Gold price touches new 2-year low after parade of rate hikes Staff Writer | September 23, 2022 https://www.mining.com/gold-price-touches-new-2-year-low-after-parade-of-rate-hikes/ Stock image. Gold continued its recent struggles on Friday to set a new two-year low after a slew of central banks followed the US Federal Reserve in raising interest rates to cool inflation. Spot gold fell 1.4% to $1,647.92 per ounce by 11:30 a.m. ET, on its way towards a second consecutive weekly loss. US gold futures were down 1.6% to $1,653.80 per ounce. Gold’s decline comes on the back of a rallying US dollar, which touched a 20-year high, curbing demand for the greenback-priced metal. Benchmark 10-year yields also jumped to their highest since April 2010, further dampening demand for bullion. “We’re seeing relentless dollar strength here and that’s going to keep gold vulnerable in the short term,” Edward Moya, senior analyst with OANDA, told Reuters. “The economy is clearly heading towards a recession. The risks of a hard landing are elevated, and this has been just continuing to drive flows into the dollar, which has been bad news for gold.” “This should see (gold) prices trading broadly sideways over the rest of the year,” Fitch Solutions added in a note to Reuters. The precious metal joined the selloff in risky assets as investors opted for cash after UK’s economic plan reignited concerns that central banks’ aggressive interest-rate hikes to rein in rampant price increases may lead to a recession. Outflows from gold-backed exchange-traded funds have continued, with holdings now close to the lowest this year, Bloomberg data shows. US business activity contracted in September for a third-straight month, though at a more moderate pace as a pickup in orders and a further softening of inflation allayed concerns of a more-pronounced pullback. Weakness in bullion is “very likely to persist” due to “monetary tightening that makes gold costlier to hold,” said Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services. “However, recession fears and any escalation in the Russia and Ukraine conflict could support prices.” (With files from Bloomberg and Reuters)
As much as gold looks like a buy, I'd be very wary. Gold has a reputation for pulling off nasty tricks at the very last moment. I have a long term buy on gold, no sell signals, (did recently), but as for a short term buy, watch like a hawk because right at this point it's not a given imo. Similar with crypto (bitcoin), just a tad too early yet to be given a green light imo.
Gold has done pretty well considering the recent rise of the USD due to the escalating debt limit fight here in the states. Seems like Silver gets pushed around more by the USD rising. My guess based on history is that after the debt limit fight USD will drop and the previous up swing of Gold & Silver will continue. I think the time to really buy Gold is when the Fed is lowering rates but I'm not sure when that will happen, maybe in 2024.
Gold has all the usual obvious signs of being at support. I'd issue a word of caution, this can fall further from today's 'dummy bounce.' Not much further down to go from here, but don't be surprised if it drops again and under support. I think cash can drop to about 1920.
Hhhrrmmmppphhh A shit of a commodity to trade, always difficult, one I prefer to leave alone, crypto is even easier to guage direction on than gold or silver. Sticking to original prognosis, just a little more to fall from here then upward, ~1920 was my floor. 100%!
I just try to do covered calls with SLV, RING, GDXJ. Just get some income, while I hope it rises. I try to do way out of the money calls, just in case it takes off big time...