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Despite its losses, the gold market continues to outperform most other major assets – WGC

Neils Christensen   Monday September 26, 2022

The gold market continues to struggle in the face of unprecedented strength in the U.S. dollar; however, a new report from the World Gold Council said that investors need to put the recent price action in perspective compared to larger movements within financial markets.

Although the gold market has seen some significant selling pressure, dropping briefly to fresh two-year lows at $1,633 an ounce, prices are still only down less than 10% since the start of the year. In his latest report, Juan Carlos Artigas, global head of research at World Gold Council, said that given where the U.S. dollar is along with bond yields, gold prices should be down closer to 30%. December gold futures last traded at $1,646.90 an ounce, down 0.53% on the day.

“In fact, gold has done much better than inflation-linked bonds both in the U.S. and elsewhere. And we believe that gold’s performance so far this year reflects the behavior of its underlying drivers,” he said in the report.

Looking at broader financial markets, the S&P 500 is down nearly 23% year to date. The tech sector has been even harder hit, with the Nasdaq dropping more than 30%. The only sector that gold hasn’t outperformed is the broader commodity index.

It’s time to buy commodities, not equities – Goldman Sachs

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“The fact that gold has performed as well as it has, all things considered, is a testament to its global appeal and more nuanced reaction to a wider set of variables,” said Artigas.

Although gold prices are expected to continue to struggle in the face of rising interest rates, Artigas said he remains optimistic that the gold market can still find some support through year end.

Although the Federal Reserve is expected to continue to aggressively raise interest rates, the WGC said that the tightening cycle is closer to the end.

“Given how much tightening has occurred so far, we would expect rate hikes to slow down, allowing some of gold’s other supporting factors to play a more important role. Also, the fact the other central banks are being more resolute in their policy decisions – partly to curb inflation, partly to defend their currencies – should weigh on the U.S. dollar,” Artigas said.

Artigas added that growing recession risks as central banks continue to tighten monetary policy worldwide should also provide some support for the yellow metal.

Finally, Artigas said that central bank demand is also providing solid support for gold as they continue to diversify their holdings away from the U.S. dollar.

Last week, the WGC noted that the central bank of Uzbekistan has been extremely active in the gold sector, buying another 8.7 tonnes of gold in August. This is the third consecutive month of purchases.The WGC noted that Uzbekistan has bought 19.3 tonnes of gold this year, pushing total reserves to 381.3 tonnes

By Neils Christensen

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Gold demand surges amid economic uncertainty: World Gold Council reports broad global inflows

By Neils Christensen – 4-10-2025

Growing fears that the U.S. economy will see lower growth and higher inflation have finally pushed investors off the sidelines and into gold in a meaningful way, according to the latest research from the World Gold Council.

While the gold market has seen solid inflows into gold-backed exchange-traded funds since the start of the year, the March flow data from the WGC showed a broad-based increase in all major regions.

According to the report, North American-listed funds represented 61% of total inflows, while European markets accounted for about 22% of demand and Asian markets represented 16% of global inflows.

European demand has been the missing piece, underperforming within the gold market for the last few months compared to other regions. However, the WGC noted that these funds are starting to catch up.

“First quarter flows in Europe of US$4.6bn stood out as the strongest quarter since Q1 2020,” the analysts said in the report.

In total, 92 tonnes of gold, valued at $8.6 billion, flowed into global ETFs last month. Meanwhile, 226 tonnes of gold, valued at $21 billion, flowed into ETFs in the first quarter, marking the second highest quarterly level in dollar terms, only behind the second quarter of 2020.

In a regional breakdown, North American ETFs saw their gold holdings increase by 67.4 tonnes last month. The analysts said that demand continues to be driven by the usual factors, including solid momentum coupled with economic chaos and geopolitical uncertainty.

“Additionally, equity pullbacks, due to growth concerns and market liquidity worries amid ongoing quantitative tightening, further pushed up investor demand for safe-haven assets,” the analysts said.

Meanwhile, European-listed funds saw inflows of 13.7 tonnes. The report said the UK, Switzerland, and Germany all saw an increase in gold holdings.

