Precious metals: ING forecasts gold price to finish end the year at $1,855

Precious metals: ING forecasts gold price to finish the year at $1,855

ING Economics ING Economics 25.01.2023 15:20
Gold prices have surged over the past two months with expectations that the US Federal Reserve will slow its interest rate rises. We have increased our 2023 price outlook slightly based on the faster-than-expected pivot in US interest rate policy and the return of Chinese demand after Beijing’s U-turn on its zero-Covid strategy Gold gains on softer dollar Gold prices fell sharply last year after hitting a record high of above $2,000/oz in March as US dollar strength and central bank tightening weighed heavily on the precious metal. Higher interest rates make gold, which provides no returns, less attractive. Investor appetite for gold also decreased in 2022. Last year was the second consecutive year of decreasing demand for gold exchange-traded funds (ETFs). Investors sold $3bn worth of physically-backed gold ETFs in 2022, a 3.4% decrease to $202.7bn of global holdings at the end of December, according to data from the World Gold Council. But the precious metal has risen almost 20% since early November to above $1,900/oz at the beginning of 2023, helped by a weaker dollar and bets on smaller rate hikes by the Fed amid signs of cooling US inflation. US business conditions contracted again in January as demand for goods and services fell for the fourth month in a row, the latest S&P survey showed. The annual rate of US inflation fell for the sixth consecutive month in December to 6.5% from 7.1%, according to the latest consumer price index released earlier this month, increasing bets that the Fed may slow down the pace of its monetary tightening. Our US economist now sees growing risks that the Fed may stop hiking after a 25bp move in February. With recessionary forces intensifying and inflation looking less threatening, the prospects of Fed rate cuts later in the year are growing. Currently, my colleague in the US expects a final 25bp rate hike in March. Real yields have also been weakening, giving support to non-interest-bearing gold. Ten-year real US yields reached their highest levels in more than a decade last year, pushing gold from a peak of above $2,000/oz in March 2022 to a low of just above $1,600/oz in November. Given the strong negative correlation between gold prices and real yields, gold struggled in the rising yield environment. Higher yields increase the opportunity cost of holding gold, which turned investors off the precious metal. The fall in real yields since November has encouraged a more bullish view on gold and has seen the price rally above $1,900/oz. Meanwhile, the latest CFTC data show that speculators increased their bullish bets in COMEX gold by 10,783 for a seventh consecutive week, to leave them with a net long of 93,357 lots as of the last reporting week. The net-long position was the most bullish in almost nine months. However, ETF holders haven’t shown a shift in sentiment just yet. The gold rally still lacks support with total gold held by ETFs falling 0.2% so far this year despite rising prices. Speculative positioning in COMEX gold Source: CFTC, ING Research Central banks' gold buying hits record highs Central bank buying in the first nine months of 2022 was the highest since 1967, according to the World Gold Council. During times of economic and geopolitical uncertainty and high inflation, banks appear to be turning to gold as a store of value. Last month, the world’s official financial institutions bought 673 tonnes. In the third quarter alone, central banks bought almost 400 tonnes of gold – the largest quarterly purchase since records began in 2000. The buying in the third quarter was led by Turkey with 31 tonnes, taking gold to about 29% of its total reserves. Uzbekistan followed with 26 tonnes, while in July Qatar made its largest monthly acquisition on record since 1967. Meanwhile, earlier this month the People’s Bank of China revealed a further 30-tonne purchase of gold in December, following on from its first reported monthly purchase of 32 tonnes in more than three years in November. By the end of 2022, China’s gold reserves reached 2,011 tonnes. Given the current geopolitical environment is likely to persist, we believe central banks will continue to add to their gold holdings in the coming months. The gold purchases made by central banks around the world constitute only a portion of the total demand for bullion, which also includes the consumption of jewellery, investments in gold bars, coins, ETFs, and technology. China gold reserves Source: PBoC, ING Research Chinese gold demand disappoints in 2022 China’s 2022 gold consumption fell 10.6% from 2021 to 1,001.7 tonnes, according to the China Gold Association (CGA). The decline in bullion demand was led by weak bar and coin demand, which fell 17.23% last year. Jewellery demand fell 8% to 654.32 tonnes, the CGA said. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drops Below 130.00| FXMAG.COM Gold jewellery consumption saw a strong recovery at the beginning of last year but fell again after subsequent Covid outbreaks, while high gold prices slowed down investment and industrial demand. We believe China’s reopening and the end of its strict zero-Covid policy should support Chinese gold demand’s rebound in 2023. China’s gold demand may also benefit from the government’s efforts to stimulate consumption, as was stipulated at the Central Economic Work Conference at the end of last year. Near-term demand may also receive a seasonal festive boost from the Lunar New Year holiday at the end of January. The Chinese holiday is observed from 21 January to 27 January. Fed's rate path crucial to gold in 2023 Looking ahead, we believe gold will remain sensitive to the Fed’s monetary policy. A less hawkish Fed is likely to lead to a weaker US dollar, which would support higher gold prices. Any hint of rising hawkishness from the US central bank would likely push gold lower. Meanwhile, fears of recession should provide support for gold, while continued weakening in the US dollar should further boost gold prices.   We expect gold prices to move higher over the course of 2023 with prices averaging $1,900/oz in the fourth quarter of 2023. ING forecasts Source: ING Research Read this article on THINK TagsGold Commodities Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Receding Market Bets On The Fed’s Hawkish Move And Chatters Surrounding The Policy Pivot Seem To Favor The Silver Buyers

