Commentary for Friday, Nov 1, 2024 (www.golddealer.com) – Today gold closed up $0.30 at $2738.60, and silver closed down $0.11 at $32.54. An interesting week in the metals as price volatility was featured and people wonder if today’s almost unchanged close suggests that investors did buy Thursday’s weakness. The weak close is confusing but investors did “buy the dip” for sound reasons. Gold’s technical picture remains solid. This close does not feel or look like a typical bear trap. It may in fact be a combination of bargain hunting and profit taking as traders climb that “wall of worry”. Will there be continued “settling”? Probably, we are coming off all-time highs, which is an ideal place for “backing and filling”. For now, however, it makes sense to ignore this “transitory noise”, because the “bigger picture” supports further gains over time. It is not a stretch for example to expect $3000.00 gold in 2025. It’s time to “fall back” as Daylight Savings time ends this Sunday. Last Friday gold closed at $2740.90 / silver at $33.60. On the week gold was down $2.30, and silver was lower by $1.06.
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 moved on the quiet side, between $2725.00 and $2744.00, as traders take time to assess bullish sentiment. Has the Israeli battle plan begun to de-escalate in the Middle East as Israel did not attack Iranian oil or nuclear facilities? Also consider the Ernest Hoffman (Kitco) headline – Wall Street and Main Street rein in their optimism on gold prices for next week – “After delivering one of its strongest weekly performances of the year last week, gold picked up right where it left off, but a midweek stall after fresh all-time highs has market participants more divided on the yellow metal’s near-term direction.” And China’s demand for bullion may be weakening at these record high prices. “The last two years have seen China purchase more than 2,800 tons of gold from overseas location, which according to Bloomberg, is more than all the metal that backs exchange traded funds (ETFs) around the world or about a third of the stockpiles held by the United States. At the same time, Reuters suggests that “China’s central bank pauses gold purchases for a fourth month in August”. The above data may suggest that traders are reassessing bullish sentiment. Which makes sense in the longer run and could lead to a less aggressive, yet more predicable pricing structure for gold in 2025. One that would suggest higher prices over the long term and at the same time one that could coexist with a “lower interest rates” which are compatible with lower inflation.
Reuters (Anushree Ashish Mukerjee) – Gold retreats as investors await US economic data – “ Gold prices eased on Monday, weighed down by a firmer dollar and higher Treasury yields while traders await a slew of U.S. economic data for guidance on the U.S. Federal Reserve’s interest rate stance. Spot gold lost 0.5% to $2,732.98 an ounce by 1230 GMT. Bullion hit a record high of $2,758.37 last Wednesday, lifted by safe-haven demand in the face of market risks from continuing conflict in the Middle East and Ukraine. The dollar index was on track for its best month since April 2022, with the currency’s strength making gold less attractive for buyers holding other currencies. Yields on benchmark 10-year Treasuries , meanwhile, rose to a three-month high. “Prospects of lower U.S. interest rates have room to support further investment demand and lift gold prices. We look for gold to hit $2,900/oz in 12 months,” said UBS analyst Giovanni Staunovo. Major data due this week includes ADP employment on Wednesday, U.S. Personal Consumption Expenditures (PCE) numbers on Thursday and Friday’s payrolls report. Traders see a nearly 97% chance of an interest rate cut of 25 basis points by the Fed in November, which would provide further support for non-yielding gold. On the physical front, Chinese gold consumption dropped 11.2% year on year in first three quarters of 2024 as high prices dented demand for jewelry, the state-backed gold association said. “While physical demand in Asia, particularly in China, has been weak lately, I guess the focus when it comes to gold demand is shifting from East to West,” Staunovo added. Spot silver was down 0.8% at $33.42 an ounce and platinum lost 0.3% to $1,019.30. Palladium eased 0.6% to $1,186.73, having hit a 10-month high in the previous session after the news that the United States asked Group of Seven allies to consider additional ways to restrict Russian revenue from the metals sector by exploring restrictions on palladium and titanium.”
On the day gold closed up $2.00 at $2742.90, and silver closed up $0.23 at $33.83.
