Since the beginning of 2018, gold has been stuck in a trading range between $1310 and $1360. Silver has ranged between $16.20 and $17.50, though primarily between $16.80 and $16.25 since February. So what’s next? While most analysts base their views largely on chart technicals, I have found – at least for me – the Commitments of Traders “tea
Ticker
leaves” is a more reliable forecasting tool. Friday’s COT report showed a continuation of the trader positioning pattern that I believe will support the next big move higher.
Elijah Johnson and James Anderson invited me on to their weekly Metals and Markets podcast to discuss why I believe the metals may be bottoming. In addition, we discuss the why Amazon.com (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) are horrifically overvalued:
BENGALURU, May 7 (Reuters) – Gold prices edged up in early
trade on Monday as the dollar took a breather after climbing to
its highest level this year in the previous session.
FUNDAMENTALS
* Spot gold rose 0.2 percent to $1,316.62 per ounce
at 0034 GMT.
* U.S. gold futures for June delivery were up 0.2
percent at $1,317.20 per ounce.
* The dollar index , which measures the greenback
against a basket of six major currencies, was steady at 92.547
after hitting its best since December at 92.900 on Friday.
* U.S. job growth increased less than expected in April and
the unemployment rate dropped to near a 17-1/2-year low of 3.9
percent as some out-of-work Americans left the labor force.
* Two Federal Reserve officials who are currently voting
members of the U.S. central bank’s rate-setting committee said
on Friday they were keeping an open mind on the total number of
interest rate rises needed this year.
* U.S. interest rate futures rose modestly on Friday, as
traders still expect the Federal Reserve to raise key borrowing
costs at its June 12-13 policy meeting in the wake of
weaker-than-forecast growth in domestic payrolls and wages in
April.
* Euro zone business growth dimmed again in April but the
picture remained relatively bright as new business stayed
buoyant and firms managed to build up backlogs of work, a survey
showed on Friday.
* SPDR Gold Trust , the world’s largest gold-backed
exchange-traded fund, said its holdings fell 0.17 percent to
864.13 tonnes on Friday from 865.60 tonnes on Thursday.
* Hedge funds and money managers trimmed their net long
positions in COMEX gold contracts in the week to May 1, U.S.
Commodity Futures Trading Commission (CFTC) data showed on
Friday.
* Demand for physical gold barely changed in major Asian
hubs last week even as global prices weakened, while a
correction in local rates in India prompted retail consumers and
jewellers to start purchases.
* The World Gold Council, owner of the world’s largest
gold-backed exchange traded fund (ETF), is launching a new fund
with a cut-price management fee to fend off rivals with lower
charges, a source familiar with the matter told Reuters.
One of the least known precious metals hit a record on healthy demand from the car industry and for growing crystals used in mobile phones.
Iridium, one of the platinum-group metals, has climbed 12 percent this year, outperforming everything from nickel to gold. As the second-densest element and with one of the highest melting points among metals, it’s sought after for its use in spark plugs and glass manufacturing.
(Kitco News) – Safe-haven gold and silver prices are slightly lower in early U.S. trading Monday. Higher world stock markets overnight are a negative for the competing asset class of precious metals. However, a slightly weaker U.S. dollar index today is working in favor of the metals bulls. June Comex gold futures were last down $0.60 an ounce at $1,335.40. May Comex silver was last down $0.007 at $16.355 an ounce.
U.S. stock indexes are also pointed toward higher openings when the New York day session begins, which suggests better investor risk appetite in the marketplace to start the trading week. Still, traders and investors are wondering if the high volatility in the stock market will continue this week. Such would favor the stock market bears and the precious metals market bulls.
The markets have not reacted significantly to reports of missile strikes on the Syrian military overnight, after weekend reports that the Syrian army has used poison gas on its civilians. Reports said the missile strikes came from Israeli jets.
The U.S.-China trade dispute simmered down a bit during the weekend. Trump administration officials said on Sunday that trade sanctions against China are not imminent and there is time to work out a solution to the matter.
