Ray Dalio still believes in gold (2)

The main reason for declining interest and appetite for gold is the fact that the noble metal does not fulfill its function of a protection asset. Gold prices dropped in February after massive sell-offs on the stock markets, continuing to fall over the next few months, amid the recovery of indices aimed at testing their peaks.
In addition, the appreciation of the dollar, in the midst of two Fed interest rates, was another factor triggering a fall in the price of gold.
The strong growth of the US economy, in an almost full employment environment, allows the Fed to think of two more interest rates this year.
Of course, there are serious prerequisites for the Fed to refrain from one of the two potential interest rates, in a climate of global geopolitical uncertainty and the growing trade war between the US and China.
Gold broke the key level of support at $1,205 and went down to the next major $1,194 support. At this stage, the latter level manages to limit the further depreciation of the "yellow metal". According to technical analysts, however, a break of $1,194 may open the way for a further decline to $1,181 an ounce.

Ray Dalio still believes in gold (1)

The billionaire investor and founder of the world's largest hedge fund, Ray Dalio, retains his belief in gold. That happens, despite the sharp decline in the metal, which today reached a new low for the last one over a year - down to less than $1,290 per ounce.
Dalio, who runs the Bridgewater Associates, has kept its stake on the two largest index-traded funds on gold by June 30, despite the fall in the metal.
By today, Dalio has 3.9 million shares of the largest exchange-traded index fund based on the gold price of SPDR Gold Shares and its 11.3 million shares in the second largest fund - iShares Gold Trust, according to data of regulators.
For the three months until the end of June, investors in gold-based index funds recorded serious losses, resulting in more than $1 billion in both funds being withdrawn. This was also the first quarterly outflow of funds from the gold funds since 2016.

The dollar is rising, the metals are collapsing

Contrary to popular beliefs that the dollar is cheaper in times of trade wars, we are seeing the extraordinary strength of the US currency. Earlier this morning, the euro fell to 1.1560 against the dollar and is about to test the critical support at 1.1500. What will happen after this test will most likely depend on the medium-term movement of the single currency.
Otherwise, green money reached a 14-month high against the yuan. China urged a vengeance on Thursday if the US threatens to raise tariffs on exports of Asian-produced goods after US President Donald Trump instructed his trade officials to consider raising customs duties on imported Chinese goods from 10 to 25% of Chinese goods for $200 billion.
But as the US imports much more from China than China from the US, investors see the deployment of the trade war, causing worse trouble for the Chinese economy.
Serious problems due to the appreciation of the dollar have metals. Gold went down this morning near the psychological limit of $1,200 per ounce. Silver is traded at 16.20 dollars per ounce and platinum at $823.

Gold imports to India declined by 39%

India, the world's second-largest gold user, after China, reported a 39 percent drop in gold imports for the first five months of the year. The data are extremely disappointing and come at an extremely inappropriate time for gold.
The noble metal fails to find its way up, despite the trade war between the US and China, after the entry of reciprocal customs duties on goods worth over $30 billion.
The strong dollar also does not particularly support the price of gold to which the "yellow metal" is in a negative correlation. A traditionally strong dollar is associated with a weakness in the performance of gold.
Imports of India, which almost entirely fuel demand in the country, are considered a serious indicator of metal demand. This is something that gold traders are watching very closely.
The weak rupee since the beginning of the year, which makes gold relatively more expensive for Indian consumers, also largely determines the weak demand for the metal.

Gold below $1300

Quotes of gold fell sharply in trading on Tuesday, losing more than $15, overcame key support for 1300 and reached $1292 per troy ounce by the end of the session.
The yield of US ten-year bonds rose to a maximum over the past seven years, reaching a growth rate of 3.05%. For the first time since 2008, the income from investments in US government securities has become comparable to the yield of the stock market. Retail sales in the US grew by 0.3% in April, as predicted. On an annualized basis, retail sales grew by 4.7%, while expenses outstripped inflation, which was 2.5%. From the speeches of representatives of the Fed in recent days, it was possible to conclude that the regulator can raise the interest rate above 3%, which will lead to even greater growth in yield bonds.
The World Bank published its forecast for 2018, according to which the price of gold could strengthen by 3% due to the increased investment demand for the asset, primarily from the Central Banks of different countries. In the medium term, demand for precious metals will decline due to the improvement of the overall political and economic situation in the world and the growth of interest in alternative investments.
Gold for the first time in a few months managed to overcome the lower limit of the trading range of 1300 dollars. The development of further impulse of decline will depend on the nearest economic releases of the US and further geopolitical conflicts in the Middle East.