On Tuesday the price of gold opened choppy, dipped then quickly moved to session highs of $2770.00 for several reasons. The labor market appears to be weakening. This is according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) data. The race for President is also uncertain, increasing political tension, which must underpin safe haven demand for bullion gold and silver. The technical picture for gold and silver remains solid which encourages the momentum traders. The Dollar Index is also solid, moving higher by 3 points this past month. This suggests that higher gold prices and a stronger dollar may be able to coexist – a big positive for bullish sentiment. Finally, the CME’s Fed Watch Tool suggests a whopping 95% chance of a 25 basis point cut in interest rates by the Fed in November. The only negative on the horizon is that traders might create a weak “overbought” argument for gold. But insiders see higher gold prices through the holiday season with the possibility of fresh record prices in 2025.
Reuters (Anushree Ashish Mukherjee) – US election uncertainty, rate cut bets pin gold near record levels – Gold prices hovered near all-time high levels on Tuesday, aided by U.S. election uncertainty and expectations of an interest rate cut by the U.S. Federal Reserve in November, while focus was also on a series of economic data. Spot gold was up 0.3% to $2,750.87 per ounce as of 1114 GMT, just shy of a record high of $2,758.37 hit last Wednesday. U.S. gold futures gained 0.3% to $2,763.40. “Gold bulls appear to be taking advantage of the recent pause in the U.S. dollar’s and yields ascent, while still enjoying the tailwinds from Fed rate cut expectations and U.S. election risks,” said Han Tan, chief market analyst at Exinity Group. “Gold should retain its upward bias and may even flirt with $2,800 in the days ahead, as long as U.S. election risks continue weighing on market sentiment while Fed rate cut expectations remain intact.” With the Federal Reserve’s rate decision due on Nov. 7, investors will be scrutinizing U.S. job openings at 1400 GMT, ADP employment on Wednesday, U.S. Personal Consumption Expenditures on Thursday, and payrolls report on Friday to gauge their influence on the U.S. central bank’s move. Markets are pricing in about 95% chance of a 25-basis-point rate cut by the Fed in November, according to CME’s FedWatch Tool. Bullion thrives in a low interest rate environment and is considered a hedge against political and economic uncertainty. Competition between Republican Donald Trump and Democrat Kamala Harris remains tight ahead of the Nov. 5 presidential election. From the technical point of view, the Relative Strength Index currently at 69 suggests that the gold price is approaching the “overbought” territory, starting at 70. Spot silver was up 1.3% to $34.13 per ounce and platinum rose 1.8% to $1,051.25. Palladium rose 1.4% to $1,236.00, after hitting a 10-month high on concerns over sanctions on top producer Russia.”
On the day gold closed up $25.50 at $2768.40, and silver closed up $0.44 at $34.27.
On Wednesday gold was choppy between $2770.00 and $2788.00 finishing the day mildly in the green. So, $2800.00 gold is on everyone’s mind. Its rapid ascent, however, has introduced caution in the paper trade because prices are now well above their 50 Day Moving Average ($2614.00). Insiders expect chop and noise which may be offset by both increased Middle East safe haven demand and rising political tension created by the coming Presidential election.
Still, we are ahead of ourselves relative to pricing given the 50 Day Moving Average so it’s smart to at least expect trouble even as the metals have scored major gains this year. Insiders believe higher prices for both gold and silver are in the cards next year given the expected lower interest rates and continued safe haven demand. I don’t expect changes in the monstrous US deficit spending regardless of who is elected our next President, another bullish plus.
