Year: 2022

As the world faces the risks of a global financial crisis, the question remains how safe gold can be. This is a question that has been debated by economists for many years. Many argue that gold can be a hedge against financial markets, while others point out that it is a risky asset to hold. While this issue is still unresolved, there is evidence that gold is a viable safe haven. Nonetheless, if you are considering purchasing gold, it is important to understand some of the factors that can affect the price of gold.

Evidence points to gold as a safe haven

In times of market stress or uncertainty, investors are often tempted to look for assets with a safe harbor. Precious metals, including gold, have been shown to offer such a safe haven. These assets provide a means of diversifying your portfolio, and help you mitigate the risk associated with investing in traditional financial markets.

Research has shown that gold is a safe haven in times of economic and political stress. It provides protection against financial and health risks. Gold’s history as a store of value, coupled with its proven resilience to turbulence, has led to a widespread belief that it is the ideal asset in times of financial distress.

During the 2007-09 global financial crisis, the price of gold rose from $252 in July 1999 to $1900 an ounce in September 2011. However, gold’s price declined in 2011, which is not surprising considering that the financial crisis caused economic stress.

In the 1990-91 recession, the correlation between gold and the stock market is positive, but not different from zero. Real rates tend to fall below zero percent, and investors may be tempted to move funds away from stocks.

In the COVID-19 pandemic, the correlation between IRA Companies Gold and the stock market remains positive. The EMV-ID data measures market uncertainty, and is unusually high during the pandemic period.

There is no co-integration of the two time-series of market and gold returns

In the wake of the global financial crisis, there has been a lot of discussion about gold and stocks. While gold is seen as a safe haven in times of financial turmoil, there have been many questions about its actual relationship with the stock market.

One question is whether there is a co-integration of the two time series. To answer this, we conducted a number of tests, including the Engle-Granger test and the Johansen test. We found no co-integration between the two time series.

We also tested for the best possible co-integration. This is achieved by using quantile regression to model the impact of a financial stress event. The results show that the magnitude of the financial market stress is positively correlated with the S&P 500 Index return. However, gold return is not highly correlated with this measure.

Quantile regression is a standard tool used by econometricians to estimate the magnitude of a single event. We find that the most significant quantile increases the coefficient the most. This is probably because the largest amount of observations are in the upper quantiles. A larger number of observations suggests a stronger correlation between the two variables.

It is neither a hedge nor a safe haven in BRICS countries

Several studies have highlighted the potential of gold as a hedge or a safe haven in times of market stress. These studies use various analytical tools to find out the best and the worst times to buy or sell gold. Generally, financial media uses the term ‘safe haven’ to denote an asset that is uncorrelated with other portfolios. Nevertheless, there is an important difference between the concept of ‘safe haven’ and ‘hedge’.

The need for a safe haven asset has increased over the past years. However, the ability of gold to serve as a hedge during extreme market declines is unknown. A robust study of the properties of gold as a hedge has become critical. This study, therefore, evaluates the safe haven property of gold in the stock markets of the BRICS countries (Brazil, Russia, India, China and South Africa).

Wavelet analysis is used to determine the effects of various crises. For example, a wavelet coherence test was used to determine the relationship between stock returns and gold prices. While it is true that gold serves as a safe haven in many places, the magnitude of the effect is still relatively small. Therefore, a sound system of controls is necessary to maximize the hedge benefits of the asset.

Read More

If you have been watching the price of gold lately, you probably noticed that the gold price has been in a bearish trend. This has left long-suffering gold bugs to suffer and wonder if it will reverse. However, while the price is still in a bearish trend, there are signs that it may be ready to reverse.

Moving average studies are in a bear mode position

The best way to get a handle on the current state of the market is to pay close attention to the moving averages. Moving averages give us a glimpse of the past and a glimpse of the future, which can be a useful tool for identifying a trend reversal or a buying opportunity.

The moving average is a useful tool at any time of the day, especially as a signal of trend change. The average can serve as a benchmark for new investment opportunities and for evaluating the performance of existing investments.

Using moving averages in conjunction with other technical indicators can yield a wealth of information. Some examples include the best times to buy and sell, the direction of a trend reversal, and how to determine the level of risk present in a given scenario.

