All articles tagged with #safe haven demand
US gold futures surpassed $4,000 per ounce for the first time, driven by safe-haven demand amid the ongoing US government shutdown, expectations of a Federal Reserve rate cut, and strong central bank buying, with gold rallying 51% this year.
Bitcoin's surge above $50,000 is unusual as it coincides with a strengthening U.S. dollar and rising Treasury yields, which historically have been negatively correlated with the cryptocurrency. Observers suggest that safe-haven demand from regions like China and Nigeria, along with strong inflows into U.S.-based ETFs, may be driving this resilience. Additionally, the CME's decision to increase margin requirements for trading its bitcoin futures may have contributed to the rally.
Gold and silver prices are slightly higher due to safe-haven demand amid the Israel-Hamas war and the potential for a wider Middle East conflict. The focus this week is on central bank meetings of the Federal Reserve, the Bank of England, and the Bank of Japan. The U.S. dollar index is slightly down, while crude oil prices are weaker. Technical analysis shows that gold and silver bulls have the near-term advantage.
Gold and silver prices are rising due to safe-haven buying as tensions in the Middle East increase. Gold prices hit a 2.5-month high and are approaching $2,000.00, while silver prices are also trending higher. Heightened tensions in the Middle East and rising bond yields are dampening risk appetite in the markets. The U.S. dollar index is steady, crude oil prices are higher, and U.S. stock indexes are expected to open slightly weaker. Federal Reserve Chairman Jerome Powell's comments on inflation and economic growth had little impact on the markets. Technical analysis suggests that gold and silver bulls have the advantage in the near term.
Despite the US labor market showing bullish momentum with a drop in weekly jobless claims to an eight-month low, gold prices remain relatively steady, experiencing mild technical selling pressure. The labor market data supports the Federal Reserve's aggressive monetary policy stance, but rising geopolitical uncertainty, the threat of a global recession, and growing inflation expectations continue to drive safe-haven demand for gold.
The recent downgrade of U.S. sovereign debt by Fitch has not sparked a surge in safe-haven demand for gold, unlike in 2011, due to the different economic conditions. However, experts believe that gold prices could rally through the end of the year as investors focus on U.S. debt. The market remains in good shape with healthy physical demand supporting the highest average quarterly gold price. The biggest hurdle for higher gold prices is the Federal Reserve's tightening cycle, and until the economic picture becomes clearer, the market is expected to remain stuck in neutral.
The euro fell as Germany entered a recession, while the dollar rose to a two-month high due to safe-haven demand amid concerns about a possible US default. Fitch has put the US's "AAA" debt ratings on negative watch, which could lead to a downgrade if lawmakers fail to agree to raise the debt limit. The dollar has also been supported by a paring of bets for Federal Reserve rate cuts this year, with the economy proving resilient to the effects of the central bank's aggressive tightening campaign until now. The Chinese yuan hit a six-month low due to disappointing economic indicators, while the Australian dollar and New Zealand dollar also fell.
Gold prices rose on modest safe-haven demand as the US government potentially runs out of money to pay its obligations. Traders and investors are shunning shorter-term US Treasury bills over fears of a US government default on that debt. Covid-19 is flaring up again in China and infections will get worse before they get better. The Federal Reserve's FOMC meeting minutes will be closely scrutinized. The silver bears have the overall near-term technical advantage.
Gold and silver prices fell due to concerns about an economic recession being on the horizon, despite safe-haven demand amid marketplace uncertainty. Weaker US economic data and fresh banking jitters have reignited recession fears. The US dollar index and US Treasuries saw better demand on safe-haven bids. The Bank of England raised its main interest rate by 0.25%, as expected. Copper prices also fell, hitting a 5.5-month low.
George Milling-Stanley, chief gold strategist at State Street Global Advisors, believes that gold's recent rally to a record high of over $2,080 an ounce is just the beginning of a long-term rally through 2023, driven by market uncertainty and investor anxiety. He expects safe-haven demand to overshadow any more rate hikes from the Federal Reserve. Central bank demand is creating a solid floor in the market, and Milling-Stanley expects this trend to continue as central banks are dangerously overexposed to the U.S. dollar and underexposed to gold.
Comex gold futures prices hit a new record high of $2,085.40 an ounce on safe-haven demand amid a jittery U.S. banking system and worries about a U.S. and/or global economic recession. Silver prices are also higher. The Federal Reserve's interest rate increase was no help for the U.S. banking system, parts of which are shaky. The European Central Bank is meeting Thursday and is expected to raise its main interest rate by a quarter-point. The marketplace is now looking forward to Friday's April U.S. jobs report from the Labor Department.
The US economy grew 2.6% in Q4 2022, slightly weaker than expected, but gold prices remain solid due to robust safe-haven demand. Weaker consumption is having a slight impact on inflation, which remains elevated. Analysts expect growing economic uncertainty and financial sector turmoil to force the Federal Reserve to cut rates in June, supporting gold prices above $1,900.
Goldman Sachs predicts that gold prices will remain above $2,000 an ounce for the next 12 months due to the surge in safe-haven demand caused by the current banking crisis. The investment bank also reiterated its bullish outlook for the commodity sector, expecting a broad-based gain of 28%. Goldman Sachs believes that gold will be well supported by ETF inflows and a weaker US dollar caused by the end of the Federal Reserve's tightening cycle. However, a significant shift in the Federal Reserve's monetary policy would be required to push prices above $2,100 an ounce.
Standard Chartered says gold's response to real yields is stronger than its response to safe-haven demand, and predicts that gold prices will remain elevated due to growing recession and inflation risks. The bank also sees another test of $2,000 an ounce as "increasingly likely." However, the risk for gold prices is a drop in the near term as investors face liquidity issues amid market volatility. The bank is projecting a 25-basis-point hike in the Federal Reserve's monetary policy meeting on Wednesday, followed by a potential pause in tightening.