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Can gold's rally last as ETF investors continue to ignore the market

Kitco NEWS sent this email to their subscribers on January 20, 2023.

Editor's Picks @neils_C

The new year is proving to be a solid start for the gold market as prices end the week near a nine-month high.

The gold market has rallied for five-straight weeks as prices are up more than 5% in the first month of 2023. And while there is strong bullish sentiment in the marketplace because, there is still one piece of the market missing.

Investors are still not jumping into the market, causing some analysts to question how sustainable this new rally is. While gold prices have rallied 5% this year, data from the world's largest gold-backed exchange-traded fund, SPDR Gold Shares (NYSE: GLD), shows that ETF demand continues to fall.

As of Jan. 19, GLD's gold holdings have dropped 5.21 tonnes. The question is: does the price follow broader investment demand, or will ETF purchases pick up to reflect the bullish sentiment in the marketplace? The outflows in the ETF market have slowed, but they haven't ended.

At the same time, there are concerns that silver is not seeing the same bullish sentiment as gold. After outperforming gold through November and December, silver appears to be treading water at around $24 an ounce.

Silver's lack of momentum is also a stark contrast to what is happening in other industrial metals like copper, which is trading at a seven-month high of around $4.26 a pound.

It will take some time for these market divergences to work themselves. Still, there are reasons to be hopeful that investors will eventually see the value in holding precious metals.

This week Bank of America published a very bullish report on gold; the analysts said that they expect the precious metal to be a mainstay asset for the next three years.

And Bank of America is not alone in its bullish outlook. In November, European fund manager HANetf surveyed 100 European and British wealth fund managers. According to the results, 89% of those respondents said they intended to increase their exposure to gold.

"It now may be the case that a lot of the negative sentiment towards gold has passed," said Tom Bailey, head of ETF research at HANetf, in the report.

As to what is driving sentiment in precious metals, the biggest factor continues to be weakness in the U.S. dollar; the U.S. dollar index has fallen more than 10% since its 20-year high in September.

According to analysts, the U.S. dollar is losing momentum as markets expect the Federal Reserve to slow its aggressive tightening cycle. Markets have all but completely priced a 25 basis point move from the U.S. central bank next month.

In an exclusive interview with Kitco News, esteemed economist David Rosenberg said that he expects the February meeting to be the Federal Reserve's last hike. He added that the impending recession will force the central bank to start cutting interest rates sometime in the second half of the year.

In this environment, he expects gold to be an attractive asset and sees prices rallying to new record highs above $2,000 an ounce this year.

With so much bullish sentiment in the marketplace, many analysts think it's only a matter of time before investors jump back into gold.

On a final note, the Kitco News team would like to wish everyone a happy Lunar New Year and may the Year of the Rabbit be prosperous for everyone.

Neils C.
Editor's picks
Gold is a 'mainstay' asset for the next 3 years - BofA
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Kevin O'Leary: Another 'meltdown to zero' will 100% happen, here's how he's hedging
WW3 IS HERE an BOTTOM IS IN FOR GOLD M- CELENTE e
World War 3 is here, global collapse will pave way for CBDCs & gold can only go up - Gerald Celente
A'WEAK' DOLLAR SUPPDRTS LS ASSET ' E T I hoe GAYED
Emerging markets to rally as the U.S. dollar gets ‘wrecked’ – Michael Gayed
Wall Street Bulish 44% o R 22 e Main Street s - s N Neutral N 15%
KITCOCTIE e
Barrick says its preliminary 2022 gold production of 4.14Moz was below guidance



Published on Tradingiew.com, Jan 20, 2023 10:16 UTC-5 Gold Spot 1 5. Dolar h, 10 1525.21 023 0.01% o ol 20993 w50 Il..,!ilh.l.m.'g ..#IJhu..lugllll"llll.,.lngllli%l T TadingView Al .
Technically Speaking
Jim Wyckoff

Market Analyst and Columnist
[email protected]

Gold price powers to 9-mo. high on safe-haven demand, bullish charts
Promotion
LOVE IS PRECIOUS Swans 10z Silver Coin
This message was intended for  [email protected] , as a subscriber and/or customer of Kitco. 
All logos, brand names and/or trademarks that appear here are the property of their respective copyright holders. 
© 2023 Kitco Metals Inc. 620 Cathcart, Suite #900, Montreal, Quebec, H3B 1M1 Canada.