Hedging and trade selling have increased against the ETF position

In the aftermath of the financial crisis, the popularity of gold ETFs has grown significantly. They are an easy way for retail and institutional investors to take a position in precious metals.

As gold prices declined last year, investors began selling their holdings. Analysts believe the drop in the price of the metal is a result of withdrawals from global exchange-traded funds. These withdrawals have been blamed on a combination of low inflation, a stronger dollar, and a more optimistic outlook for the stock market.

The largest gold-backed exchange-traded fund, SPDR Gold Shares (GLD), was launched in November 2004. Its shares are among the most widely traded on the U.S. equity market.

GLD holds gold bars in HSBC PLC’s London vaults. Its administrators estimate between 750,000 and 1 million individual investors hold positions in the fund.

2023 gold price recovery is bearish compared to bullish potential

Gold price forecasts are affected by a number of factors including the strength of the dollar, the global economy, and geopolitical issues. Some analysts are optimistic about the gold price recovery in the future, but others are bearish. Here are some of the key gold price forecasts for 2023.

In the short term, the main risks are the US Federal Reserve and the potential for a recession in the US. The Fed could still hike interest rates. But this would raise inflation, which could increase fears of higher long-term inflation. If the Fed does not raise interest rates, then there may be an increase in demand for gold as a safe haven.

In the long term, the main factors driving the gold price are monetary policy and supply side dynamics. The Fed could increase the balance sheet, which would lead to further price increases. However, it would also strengthen the U.S. dollar and reduce the demand for gold.

Read More

Currently, the prices of many commodities are in a downward trend. This is due to inflation, the price of oil, the price of gold and copper. Hopefully, it will improve in the next quarter. In the meantime, it is important to keep track of these prices so that you can make the right investment choices.

Copper

Traders are now more active in restocking their short positions in the copper market. As a result, physical copper stocks are down to 61,300 tonnes. Traders also brought metals from LME warehouses to China during the arbitrage window that opened in August.

The price for copper reached all-time highs of $10,512 per metric ton in May. But the price has since been declining. The IMF projects the price to fall to $7,600 per metric ton by 2026. The Department of Industry, Science, Energy, and Resources predicts it to decline to $7,724 in two years.

The price for copper was down 18% from the same period last year. It is expected to decline further to $7,500 per metric ton by 2021 and $8,400 per metric ton by 2023. It is also expected to rise to $8,250 per metric ton by 2035.

Gold

During Q4 2022, gold news could be favorable, according to analysts. The United States is expected to recover from a recession, and emerging markets are also likely to grow, leading to increased demand for gold. But the price of the metal could fall during the fourth quarter. Depending on interest rates in the US, the dollar could also depreciate.

Goldman Sachs analysts predict that the price of the metal will average US$ 1,200 per ounce in the next few years. They cite stronger growth in emerging markets, but also a slowing global economy. They assume that consumers will buy more gold and that household wealth will also increase.

ABN Amro’s gold price forecast for next year is US$ 1,400. It expects the price to drop further, however, by the end of 2018. The bank says it expects the price to be below the current level.

Lean hogs

Despite a slow start, Lean hogs in Q4 2022 have shown signs of life. Futures markets have been projecting favorable pricing opportunities for producers and consumers, albeit at the cost of volatility.

The market is backwardally curved in this month’s forward curve, meaning that it is predicting higher production in the near future, but lower near-term demand. This indicates that supply is expected to continue to outpace demand in the coming months, and the market believes that it will begin to catch up with demand in the next few years.

The USDA WASDE report espouses higher expectations for pork exports. It also indicates that carcass weights will decline in the next three quarters, which is a sign of tightening supplies.

The pork industry has seen a robust domestic demand, supported by strong grocery sales. Consumers are looking for value-conscious options and are trading down from branded products to private label alternatives.

Oil prices

Despite the strong dollar, energy prices have risen this year. It is still unclear where this bull run will end. The short-term bearish market dynamics are expected to keep oil prices below $110/b before year-end.