“Although the Bank of England made no changes to its benchmark rate during its March meeting, a cloudy growth outlook further weighed by US tariff concerns, weak stock market performance, and the gold price surge drove demand higher in the UK,” the analysts said. “Equally, despite a jump in the 10-year German Bund yield in early March amid Germany’s massive spending plan, investors in Europe continue to add gold ETFs to their portfolios as the ECB’s March cut encouraged further easing expectations and US tariff risks loom over the growth outlook.”

Finally, Asia-based funds saw inflows of 9.5 tonnes last month.

“China and Japan dominated demand in March, both likely driven by rocketing gold price performances, which dwarfed other assets in the month, and roaring global trade policy risks,” the analysts said.

Although there is a risk that gold’s rally becomes unsustainable, the WGC said the market is backed by solid momentum.

“The extent and speed of gold’s rally have drawn out comparisons to previous peaks. While there are headwinds that the gold market will naturally face in this environment, our analysis also suggests that current macroeconomic conditions are quite different from prior periods when the gold market reached previous highs,” the analysts said in the report.

“The willingness to hold and reluctance to sell – given current extreme policy uncertainty – could generate real momentum,” they added. “By historical standards, the current rally isn’t particularly large or long. And comparing the current rally to the recent 2011 and 2020 peaks highlights that, relatively speaking, fundamentals look more solid.”

Gold prices holding above $3,200 an ounce as US PPI drops 0.4% in March

By Neils Christensen – 4-11-2025

The gold market continues to hold near record highs above $3,200 an ounce and is paying little attention to economic data as U.S. wholesale inflation pressures fell sharply last month.

The headline Producer Price Index (PPI) dropped 0.4% in March, following February’s revised 0.1% reading, the U.S. Labor Department announced on Friday. The latest inflation data was significantly cooler than expectations, as economists had predicted a 0.2% increase.

In the last 12 months, headline wholesale inflation increased by 2.7%, well below the consensus of 3.3%.

Core PPI, which strips out volatile food and energy costs, dropped 0.1% last month, in line with February’s 0.1% decline. Economists had forecast a 0.3% increase. Annual core PPI was 3.3%, also well below the consensus expectation of 3.6%.

The report indicated that lower energy prices were the biggest contributing factor behind the drop in producer prices.

Gold is not paying much attention to the forward-looking inflation numbers as the market continues to attract significant safe-haven flows due to the weakening U.S. dollar and elevated bond yields. Spot gold last traded at $3,230.40 an ounce, up nearly 2% on the day.

Some economists note that the inflation data is outdated as the market continues to react to President Donald Trump’s global reciprocal tariffs, which were in place for a week before being halted for 90 days.

“While tariff effects didn’t move the needle for either CPI or PPI in March, there were some signs of them in this release, with the steel mill product PPI jumping by 7.1%. The broader tariffs that took effect last week will start to feed through in the next set of monthly price data, although the recent weakness in markets and evidence of some economic weakness may give the Fed more confidence that these will not have significant second-round effects,” said Stephen Brown, Deputy Chief North America Economist at Capital Economics.

Even gold was hit by the global market selloff Thursday — but this is turning it around

Gold recovers most of its losses while world markets sink

Gloomy economic growth outlook offers ‘perfect backdrop for further gains in gold’, says BullionVault’s Adrian Ash

By Myra P Saefong

Gold on Thursday was performing its “role as a store of value, providing liquidity in times of trouble,” said Brien Lundin of Gold Newsletter.

Gold fell victim to a selloff in global markets Thursday after President Donald Trump announced wide-ranging tariffs on foreign imports — but it’s still a clear-cut winner to hedge uncertainty, as bargain hunters helped prices for the precious metal recover much of their losses by the day’s settlement.

Gold bulls were looking to “buy the dip amid trade-war chaos,” Jake Hanley, managing director and senior portfolio specialist at Teucrium, told MarketWatch, as gold futures traded well off Thursday’s intraday lows.