FXEmpire (James Hyerczyk) – Gold Reaches New High on Safe-Haven Demand Amid U.S. Election Uncertainty – Gold reached a record high of $2,789.86 on Wednesday before pulling back slightly, with traders focused on upcoming U.S. economic data, including today’s ADP Employment Change and Advance GDP reports. This fresh high reflects heightened demand for gold as a safe-haven asset amid political and economic uncertainties, particularly as the U.S. presidential election enters its final days. With polls showing a tight race between Republican former President Donald Trump and Democratic Vice President Kamala Harris, investors are bracing for potential volatility, with gold positioned to benefit from its safe-haven appeal. Technicals Indicate Market Vulnerability Despite Uptrend – Gold’s technical outlook remains strongly bullish, with the main trend pointing upward as long as prices stay above the swing bottom at $2,708.76. However, the market’s rapid ascent has left it trading well above its 50-day moving average of $2,614.60. The widening gap between gold’s current price and this moving average increases the likelihood of a potential bearish reversal pattern, as the market becomes more susceptible to pullbacks in the event of a reversal or correction. A close below the 50-day average would likely signal a downward shift, making this a critical level for traders monitoring technical signals. Fed Rate Cut Speculation and Dollar Weakness Fuel Gains – In addition to political uncertainty, anticipation of a Federal Reserve rate cut has bolstered gold’s appeal. With expectations that the Fed will reduce short-term borrowing costs by 0.25% in response to softening job market data, the prospect of lower interest rates is adding upward pressure on gold. Given gold’s tendency to perform well in low-interest environments, the potential for further rate cuts could sustain support for the metal, especially with the U.S. dollar showing persistent weakness. Strong Investment Demand Boosts Gold, Offsetting Weak Jewelry Sales – So far in 2024, gold has surged 35%, putting it on track for its best annual performance since 1979. Investment demand remains robust, counterbalancing a decline in jewelry sales, according to the World Gold Council (WGC). Global gold demand, excluding over-the-counter trading, held steady year-over-year at 1,176.5 metric tons in Q3 as higher investment volumes offset weaker jewelry demand. However, the WGC also projects that gold demand in India, traditionally a major consumer of the metal, may fall to a four-year low in 2024 due to economic factors and changing consumer preferences. Outlook: Bullish Near-Term Bias with Potential for Volatility – Gold’s outlook remains bullish in the near term, supported by election-driven safe-haven demand and expectations of a Fed rate cut, both of which align with gold’s positive performance in uncertain times. Traders should, however, remain cautious of potential volatility due to gold’s elevated level relative to its 50-day moving average. A failure to sustain support above this technical level could lead to corrective price action, but overall, gold prices are likely to continue benefiting from the unique alignment of low-interest rate expectations, dollar softness, and geopolitical uncertainties.”
On the day gold closed up $20.10 at $2788.50, and silver closed down $0.36 at $33.91.
On Thursday the price of gold dipped significantly in the early trade bottoming around $2737.00. Frankly the suddenness of such a large drop in prices is a wakeup call and a big disappointment to bullish sentiment after yesterday’s close to the upside. It will be difficult this early on to pinpoint the reasoning behind this $50.00 dip because of the many cross currents.
But they could be the result of cooling tension in the Middle East, rising “too fast and too soon” sentiment, or simply a round of profit taking. If traders buy this dip, it suggests that the underlying bullish sentiment has not been damaged. This is the likely outcome given the strong technical picture. If prices do not quickly consolidate, further settling could lead to a test of support and perhaps lower prices. Answers to these questions will likely have to wait until next week. But with the Presidential election right around the corner expect further volatility.
Reuters (Anjana Anil) – Gold consolidates after climbing record peak, eyes fourth straight monthly rise – “Gold retreated on Thursday as prices consolidated after hitting a record high, but safe-haven demand prompted by a knife-edge U.S. presidential election kept the precious metal on track for its fourth straight monthly gain. Spot gold was down 0.7% at $2,766.59 per ounce by 9:35 a.m. ET (1335 GMT), after hitting a record high of $2,790.15 earlier in the session. Prices have firmed around 5% for the month so far. U.S. gold futures dipped 0.8% to $2,777.20. “You’re going to see a bit more consolidation. We have a lot of major impactful news next week. The U.S. election on Tuesday, Fed meeting on Wednesday. So it’s really not surprising to see some traders take profits,” said David Meger, director of metals trading at High Ridge Futures. Opinion polls show that Republican former U.S. President Donald Trump and Democratic Vice President Kamala Harris are neck and neck in the highly anticipated race to the White House. Underlying forces spurring demand for gold include geopolitical tensions and uncertainties about the outcome of the election, with the market remaining in a “buy-on-dips” mode, said StoneX analyst Rhona O’Connell. “Gold and the (U.S.) dollar are acting together as safe havens, which is not unusual in times of strife.” Gold is considered a safe investment during economic and geopolitical turmoil due to its ability to store value. Data showed the U.S. personal consumption expenditures (PCE) price index increased 0.2% in September after an unrevised 0.1% gain in August. Economists had forecast PCE inflation climbing 0.2%. Investors now await the payrolls report on Friday and see a 96% chance of a quarter-basis-point rate U.S. rate cut next week, which would further benefit non-yielding gold. Spot silver fell 1.8% to $33.19 per ounce. It is up more than 6% for the month. Platinum shed 0.4% to $1,004.60. Palladium was down 1.8% at $1,126.74, headed for its best month since January 2022.”
