The gold price is in recovery mode after last week's speech from US Federal Reserve Chair Kevin Warsh ate away at its end-of-summer gains.
The yellow metal slipped briefly below the US$4,300 per ounce level on Tuesday (September 1), but then bounced back, nearly touching US$4,500.
Silver was also on the rise, pushing past US$67 per ounce for a short time.
The precious metals were reacting to a variety of factors, including comments from Fed Governor Christopher Waller. Speaking at a Reuters event on Thursday (September 3), he said his stance on interest rates will be "heavily influenced" by August inflation data.
Those numbers are scheduled to come out on September 11, and Waller said if he sees progress toward the Fed's 2 percent target, he would be in favor of keeping rates steady.
Waller's comments helped calm a surge in treasury yields that saw the 10 year note reach its highest level since November 2023. The jump came as tensions in the Middle East reignited.
Looking forward, investors are focused on the Fed's next meeting, set to run from September 15 to 16. CME Group's (NASDAQ:CME) FedWatch tool currently shows market watchers are pricing in a 60 percent probability of a hike — the percentage increased after US nonfarm payroll numbers, released on Friday (September 4), came in well above expectations.
Going back to gold, a key question is whether the bottom has been reached. I heard this week from John Kaiser of Kaiser Research Online, who said the overall trend is positive:
"(Gold) has its ups and downs like it had in the past week, but I think it's on a sustained uptrend. I don't know where it'll eventually level out.
"But now ... I'm saying now US$4,000 is the base, and the juniors are seriously undervalued. Explorers are just getting underway. Their financing is still fairly focused on a small group of companies. I think we're in the fourth inning of the mother of all resource junior bull cycles."
Kaiser also weighs in on how he's positioning for that scenario — watch the full interview here.
Bullet briefing — Billions in gold moved, oil breaks US$90
The Dutch central bank turned heads this week with the news that it has moved billions of dollars worth of gold from New York and Ottawa to London.
Between March and August of this year, it transferred around 86 tonnes of the yellow metal out of North America, leaving about 227 tonnes between Canada and the US.
The central bank cited "increasing geopolitical unrest" as a key reason for the decision, saying that a more balanced distribution of its gold reserves helps to spread risk, and also makes the metal "more readily available for use in a crisis situation."
The Netherlands joins a growing number of countries that are looking to move their gold closer to home, with others including France.
This week's tensions in the Middle East didn't just impact gold — they also affected oil, pushing prices above the US$90 per barrel level early in the period.
The conflict has undeniably created a huge amount of volatility, but in an interview this week, Adam Rozencwajg of Goehring & Rozencwajg pointed out that it hasn't led to the sky-high price levels that many expected when the Iran war first broke out — at least not yet.
Rozencwajg sees a potential bottleneck building in the refinery segment of the market, and he believes that as that comes to light oil prices are likely to go up. Here's how he explained it:
"No one is particularly bullish. I think whatever price you see, if you see a nine-handle on oil today, it's not because people are more bullish today than they were two or three months ago. In fact, I think people have maintained their fairly bearish, pervasive views throughout the year. And the only thing that's really affected the price has been what your risk team is allowing you to short.
"So that's going to flip. At some point, if we're right, this is going to become an area where people are interested in putting risk capital. This is something that people are going to talk bullishly about, and push the price up. And you're at a US$90 price without any of that having happened yet. And even if you look today, the short interest is quite high on a lot of this. So where do prices go from here? I mean, I suspect higher."
Rozencwajg covers a lot of ground, and I highly recommend listening to the full conversation to get his complete thoughts. Click here to watch the interview.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
