1. Gold prices are sharply up in midday U.S. trading Thursday, near the daily highs, and are closing in on the recent record highs. Silver prices are modestly higher. More technical buying is featured in both metals, amid bullish charts. June gold was last up $27.10 at $2,239.90. May silver was last up $0.198 at $24.95. It was a very busy U.S. data release schedule Thursday, but none of the data contained big surprises and the markets showed no major reactions. U.S. markets are closed Friday for the Good Friday holiday but personal income and outlays, including PCE inflation data, will be released that day. Today is the last trading day of the week, of the month and of the quarter, which makes it an important trading day from a technical chart perspective. Gold today is set to close at a very bullish weekly, monthly, and quarterly high close today, as well as a record high close in futures markets.
2. Hedge funds are starting to take an interest in silver as it could be the next major momentum play in the precious metal market while gold prices find a balance. Historic speculative bullish interest in gold has pushed prices to multiple record highs in the last three weeks; however, silver has lagged. The gold/silver ratio remains fairly elevated, trading above 88 points. However, the latest trade data from the Commodity Futures Trading Commission (CFTC) shows that silver still has solid momentum. The CFTC disaggregated Commitments of Traders report showed money managers increased their speculative gross long positions in Comex silver futures by 7,963 contracts to 53,484 for the week ending March 19. At the same time, short positions fell by 3,365 contracts to 16,362. The silver market has seen its net bullish positioning increase for three consecutive weeks. The market is now net long by 37,122 contracts, its highest level since April 2022. Although the silver market has seen a significant increase in bullish speculative positioning, the market is still below the levels seen in early 2020, ahead of the rally towards $30 an ounce. There are some concerns that weak industrial demand could lead to lower silver consumption. However, some analysts have noted that silver might be recession-proof as it remains a critical metal in the green energy transition as it is a major component in the production of solar panels. Analysts have said that the green energy sector remains an attractive target for government spending if the global economy does fall into a recession.
3. A British financial trader, who has been described as the ringleader in the manipulation of a key interest rate before and after the global financial crisis, lost his appeal Wednesday to have his conviction quashed. Tom Hayes, who was a former trader at U.S. bank Citigroup and Switzerland’s UBS, was found guilty in 2015 of manipulating the so-called London Inter-Bank Offered Rate, or LIBOR, between 2006 and 2010. Hayes, described at his trial as at the center of an enormous fraud, spent half of his 11-year sentence in prison before his release in 2021. He was also convicted in a U.S. court in 2016. LIBOR was a critical rate that banks used to borrow from each other and indirectly affected the cost people pay when they took out loans, such as when consumers buy a home or a car. It was an interest rate average calculated from figures submitted by a panel of leading banks in London, with each one reporting what it would be charged were it to borrow from other institutions. The scandal emerged in 2012 when some banks were accused of submitting fake numbers on purpose to have the LIBOR set at a rate that better suited them. LIBOR has been phased out in recent years, partly because it was seen by many as worsening the 2008 financial crisis.
4. Sales of new U.S. single-family homes unexpectedly fell in February, but data for the prior month was revised higher, pointing to underlying strength as a shortage of previously owned houses on the market persists. New home sales slipped 0.3% to a seasonally adjusted annual rate of 662,000 units last month, the Commerce Department’s Census Bureau said on Monday. The sales pace for January was revised up to 664,000 units from the previously reported 661,000 units. The new homes market has defied 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022, bolstered by a scarcity of previously owned houses on the market. Builders are ramping up construction, while offering price cuts and other incentives as well as reducing floor size to make housing more affordable. The government reported last week that housing completions hit their highest level in 17 years in February.
5. Almost half of the energy companies Citi lends to are lacking plans to cut greenhouse gas emissions, the fourth-largest U.S. bank said in a climate report released on Thursday. In 42% of cases, it found “absence of a substantive transition plan,” and a lack of disclosure of Scope 3 emissions, which are released into the atmosphere from companies’ supply chains and customers. Citi found just 8% of its energy clients had a ‘comprehensive and ambitious transition plan targeting Scopes 1-3 emissions reductions and demonstrated ability to execute.’ The proportion rose to 37% when Scope 3 emissions were excluded. The analysis, started last year, is based on data from 2021. Chief Sustainability Officer Valerie Smith said she expected the timing of data collection and analysis to improve. “We are still in building mode. We understand the importance of moving forward on climate. We also understand the energy transition is a monumental effort, it is not happening overnight,” Smith said.
6. FTX co-founder Sam Bankman-Fried will serve 25 years in prison after being convicted of defrauding his customers, investors, and lenders. The man who presided over the largest crypto collapse in history received his sentence Thursday in a Manhattan federal court from a U.S. Judge who presided over Bankman-Fried’s trial last fall. He faced up to 110 years. Prosecutors argued for a sentence of 40 to 50 years, while Bankman-Fried’s lawyers asked for six and a half years. Sentences for white collar crimes have varied in recent years, from 150 years for Bernard Madoff to 11 years for Elizabeth Holmes. The 32-year-old Bankman-Fried, in his final statement before the judge, said what happened at FTX “haunts me” and that “I made a lot of mistakes.” As CEO, “I was responsible at the end of the day.”
7. In the week ending March 23, the advance figure for seasonally adjusted initial claims was 210,000, a decrease of 2,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 210,000 to 212,000. The 4-week moving average was 211,000, a decrease of 750 from the previous week’s revised average. The previous week’s average was revised up by 500 from 211,250 to 211,750.
