Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more. You can visit the forum page to see the list of forum nodes (categories/rooms) for topics.
Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!
...
Gold was the only asset standing tall in the sea of red on Wednesday morning as stocks, commodities, and cryptocurrencies plunged. The overall trend in gold has shifted to the bullish side after the precious metal bottomed out at $1,680 at the end of March and started its approach to the $1,900 an ounce level.
JPMorgan pointed out that the retreat in bitcoin coincided with new inflows into gold.
"This suggests that institutional investors appear to be shifting away from bitcoin and back into traditional gold, reversing the trend of the previous two quarters," analysts led by Nikolaos Panigirtzoglou said in the report.
...
One-day swings of 31%. A slump amid a jump in U.S. inflation. Ever more critical regulatory scrutiny. Bitcoin delivered all of these in the past few days, undermining its claimed role as a portfolio hedge rivaling gold.
...
“For all of 2020 and pretty much up until April, Bitcoin has been the best performing asset, so it wasn’t hard to say it was an inflationary hedge given all the stimulus that keeps getting pumped into the global economy,” said Edward Moya, senior market analyst with Oanda Corp. “This week’s crypto plunge and rebound was a wake-up call. Bitcoin will still act like a leveraged risk-on trade and not a proper inflation hedge.”
Bitcoin volatility rising as gold's drops
Bitcoin’s 60-day realized volatility is far higher than that of gold and currently pulling away. ...
Gold, meanwhile, is heading for a third weekly gain, bolstered by a weaker dollar and wavering Treasury yields, which boost the allure of non-interest-bearing bullion. It’s also benefiting from the crypto crash, according to Brian Lan, managing director of Singapore-based dealer GoldSilver Central Pte.
...
You know that's an accident waiting to happen. So much shiny lost to the depths.... I've had a bad case of want to buy a boat fever for about 3 months ...
Growing uncertainty surrounding U.S. central bank monetary policy prompted some hedge funds to jump back into the gold market, according to analysts looking at the latest trade data from the Commodity Futures Trading Commission (CFTC).
Although Federal Reserve Chair Jerome Powell said recently that he expects the central bank to release its plans regarding reducing its monthly bond purchases by the end of the year. Some analysts have said that it is improbable any road map will be released later this month, and this delay has provided some initial support for gold.
"Our economists believe that [Friday's] labor market report will influence the U.S. Fed and consider it unlikely that so-called tapering will be announced either at the upcoming meeting on 21/22 September or at the following meeting in early November," said Daniel Briesemann, precious metals analyst at Commerzbank.
The CFTC disaggregated Commitments of Traders report for the week ending Aug. 24 showed money managers increased their speculative gross long positions in Comex gold futures by 9,919 contracts to 136,555. At the same time, short positions rose by 3,686 contracts to 54,878.
Gold's net length now stands at 81,677 contracts, up 8% from the previous week. Renewed interest in gold helped push prices to $1,820 an ounce, nearly a one-month high.
"After aggressively increasing long gold exposure last week, money managers again hiked their net long holdings as prices continued to migrated into $1,800/oz territory. Investors also grew their long positions in response to signals coming from Fed Chair Powell, which suggested that the US central bank is tilting policy emphasis toward full employment and that it has no major inflation concerns, suggesting no material removal of stimulus," said commodity analysts at TD Securities. "However, while the market believed that the Fed may tolerate temporary inflation spikes and rates slid lower, some money managers added short exposure nonetheless."
While hedge funds continue to see value in gold, the silver market remains relatively lackluster. However, some analysts note that silver has more bullish potential.
The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures increased by 914 contracts to 49,008. At the same time, short positions dropped by 735 contracts to 36,735.
Silver's net length stands at 12,273 contracts, up 15% from the previous week. During the survey period, silver prices push above resistance at $24 an ounce.
...
Gold has the potential to double once the Federal Reserve begins to tighten and hike rates to fight off hotter-than-expected inflation, said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
...
If Russia backs off Ukraine and the present conflict ends, I could see metals tanking while stocks jump.... the only thing that can stop this upswing is me buying in.
If Russia backs off Ukraine and the present conflict ends, I could see metals tanking while stocks jump.
I suspect that isn't going to happen though. This looks to get a lot messier before anything gets resolved.
With rising interest rates, disrupted global supply chains, and aggregate demand expected to shrink, investors can expect risk assets like stocks and cryptos, as well as traditional safe haven plays like gold to take a hit this year, said Alfonso Peccatiello, author of The Macro Compass.
"This is an environment where you have nowhere to hide. You can't buy stocks, you can't buy gold, you can't buy Bitcoin," Peccatiello told David Lin, anchor for Kitco News.
...
While gold may enjoy some tailwinds later in the year, the risks are to the downside for the metal in the foreseeable future, he said.
"The problem is that inflation expectations are starting to become de-anchored. We are starting to have traders pricing in a meaningful probability that inflation will print above 5% over the next five years. If you are a policymaker, you don't like that," he said. "I would argue we're at the point where if inflation becomes sticky high, then policymakers are going to react in a non-linear fashion. They're going to really make sure that rates are hiked to much higher levels, and that hurts gold."
...
The second suppressing driver has been speculation over what Russia might do with its gold reserves - one of the few assets that remained untouched by the Western sanctions introduced against Russia after it invaded Ukraine.
"Given that a substantial proportion of Russia's assets have been frozen, there's always the possibility some of the country's gold – understood to be worth around $140 billion – could be sold to make payments," Smith said.
...
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?