Gold – An Optimistic 2024
Commentary for Friday, Dec 22, 2023 (www.golddealer.com) – Today gold closed up $18.00 at $2057.10, and silver closed down $0.02 at $24.29. Going into the holiday season the gold bulls should be happy enough in that prices this week have moved higher 4 days out of 5. This is not a Christmas rally for our shiny friend, the number of traders that believe the Fed will not raise interest rates next year is growing, and they believe this may portend higher prices for gold in 2024. Reuters however throws up a cautionary flag, “On the physical front, gold demand in India fell sharply due to high domestic prices.” The World Gold Council notes that China and India are the two largest consumers of gold bullion, so this lagging demand is a good reminder that relative price always matters. Still, gold’s 200 Day Moving Average ($2011.00) suggests it is not moving considerably lower anytime soon, and the corollary may be that further price upside is in the cards for 2024. Last Friday gold closed at $2021.10 / silver at $23.87 – on the week gold was higher by $36.00 and silver was higher by $0.42. If you are looking for an unrelated wild card that may change gold’s pricing, consider the presidential election. And let me offer a quote from Clarence Darrow, an early 20th century attorney who gained prominence in the sensational trials of Leopold and Loeb and Scopes. “When I was a boy, I was told that anybody could become President; I’m beginning to believe it.” We will be closed Dec 25th (Monday) and Dec 26th (Tuesday) for Christmas. And Jan 1st (Monday) for New Years.
Please note that FedEx is no longer asking for delivery signatures. They are scanning IDs. We have complained to FedEx, but they remain resolute. Scanned identification is safer, but if you have a problem with this decision, please make your feelings known to FedEx. Unfortunately, the present delivery time for the USPS alternative is 2-3 weeks.
Should you decide to use our Delayed Delivery Program please talk with your service rep and understand how this program works. It is handy if you want to lock in the price “now” and insist on a new product – but is not for everyone. Just like us – you must pay upfront to “lock in” prices and you can’t “change” your mind. So, unless God has blessed you with patience, please ask your rep for other options and thank you for understanding.
On Monday the price of gold rallied in early trading (2034.00). It was also subject to a profit taking round ($2025.00) and a small upward adjustment before settling on the day. Silver followed suit, pushing to daily highs ($23.86) before traders sold the rally and it closed almost unchanged on the day. Gold and silver were helped by a weaker dollar as the Dollar Index has moved from 104.00 through 102.00 since last Tuesday. On this first day of the trading week gold and silver are holding up rather well considering the possible crosswinds and I expect a quiet market throughout the holidays in the absence of any big surprises. Next year this quiet assessment will be revised depending on the latest FOMC guess interest rate policy.
FxEmpire (Vladimir Zernov) – Gold Gains Ground at The Start of The Week – “Gold continues its attempts to settle above the resistance at $2015 – $2025 despite rising Treasury yields. Traders remain focused on dovish Fed, which is bullish for gold. If gold settles above $2025, it will head towards the next resistance at $2065 – $2075. Silver moved lower as gold/silver ratio settled back above the 85.00 level. The nearest support for silver is located in the $23.40 – $23.60 range. A move below $23.40 will push silver towards the support at $22.25 – $22.50. Platinum gains ground as traders react to the continuation of the strong rally in palladium markets. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.”
On the day gold closed up $5.20 at $2026.30, and silver closed down $0.04 at $23.83.
On Tuesday the price of gold remained choppy between $2039.00 and $2047.00 so the bullish sentiment is not hiding under the bed. The fact that traders are buying the dips also bodes well for the gold trade, especially through the holidays. In today’s trade the price of gold began to move sideways around $2045.00 so overhead resistance caps prices to some degree.
Still, the price of gold this past month is higher by $57.00, and this past year gold is higher by $250.00. This may suggest that any fresh bearish problems might prompt an accelerated downward draft as traders lock in profits and move to the sidelines. Silver prices seem a bit lazy trading on both sides of $24.00. Not too hot and not too cold as they say but this market offers long-term investor potential provided by still developing “green programs”.
