Market Updates

It looked like we were about to see a more sustained pullback in precious metals prices this week when gold traded lower into to the USD$1,460-$1,470 range, but this was short lived as equity market volatility and a miserable US PMI read helped gold rebound back up through the $1,500 level for now. A tough market to pick in the short term, but it seems in general the overall mentality moving forward is to buy into any decent sized dips.

Gold held within its $1,480-$1,550 channel during a headline driven week. The metals were initially supported with weak manufacturing data out of Europe and then Boris Johnson’s suspension of British Parliament being ruled as unlawful. The announcement of a formal impeachment inquiry against President Donald Trump was a further boost as was Trump’s surprisingly negative comments at the UN regarding China’s “massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property.”

Gold opened the week strongly with a flight to safety following the weekend attack which cut Saudi Arabia’s oil production by half. The market was range-bound during the week waiting for the US interest rate decision. Following the announcement that the Fed would lower its target range by a quarter of a percent, gold fell rapidly by $25 to a low of $1,481. Gold tested the bottom of the $1,480-$1,550 range we discussed last week but has held up as we write, trading at just above $1,500. Silver was unable to get above $18 and is currently trading at $17.85. Its lacklustre performance relative to gold saw the gold:silver ratio getting as high as 85.3 this week, and currently settling around 84.

This week saw the metals falling on choppy trading, particularly yesterday following the European Central Bank’s monetary policy meeting. While the ECB’s multiple aggressive easing measures (minus 0.5% rates, Euro 20 billion of quantitative easing) saw prices rise, it wasn’t enough to overcome softening geopolitical risk (i.e. John Bolton being “you’re fired” by Trump) and wholesale market reports of tepid Chinese and Indian demand.

This week, gold had another crack at the $1,550 level on the back of negative manufacturing index figures, the continuing saga that is Brexit and commencement of tariff hikes. However, the resumption of US-China trade talks and strong US employment figures overnight on top of easing tensions in Hong Kong saw profit taking in the precious metals, with gold booking a -$40 move to $1,513 and silver dropping a buck to $18.50. The RBA’s decision to leave interest rates on hold gave the Aussie a boost, seeing it end its couple of weeks’ downward trend to below 0.67 to put on a cent and trade above 0.6810 as we write. The Australian dollar’s strength saw local gold prices miss a run to $2,300 to currently hold just above $2,200.

A constructive week for precious metals. After trading between $1,490 and $1,510 last week, gold jumped $30 Friday US time on tit for tat tariff increases from both the US and China. Then followed Fed Chair Jerome Powell’s Jackson Hole speech which focused on uncertainty around trade and risks to the US economy. We say constructive because gold held on to its Friday gains and now seems to be trading in a $1,520-$1,550 range, testing the bottom of that as we write.

We saw some consolidation in precious metals prices this week with gold drifting back below US$1,500 and silver pulling back to $17.00 an ounce. It seems that short-term, the battle for the $1,500 level will come under pressure from profit taking as the price remains well above moving averages and looking short-term overbought. With some further consolidation warranted, those waiting and hoping for a short-term pullback in precious metals prices might find their entry spot next week, but what could upset the party would be commentary coming out of the Jackson Hole gathering of central bankers which will happen our time tonight. Gold will no doubt react to the tone of the commentary of Fed chair Jerome Powell, so prices hinge on how that plays out tonight.

The gold price consolidated this week with trading bouncing off $1,500 but being capped at $1,525. There was one sell-off mid-week in reaction to better US CPI figures and Trump delaying China tariffs until mid-December. However investors became risk adverse and dumped US stocks as the yield on10-year Treasury bonds dipped below the 2-year Treasury, the first time since June 2007. We discussed yield curve inversions back in March, when 3-month interest rates went higher than those for 10-year bonds.

Well, what a week! After consolidating during July between $1,380 and $1,450, this month, gold has made another break going above $1,500 (and holding) on more trade troubles and negative rates. Silver moved in sympathy, breaching $17, although a little weaker than gold pushing the gold:silver ratio back up to the high 80s. At the same time, the Australian dollar has had a relentless fall, reaching 67 cents but making a small recovery as we write.

Just when you think gold prices are going to pull back and have a breather, Trump comes back into the spotlight with some fresh tariffs on Chinese imports, spiking gold to a high of USD$1,449 before pulling back to $1,433, with silver gaining some ground back to $16.23 per ounce. So the volatility in precious metals prices continues this week and we’ve seen some wild swings so far. In AUD terms, we once again pushed through records highs to $2,105 at time of writing, with silver trading close to $24 per ounce.

Gold pulled back to USD$1,417 this week on the back of a stronger US Dollar, with silver shining brightest at present, adding USD 10c since last week and trading at $16.45 at time of writing. 
There seems to be some resistance for gold around the $1,440 level as there would be some profit taking from recent longs, so we remain range bound for now, with the Fed meeting next week likely to see a cut of 0.25% to their cash rate.

We talked last week of gold consolidating in a range with a break up through $1,440 as potential indication of the next leg higher. We saw this on Thursday night with gold benefiting from some further dovish commentary coming from NY Fed President John Williams. Gold moved higher to USD$1,444 at time of writing which is the highest price since 2013 in USD terms. Silver too staged a very sharp rally, rising over 7% in 5 days to USD$16.32, a high for 2019 and the best week in 3 years.