Text-only version of this email

Editor's Picks @neils_C The new year is proving to be a solid start for the gold market as prices end the week near a nine-month high. The gold market has rallied for five-straight weeks as prices are up more than 5% in the first month of 2023. And while there is strong bullish sentiment in the marketplace because, there is still one piece of the market missing. Investors are still not jumping into the market, causing some analysts to question how sustainable this new rally is. While gold prices have rallied 5% this year, data from the world's largest gold-backed exchange-traded fund, SPDR Gold Shares (NYSE: GLD), shows that ETF demand continues to fall. As of Jan. 19, GLD's gold holdings have dropped 5.21 tonnes. The question is: does the price follow broader investment demand, or will ETF purchases pick up to reflect the bullish sentiment in the marketplace? The outflows in the ETF market have slowed, but they haven't ended. At the same time, there are concerns that silver is not seeing the same bullish sentiment as gold. After outperforming gold through November and December, silver appears to be treading water at around $24 an ounce. Silver's lack of momentum is also a stark contrast to what is happening in other industrial metals like copper, which is trading at a seven-month high of around $4.26 a pound. It will take some time for these market divergences to work themselves. Still, there are reasons to be hopeful that investors will eventually see the value in holding precious metals. This week Bank of America published a very bullish report on gold; the analysts said that they expect the precious metal to be a mainstay asset for the next three years. And Bank of America is not alone in its bullish outlook. In November, European fund manager HANetf surveyed 100 European and British wealth fund managers. According to the results, 89% of those respondents said they intended to increase their exposure to gold. "It now may be the case that a lot of the negative sentiment towards gold has passed," said Tom Bailey, head of ETF research at HANetf, in the report. As to what is driving sentiment in precious metals, the biggest factor continues to be weakness in the U.S. dollar; the U.S. dollar index has fallen more than 10% since its 20-year high in September. According to analysts, the U.S. dollar is losing momentum as markets expect the Federal Reserve to slow its aggressive tightening cycle. Markets have all but completely priced a 25 basis point move from the U.S. central bank next month. In an exclusive interview with Kitco News, esteemed economist David Rosenberg said that he expects the February meeting to be the Federal Reserve's last hike. He added that the impending recession will force the central bank to start cutting interest rates sometime in the second half of the year. In this environment, he expects gold to be an attractive asset and sees prices rallying to new record highs above $2,000 an ounce this year. With so much bullish sentiment in the marketplace, many analysts think it's only a matter of time before investors jump back into gold. On a final note, the Kitco News team would like to wish everyone a happy Lunar New Year and may the Year of the Rabbit be prosperous for everyone. Neils C. Editor's picks Gold is a 'mainstay' asset for the next 3 years - BofA MELTDOWN TO ZERO' E EE i R KEVIN OLEARY - Kevin O'Leary: Another 'meltdown to zero' will 100% happen, here's how he's hedging WW3 IS HERE an BOTTOM IS IN FOR GOLD M- CELENTE e World War 3 is here, global collapse will pave way for CBDCs & gold can only go up - Gerald Celente A'WEAK' DOLLAR SUPPDRTS LS ASSET ' E T I hoe GAYED Emerging markets to rally as the U.S. dollar gets ‘wrecked’ – Michael Gayed Gold price is going to record highs in 2023 as investors protect themselves against a severe recession - David Rosenberg Gold's bull market is just beginning as European fund managers take a bigger stake - HANetf National Australia Bank to launch AUDN, an Australian dollar-pegged stablecoin Royal Mint sees record bullion demand in 2022 as sales increase 25% for gold, 29% for silver Russia is working with Iran on a gold-backed stablecoin Gold to leave behind its $1,700-$2,000 range, eyes on gold-copper ratio as Fed pivots The world could run out of gold by 2050 as demand grows to keep up with evolving society, says researcher Further weakness in the U.S. dollar will drive gold prices higher - VanEck Gold price to $2,200, silver to $30 in 2023 - Degussa Genesis files for bankruptcy as Gemini targets parent company DCG IMF offers five recommendations to manage risk in the crypto sector CBDC Outlook 2023 - More than meets the eye Junior gold stocks are poised to outperform in 2023 Wall Street Bulish 44% o R 22 e Main Street s - s N Neutral N 15% KITCOCTIE e Barrick says its preliminary 2022 gold production of 4.14Moz was below guidance First Majestic reports record silver equivalent production in 2022 Pan American Silver reports 2022 silver and gold production within guidance IAMGOLD says its 2022 gold production exceeded revised guidance Published on Tradingiew.com, Jan 20, 2023 10:16 UTC-5 Gold Spot 1 5. Dolar h, 10 1525.21 023 0.01% o ol 20993 w50 Il..,!ilh.l.m.'g ..#IJhu..lugllll"llll.,.lngllli%l T TadingView Al . Technically Speaking Jim Wyckoff Market Analyst and Columnist [email protected] Gold price powers to 9-mo. high on safe-haven demand, bullish charts Promotion LOVE IS PRECIOUS Swans 10z Silver Coin This message was intended for  [email protected] , as a subscriber and/or customer of Kitco.  Advertising |  | | Contact us | All logos, brand names and/or trademarks that appear here are the property of their respective copyright holders.  © 2023 Kitco Metals Inc. 620 Cathcart, Suite #900, Montreal, Quebec, H3B 1M1 Canada.
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