Gold futures had dropped by more than $90 an ounce on Comex, from Wednesday’s record-high settlement at $3,166.20 an ounce to their intraday low of $3,073.50 on Thursday, Factset data showed.

“What we’re witnessing today is the kind of asset-wide liquidity event in which everything is sold to raise capital,” said Brien Lundin, editor of Gold Newsletter. “In this kind of liquidity vacuum, babies are thrown out with the bath water across the board.”
— Brien Lundin, editor of Gold Newsletter

“As we’ve seen in previous events like this, gold performs its role as a store of value, providing liquidity in times of trouble,” Lundin told MarketWatch. “It is the figurative piggy bank that gets broken open as traders desperately reach for cash to meet margin calls.”

Following Wednesday’s announcement of Trump’s new plan for U.S. tariffs — which include a universal tax of 10% on imported products from all other countries — U.S. benchmark stock indexes traded broadly lower Thursday, dragging down most markets along with it, including oil prices. Treasurys were an exception, rallying as investors sought safety in the bond market.

Dennis Gartman, retired publisher of the Gartman Letter, said he had sold the “vast majority” of his gold-oriented holdings on Tuesday, ahead of Trump’s announcement. He retained “only my very small holdings of actual, physical gold,” which he’s had for nearly 15 years and said he has no intention of selling, given that he owns that bullion at something close to $600 an ounce.

Gartman, who serves as emeritus chairman of the University of Akron Foundation’s endowment investment committee, said he has little intention of getting back into those gold-oriented holdings “at the moment given the confused atmosphere.”

The White House said some goods and economies would be exempted from the reciprocal tariffs, including gold bullion, according to the Wall Street Journal. Concerns that Trump’s tariffs would include gold had contributed to the metal’s rise to record highs. Traders had scrambled to move physical gold to New York from London and took advantage of a big spread between London spot prices and near-term New York futures prices.

Short term, Adrian Ash, director of research at BullionVault, said Trump’s “liberation day” tariffs were proving to be a “buy the rumor, sell the fact” event for gold prices. Gold futures on Comex had touched fresh record intraday highs above $3,200 overnight, before temporarily dipping below $3,100. settled at $3,121.70 an ounce, down $44.50, or 1.4%.

Gold recoups most of its early Thursday lossesSource: FactSet

April 2April 33,0753,1003,1253,1503,175$3,200

“Risk and uncertainty are strategic drivers of gold demand, whether they are prompted by safe-haven conditions or economic conditions that will be impacted by trade wars,” Joe Cavatoni, senior market strategist, Americas, at the World Gold Council, told MarketWatch. Gold remains “top of mind as a global asset, driven by the need for the right kind of diversification to a portfolio — one that offsets risk [and] volatility, and provides returns.”

Still, for now, the obvious move for traders is out of risk assets and into U.S. Treasurys “as traders seek to shore up liquidity and seek safety,” said Teucrium’s Hanley.

“No one can know for certain who the winners and losers will be” following the implementation of Trump’s tariffs, he said. It will all depend on trade negotiations, but “gold is likely to benefit from the ongoing uncertainty.”

Thursday’s low may actually be the “bargain” price level investors were looking for, as gold clawed back much of the session’s decline, Hanley noted, but “round-number support levels” include $3,000 and $2,800.

“If gold prices fall back to these levels and hold, it will signal that investors see value at those prices,” he said.

Longer term, BullionVault’s Ash said he believes the reasons behind gold’s “stellar start to 2025 are only stronger now that Trump has announced his tariffs.

“Weaker trade, higher input costs and shrinking margins are badly hurting the stock market, while geopolitical mistrust is deepening,” he said. “Such a gloomy outlook for economic growth offers the perfect backdrop for further gains in gold.”

Gold outshines equities and Bitcoin as investors protect themselves from trade war

BY Neils Christensen

President Donald Trump’s escalating trade war is taking its toll on risk assets, and gold continues to shine as a safe-haven asset and an alternative global currency.

Not only is gold beating the S&P 500 as Trump levies significant tariffs on Mexico, Canada, and China, but it’s also outperforming Bitcoin, which saw a sharp drop over the weekend.