The Fed has begun a cycle of tightening monetary policies to combat inflation. This could lead to slower manufacturing activity, lower trade, and lower commodity prices. This could also limit oil demand growth. A recession could result from a slowdown in the global economy.

Oil prices are down from their early March highs, but they are still up from the lows of the previous quarter. This is the result of increased supply and weaker demand expectations. The EIA forecasts that global oil inventories will fall slightly in 2023. Despite the expected decline, the EIA also expects record U.S. crude oil production of 12.4 million bpd in 2023.

Inflation

Across advanced economies, inflation exceeded World Economic Out- look forecasts in the 2021-22 period. The increase was led by energy, and a strong recovery in demand drove underlying inflation. However, the corresponding upward revisions in inflation forecasts for emerging and developing Asia and Sub-Saharan Africa were smaller.

Core inflation forecast errors have been less pronounced in China and developing Asia, although the latter has been hampered by cooling economic activity. The global economy may have been at the steeper end of the aggregate supply curve in 2021. However, this may be less pronounced in the coming years as efforts to ramp up crude oil production help soften energy-induced inflationary pressures.

Forecasts for global headline consumer price index inflation have been revised upward by 0.5 percentage points since July. Headline inflation is estimated to rise from 4.7 percent in 2021 to 8.8 percent in 2022.

Read More

Currently, the gold market news update includes news of the latest developments in gold stocks. In the last few decades, global stocks of gold have been increasing continuously. In India, the gold industry has come together to sign a Declaration of Responsibility and Sustainability Principles.

South Africa is the most important producer of gold

Until recently, South Africa was the largest gold producing country in the world. In fact, it was the world’s largest gold producing country until China overtook it in 2007. However, China has been the number one gold producer in the world for several years now.

As China has become the world’s largest gold producer, many other countries have been catching up. In fact, a number of African countries are now starting to increase gold production.

The South African gold mining sector has faced struggles in recent years, due to industrial strife and rising production costs. The AMCU has held protests at several mines and the industry has faced a decrease in output.

Gold production in South Africa has amounted to only a small fraction of its potential. While the industry has produced some low hanging fruit, it is now looking for new projects with higher returns.

Gold mining in South Africa is still a vital economic sector. It is estimated that more than two million people are dependent on the sector for their income. In addition to gold, the country has a wealth of other minerals. It has a large stock of iron ore, copper, diamonds, beryllium, manganese, chromium and titanium.

Global stocks of gold have continuously increased in recent decades

Historically high real gold prices have coincided with widely held expectations of future inflation. Ultimately, however, high real gold prices were not matched by higher inflation rates. In fact, the real price of gold has actually decreased in recent decades. The price of gold per ounce declined 55% from $682 to $304.

The price of gold per ounce is a product of supply and demand. Assuming an inflation rate of 7% per year, a terminal real gold price can be calculated by multiplying the nominal price of gold by the expected inflation rate. In theory, a breakeven yield may also be used to forecast future inflation.

In the long run, gold is likely to be a good inflation hedge. However, financial market volatility may decrease its appeal as a safe haven in a crisis. It may even lower the trough of the real gold price.

Statistically derived models are useful in this regard. The best and most obvious example is the “golden constant”. This idea is not actually a fact, but rather a theoretical concept. The nebulous concept posits that the price of gold given by the top gold IRA companies is a reflection of the value of the gold bullion in circulation.

India’s gold industry has come together to sign a Declaration of Responsibility and Sustainability Principles

Among the many issues addressed by gold industry players are the impacts of gold mining on vulnerable populations and climate change. The Declaration of Responsibility and Sustainability Principles is the product of a collaborative effort that includes leading companies, government and non-government organizations, and global trade associations.

The Principles include ten key sustainability goals. These include: respecting human rights, disclosure, advancing the UN Sustainable Development Goals, and demonstrating responsible sourcing standards in the gold supply chain.

Signatories of the Declaration of Responsibility and Sustainability Principles include the London Bullion Market Association (LBMA), Responsible Jewelry Council (RJC), Swiss Association of Precious Metals Producers and Traders (SAPM), Dubai Multi Commodities Centre (DMC), and World Gold Council (WGC). The signatories have committed to a series of supply chain initiatives, including the Responsible Gold Guidance (RGG) developed by the LBMA and the Responsible Artisanal and Small-Scale Mining (RASM) initiative developed by the World Gold Council.