The Silver Price Remains On The Bear’s Radar

TeleTrade Comments TeleTrade Comments 25.01.2023 10:19
Silver traders take offers to refresh intraday low while paring previous daily losses. DXY steadies during three-week downtrend as traders brace for US Q4 GDP. Inactive yields, light calendar adds to the market’s indecision ahead of key catalysts. Silver price (XAG/USD) remains depressed around intraday low of $23.50 as traders seek fresh clues to extend the fortnight-long downtrend during early Wednesday in Europe. In doing so, the bright metal takes clues from a pause in the US Dollar’s downtrend while reversing the previous day’s gains. That said, the US Dollar Index (DXY) steadies around 102.00 as bears await the US Gross Domestic Product (GDP) for the fourth quarter (Q4) and the next week’s Federal Open Market Committee (FOMC) meeting. It’s worth noting that the downbeat US activity data join the dovish concerns surrounding the Federal Reserve’s (Fed) next moves to keep XAG/USD buyers hopeful. However, an absence of Chinese traders and the pre-Fed blackout period joins the consolidation in the commodity markets, due to China’s Lunar New Year holidays, which seem to weigh on the Silver price of late. Additionally, the market’s dicey moves and a lack of major data/events also probe the commodity traders. While portraying the mood, US Treasury bond yields remain inactive after Tuesday’s pullback while the S&P 500 Futures print mild losses but the stocks in the Asia-Pacific region trade mixed and support the currencies of the zone. Moving on, Silver traders will pay close attention to the risk catalyst ahead of the US Q4 GDP as recession woes challenge the partially industrial commodity. However, major attention will be given to the next week’s Federal Open Market Committee (FOMC) meeting for clear directions. To sum up, the Silver price remains on the bear’s radar for the day but the bulls are lurking ahead of the key data/events. Read next: The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$| FXMAG.COM Silver price technical analysis A sustained downside break of the seven-week-old ascending trend line, now immediate resistance near $23.70, keeps Silver bears hopeful of retesting the monthly low near $22.75
The XAU/USD Pair (Gold) Could Try To Resume Its Growth

The Cautious Mood Ahead Of The Key Data Seemed To Have Put A Floor Under The Gold Price

TeleTrade Comments TeleTrade Comments 24.01.2023 09:23
Gold price renews nine-month high while staying comfortably beyond $1,917 support confluence. US Dollar weakness, mixed sentiment allows XAU/USD bulls to keep the reins amid China’s off, Fed blackout. First readings of January’s PMI will direct intraday moves but US Q4 GDP will be more important to guidance. Gold price (XAU/USD) refreshes a nine-month high as it picks up bids to $1,940 during the initial hour of Tuesday’s European session. In doing so, the bright metal cheers broad US Dollar weakness, as well as hopes of more demand from China, ahead of the monthly activity data. It’s worth noting that the cautious mood ahead of the key preliminary activity data from the US, Eurozone and the UK seemed to have put a floor under the Gold price of around $1,917. Also read: Gold Price Forecast: XAU/USD eyes $1,942 and global PMIs for further upside Gold Price: Key levels to watch The Technical Confluence Detector shows that the Gold price grinds higher past the $1,917 support confluence including the Pivot Point one-day S1 and Pivot Point one-month R3. That said, a convergence of the Fibonacci 23.6% on one-week, 50-HMA and the middle band of the Bollinger on the hourly play, around $1,930, appears immediate support for the Gold traders to watch. It should be noted that a downside break of the $1,917 support confluence opens the door for Gold’s south-run towards the $1,900 threshold. Alternatively, Pivot Point one-week R1 close to $1,945 appears the nearby hurdle for the XAU/USD bulls to aim for. Following that, there prevails an empty road for the buyers to ride ahead of the April 2022 peak surrounding $1,966. Here is how it looks on the tool About Technical Confluences Detector The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
Analysis Of The Silver Commodity Asset Price Movement