On the day gold closed down $50.20 at $2738.30, and silver closed down $1.26 at $32.65.
On Friday the price of gold moved between $2760.00 and $2742.00. An interesting close to a volatile week of trading. You could make a case that traders did, indeed, buy Thursday’s weakness but quickly faded and gold moved to session lows, finishing the day almost unchanged. The good news is that traders bought weakness, the bad news is that investors are still unsure as to whether Thursday’s significant loss in price will create an unstable trade on the shorter term. I would not overemphasize the importance of this week, given the wider scale of geopolitical uncertainty and subsequent safe-haven demand. Ceasefire hopes fade as Israel bombards Gaza, Lebanon (Reuters). And increased central bank interest in restocking gold reserves, and the still uncertain outcome of the presidential election. This week’s sudden price volatility will slow recent bullish enthusiasm. In my opinion it will not hinder higher prices in the metals to any great degree, especially in the longer term.
Reuters (Anjana Anil) – Gold prices rise as dollar, yields fall after US nonfarm payrolls – “Gold gained on Friday, recovering from the losses in the previous session, as the dollar and Treasury yields weakened after data showed U.S. job growth slowed sharply in October. Spot gold rose 0.5% to $2,757.25 per ounce by 10:00 a.m. ET (1400 GMT). Prices fell 1.5% on Thursday as some traders took profit after bullion hit a record high of $2,790.15. U.S. gold futures rose 0.6% to $2,767.80. “The biggest factor this morning is the terrible jobs report that came out of the U.S … naturally in the environment that we’re in, with rates, debt concerns, and worry, gold is right back up,” said Bob Haberkorn, senior market strategist at RJO Futures. U.S. job growth last month was affected by disruptions from hurricanes and strikes by aerospace factory workers. After the report, the dollar erased earlier gains to trade lower, while benchmark 10-year yields also dipped. However, the unemployment rate held steady and economists expected the Federal Reserve to sort through the noise and cut interest rates by 25 basis points next week. “I think (prices) will stay elevated all day long going into the weekend ahead of the U.S. election and also with talks of an Iranian retaliatory strike on Israel,” Haberkorn said. Opinion polls indicate a close race between Donald Trump and Kamala Harris in the Nov. 5 U.S. presidential election. Saxo Bank said despite a less dovish tone following a number of strong economic data prints, the Fed is still expected to cut rates on Nov. 7, potentially supporting additional demand for bullion-backed exchange-traded funds. High gold prices, however, continue to affect physical demand in major Asian regions. Gold consumption in China fell 11% in the first nine months of 2024. Among other metals, spot silver was up 1.1% at $33 per ounce. Platinum gained 1.6% to $1,003.90, while palladium added 2.1% at $1,129.01.”
On the day gold closed up $0.30 at $2738.60, and silver closed down $0.11 at $32.54.
Platinum closed up $3.50 at $995.10, and palladium closed down $2.70 at $1103.80.
Brothers and Sisters, thank you for your friendship. If you have unusual circumstances, need cash or a special favor – talk to Harry or Eric or Ken Slater. We are now back to our traditional business model. Thank you for your patience. Blessings. Richard Schwary
Risk Disclosure – The content in this newsletter and on the GoldDealer.com website is provided for informational purposes only and our employees are not registered financial advisors. The precious metal and rare coin markets are random and highly volatile so they may not be suitable for some individuals. We suggest before deciding on a course of action that you talk with an independent financial professional. While due care has been exercised in development and dissemination of our web site, the Almost Famous Gold Newsletter, or other promotional material, there is no guarantee of correctness so this corporation and its employees shall be held harmless in all cases. GoldDealer.com (California Numismatic Investments, Inc.) and its employees do not render legal, tax, or investment advice.