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While the gold price consolidates, silver begins to awaken
What does the new 'big quest for yield' mean for gold prices next week?

The incredible gains in gold stocks, which began just after the turn of the century, had caught my eye and I became fascinated with the mining sector. These strong deflationary forces, created by government decisions to shut down most of the global economy due to the Covid pandemic, has driven most speculators to finally give up in frustration on this tiny sector. This barometer, closely watched by precious metals speculators, reached an all-time spike high of over on March 18th. This means it took ounces of silver to purchase just one ounce of gold on that day. And after being pummeled to record-low levels relative to gold, silver speculators have plenty of room to get back in before an epic silver mean reversion higher gets started. The extreme high in this ratio implies the metal has been used more for industrial purposes, as safe-haven investors have been favoring gold since the lows in late

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Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here! Kitco News With the futures market starting to price in the possibility of negative U. The Fed funds futures for December of this year are pricing in negative rates.

Gold prices are looking at a gain this week of around 0. Possibility of negative policy rates by early of next year is helping gold prices out and is something to watch next week as well, said TD Securities commodity strategist Ryan McKay. That is the only place where they have been any yield. There is a big quest for yield. There seems to be an inverse relationship happening between equities and gold as the yellow metal is rising along with stocks, the strategist pointed out.

Some analysts pointed out that they see gold as trading in a tight range next week as investors explore risk-on assets. We are probably at the point where investors are going to be paying attention to risk assets just because there is no clear direction one way or the other for the broader market. Some volatility is expected going forward, added Millman, highlighting that he is neutral on the precious metal in the short-term.

McKay also pointed to a general lack of interest in terms of volume and open interest in the gold market at the moment. The market is still reluctant to get in. The higher move in silver could help gold move higher as well, explained Baruch. Along with those low rate expectations, there is a search for yield. Stocks have been beneficiary in that and it helped to push back deflationary fears. And both of those narratives are helping silver. Wall St. McKay sees gold trading range-bound next week.

However, on the downside, there is a lot more room for declines. There is quite a lot on the macro data front next week. Still, it is unlikely to shake the markets too much unless there is a big surprise on the upside or downside, McKay told Kitco News. People are expecting it to be fairly bad. The only way you get a major reaction is if it surprises one way or the other substantially. On Friday, markets digested the news of the U. On top of that, the unemployment rate jumped to The bad news had no impact on the equity markets with the Dow up more than points on Friday afternoon.

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Gold Silver. Currency Converter Currency Cross Rates. Features Tech Metals. Real-time gold scrap value calculator for professionals iPhone Android Web. Calculate precious metal dimensions, weights and purity iPhone Blackberry Android. News Bites. What does the new 'big quest for yield' mean for gold prices next week? Anna Golubova Friday May 08, Kitco News Share this article:. Key data There is quite a lot on the macro data front next week. Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. Today's un-employment rate challenges levels not seen since the rate the Great Depression May 8, PM. Wall Street jumps as historic job losses fewer than feared May 8, PM.

Negative interest rates: the next trigger in gold May 8, PM.

Kitco News' contributed commentary features articles and opinions from some of the top experts in the gold industry. Live gold news headlines, data, analysis, information, prices and charts from the global gold markets.

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Gold on Friday eased from its highest in nearly two weeks, as investors grew hopeful about economies reopening after COVID lockdowns, but a continued wave of central. Gold hit a near two-week high on Friday as investors awaited U. Gold was hovering near a two-week high on Friday as investors awaited the U.

While the gold price consolidates, silver begins to awaken

As of writing, the pair was down 0. PM Johnson will announce his decision on extending the lockdown on Sunday. The US reported over 20 million job losses in April, yet markets mostly shrugged it off. Canada stands to have forfeited a fifth of its employment in one month as the full impact of the coronavirus economic shutdown took effect in April. The US is expected to have lost 22 million jobs in the past month.

What does the new 'big quest for yield' mean for gold prices next week?

Gold was extracted in Egypt as early as B. This shows that people have always been fascinated by gold and by its rarity, durability and beauty. Because of its properties, gold is also one of the most important industrial raw materials. The yellow precious metal is easily workable and conducts electricity and heat. Because of its excellent conductivity, gold is used particularly in the electrical industry. Gold has also been used in dental technology for around years. However, gold is used most frequently in the jewelry industry. This line of business accounts for around 75 per cent of the gold worked. Apart from the Antarctic, where mining is not allowed due to international regulations, the precious metal is mined on all continents.

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In the international market, silver was quoting 1. In the international market, silver was quoting 0. The country is undergoing a day lockdown announced on Tuesday to curb the spread of coronavirus. Spot gold markets in India remained shut due to countrywide lockdown to prevent spreading of Covid All rights reserved. For reprint rights: Times Syndication Service. Have you read these stories? How not to become immune to economic common sense Updated: May 10, , The virus will keep spreading for some more time. Lockdown 3. Brand Solutions. TomorrowMakers Let's get smarter about money. ET NOW. ET Portfolio.

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