FXEmpire (Christoper Lewis) – Silver Price Forecast – Silver Stretches Toward The $24 Level – “Silver has rallied slightly during the trading session on Tuesday to reach the $24 level, an area that of course a lot of people will pay close attention to as it is a large, round, psychologically significant figure, and an area where we have seen a little bit of resistance, but we have also broken through their multiple times. At this point, if we can break above the $24.25 level, then silver could really start to take off. That being said, remember that we have seen a massive repudiation of buying at the $26 level, which will of course come into the picture, as a certain amount of “market memory” will come into the picture, showing that the market will almost certainly react in this area. I think there’s a situation where every time we dip, there should be buyers willing to get involved, as they can pick up “cheap silver.” Remember that silver is highly sensitive to the interest rate situation in the bond markets, most specifically the US. The 10-year yield is one that a lot of people pay close attention to, and if those yields continue to drop, it’s very likely that silver will continue to see a lot of upward momentum. After all, traders will do what they can to protect wealth as lower interest rates make bonds less valuable, and therefore precious metal suddenly get a little bit of a 2nd look. Looking at the industrial demand side of silver, a lot of people put heavy weight on the idea of new “green technology” demand coming into the picture to put silver much more in demand. Furthermore, we have to ask whether or not the market is going to continue to see other industrial demand, which of course silver has plenty of. In general, this is a situation where I think you’re looking for dips as buying opportunities with the 200-Day EMA as support, preceded by the 50-Day EMA. I have no interest in shorting silver anytime soon, but I do recognize that as we head into the holiday season, liquidity could cause a lot of volatility.”
On the day gold closed up $12.10 at $2038.40, and silver closed up $0.21 at $24.04.
On Wednesday morning the price of gold remained choppy between $2040.00 and $2030.00. With such a small price spread I would suggest this has turned into a quiet trade, in the holiday season mode. I would not be surprised to see little pricing action through the New Year, but analysts expect this static situation to shift gears as early as March. This remains to be seen but a dovish turn would be bullish for the price of gold, a hawkish turn would be bearish. The price of silver, in my opinion, has the opportunity to decouple from gold next year and proves to be the better of the two investment choices if patience is one of your virtues.
FXEmpire (Christopher Lewis) – Gold Markets Continue to Consolidate – ‘The gold markets pulled back slightly during the trading session on Wednesday, as the $2050 level has offered a bit of resistance, and therefore I think it will be interesting to see if we can break above there. That being said, the market is going to continue to go back and forth between the $2000 level underneath, and the $2050 level above. The 50-Day EMA sits below the $2000 level, which would be a hard “floor in the market” currently. All things being equal, the market is likely to continue to see upward pressure, and I do think that the $2050 level continues to be resistance, but ultimately, I think we have a situation where the liquidity starts to pull out of the market, therefore I think you get a situation where we are more likely than not going to stay in this overall range. That being said, the market is likely to continue to see a lot of noisy behavior, but I do think that overall, the buyers are going to be driving the market. At this point, I am a buyer on dips, and therefore I will look for certain types of short-term drops that I can take advantage of. The $2000 level underneath should be a major support level; therefore, I think we need to pay close attention to it. The 50-Day EMA racing there also brings a lot of people into the market due to algorithms, and therefore I think it’s a situation where the market will continue to see plenty of support. With the market focusing on interest rates, I do think it makes quite a bit of sense that we would see the gold markets continue to move up and down based on that, especially considering that gold tends to do fairly well when interest rates drop, something that we should see during the course of 2024. With that being the case, I think you get a situation where eventually, we break toward those highs that we made a while ago on that huge wipeout candlestick. In general, this is a scenario where I think you cannot be a seller, at least not until we break down below the 50-Day EMA.”
On the day gold closed down $3.90 at $2034.50, and silver closed up $0.31 at $24.35.
On Thursday gold continued its quiet holiday trading mood moving between $2036.00 and $2046.00 and the weaker dollar helped it finish mildly in the green for the day. If economic data does not fade into the first quarter of next year the scenario of possible lower interest rates will likely continue to stoke higher prices in gold. Our walk-in trade at the store has typically slowed as folks embrace the holiday season. The weather continues to be cloudy and rainy in Los Angeles and it is another blessing that Rudolph is guiding Santa’s sleigh!
