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Globe and Mail
2 days ago
- Business
- Globe and Mail
One-Minute Analysis: The Bull and Bear Cases for Gold and Silver
My favorite reading involves no beating around the bush. Short and right to the point. Here are one-minute bull and bear cases for the gold (GCM25) and silver (SIN25) markets, followed by my take on the two precious metals' price direction going forward. Bullish Points for Gold and Silver Geopolitics and the corresponding safe-haven demand for gold and silver are still in play. The next geopolitical hotspot to push gold and silver prices higher remains unclear. What we do know is that a geopolitical flare-up is never far away. That will never change. Both metals are still in shorter-term and longer-term overall bullish technical postures. The U.S. Dollar Index ($DXY) remains in a longer-term downtrend, and currency markets tend to see longer-lasting price trends. Central bank demand for gold has been and likely will continue to be robust as many countries around the globe want to move away from the U.S. dollar in their sovereign reserves. China's economy is still shaky, which has prompted more of the Chinese public to stock up on gold due to notions of a weakening Chinese yuan on the foreign exchange market. Bearish Points for Gold and Silver While the technical postures for gold and silver remain overall bullish, there are bearish chart clues that have developed recently to begin to suggest market tops are in place — especially for gold. Also, the gold market is in a very mature bull run, and the bulls may now be exhausted. Improving trader and investor risk appetite in the general marketplace recently is bearish for safe-haven gold and silver. The better appetite is evidenced by price uptrends in the U.S. stock indexes and strong price recoveries from the early April lows. The crude oil (CLN25) futures market has seen its recent price uptrend negated amid reports of slowing global demand for oil. This is due to fears of slowing world economic growth due to trade wars. Crude oil is the leader of the raw commodity sector and when crude starts to sputter, many raw commodity markets do the same. U.S. Treasury yields have been on the rise over the past few weeks, suggesting higher interest rates and diminishing prospects for a Federal Reserve interest rate cut in the coming months. My Bias The longer-term buy-and-hold gold and silver investors can still rest easy. The historical cyclicality of commodity market prices suggests new all-time highs will continue to be made in gold and silver, even if they're down the road a way. Shorter-term gold and silver traders should be more worried. The gold market is showing signs of buyer exhaustion in this major and very mature bull run. Recent rebounds in gold prices on the daily chart have seen the price fail to reach the previous for-the-move highs. That's suggesting a developing price downtrend on the daily chart. My bias is that gold prices have put in a near-term market top — meaning a peak that will last at least several weeks, if not several months. Silver prices have been trading sideways and choppy for the past five weeks, suggesting complacency or even some exhaustion from the silver bulls. I'm not quite as negative on silver as I am gold, on a near-term basis. However, I do think silver bulls will be constrained if gold prices continue to develop a near-term downtrend. I'll bet I've overlooked a bullish or bearish point or two. Tell me what you think. I really enjoy getting email from my valued Barchart readers all over the world. Email me at jim@
Bloomberg
3 days ago
- Business
- Bloomberg
Bond Traders See Treasuries Selloff Going Even Further
Traders rattled by the rout in long-dated Treasuries are turning more bearish as yields continue to oscillate around a key 5% psychological threshold. A JPMorgan Chase & Co. survey of traders released Wednesday spotlighted that investors expect the selloff to worsen, keeping yields elevated in the $29 trillion Treasury market. The survey's all-client category for outright short positions — which includes central banks, sovereign wealth funds, real money and speculative traders — has climbed to the most since around mid-February.
Bloomberg
19-05-2025
- Business
- Bloomberg
Here's Proof That the Fed Needn't Fear a Tokenized World
A new report demonstrating that central banks can port their monetary policy tools into a tokenized financial system is an important step in transforming how we trade securities including stocks and bonds. There's never been a shortage of cryptophiles saying, 'Of course central banks can run monetary policy with tokens,' nor of conservative bankers saying, 'I'll believe it when I see it.' The report from the Bank for International Settlements and the Federal Reserve Bank of New York is not just one more opinion added to the mix, the authors actually built the necessary tools and tested them in 10 financial stress environments.
