Award-winning investment boutique HULT Private Captial has been closely monitoring the precious metals markets.
In the past 30 days, both silver and gold prices have been on an uptick.
After reaching a peak on the 12th with gold over $1800 per ounce and silver above $20.80, both metals’ prices have fallen back. The choppy trading that preceded these highs was due to the predictions by traders that the US Federal Reserve would not continue its aggressive rate hikes after some relatively benign inflation readings were released on the 10th. Inflation is s ll a concern in the UK, where the most recent numbers show that they have seen a price rise of 10% over last year.
According to HULT Private Capital’s Amrit Singh HULT believes that the Fed’s two previous rate hikes of 0.75%, combined with the lessening fears of energy issues that started with the Ukraine invasion, are leading to a calming effect.
Spot gold has fallen back to $1763 per ounce, well below its high of around $2050 per ounce seen in March. The continuous gold futures price is at $1776 a 0.7% premium, down slightly from a 0.8% premium a week ago.
HULT Private Capital’s Singh said that the US consumer prices did not rise in July, mainly due to a significant drop in gasoline prices. The US inflation benchmark Consumer Price Index (CPI) was flat at 0% in July, a sign of relief after it had advanced 1.3% in June.
According to HULT Private Capital’s Singh, “Gold and silver both saw a knee-jerk reaction, the tamer in a on data led investors to believe that the Fed is going to be less aggressive this month. The price dipped then rose to the recent high but then has fallen back. Metal’s investors are not certain if the Fed will be ‘tame” or ‘tamer.’ The subsequent fall to today’s levels makes us believe they will be tame.”
Singh continued, “The technical posture of the near-term precious metals markets has turned bullish recently; if inflation starts to show its head again as it has in the UK, or signs of recession become clearer, the next price objective for Gold bulls is first $1850 and then $1900. Gold performs well if interest rates are low, so the FED’s next moves will be key.”
HULT Private Capital will be watching the Fed’s coming comments looking for hints about its potential rate hike path.
The dollar index has also been choppy, falling over 1% and then moving back up. Any fall will then bolster the appeal of metals by overseas buyers looking for additional arbitrage opportunities.
Concurrently, US Treasury yields have risen over the past month except for the ten years.
The Goldman Sachs price points for gold are in line with HULT Private Capital’s forecasts. Goldman currently has three six and 12-month price forecasts at $1850 for three months, and 1950 for both six months and one year. HULT Private Capital stated that they see gold in this range being bound by offsetting growth and tightening factors.
Rounding out the metals markets, platinum is down below $925 per ounce, and Palladium is below $2140 per ounce.