Interest rates on 10-year US government bonds again over 3%

Interest rates on 10-year US government bonds rose again above the exceptionally high level of 3%. This has led to a new appreciation of the dollar against other major currencies, and especially against European currencies.
Interest rate hikes are in the midst of new concerns about the breakdown of US-China talks. There are concerns that trade clash and war between the two sides is inevitable.
This is expected to trigger a rise in inflation and hence lead to a stronger rise in interest rates than current expectations.
Otherwise, the rise in the dollar has already had a very negative impact on the levels of metal trade. Gold went back to trading at $1,310 and platinum and silver fell to $903 and $16.30 per ounce.
Interest rates on 10-year US government bonds rose 2.3 basis points to 3.018 per cent on an annual basis, while those on 30-year bonds added 1.9 basis points to 3.148 per cent on an annual basis.
The popular interest spread between 2 and 10-year bonds remained at a level of 46.6 basis points, or close to its lowest levels in nearly a decade.
It is precisely the potential reversal of the interest rate curve, James Bullard warned yesterday. According to him, the interest rate curve may gain a negative slope at the end of this or early next year.

Platinum and silver became even cheaper than gold

Platinum and silver continue to fall cheaper than gold. Indeed, yesterday, platinum was threateningly approached the psychological limit of $900 per ounce. Silver tried to test its bottom at $16.15.
And while at this stage both metals are able to hold on to the important support, a breakthrough could initiate extremely massive sales and closing down long positions after triggered stops.
It is quite possible to see spikes in platinum and especially in silver, which is extremely volatile and is traded at relatively weak volumes.
Such a spike can safely take the silver with a dollar, and why not with a dollar and a half down. Recall that there are plenty of holidays in many places around the world, which would further weaken the liquidity.
So, all investors should be extremely careful. Meanwhile, we see how the platinum-gold ratio is already close to its record bottom after it is at a level of 0.6870.
At the same time, the gold-silver ratio is at a level of 80.5, which is also extremely high, according to historical standards.
By comparison, in the long run, this ratio was about 40, as every time when it reached this level, it rebounced above the psychological limit of 80.

Gold descends from its top

The price of gold fell on Thursday, returning from its one-week maximum, after reducing the risks of a US-China trade war.
The spot price of the metal lost 0.6 percent of its value to a level of 1 324.96 dollars per ounce, compared with a one-month high of $1,348 on Wednesday.
Gold futures fell 0.6 percent to $1,328.50 per ounce.
After the investors pulled out of gold, the dollar rose during the Asian session, and the Asian indices pushed back from their two-month bottom.
The fall in the dollar indicates that traders take their profits, taking advantage of the growth on a short-term basis.
Gold is often used by investors as a rescue island in difficult times such as the one in which there was a danger of a trade war between the US and China. The metal, however, tends to become cheaper when the situation improves.
The spot price of gold reached bottom at 16.24 dollars per ounce.

Gold broke off its big weekly downturn

Gold rose on Monday due to the weakness of the dollar. The spot price of the precious metal added 0.4% to its value to a level of 1,333.74 dollars at which levels are traded earlier today.
Last week, gold fell 1.4%, which was the biggest price depreciation for two and a half months.
The dollar index fell 0.1% on the first day of the week, which helped raise the price of metals and, in particular, gold.
Gold futures with delivery in April rose by $4.9 to $1,335.20 per ounce.
Gold is very sensitive to rising interest rates in the United States. Investors' expectations are that the central banks of the UK and Europe will also resort to interest rates.
The price of gold was also supported by the lunar new year in China.

Gold with a third consecutive drop

Gold prices dropped for a third consecutive trading session yesterday after the dollar pushed from its three-year minimum in the past week. Investors await the protocols of the Fed meeting later this week for more clarity about the future policy of the reserve.
The spot price of gold fell 0.6%, or its biggest daily decline in two weeks. The noble metal traded at levels of $1 339 per ounce.
Gold futures fell 1.2% to $ 1,340.40 an ounce, marking its biggest daily decline since November 2017.
The dollar index, following the US dollar's performance against a basket of six major currencies, rose 0.5 percent to 89.544 points. It dropped to 88,253 points last week, which was its lowest value since December 2014.
The US currency has shown signs of deprivation after some investors bought the dollar after its record sales last week.
Last week was the best gold for more than five months when the metal added 2.4% to its value as a result of rising US inflation and declining tensions.
The spot price of gold is expected to find strong support at a level of $1,326 per ounce.