Bloomberg
16-05-2025
- Business
- Bloomberg
Basel Committee Resists US Pressure to Downplay Climate Risk
US efforts to rein in the Basel Committee's focus on climate risks were met with a rare show of resistance this week, according to people familiar with the matter. At a closed-door meeting that took place on Monday, the heads of the central banks and regulators that make up the Basel Committee on Banking Supervision rejected a proposal to dissolve the taskforce overseeing climate work, said the people, who asked not to be identified disclosing confidential conversations.
Zawya
13-05-2025
- Business
- Zawya
Fed tests limits of 'wait and see': McGeever
(The opinions expressed here are those of the author, a columnist for Reuters.) ORLANDO, Florida - A split is emerging between the Federal Reserve and other major central banks as they try to assess the economic impact of the rapidly shifting global trade war. The Fed has kept interest rates on hold in the face of rising inflation risk, while many of its peers are cutting to cushion the blow from the looming growth slowdown. The Fed's cautious stance runs the risk of leaving Chair Jerome Powell and team behind the curve once again. With its decision last week to leave rates unchanged, the gap between the Fed's and European Central Bank's respective policy rates is the widest in more than two years. U.S. interest rates have not been higher than Canada's since 1997. Powell said last week he and his colleagues could afford to maintain a patient policy stance because the U.S. economy was, on the face of it, still in good shape. Growth and the labor market are strong, and inflation is reasonably close to their 2% target. The costs of waiting were "fairly low", he told reporters after the Fed left policy unchanged. "We can move quickly when appropriate. But there's so much uncertainty ... I can't really give you a time frame on that." The inference here is that any economic damage from delaying the resumption of its easing cycle - remember the Fed cut rates 100 basis points between August and December of last year - will be neutralized by more aggressive moves later. That may be wishful thinking. While Powell is correct that the "hard" economic data, like unemployment and retail sales, remains fairly healthy, "soft" data such as sentiment surveys right now are "about as dark as it gets," according to Moody's chief economist Mark Zandi. And confidence has a direct impact on consumer, business, and investor spending. It's tough to predict exactly how strong that link is right now, as it has weakened since the pandemic. But by the time the Fed detects serious deterioration in the "hard" data, underlying growth has probably already cooled meaningfully, meaning it may be too late to prevent a recession. EXPORTING INFLATION To be fair to Powell, the cautious U.S. stance is more reasonable when viewed through an inflation lens. U.S. inflation expectations are significantly higher than those elsewhere as consumers brace for a steep rise in prices later this year due to incoming import tariffs. These expectations may shift following news on Monday of a significant de-escalation in U.S.-Sino trade tensions. But even after trade agreements are reached, America's average effective tariffs will still be the highest in decades. And more than 75% of companies surveyed by the Fed have stated they will be passing cost increases along to consumers. And if the U.S.-China ceasefire doesn't hold, Beijing would almost certainly redirect its shipments of cheap goods previously bound for the U.S. to the rest of the world. All else being equal, that would put upward pressure on inflation in the U.S. while exerting downward pressure in other developed economies. This may largely explain the Fed's more cautious and reactive stance. 'EXCESSIVE UNANIMITY' "The Fed suffers from excessive unanimity disease," says Willem Buiter, former rate-setter at the Bank of England. He argues that there is a tendency among central banks to be "excessively gradualist" when it comes to changing rates. If policymakers know their end goal, he says, they should try and get there as quickly as possible without sparking unwanted financial market volatility. The trouble is the Fed doesn't have an idea of what its end goal is because of the fog of uncertainty Trump's trade war has created. Powell refused to definitely say which side of the Fed's employment and inflation dual mandate he and his colleagues consider the bigger risk to the economy. Even in the best of times, setting policy is an uncertain science and vulnerable to the vagaries of Milton Friedman's "long and variable" lag. "You never get it quite right – you're either too fast or too slow," says Steve Dean, Chief Investment Officer at Compound Planning. Investors don't seem to be too worried right now about the policy stasis, especially given the increasingly positive news on the trade war front in recent weeks. Wall Street has fully recovered the ground lost immediately after April 2. And if the trade war fog clears up, the Fed will be in a better position to act, perhaps justifying Powell's "wait and see" approach. But we may need to wait another 90 days to find out. (The opinions expressed here are those of the author, a columnist for Reuters) (By Jamie McGeever; Editing by Alex Richardson)