The key “outside markets” on Monday morning see the U.S. dollar index slightly lower. The greenback is seeing a corrective pullback today after hitting a five-week high on Friday. Meantime, Nymex crude oil prices are higher and trading just below $63.00 a barrel.
Will Gold Keep Reacting to US-China Trade War Jitters?
By Meera Shawn
9 hours ago
Trade war jitters?
Among the four precious metals that we’ll be discussing in this series, only gold saw gains on Wednesday, April 4. Gold prices for April futures were up 0.23% and closed at $1,335.8 an ounce. Silver was down 0.84% to close at $16.2. Platinum was down 1.4% and was the biggest loser among the four precious metals. It ended the day at $912.1 an ounce. Palladium was also lower by 1.1% and closed at $918.9 per ounce.
The rise in gold was most likely due to the ongoing unrest in the markets due to the US and China trade war. China said that it would impose additional tariffs on $50 billion worth of US imports. The tariffs would include products ranging from cars, chemicals, tobacco, and whiskey. This made markets jittery, which led the US dollar to fall and pushed gold higher. The sentiment didn’t provide a substantial impact on the other three precious metals.
Correlated moves
The above chart compares the performance of gold to the volatility index (or VIX). It is a barometer for overall uncertainty in the market. The higher chances that we could see weak markets led to a rise in this index.
We have seen that gold has a strong relationship with market unrest (VIXY) (VXZ). The higher the tensions in the market, the higher the demand for gold. As gold is famous as a safety asset, investors often jump to this reserve-for-safety. Though the short-term relationship between gold (IAU) and VIX can diverge in a more extended run, we can expect the two to track each other.
Some of the mining companies that also increased on Wednesday with gold include Cia De Minas Buenaventura (BVN), Eldorado Gold (EGO), Alacer Gold (ASR), and Coeur Mining (CDE). They were up 2.4%, 2.5%, 1.5%, and 2.3%, respectively.
Gold is the only precious metal that moves higher in Q1.
Silver underperforms and posts a loss for the first quarter.
Continued weakness in platinum.
Palladium rises to a new record high, reverses, and posts the biggest loss in the sector.
Bullish and bearish factors facing precious metals in Q2.
The precious metals sector of the commodities market posted an overall loss in the first quarter of 2018.
The composite of the four precious metals that trade on the COMEX and NYMEX divisions of the CME dropped by 8.10% in 2014. The sector fell by 19.46% in 2015, but in 2016, precious metals gained 11.71 %. Precious metals moved 20.19% higher in 2017 posting its second consecutive annual gain. In Q1 2018, the sector moved 4.08% lower in a corrective move led by losses in palladium and silver. The sector declined despite a continuation of weakness in the US dollar which declined by 2.19% over the three-month period.
I believe in free trade, but I still understand why President Trump is imposing tariffs on steel, aluminum and a range of Chinese products. America’s industrial workers have suffered for a long time, and Mr. Trump is fighting to create middle-class jobs.
Achieving that will take more than righting the last administration’s wrongs on taxes and regulation, a task already well under way. Blue-collar prosperity was eroded along with American manufacturing. From 2000-10, U.S. manufacturing employment shrank by a third after holding steady for 30 years.
PHOTO: ISTOCK/GETTY IMAGES
President Trump has rightly blamed bad trade deals, particularly those with Mexico and China, for contributing to this meltdown. But the Federal Reserve deserves a share of the blame, too, since its inflationary policies priced out U.S. manufacturers from global trade. Since 2000, their prices have risen nearly 50%, compared with about 25% for German competitors—mirroring the domestic inflation rates in each country. As a result, manufacturers fled the U.S., much the way American families have fled high-tax states.
The solution is to take control of the money supply away from the Fed and give it back to the American people—in other words, to return to the gold standard. Gold gets a bad rap in some history books because of its misuse during the 20th century. This ignores its peacetime record of high growth and nil inflation between 1834 and 1913.