The Declaration of Responsibility and Sustainability Principles is based on a simple yet effective goal. It includes a clear list of metrics that demonstrate the industry’s commitment to responsible business practices and advancement of the UN Sustainable Development Goals.

Technically, the trend in precious metals may remain range-bound to the upside

Whether the trend in precious metals is range-bound to the upside or the downside will depend on a range of factors. Some of these factors include: global economic growth, trade wars, geopolitical risks and monetary policies. Regardless of these factors, it is likely that the price of gold will continue to be range-bound to the upside.

In May, the price of gold ended the month with a 10.6% gain in the Euro currency. Gold is considered a safe haven and has enjoyed a strong performance in 2015 so far.

The Federal Reserve is stuck in a bind between a low interest rate environment and aggressively suppressed central bank interest rates. The Fed is likely to keep its asset purchases in place for two more years. The expectation of further rate hikes by the Fed will drive the U.S. dollar, but higher inflation and higher Treasury yields will offset that.

With the Fed likely to keep its asset purchases in place for at least two more years, the risk of recession is greater. There is also a possibility of further quantitative easing, which could support the price of gold. However, the Federal Reserve may decide to delay further rate hikes for a longer period of time.

Read More

Consumers should prepare for higher interest rates this year by putting their finances in order. The Fed recently increased interest rates by 75 basis points for the third straight time. Although the Fed doesn’t control consumer interest rates directly, the trend is clear: rates will rise this year. So, if you’re thinking about buying a home or refinancing your mortgage, now is the time to get ready for higher rates.

2022

The Federal Reserve has raised interest rates again, this time by 75 basis points, or 0.75%. This is the largest single rate hike since 1994, and is consistent with the central bank’s commitment to fighting inflation. As of September, the target policy rate stands at 2.25%, which is the highest level since 2008. Several experts believe the Fed will hike rates more often in 2022. The next anticipated hike is expected to occur in November, when the Federal Open Market Committee meets again.

2023

The Federal Reserve recently announced a plan to increase the federal funds rate 11 times through 2023. Each time, it would raise the rate by a quarter percentage point. This plan is expected to slow economic growth because it will increase borrowing costs. As a result, the Fed expects the economy to grow 0.2% this year and 1.2% in 2023. Fed officials are predicting a higher rate of growth in both years, but that rate will still be far less than the rate needed to bring persistent inflation down.

2024

Federal Reserve policymakers are unlikely to reduce the benchmark interest rate until at least 2024. The central bank is battling high inflation while maintaining maximum employment. A consensus among policymakers is building toward gradual tightening of policy to keep inflation at bay.

2025

Interest rates are expected to rise in the years ahead but the timing is far from clear. The Federal Open Market Committee, or FOMC, makes decisions about the direction of interest rates. They release guidance, which includes a “dot plot” of individual members’ expectations. As of June, the consensus of FOMC members predicted that the federal funds rate would increase to nearly 3% by the end of the year.

2027

The Fed has issued its annual forecast and this gives a clue as to when it will start raising interest rates again. For instance, the median Fed official projection for 2021 calls for inflation to reach 2.6 percent. The preferred inflation measure is the personal consumption expenditures index. Moreover, investors are increasingly buying long-term Treasury securities, which will lead to lower long-term interest rates than before.

2028

There’s no single answer to the question “When will interest rates increase again in 2028?” The answer to this question depends on the underlying economic conditions. While demographic trends and slow productivity growth have reduced the natural rate of interest, other factors are driving rates upward. These factors include a higher federal debt and an increasing share of older workers. These factors will make borrowing and saving harder and lead to higher interest rates.

2029

The Fed has stated that it plans to get interest rates back to 2% by 2024. Although this is still a long way away, it is not far from the average estimate of what a neutral rate of interest should be. Meanwhile, inflation expectations are increasing, which reduces the real interest rate that borrowers pay. This, in turn, offsets the effect of Fed tightening.