Bitcoin has been struggling since hitting new all-time highs above $100,000 per token last month. On Sunday, as equity markets were starting a new trading week, the leading cryptocurrency dropped to a low of $91,530 per token. Although Bitcoin has managed to bounce off its overnight lows, it remains in negative territory at $95,135 per token, down 2.6% on the day. Bitcoin is down 13% from its all-time highs seen just two weeks ago.

Meanwhile, gold prices experienced some modest selling pressure overnight as they tested support around $2,800 an ounce. However, prices have recovered ahead of the North American open. As of 8:45 a.m. ET, April gold futures were trading at $2,847.50 an ounce.

Many analysts expect gold prices to remain in a solid uptrend, even as they face increasing volatility due to strong gains in the U.S. dollar. In a note Monday, Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, said that gold should remain well supported as the “everything bubble” starts to deflate. While gold has managed to bounce off its lows, the S&P 500 remains in heavily negative territory, down 1.58% ahead of the open.

“Gold may be gaining momentum vs. the stock market and Bitcoin, with unfavorable macroeconomic implications. Up about 5% as of Jan. 31 since Bitcoin first closed above $100,000 on Dec. 6, the precious metal is beating both the crypto and the S&P 500,” McGlone said in his note.

McGlone added that gold is in a much better position than Bitcoin to attract new safe haven flows as sentiment in equity markets continues to sour.

“It could be a short-term spurt for the old-guard store of value, but four years of gold ETF outflows versus the biggest ETF launch in history for Bitcoin, strong competition from record-setting stocks, and high U.S. interest rates may suggest a pinnacle that the precious metal is sniffing out,” he said.

McGlone noted that Bitcoin could be facing a make-or-break moment as it underperforms gold, which could also have broader implications for global financial markets.

“A top prerequisite for continued appreciation of the highly speculative digital asset that’s been embraced by Trump might depend on the performance of the U.S. stock market. At 36x, the ounces of gold equal to a Bitcoin have stalled near the 2021 high,” he said. “Gold’s roughly 37% gain versus 27% for the S&P 500 year-over-year as of Jan. 31 may suggest that the metal is testing the limits of the great U.S. wealth-creation machine. Runaway U.S. government deficit spending buoys both gold and the stock market, but equities may have reached diminishing returns. Bitcoin/gold may be in a ‘must-go-up-or-else’ situation due to President Donald Trump’s endorsement and its implications for risk assets.”

By Neils Christensen

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Gold hits all-time high on new U.S. trade tariff threats

By Jim Wyckoff

Gold prices are higher and have hit new record highs in midday U.S. trading Monday. Safe-haven demand is featured in the yellow metal amid keener marketplace uncertainty as the U.S. may soon implement tariffs against its major trading partners. April gold was last up $17.40 at $2,852.10. March silver was up $0.14 at $32.41.

Gold did back down from its daily high at mid-morning on news that U.S. trade tariffs against Mexico, which were set to go into effect Tuesday, have been delayed by one month so the U.S. and Mexico can negotiate more. Canada has vowed retaliation and as of this writing the new U.S. trade tariffs against that nation and against China were set to go into effect Tuesday.
The Canadian dollar overnight sank to its weakest level against the U.S. dollar since 2003.

U.S. stock indexes are lower at midday but up from daily lows on the news of delayed tariffs against Mexico.

The key outside markets today see the U.S. dollar index higher but down from its daily highs. Nymex crude oil futures prices are slightly up after trading solidly higher earlier, and are now trading around $72.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.55%.

Technically, April gold futures bulls have the strong overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $2,760.20. First resistance is seen at today’s contract high of $2,872.00 and then at $2,885.00. First support is seen at $2,822.10 and then at $2,800.00. Wyckoff’s Market Rating: 9.5.

March silver futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the December high of $33.33. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at last week’s high of $32.92 and then at $33.00. Next support is seen at $32.00 and then at the overnight low of $31.61. Wyckoff’s Market Rating: 6.5.

By Jim Wyckoff

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