Clouding the historical picture are two fake gold standards. The Depression-era gold standard was constructed to make prices fall toward the levels that prevailed before World War I, with the disastrous result of deflation. Then, under the Bretton Woods version after World War II, only foreign central banks could convert dollars into gold. This deformity caused inflation, which skyrocketed after the Fed gained total control of the money supply in the early 1970s.
Since then the U.S. has seesawed between too much and too little money in the economy. The Fed has the impossible task of guessing the market’s demand in real time. Its performance worsened in the 2000s because the Fed began to grade itself by how its money creation boosted the financial markets. Today many people are so disillusioned with the dollar’s prospects that they have embraced cryptocurrencies like bitcoin.
My constituents in West Virginia get little of the upside from the Fed’s money creation and most of the downside. They don’t benefit from speculative investment returns, but they do lose their jobs and homes when the local plant decides to close because it’s too expensive to compete from the U.S.
The current Federal Reserve system benefits elites. The gold standard is equitable and puts “we the people” in control of the money supply. That’s why it was part of America’s founding and has been a key to the country’s long economic success.
On Thursday I introduced a bill that would return the dollar to the gold standard—the first such attempt since Jack Kemp’s Gold Standard Act of 1984. Under this legislation the Fed would still exist, but it would administer the money supply rather than dictate it. Instead the market would be in charge, the supply and demand for money would match up, and prices would be shaped by economics rather than the instincts of bureaucrats.
Like President Trump, I believe that success is again possible for Americans who go to work every day and build things. Mr. Trump’s vision of how the American economy could and should work resonated with voters in 2016. Returning to the gold standard is a way for the president to deliver on his promise of American working-class prosperity.
Mr. Mooney, a Republican, represents West Virginia’s Second Congressional District.
Gold producer Eldorado Gold Corp has agreed to buy the remaining shares of Integra Gold Corp , to expand its mining opportunities in the Eastern Abitibi region of Canada.
Integra shareholders have the option of receiving cash or shares in Eldorado or a mix of both. The maximum number of shares issuable by Eldorado under the arrangement will be about 77 million and the total deal value is about C$590 million, inclusive of Integra shares held by Eldorado.
“From previous experience of building and operating gold mines in Canada, I am excited about Eldorado’s entry into the Eastern Abitibi region of Canada,” Eldorado Chief Executive George Burns said in a statement.
Upon completion of deal, existing Eldorado and Integra shareholders would hold about 90 percent and 10 percent of the combined company, respectively.
The Integra acquisition comes after Eldorado in January indefinitely shelved expansion plans for its flagship Kisladag mine in Turkey and put off a development decision on a project in Brazil, citing lower gold prices.
After 11 years of operations in China, Eldorado Gold left the country last year after selling stakes in two mines and a development project to Yintai Resources Co Ltd for $600 million.
“Where is the price of gold headed? Well, consider this: One closely followed statistical model concludes that bullion is 46% overvalued, while another says that gold is 35% undervalued.
Which is closer to the truth? It’s impossible to say.”
The European Parliament has adopted legislation that will restrict the use of mercury, further closing the gap between existing European Union legislation and the 2012 United Nations Minamata Convention against mercury pollution. The legislation will phase out the use of mercury in dental amalgam by 2030.
“Mercury is acutely toxic and is one of the 10 most damaging naturally occurring substances on the planet. Fetuses, newborns, and children are the most vulnerable group, since in the growth phase the brain and the nervous system react very sensitively to mercury,” said Member of Parliament Stefan Eck of Germany.
“Where is the price of gold headed? Well, consider this: One closely followed statistical model concludes that bullion is 46% overvalued, while another says that gold is 35% undervalued.
ean Parliament has adopted legislation that will restrict the use of mercury, further closing the gap between existing European Union legislation and the 2012 United Nations Minamata Convention against mercury pollution. The legislation will phase out the use of mercury in dental amalgam by 2030.
Landis Refining Industry News 