s performance in dollar terms has underwhelmed in recent times on the back of the strength of the greenback, gold has performed much better in other currencies, notably in pound sterling terms for example. Gold has also held its relative value against West Texas Intermediate oil, even with the volatility oil has experienced this year. As ever, the words and actions of the Federal Reserve and its officials will be closely scrutinised and will be the primary driver of the gold price in October. As such, October 12th and 13th look like key dates for gold investors, with the release of the latest minutes of the Federal Open Market Committee followed by the US September inflation figure. The hope will be that inflation has finally peaked with higher interest rates successfully curbing rising consumer prices. However, any indication that the peak hasn’t yet been reached will be detrimental to gold as it increases the likelihood of the Fed making an even more significant hike come the next interest rate decision. Rising Geopolitical Tensions Away from macroeconomic policy, where central banks face the tricky task of balancing the need for rate hikes to curb inflation, the ongoing war in Ukraine is a potential wildcard that could impact the price of gold and global markets more widely. The success of Ukraine’s counterattack in September has raised the prospect of an increasingly desperate Russia further escalating the scale of the conflict. Such an event would raise geopolitical fears, with gold a likely beneficiary of a risk-off market environment, with the precious metal proven as the ultimate safe-haven asset that has endured through centuries of wars. Taking all these things into account, gold is more likely to go down rather than up in October with no sign of the pressure being applied by central banks will ease. Given the losses that have seen the precious metal sink to its lowest levels in more than two years, the hope will be that the Ukrainian war has created sufficient haven demand for $1,600 an ounce to be stable support around which the price can stabilise. Silver Outlook Silver’s fortunes have moved out of sync with its golden peer, with September proving a month where the price of silver has treaded water rather than suffering another monthly decline. Support Despite Hawkish Environment Hawkish central banks are making all non-yield bearing assets, including silver, less attractive. While silver has undoubtedly been losing ground in the macroeconomic environment, shedding $8 an ounce from its March highs, the long-term fundamental demand for the metal has seen investors buy recent dips in the price and keep it supported around the $18-$19 an ounce mark. This scenario could well continue into October when hawkish speeches by central bankers and further interest rate hikes cause the price of silver to dip initially, only for the price to recover ground as value-seeking investors flood in. Demand Forecasted to Climb While the focus is very much on a short-term outlook in which persistently high inflation needs to be tackled to protect consumers from ever-faster price rises, the longer-term view in which governments and companies across the world need to progress in their net zero commitments is far rosier. Silver has a key role to play in the energy transition with its use in photovoltaics in the solar industry and the batteries of electric vehicles; demand is forecast to climb consistently as a result. Investors willing to look to the horizon see a metal that is way below its fair value. While rising interest rates make it hard to see silver making huge gains, it is equally hard to see the price going significantly lower. 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

03/10/2022

Gold Steadies Around $1,660 as Markets Assess Economic Outlook

Gold is steadying around the $1,660 an ounce mark as the markets pause for breath awaiting the next significant market driver. It is hard to see gold making material gains in the current macroeconomic environment with the Federal Reserve, and other central banks around the world, still fixed on a policy of continued interest rate hikes over the coming months to try and bring stubbornly high inflation down. In the face of rising interest rates, gold’s appeal is diminished with its lack of yield making interest-bearing assets such as bonds more attractive instead. The latest US employment figures will be published at the end of this week which will give a pointer to the current health of the world’s largest economy and with it how much breathing space the Fed has to keep up with its large rate hikes without risking tipping the economy into recession. Before that key announcement, there will be the latest interest rate decision from the Australian central bank, with a 50 basis point increase expected, while throughout the week a slew of Fed officials will be speaking with each word scrutinized for any indication of how hard and for how long the next and future interest rate moves will be, and with that, what the impact on gold will be. 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

03/10/2022

Gold Suffers Another Monthly Decline as Fed Reiterates Hawkish Stance

Even with the slight recovery over the last two days, gold is set to end another month in which it has made a loss, extending the downward trend that started in April. This week has seen several senior Federal Reserve officials reiterate the central bank’s commitment to continuing to increase interest rates to try and bring inflation under control. In such a hawkish environment with monthly rate hikes from central banks worldwide, gold has fallen out of favour with its lack of yield making other interest-bearing assets more attractive in its place. The gains made in the last few days demonstrate that while gold is under pressure, support for the precious metal hasn’t completely evaporated with escalating tensions from the war in Ukraine, maintaining demand for the haven asset. Furthermore, the need for central banks, notably the Bank of England this week, to step into markets to support them demonstrates for some investors gold’s value as an asset that doesn’t rely on the whims of banks in the same way that fiat currencies do. As September draws to a close and October begins, the short to medium-term outlook for gold remains bearish with inflation likely to remain stubbornly high for a while longer yet forcing central banks to keep on hiking rates. Investors will be relying on the key threshold of $1,600 an ounce to stave off further slides and hope that given the hawkish stance of the Fed, in particular, is well known by now, the price impact isn’t as severe in October. 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

30/09/2022

Gold Sinks to Fresh Lows After Fed Officials Reiterate Need for Hikes

Gold is falling again with the price now languishing at levels last seen in March 2020 after a series of Federal Reserve officials reiterated the need to keep raising interest rates to try and bring inflation under control. The Fed’s hawkish policy of raising interest rates has had a doubly negative impact on gold as not only has it made the non-yield bearing asset less attractive, it has also helped strengthen the US dollar to record levels, which given gold’s typically inverse correlation with the greenback has exacerbated its decline. In the current environment it is hard to see where gold can gain a foothold to stave off further declines. One possible source is the ongoing war between Russia and Ukraine with Russia showing ever more desperate attempts to wrestle back the initiative, including potentially sabotaging its own Nordstream pipelines to cause the maximum gas disruption to Europe. If this is confirmed as a Russian act, it would demonstrate the level the government is willing to sink to, increasing the possibility of nuclear weapons being used. In this scenario, gold would be one of the few beneficiaries, with the precious metal viewed as the ultimate safe haven that has endured through centuries of conflicts. 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

28/09/2022