8. Oil prices jumped more than $1 a barrel on Thursday, closing out the month higher on the prospect of OPEC+ staying the course on production cuts, ongoing attacks on Russia’s energy infrastructure and a falling U.S. rig count tightening crude supplies. Brent crude futures for May settled at $87.48 a barrel, its highest level since Oct. 27, after gaining $1.39, or 1.6%. The more actively traded June contract settled at $87 a barrel, rising $1.58, with the May contract expiring on Thursday. U.S. West Texas Intermediate (WTI) crude futures for May delivery settled at $83.17 a barrel, rising $1.82, or 2.2%. On the week, Brent rose 2.4% and WTI gained about 3.2%. Both benchmarks finished higher for a third consecutive month.
9. EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell is set to speak ahead of the weekly close.
10. Japan had its toughest warning yet for traders on its willingness to intervene in currency markets after the yen slid to its weakest level in about 34 years against the dollar. The nation’s currency dipped to 151.97 versus the greenback early on Wednesday in Tokyo, beyond the level at which policymakers stepped in during October 2022, before comments from government officials on their readiness to act boosted the yen to its strongest level of the day. “We are watching market moves with a high sense of urgency,” Finance Minister Shunichi Suzuki said. “We will take bold measures against excessive moves without ruling out any options.” Suzuki’s reference to bold action is generally interpreted to mean direct intervention in the currency market.
Mortgage demand remained subdued for the second consecutive week despite slightly lower mortgage rates. Mortgage applications decreased by 0.7% on a seasonally adjusted basis during the week ending March 22, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey. “Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6% by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.” Both purchase and refinance activity decreased during the week. Purchase loan application volume dropped by 0.2% from one week earlier. Meanwhile, refinance volume fell by 2% from the prior week. As of Wednesday, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.16%.
The Bank of Canada (BoC) is likely to move ahead of the U.S. Federal Reserve on its first rate cut, as tepid economic growth and cooling inflation are priming up conditions to ease borrowing rates sooner, economists and analysts said. Usually, a strong economy south of the border is good news for Canada, since about three quarters of Canada’s international trade is knitted to the U.S. But with the Canadian economy clocking growth of 1% in the fourth quarter, compared with a 3.2% annualized increase in the U.S., the Bank of Canada may chart its own course. “The Canadian economy has buckled under the pressure of higher interest rates… therefore, they can’t match the Fed,” said Simon Harvey, head of forex analysis who expects a 25-basis point cut in June. Money markets are pricing in a 70% chance of a quarter point cut at the BoC’s June 5 meeting, and bets for a cut at its April 10 gathering have risen to 20% since data last week showed an unexpected slowdown in inflation. The Fed is widely expected to cut rates for the first time at its June 11-12 meeting.
The yen’s rapid decline comes even after the Bank of Japan raised interest rates for the first time since 2007. A lack of guidance pointing to further near-term policy tightening, and the central bank’s insistence that financial conditions will remain easy, have instead pushed the yen in the opposite direction — something that traders have jumped on. That leaves Japan looking to the Federal Reserve to start cutting U.S. rates, a move that should indirectly bolster the yen by weighing on dollar. But markets suggest that move is still months away, with swaps pricing the first Fed cut in July. It all points to a growing tug-of-war between policymakers and markets over how far the yen can fall. Traders already see 152 yen per dollar as the next line in the sand and have established options bets to capitalize.
Volatility should be expected to remain high as investors will be closely watching for hints on upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hopes that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Mar. 22, 2024 | Mar. 29, 2024 | Net Change | ||
| Gold | $2,159.42 | $2,221.41 | 61.99 | 2.87% |
| Silver | $24.65 | $24.87 | 0.22 | 0.89% |
| Platinum | $896.10 | $911.70 | 15.60 | 1.74% |
| Palladium | $993.52 | $1,019.78 | 26.26 | 2.64% |
| Dow | 39483.40 | 39807.37 | 323.97 | 0.82% |
Month End to Month End Close
| Feb. 29, 2024 | Mar. 29, 2024 | Net Change | ||
| Gold | $2,045.75 | $2,221.41 | 175.66 | 8.59% |
| Silver | $22.68 | $24.87 | 2.19 | 9.66% |
| Platinum | $881.60 | $911.70 | 30.10 | 3.41% |
| Palladium | $941.68 | $1,019.78 | 78.10 | 8.29% |
| Dow | 38996.39 | 39807.37 | 810.98 | 2.08% |
Previous Year Comparisons
| Mar. 31, 2023 | Mar. 29, 2024 | Net Change | ||
| Gold | $1,966.95 | $2,221.41 | 254.46 | 12.94% |
| Silver | $23.96 | $24.87 | 0.91 | 3.80% |
| Platinum | $994.69 | $911.70 | -82.99 | -8.34% |
| Palladium | $1,473.25 | $1,019.78 | -453.47 | -30.78% |
| Dow | 33279.72 | 39807.37 | 6527.65 | 19.61% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2180/2150/2105 | 24.10/23.55/22.71 |
| Resistance | 2254/2286/2305 | 25.50/26.34/26.89 |
| Platinum | Palladium | |
| Support | 887/880/867 | 972/960/935 |
| Resistance | 919/926/950 | 1009/1034/1046 |