Heraeus metals strategy analyst 24K99 News said that under the influence of the Fed's tough rhetoric and interest rate forecasts, the performance of gold is quite good, and with the spot price testing the resistance, there is a clear difference in the demand for silver coins among major producers.
In the latest report on metals, analysts pointed out that despite the Federal Reserve taking a strong stance, gold prices continue to rise.
They said, "On June 12, the overall CPI announced by the United States was relatively stable, with a year-on-year increase of 3.3% and remained flat after seasonal adjustment, the lowest level in three years." "This provided some support for the price of gold, although Fed Chairman Jerome Powell sent out a cautious signal after the Federal Open Market Committee (FOMC) meeting, temporarily putting interest rate cuts on hold." They said," the FOMC members still have divergent views on whether to support one or two interest rate cuts this year ", adding that the swap market still expects a 42% chance of a 50 basis point rate cut by the Federal Reserve in 2024. They said, "the price of gold is still consolidating its gains, with resistance in the vicinity of $2,280 per ounce."
They said, "At present, there is still a difference among FOMC members as to whether to support one or two interest rate cuts this year", adding that the swap market still expects a 42% chance of a 50 basis point rate cut by the Federal Reserve in 2024. They said, "the price of gold is still consolidating its gains, with resistance in the vicinity of $2,280 per ounce."
Analysts also pointed out that extreme weather events disrupted gold production in Australia in the first quarter. They wrote, "hurricanes and rainstorms caused floods, resulting in a decline in Australia's gold production from 77 tons in the fourth quarter of 2023 to 70 tons in the first quarter of 2024." "In 2023, Australia was the world's second largest gold producer (310 tons), second only to China. However, most miners still maintain their production forecasts for this year, boosted by high prices."
Gold trading was flat this week, with spot gold opening overnight at $2,334.87 per ounce, falling to a daily low of $2,315.54 per ounce around 3 a.m. Eastern time in the United States. Gold has since rebounded slightly, with the latest trading price at $2,313.59 per ounce, down 0.79% for the day.
(Image source: FX168)
Regarding silver, analysts said that after falling below $30 per ounce after the June 7th Fed meeting, the spot price of this gray metal fluctuated between $29 and $30 per ounce last week, testing key support levels.
They said, "As silver performs worse than gold, the prices of both metals are falling, and the gold/silver ratio has rebounded from a low of 73 in early June to 79."
(Image source: kitco)
In terms of physical demand, Heraeus emphasized the significant difference between silver coin sales at the Perth Mint and the U.S. Mint this year.
They said, "Perth Mint silver coin sales remain weak, with sales of 796,934 ounces in May, far below previous years. May sales data fell 58% year-on-year, the lowest May data in five years. Sales to date this year have fallen 51% year-on-year to 4.12 million ounces."
They said that the weak sales of silver coins from the Perth Mint in 2024 reflect the impact of rising metal prices on consumer demand.
"In contrast, U.S. Mint sales seem much stronger in recent years," they wrote. "In May, sales were 1.75 million ounces, up 9.7% year-on-year. Sales to date this year have reached 12.6 million ounces, up 52% year-on-year."
(Image source: kitco)
At the opening of trading on Monday, the price of silver followed gold downwards and tested key support levels at $29.026 per ounce before 3 a.m. Eastern time in the United States. Since then, the gray metal has rebounded slightly but remains in a downward area, with the latest trading price at $29.289 per ounce, down 0.83% on the daily chart.
(Image source: FX168)