2032

The CBO, a nonpartisan scorekeeper for Congress, recently estimated that by 2032 the cost of servicing the federal debt will reach a new high of 3.3 percent of GDP. This will likely lead to higher borrowing costs for consumers and businesses. In addition, it’s likely that the cost of servicing the debt will increase in tandem with the costs of inflation. The CBO’s projection comes at a time when the Federal Reserve is poised to announce an interest rate increase. Meanwhile, mortgage demand fell for a fourth straight week, another sign of a weakening housing market.

2033

The Fed raised short-term interest rates by three-quarters of a percentage point and forecast that the benchmark interest rate will rise to 4.6% by 2023. By raising interest rates so aggressively, the Fed is signaling a hawkish stance. But if rates continue to rise at their current pace, the market could see a sharp drop in the value of its assets.

Read More

The latest inflation market news in the United States is a mixed bag. It includes August’s Consumer prices, the Fed’s interest rate decision, and OPEC’s deal to cut oil output. The report also covers expectations for future inflation. Despite this mixed bag, traders see a one in three chance that the Fed will hike interest rates by a full percentage point next week.

Consumer prices for August

The Consumer Price Index (CPI) showed that prices for core goods and services increased 0.1% in August after essentially staying flat in July. The slowdown was largely due to a drop in gasoline prices, which fell 10.6% last month. Gasoline costs reached nearly $5 per gallon in June, but fell to $3.83 by August’s end. Despite the drop in gasoline prices, core inflation was still 0.4% higher than expected.

Housing and rent increased by 0.7% last month. These increases are a cause for concern for the Federal Reserve, which is increasing interest rates to control inflation and cool the economy. The Fed’s next rate increase is widely expected to be three-quarter percentage points, or 75 basis points, but the Fed may have to raise rates more aggressively if inflation continues to outpace the economy.

The consumer price index for August in the United States shows that prices are continuing to rise despite a tight labor market. However, the growth was moderate compared to July, with food costs increasing by 0.7%. Overall, the core CPI is up 6.3% over the last 12 months, compared to 5.9% in July.

Fed’s interest rate decision

The latest news about inflation in the United States isn’t good. Consumer prices are still rising, but at a slower pace than in the past. The Federal Reserve has said it will raise interest rates again on September 21. But the upcoming data may change the Fed’s calculus. This week, we will see August consumer and producer price indexes and retail sales figures. If these numbers continue to rise, we can expect to see more hikes by the Federal Reserve.

While the headline rate of inflation has slowed, it remains at levels unheard of in the past four decades. These figures are adding to the headwinds facing the Biden administration. The Fed is also grappling with the prospect of raising interest rates again, which could hurt the economy. When news of the upcoming interest rate hike broke, investors sold off gold and stocks.

Earlier this week, the Labor Department reported that core inflation in August was 7.4%, well above the Federal Reserve’s target of 2%. Those figures sparked expectations of a third straight hike later this month. However, the Fed is also keeping an eye on inflation in the coming months. Inflation is a big concern for policymakers because it directly impacts the lives of most Americans.

OPEC agreement to cut oil output

OPEC has made it clear that they are ready to slash oil output to stabilize the world’s energy markets. However, it’s unclear what the exact terms of the agreement are, and how the cuts will affect the United States. The OPEC cuts are meant to help lower prices in lower and middle-income countries, which have already been hit by the high price of energy. The cuts will be voluntary, but it’s unclear how much will be reduced.

The oil price has fallen dramatically since last spring, after the United Kingdom asked Saudi Arabia and the United Arab Emirates to increase production. As a result, the price of crude oil crashed because there weren’t enough buyers. However, producers were willing to pay people to buy their oil. Ultimately, the move to cut production was widely seen as a tactic by Saudi Arabia to support oil prices. Oil prices peaked over $120 a barrel in the spring but then began to fall as concerns about the global economy became increasingly acute. By the end of September, they were trading at less than $90 a barrel.

This could have an impact on US gasoline prices. Prices have already started to creep higher in the US, and the OPEC agreement to cut oil output could add to inflation, which could raise the pressure on the Federal Reserve to raise interest rates. The cut is likely to have a limited impact on gas prices, though, because many smaller OPEC producers were already struggling to meet their previous production targets.

