This weeks roundup of Gold bullion prices, news & products.
–Core Bullion Traders Desk.
Read on for your snapshot of this weeks markets with a roundup of Gold Bullion Prices, Products and News.
Gold Prices This Week:
On Monday the gold market, as we move in to a new month, is seeing a renewed push back above $2,000 an ounce. Silver is also performing well as it makes a move back towards $25 an ounce. Gold investors will be watching U.S. data closely this week, anticipating a weakening trend that may help provide some clarity to the Federal Reserve’s open-ended monetary policy stance, with disappointing economic data supporting higher prices.
Tuesday, saw Gold and silver prices down in early U.S. trading. With a lack of major, fresh fundamental news so far this week, precious metals traders are focusing on the key outside markets that are all in bearish daily postures. Trading may remain subdued this week, ahead of the awaited U.S. data point of the week on Friday: the U.S. employment report for July. The key non-farm payrolls number is expected to come in at up 200,000 jobs, compared to a rise of 209,000 in the June report.
On Wednesday Gold prices dropped to a three-week low and tested critical support. This comes as rising risk aversion sentiment in the marketplace is not providing much support for gold as investors continue to react to Fitch Rating’s announcement, downgrading the U.S. government’s long-term debt to ‘AA+’ from ‘AAA. Analysts note that the U.S. dollar and bond yields have benefited from safe-haven flows, which has kept a solid lid on gold prices.
Thursday saw a slight increase in Gold pricing and trading as the key non-farm payrolls number came in at up 187,00 jobs, versus the 200,000 jobs gain that was the consensus forecast, and compares to a revised rise of 185,000 in the June report.
Friday, and Gold prices are up just a bit in early U.S. trading, with silver prices just slightly down, in the wake of a U.S. jobs report for July that came in close to market expectations. It appears the takeaway from the report is that it suggests the U.S. economy is not running too well.
Gold Price Summary….The Low-down:
Precious metals experienced volatility this week, with silver in particular seeing some big price moves. This time last week, gold was $1,979/oz and threatening the key $2,000/oz level but has pulled back to $1,942/oz at the time of writing, a drop of 1.8%. For silver, this has been more pronounced, dropping more than 5.5% from $25.33 to $23.50 currently.
General Markets Summary:
• U.S. government’s credit rating downgraded – Fitch Ratings on Tuesday downgraded the credit rating of U.S. government debt from the highest level, AAA, to AA+, with the ratings agency saying its decision “reflects governance and medium-term fiscal challenges.”
• Jobs down from start of year – The US nonfarm payroll report showed that employers added 187,000 jobs in July, about the same as June’s downwardly revised 185,000.
• BoE hikes interest rates, likely to keep borrowing costs higher for much longer –The Bank of England raised its key interest rate by a quarter of a percentage point to a 15-year high of 5.25%. It warned that rates were likely to stay high for some time,
• UK house prices fall most since 2009; mortgage lending contracts –The UK housing market remained weak amid the highest mortgage rates since 2008. House prices fell 3.8% year over year in July, worse than June’s drop of 3.5%
• Eurozone inflation slows but economy rebounds –Annual inflation in the euro area slowed further to 5.3% in July from 5.5% in June but remained well above the European Central Bank’s 2% target.
The wider outlook for Gold:
A Rise in U.S. Money Supply Could Drive Gold & Silver Prices to New Highs.
In an interview with Kitco News, John LaForge, head of real asset strategy for Wells Fargo Investment Institute, said that Gold and silver have been underperforming commodities in a broad neutral trading range for the last three years. He added that the precious metal market is stuck as investors continue to focus on tightening U.S. monetary policies and the sharp drop in U.S. money supply.
However, LaForge added that with the Federal Reserve nearing the end of its tightening cycle, both Gold and silver could be on the cusp of a long-term bull market as part of the larger commodity super-cycle. He said that it’s only a matter of time before the U.S. central bank starts pumping money back into financial markets to keep the economy from slipping into a recession.
“If we do get this jump back up in Money supply and again and investors start to worry that we are printing too many of these little pieces of paper, we will finally see that long-term run in gold and silver. I would expect that rally to last for three years,” he said.
LaForge added that it wouldn’t take a significant rise in the money supply nor a major shift in U.S. monetary policy to support gold prices at record highs. He added that the market is already sensitive to the government’s massive deficit spending.
The comments come as the U.S. deficit has surged by more than $1 trillion in the last two months since the U.S. government resolved its debt ceiling crisis in early June. LaForge said he expects the deficit to be a significant talking point ahead of the November 2024 elections.
Another potential piece to the gold rally is a further deterioration in the U.S. economy. He added that the Federal Reserve could be forced to expand its balance sheet as smaller regional banks continue to feel the pressure of a weakening economy, rising corporate bankruptcies and tighter financial market conditions due to rising interest rates.
“I don’t think it will take much to wake people up to how fragile the economy actually is. There are a lot of potential little triggers that could create a big move in the market,” he said.
THIS WEEKS PRODUCT FOCUS:
The 1oz Austrian Philharmonic Gold Coin
A 1oz Gold Austrian Philharmonic coin is a prestigious bullion coin produced by the Austrian Mint, known for its exquisite design and rich cultural significance. First issued in 1989, it quickly became one of the world’s most popular gold coins.
The obverse (front) of the Gold Austrian Philharmonic features an elegant and detailed portrayal of the iconic Vienna Philharmonic Orchestra’s Great Organ, found in the Musikverein Golden Hall. The design represents Austria’s profound musical heritage and is a tribute to the country’s contribution to classical music.
On the reverse (back) side, an arrangement of musical instruments commonly used in the orchestra, such as the harp, violin, cello, flute, and French horn, is depicted. This side of the coin symbolizes the harmony and unity created through the power of music.
The 1oz Gold Austrian Philharmonic coin is minted in 1 troy ounce (31.1035 grams) of .9999 fine gold, showcasing its exceptional purity and quality. It is renowned for its precise and intricate craftsmanship, making it a sought-after choice among both investors and collectors.
As legal tender in Austria, the 1oz Gold Philharmonic holds a face value of 100 Euros, although its true value primarily lies in its gold content. Being a government-issued coin, it carries the guarantee of authenticity and is recognized worldwide for its purity and content.
The 1oz Gold Austrian Philharmonic stands as a beautiful representation of Austria’s cultural heritage and excellence in the arts, making it an exceptional addition to any collection or investment portfolio, sought after by both enthusiasts and those seeking a reliable store of value.
Nigel Doolin is Head of Trading at Core Bullion Traders – A gold trading company based in Dublin, Ireland – he can be contacted directly at: nigel@corebulliontraders.ie or Tel: +353 (0)1 447 5975
Disclaimer & Copyright 2023
Although every effort has been made to undertake this work with care and diligence, Core Bullion Traders do not guarantee the accuracy of any forecasts or assumptions. Nothing contained in this editorial constitutes an offer to buy or sell securities or commodities and nor does it constitute advice in relation to the buying or selling of investments. It is published only for informational purposes. Core Bullion Traders does not accept responsibility for any losses or damages arising directly or indirectly from the use of this information or data.
