June gold (GCM21) on Wednesday closed down -1.40 (-0.08%), and May silver (SIK21) closed up +0.020 (+0.08%).
Pre Basel 3 (eft paper fake gold) shuffling is nearly DONE... thank gold... soon oh so soon...go precious...Precious Metals Settle Mixed On Strong Stocks And A Recovery In The Dollar
Gold and silver prices on Wednesday settled mixed. Strength in stocks and a rebound in the dollar sparked long liquidation in precious metals. However, gold saw underlying support from lower global bond yields, and silver garnered support from better-than-expected global economic data.
Wednesday's global economic data was bearish for gold but positive for industrial metals demand and silver prices. The Eurozone Mar Markit composite PMI was revised upward to 53.2 from the previously reported 52.5, the fastest pace of expansion in 8 months. Also, the Japan Feb leading index CI rose +1.2 to a 2-1/2 year high of 99.7, right on expectations.
Central bank comments on Wednesday were mixed for precious metals. On the positive side, Chicago Fed President Evans said he "expects monetary policy will have to remain accommodative for some time to ensure that we meet the policy goals laid out in our new framework" as the Fed "still has some ways to go to reach its dual mandate goals of maximum and inclusive employment and inflation that averages 2%." Conversely, ECB Governing Council member Knot said, "if the economy develops according to our baseline, from the third quarter onwards we can begin to gradually phase out pandemic emergency purchases and end them as foreseen in March 2022."
Lower global bond yields are supportive for gold demand after the 10-year T-note yield fell to a 1-week low Wednesday of 1.626%. Also, the 10-year German bund yield fell to a 1-week low Wednesday of -0.342%.
Gold has underlying support from the Covid pandemic, which is dovish for central bank policies. India reported a record of 103,558 new Covid infections on Sunday, which prompted Maharashtra state to shut down malls and restaurants through April. Also, France last Wednesday extended a nationwide lockdown for four weeks to contain the recent surge in Covid infections. Globally, Covid infections have risen above 133.153 million, while deaths have exceeded 2.889 million.
Safe-haven demand and dovish central bank expectations have sparked fund buying of precious metals in recent months. However, long liquidation pressure has emerged for gold after long gold positions in ETFs fell to a 10-1/2 month low Tuesday, down from October's record high of 3,459.8 metric tons (data since 2002). Long silver positions in ETFs soared to a record high Feb 2 of 1.017 billion troy ounces (data from 1990), although long silver positions fell to a 2-1/4 month low last Wednesday.
Precious Metals Settle Mixed On Strong Stocks And A Recovery In The Dollar (barchart.com)