Gold spent most of the week under $1,400 even though China added 10 tonnes to its reserves and Poland reported a large acquisition of 100 tonnes.Wednesday gold moved decisively up to $1,426 on the back of Federal Reserve chair Jerome Powell dovish comments at his semi-annual monetary policy testimony but then moderated with US inflation coming in above expectations overnight, although it has held above $1,400.

A wild week to end the financial year as both ABC Bullion’s trading volumes and number of transactions were higher than any other week this year. After pulling back on Friday night, gold started the week at USD$1,384 per ounce, before being met with strong buying back up through $1,400 to sit currently at $1,422 per ounce. Silver sat in a much tighter range this week, and currently remains at a low $15.32 per ounce.

After such a sharp rally it only made sense for gold to consolidate somewhat, so we see a pullback to $1,405 this week with silver trading back to $15.25 per ounce. It has been a wild week at ABC Bullion with a big uptick in trading volumes. Shortly after last week’s update, gold broke through $1,400 per ounce and reached highs of around $1,436 before taking a breather. In AUD terms, we reached highs of $2,063 before a quick correction back to $2,012 at time of writing.

Patience is beginning to pay off for precious metals bulls, as gold has managed to break through a key resistance zone of the past few years. Once the level of $1,350-$1,360 was broken on Thursday it was a quick trip to $1,395 before consolidating down to $1,389 at time of writing.

Gold marched higher as news filtered through of two oil tankers being attacked by torpedoes in the Sea of Oman. Gold rallied to USD$1,345 and silver to $14.95; with the AUD/USD back down to 0.690 US cents, we see gold trading into fresh new highs of AUD$1,952 and silver at $21.70. It seems our call from a few weeks ago for AUD$2,000 gold by end of year could potentially happen sooner than expected, particularly if we have further escalation of US/Iran tensions.

A huge week for precious metals this week with gold rallying back up through the USD$1,300 level to $1,333 with silver following to USD$14.88. We warned investors in last week’s update to keep an eye out for a potential rally this week due to the bullish technical setup, so it’s good to see the market reacting as expected in the short-term. Continued trade tension and perhaps dented confidence in the Federal Reserve and their credibility sparked one of the best weeks for gold in some time. Recent commentary from the Fed suggested that they might not be able to normalise interest rates after all (old news to us) and are apparently willing to look at rate cuts if the data warrants.

This week saw gold trading back above USD$1,290 and silver relatively unchanged at USD$14.50. After such a consolidation in price, it seems like gold has formed a base in USD terms, so keep an eye out for a potential rally next week. In local currency terms, the AUD clings to 0.69c for dear life for now, which sees gold in AUD a whisker from all time highs at $1,870, and silver back above $21 per ounce after briefly trading below $21 earlier in the week.

Gold drifted lower this week before catching a bid Thursday night on the back of US stock markets selling off. We remain at the USD$1,280 level as per last week, with silver trading not too far off multi-year lows at USD$14.60. Some further weakness in the beaten up AUD sees gold for local investors trading higher at $1,868 and silver at $21.20.

Precious metals had an up and down week this week with gold in USD trading back above $1,300 ever so briefly, before consolidating just above $1,280 per ounce. Silver slightly lower at $14.50 per ounce. With the AUD/USD continuing to knock out fresh lows below 0.69c we see gold in AUD continuing towards all time highs. They say “the trend is your friend” and with little to no catalysts on the horizon to spark any AUD buying, we expect the trend to remain friendly for gold bulls here domestically.

Gold added $10 per ounce this week, rallying back above USD$1,280 and has managed to successfully hold above the trendline from September 2018. Silver is slightly higher than last week at USD$14.80. Gold in the short term looks bullish above this trendline – keep an eye out over coming weeks to see if we can break out of the range seen in the daily chart below.

The gold price was under pressure the first half of this week, falling from $1,279.88 to $1,266.42 with silver breaking below $15 to get as low as $14.75. The $6 “slam” overnight Tuesday naturally attracted much comment. There were the usual questions about “why would someone sell so much in a single trade rather than feed it into the market” implying either manipulation by institutional short sellers or governmental interference. We do note that rarely are such claims based on trade-by-trade analysis at a millisecond level, which can show a much more different picture, as Monetary Metals has done for previous price smashes.

Gold failed to hold the recent support level of USD$1,280 this week so we saw some selling purely on the back of the technical setup, as news was fairly absent this week. Stop losses aplenty would have sat just below this level for speculators long gold, so triggering of stops provided a quick sell-off down to the lowest price of 2019, USD$1,274 per ounce. Silver didn’t quite react as much and trades at the same price this time last week at USD$15 per ounce at time of writing.

Gold continued to dance around the USD$1,300 per ounce mark, before trading lower to the exact price of this time last week ($1,292 per ounce). Silver trades just below $15 per ounce at time of writing and the Gold Silver Ratio remains at an incredibly high 85. For gold in USD, the daily chart below shows the range we appear to be stuck in until gold breaks either side. Support seems to be around $1,280 and we currently trade just above the 100-day moving average for now.