Gold demand in India will remain weak

Gold demand in India is expected to remain below its 10-year average value for the third consecutive year in 2018. Higher taxes and new transparency rules for metal purchases are among the main reasons for these forecasts, according to a World Gold Council (WGC) analysis.
India is the second largest consumer of gold and weaker metal demand there may trigger downward pressure on gold, some experts predict.
Gold rose 8% since mid-December, despite the fall in metal imports to India, which, incidentally, helped reduce the country's trade deficit.
Consumption of gold this year in India is expected to be between 700 and 880 tonnes, compared with 727 tonnes in the past year. Over the past 10 years, the consumption of gold in India amounted to 840 tonnes on average.
Demand for the yellow metal is likely to be low as a result of the additional metal tax in 2017 and additional measures to track gold purchases.
In July of last year, the gold tax was raised from 1.2 to 3%, with gold buyers already having to disclose their tax code when buying gold at high value.
The government's actions have seriously affected small jewelery stores, which account for nearly two-thirds of total gold sales in India.
According to well-known sources, there are still some changes that could further affect the consumption of gold in India.
Gold has an extremely important place in Indian culture, and it is a major way of saving hundreds of millions of people in the third largest Asian economy.
Gold demand rose 9 percent in 2017 to 726.9 tonnes after demand for jewelery business rose 12 percent on an annual basis.
A serious problem for the business is the illegal import of gold. According to country statistics, illegal gold of 120 tonnes was imported in the past year. The same amount is expected to enter smuggling this year.

Gold with a third consecutive drop

The price of gold fell yesterday, which was its third consecutive session of loss. In spite of the fall in stocks and indices.
Gold with delivery in April fell by 7 dollars, or 0.5% to 1 329.50 dollars per ounce, after a decline on Monday. Earlier in the day, the price of gold rose to $1 349.30 per ounce.
There is no guarantee of rising gold when asset prices fall. In fact, the metal may decline as a result of sales by portfolio managers who close positions to cover losses from other positions. But this is part of the role of gold as insurance because it offers deep and unique liquidity.
US stocks rose somewhat on Tuesday, after exclusive Friday and Monday auctions, when the biggest daily drop of Dow index was recorded in its history. The index lost more than 1,100 points on the first day of the new week.
Despite the depreciation of assets, gold does not play a rescue asset because there is no real panic on the market, according to Naemie Ashlam, chief market strategist at ThinkMarkets.
According to the expert, if the panic of the market was a factor, we had to see a very strong growth in the price of gold and other precious metals.
In addition, the dollar's strength also hurt the performance of gold and other assets.

Gold with a second consecutive decline, after the appreciation of the dollar

Gold fell for a second consecutive session on Tuesday after the dollar gained, and interest rates on US bonds rose. Meanwhile, investor's attention is almost entirely focused on the Fed's forthcoming decision and Fed guidelines on interest rates at the end of the two-day meeting that begins today.
The spot price of gold fell 0.3 percent to 1 335.93 dollars per ounce after yesterday lost 0.7 percent of its value. Since the beginning of the month, gold has appreciated by 2.5%, mainly due to the weakness of the dollar.
It was the strengthening of the dollar, however, one of the main reasons for the rise in the price of gold and other precious metals.
Among market participants, there is an expectation that if the spot price of gold overcomes support at $1 335 per ounce, it may continue to fall to the next $1,316 key support.

The prospects for precious metals in 2018

For next year the price of gold is expected to be far more volatile then in 2017, according to Georgette Boyle, an analyst at ABN Amro. The reason for this will be the ambiguity about the Fed's interest rate policy as well as the reduction in balance.
Otherwise, the prospects for gold are positive from a technical point of view after the metal has shed its 100-day moving average during the past week, at a level of $1,295 per ounce. While the metal is traded above this level, it is completely possible to see its further rise to $1,350 per ounce, market observers say.
For other metals, palladium is the best-performing metal, reaching its highest level since February of 2001. Palladium deals with an unusually high premium over other metals such as platinum.
Platinum rose 3% this year and silver only 6%. It is quite possible that this will give them a good catch-up potential for next year, according to analysts.