Reuters (Sherin Elizabeth Varghese) – Gold extends gains after US data spurs Fed rate-cut prospects – “Gold prices gained on Thursday as U.S. Treasury yields retreated after economic data fueled expectations that the Federal Reserve would likely cut interest rates next year. Data showed U.S. gross domestic product increased at a 4.9% annualized rate last quarter, revised down from the previously reported 5.2% pace, while weekly jobless claims increased slightly. “GDP data came in a bit soft and gold charged up. Market is craving the burgeoning Fed pivot,” said Tai Wong, a New York-based independent metals trader. The market expects an 85% chance of a Fed rate cut by March, compared with 79% before the data, according to the CME FedWatch tool. Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar and bond yields. Benchmark U.S. 10-year yields hit a near five-month low. The Fed’s dovish stance has caused markets to price in several rate cuts in 2024. However, some Fed officials have spoken out against imminent rate cuts. Market focus has now shifted to the U.S. core personal consumption expenditure (PCE) report on Friday. “We do believe that gold will continue to maintain price levels above $2,000 and these expectations we have of lowering inflationary pressures will continue to foster the sideways to higher movement in gold,” said David Meger, director of metals trading at High Ridge Futures. In other metals, spot silver gained 0.9% to $24.34 per ounce, while platinum edged down 0.4% to $954.79 and palladium fell 0.3% to $1,192.71. “The fundamental backdrop is stronger for platinum and it should continue to outperform palladium going forward,” BofA said in a research note dated Wednesday. BofA expects rising palladium surpluses under its base case next year, with a possibility of prices falling to a low of $500 per ounce if there are no supply cuts.”
On the day gold closed up $4.60 at $2039.10, and silver closed down $0.04 at $24.31.
On Friday the price of gold edged higher, making its second attempt this month to challenge $2070.00. While the technical guys may be expecting even higher prices next year, I would suggest caution. You could be looking at the early signs of a tired bull market, and the beginning of solid overheard resistance which could drag on for years.
An optimistic view for gold pricing in 2024 is straightforward. Cautious investors are not sure what the Fed has in mind and will consider options. The fact that the physical gold bullion market across our trading desk remains a net buyer at these higher prices supports this conclusion. Also note that a guaranteed US 5% interest rate through 2024 is a safe bet – while these turbulent markets sort themselves out you can relax and tend to less volatile issues.
Reuters (Serin Varghese)) – Gold gains 1% as rising Fed rate cut bets boost appeal – “Gold climbed 1% to a near three-week peak on Friday as the dollar and U.S. Treasury yields slipped on rising expectations that the Federal Reserve will cut interest rates early next year. “Precious metals, including gold, are being driven higher by very aggressive rate cut expectations with the market pricing in a Fed cut in March and a total of 150 bps in 2024,” said Tai Wong, a New York-based independent metals trader. “It’s priced for perfection but the market usually discounts too zealously.” Traders on Friday stuck to the view that the U.S. central bank will start cutting rates in March after government data showed price pressures continued to cool last month. Annual U.S. inflation slowed further below 3% in November and underlying price pressures continued to abate. The dollar index (.DXY) traded near a five-month low, making gold more appealing to foreign buyers. The benchmark 10-year bond yields were close to their weakest level since July. Gold will continue to be helped by weaker Treasury yields and the U.S. dollar index and concerns about a slowdown in the economy, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. “The current technical breakout could really push prices up to that $2,100 level. It could retest those recent contract highs.” On the physical front, gold demand in India fell sharply due to high domestic prices.”
On the day gold closed up $18.00 at $2057.10, and silver closed down $0.02 at $24.29.
Platinum closed up $11.90 at $979.50, and palladium closed down $4.50 at $1212.20.
Brothers and Sisters, thank you for your friendship. If you have unusual circumstances, need cash or a special favor – talk to Harry or Eric. We are now back to our traditional business model. Thank you for your patience. Have a blessed day. Richard Schwary
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