Posts with tag gold-markets

Gold & Silver Hanging Tough

Guest Writer, May 31 2023

It's time to stock up on gold. Reuters' Seher Dareen reports that gold prices are near two-month lows in holiday-thinned trading today.

On the one hand, the "agreement in principle" to raise the nation's $31.4 trillion debt limit is easing investor worries. 

On the other hand, chances that the Federal Reserve will raise rates at its next meeting in two weeks is tempering the demand for bullion.

Spot gold was mostly unchanged at $1,944 per ounce by 1:15 EDT this afternoon, while U.S. August futures were up to $1,962.

The news from the Capitol of a debt deal, which still has to pass both houses of Congress -- no done deal to be sure -- came on a low-volume day with the U.S. and parts of Europe on holiday.

Until a couple of days ago, most investors were betting that the Fed would keep its benchmark rate steady and wouldn't raise them on June 14th.

Last week's economic data changed that view, with investors now expecting the Fed's FOMC to raise rates for the 11th time since March last year. 

Fed Fund futures now show a 59% chance of a 25-basis-points increase and a 41% chance of rates holding steady -- with rates peaking in July at 5.32%.

A little over two weeks ago, over 90% of futures traders were expecting a rate freeze, with only 10% seeing a 25bp rate hike.

Tim Waterer at KCM Trade said, "With a possible June rate hike by the Fed still in play, it is the greenback and U.S. treasury yields which continue to prosper." 

Gold has no yield of its own, so it tends to fall out of favor with investors when interest rates rise and vice versa.

The dollar index was near a two-month high, and that's been weighing on gold prices. A stronger dollar makes bullion more expensive for holders of other currencies and vice versa. 

Carlo Alberto de Case at Kinesis Money said, "As long as we remain above $1,900, I don't see too much risk of further decline."

Spot silver was down 0.63% today at $23.17, platinum was up 0.24% at $1,024, and palladium was down 0.63% at $1,412.

It's always good to add gold and silver to your nest egg. But from a pure pricing perspective, it's even better to be adding them today.

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