Is gold ready to crack US$2,000 per ounce again?

Thursday 14 April 2022

In this week's market report:

• Gold moves higher on US inflation data

• Bulls, keep looking up

• Investors flock to gold

Dear Investor,

US dollar gold price [XAUUSD] Daily chart

Source: Trading View
(Click to enlarge)

Gold moves higher on US inflation data: Spot gold traded US$10 per ounce higher on US CPI data, reaching a four-decade high. Overall, gold is up 2.46% to US$1,978.

• March inflation data rose 8.5% for the month, slightly above the expected 8.4%. Core inflation (minus food and energy) sits at 6.5%. Rent increases were the fastest increasing sector, followed by medical care, food, and petrol.

US dollar remains strong: Gold’s softer response to the US inflation data is largely because the US dollar remains strong and real yields continue to rise. Furthermore, an economist from Ernst & Young says this could be close to the peak, and that core inflation should slow in the months ahead.

Silver shines this week: All precious metals were up this week. However, silver posted the largest gain.

• Silver is up 4.46% this week to US$25.69

• Platinum is up 2.72% to US$988

• Palladium is higher by 7.43% to US$2,395

Bulls, keep looking up: Short-term price targets include US$1,980 and then again at US$2,002, where gold may meet some resistance.

Bears, the support is strong: Any sell-off may see gold fall into the US$1,916–20 range.

Strong gains in the Australian gold price: The Australian dollar fell 0.75% to 74.25 US cents, which amplified the Australian dollar gold price. Gold in Australian dollars rose 3.32% this week to US$2,667.

Investors flock to gold

Global gold-backed exchange-traded funds (ETFs) surged for the third consecutive month as investors flocked to gold in March.

• A total of 187.3 tonnes of inflows for March

• Total ETF holdings now sit at 3,837 tonnes, not far from the record high in July 2020

Banks back gold’s rally: An ANZ economist noted this week that they see gold heading above US$2,000 per ounce.

India’s largest gold buyers: The middle-income group are the largest buyers of physical gold in India, with this demographic buying 56% of the 800–850 tonnes of gold India buys annually.

Gold shines when things aren’t normal: Popular gold advocate Nick Barisheff, CEO of BMG Group, has recently pointed out that equity markets are ‘grossly overvalued’ and that he and several other analysts are expecting a crash ‘way worse’ than 1929. Barisheff pointed to the benefits of owning physical gold by saying:

‘Gold is a portfolio diversifier because it’s negatively correlated to everything else.
‘So, when you add gold to a portfolio, it actually improves the return and reduces the standard deviation of the portfolio. That’s valuable in these times, which aren’t normal.’

Read the article in full here.

Russia stops buying gold at a fixed price

The Central Bank of Russia has ceased their fixed price for gold due to significant changes in market conditions. Instead, they will resume buying gold through commercial banks and negotiating the price.

Inside our office this week…

The ABC Bullion offices will be closed on both:

Good Friday - April 15th 2022
Easter Monday - April 18th 2022

Our website continues to trade 24/7, lock in an order online at any time.

Happy Easter!

Warm regards,

The ABC Bullion Team