Silver Is Expected Limited Recovery

TeleTrade Comments TeleTrade Comments 24.01.2023 08:51
Silver price renews intraday high to reverse the previous day’s slump to five-week low. 200-SMA, bearish chart formation keeps XAG/USD bears hopeful. Monthly high acts as the last defense of Silver bears. Silver price (XAG/USD) picks up bids to refresh intraday high near $23.55 as it bounces off the five-week low marked the previous day. In doing so, the bright metal recovers from the support line of a one-week-long descending trend channel. As the XAG/USD recovery takes clues from the RSI (14) rebound from the overbought territory, the latest run-up is likely to poke the immediate hurdle, namely the 200-SMA level surrounding $23.65. However, the quote’s further upside will need validation from the top line of the stated channel, close to $24.10 at the latest. Even so, the monthly high near $24.55, also the highest level since late April 2022, could challenge the Silver buyers, a break of which won’t hesitate to direct the commodity price towards the April 2022 high near $26.25. On the contrary, the 61.8% Fibonacci retracement level of the XAG/USD’s upside from December 16 to January 03, around $23.30, restricts immediate declines of the metal. Following that, the aforementioned bearish chart formation’s support line, near $23.00 by the press time, will be crucial to watch for a corrective bounce. In a case where the Silver price fails to rebound from $23.00, a slump toward the mid-2022 peak surrounding $22.50 can’t be ruled out. Silver price: Four-hour chart Trend: Limited recovery expected
The U.S. Dollar Remains The Biggest Risk For Gold

The U.S. Dollar Remains The Biggest Risk For Gold

InstaForex Analysis InstaForex Analysis 23.01.2023 12:51
The latest weekly gold survey shows that optimistic analysts have a slight advantage; however, most analysts have stepped aside as they believe the precious metal looks slightly overvalued. At the same time, the survey shows that retail investors are optimistic about gold prices for the current week; however, the low level of participation in online surveys does not add confidence to the positive market sentiment. Sean Lusk, co-director of commercial hedging at Walsh Trading, said it's hard to ignore gold's bullish momentum. He explained that the growing headwinds to the U.S. economy are creating a lot of uncertainty about the Federal Reserve's monetary policy, which benefits gold. "I think this rally has some room to move higher," he said. "The whisper number is $2,000 and that is when you will see investors take profits on their long positions. As long as gold can stay above $1,920, I think it has a shot of going higher." On the other hand, Colin Cieszynski, chief market strategist at SIA Wealth Management, said he expects gold to consolidate at current levels before resuming gains. "While the longer-term trend remains positive for Gold, technically, it has had a good run lately and is looking a bit tired and due for a brief pause," he said. Last week, 18 Wall Street analysts took part in the survey. Among the participants, eight analysts, or 44%, were optimistic about gold for the current week. At the same time, four analysts, or 22%, are bearish, and six analysts, or 33%, believe prices are trading sideways. Meanwhile, 783 votes were cast in online polls. Of these, 500 respondents, or 64%, expect prices to rise this week. Another 169 voters, or 22%, said the price would come down, while 114 voters, or 15%, were neutral in the near term. Participation in online surveys dropped to a low last week. The overall bullish mood in the market is due to the fact that the gold market has been demonstrating growth for the fifth consecutive week. Adrian Day, president of Adrian Day Asset Management, said he also expects the price of gold to fall this week, but sees any drop in the market as a long-term buying opportunity. "Gold needs a break after the strong run-up and it could be sparked by commentary around the Federal Reserve's upcoming meeting. Given current expectations, there is more potential for disappointment than a pleasant surprise. After a brief and shallow pullback, gold will be strong again; nothing has changed the story for the year," he said. For many analysts, the U.S. dollar remains the biggest risk for gold. The U.S. dollar index ended last week relatively unchanged. Analysts believe its 10.5% drop from September's 20-year high is a big reason why gold would rise 5% in the first month of 2023. However, some analysts see the dollar's sell-off as somewhat exaggerated and suggest that the greenback may find some support ahead of the Federal Reserve's monetary policy meeting next month. The central bank is expected to raise interest rates by 25 basis points, slower than previously expected. According to Darin Newsome, senior technical analyst at Barchart.com, Gold is short-term overbought and the U.S. dollar index is short-term oversold. Relevance up to 10:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332983

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Most popular precious metals?

Gold (XAU) and silver are obviously the most popular precious metals. 

What are precious metals prices?

You're welcomed to check latest stats of gold and silver prices at FXMAG.COM

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