The gold with the highest growth in three years in 2017

Gold continued its rise to a three-month high on Friday, which helped it mark its biggest annual increase in three years. To a large extent, the weakness of the US dollar and the recent political tensions contributed to the rise in the price of precious metal.
The dollar recorded its worst year against the rest of the major currencies since 2003, following North Korea's tensions and continued record low inflation.
The dollar index reached a three-month minimum on Friday. Traditionally, the price of gold is rising when the dollar becomes cheaper.
After all, gold ended the year at levels above $1,300, marking a momentum of $1,307.60 per ounce at the end of last week.
Or the rise for the yellow metal was 12% for the year. And, although exceptional, this result is close to half of the performance of some of the leading US indices.
Returning to the last Fed meeting, despite the rise in interest rates by the reserve, there was a less aggressive tone in terms of the future policy of raising interest rates, according to analysts. This further contributes to the appreciation of precious metals.

Gold rose

Gold appreciated yesterday as a result of continuing uncertainty as to when tax reform will be presented. This weighs on the dollar and initiates a rise in precious metals.
The dollar index was down, which was a good news for gold. Traditionally, the price of gold is in reverse correlation with the level of the dollar.
If the tax reform sees the world, it is possible for the price of gold to fall, but only for a moment.
Expectations that the tax reform will trigger economic growth, and this will lead to inflation and appreciation of the dollar, generally discourage gold from more serious growth, commented market observers.
The spot price of gold added 0.5% to 1 261.30 dollars per ounce. Metal futures added 0.6 percent to $1,264.40 per ounce.
For the next year, it is expected the price of gold to drop by between $25 and $50, due to good prospects for the US and world economy, Fed's rising interest rates, and the potential rise in the dollar.
In the first part of 2018, however, potential concerns and correction of the stock markets may bring some strength to the noble metal.

Gold with a six-week high yesterday, tested $1,300

The price of gold has fallen today, albeit keeping close to its highest level in six weeks since yesterday's session. This happened after Powell initiated a further raise in interest rates before the Trump Senate Tax Reform vote.
The spot price of gold lost 0.1% of its value to a level of $1,293 per ounce. Yesterday, gold reached a momentum of $1,299 per ounce, or the highest level since October 16.
According to political analysts, North Korea may be preparing to launch new ballistic missiles soon. Such actions would have a positive impact on the price of gold.
Gold is also very sensitive to the interest rates and the US Dollar exchange rate. Traditionally, it is cheaper when the dollar strengthens, or more aggressive on interest rises.
Speculators have lowered their long positions in gold and silver futures in the week to November 21.

Gold returns after its growth yesterday

The price of gold fell on Thursday after investors were taking their profits. The noble metal added nearly 1% the previous session, after weaker than expected data on the US economy and the Fed's fears about inflation.
Investors have lowered their expectations of the number of interest rises next year after Yellen said aggressive interest rates could further exacerbate inflation. The latter is still below the target of 2%.
Still, expectations are for another rise in interest rates in December, which continues to weigh above the price of precious metal. It trades in a relatively narrow range so far between $1,265 and $1,290.
According to technical analysts, only an increase of more than $1,300 could lead to further growth of the precious metal.
The spot price of gold lost 0.2% of its value to levels of $1,290 per ounce earlier this morning.
Gold futures with delivery in December fell 0.2 percent to $1 289.80 per ounce.
Gold may test support at $1 283 per ounce.

Gold slows down its decline

Gold fell on Friday after interest on US bonds rose. Losses, however, were limited by the weakness of the stock market and the dollar, which declined due to the uncertainty surrounding the US tax reform.
Increases in US bond interest rates have put pressure on gold, reducing the attractiveness of the metal.
The spot price of gold fell 0.7 percent to 1 275.6 dollars per ounce at the end of the week. It reached the highest value of $1,288 on Thursday, prompting analysts and traders to talk again at $1,300 or even more.
However, it was quickly overcome on Friday and almost all of the growth was offset.
Gold futures with delivery in December fell by 13.3 dollars, or 1% to 1 274.20 dollars per ounce.

Gold returns some of its glitter

Gold went back above $ 1,270 per ounce yesterday after stabilizing in the dollar. This led to a recovery in interest in the precious metal after a third consecutive week of decline.
But the price is still under pressure from expectations of a new Fed interest rate increase next month.
The spot price of gold was trading early this morning at $ 1,278 per ounce, while metal futures with delivery in December rose to $ 1,280 per ounce.
The dollar stabilized on Monday after its biggest weekly rise this year.
The fact that Trump is on a visit to Asia can re-focus North Korea to support the price of the noble metal, according to market observers.
Gold has fallen over the past weeks, back by 2.5 percent of its peak in mid-October, with Fed rising expectations for a further rise in interest rates in December.