Expectations for future inflation

The expectations of consumers are a powerful tool for forecasting inflation. The January 2022 Survey of Consumers conducted by the University of Michigan showed that consumers expected inflation to reach 4.9 percent in the next year. However, the preliminary February results indicate that consumers expect inflation to rise to 5 percent, or higher.

There are several ways to measure expectations for future inflation. The Fed’s Survey of Professional Forecasters (SPF) is one source. This survey asks economic forecasters to provide forecasts for inflation over one, five, and ten years. The median estimates of these forecasts are displayed in a chart. The one-year forecast corresponds to the year after the date on the axis, while the 10-year forecasts represent the corresponding average rate over ten years.

Another indicator of expectations is the difference between nominal and inflation-indexed bonds. The SPF forecasts have the highest accuracy, though the Michigan survey has flaws. In the last decade, the survey has consistently over-predicted inflation by about 0.8 percentage points. The other indicator is the bond yield-based index, which is volatile and heavily influenced by financial market conditions.

Read More

If you’re looking to invest in the gold industry, it’s time to consider royalty companies, such as Sandstorm Gold. Royalties are a less risky asset class than owning a mine. The company’s project is in Turkey, which has historically been a solid mining jurisdiction, despite recent political unrest. The company also has an excellent domestic project partner and has received environmental approval, both of which are crucial for long-term growth.

Barrick Gold Mining

On August 8, 2022, Barrick Gold Mining is scheduled to release its second quarter results, including a discussion and analysis, or MD&A. The conference call is being recorded, and investors can listen to it later in the day. Mark Bristow, CEO of Barrick, is scheduled to give the call.

In a separate report, the company said its second quarter results were in line with its previous guidance. The company reported net earnings of $488 million, or $0.27 per diluted share. During this period, Barrick sold 1,040K oz of gold and produced 120 million pounds of copper. It also increased its operating cash flow by 44.6% year-over-year, or $924 million, and increased its cost of sales by 1.04 million ounces. The company indicated that it remains on track to meet its guidance for the production of gold and copper by 2022.

But as with any investment, there is a risk of loss. While gold prices have climbed higher this year, there are other factors that could negatively impact revenue for gold miners. One of these factors is the rising cost of labour and freight. This has pushed up AISC, or All-In-Sustaining-Costs. Barrick’s ASCI has climbed by six percent to $1,026 per ounce.

Sandstorm Gold Royalties

Sandstorm Gold Royalties 2022, a mining company, has recently released its first-quarter financial results. The company sold gold equivalent ounces during the first quarter of 2022, accounting for approximately 18% of its sales from Canadian mines. The remaining 61% of Sandstorm’s gold equivalent ounces came from South American mines.

The company’s net income improved over the same period last year, due to increased revenue. Additionally, it realized a $22.9 million gain on the sale of royalty assets. The sale of the royalties assets included 34 million shares of Sandbox and a $31.4 million convertible promissory note. This transaction also created an opportunity for Sandstorm to surface its value concern assets.

In addition, Sandstorm recently acquired Nomad Royalty Company for $1.1 billion. Nomad’s royalty assets include seven mines that are currently producing. This acquisition is expected to improve Sandstorm’s scale and portfolio diversification. The deal is expected to close in the second half of 2022.

Freeport-McMoRan

Freeport-McMoRan is a global mining company with operations in North America, South America, and Indonesia. It also explores for metals and oil. Its assets include mines in Indonesia, offshore California, and the Gulf of Mexico.

As of the end of August, Freeport-McMoRan’s gold stock was holding up rather well. However, the stock has lost a lot of ground this week. Although it recovered slightly on Friday, it is still down 11.6% on the week.

Freeport-McMoRan (FCX) is a mining giant based in Phoenix, Arizona. Its share price has recently surged to near $50. It is the second largest copper producer in the world, accounting for approximately 7% of total copper production. The company’s revenues are heavily dependent on the commodity cycle. While its stock price has surpassed its peak levels from 2011, it is still far from reaching its previous peaks.

Read More