Precious Metal Market News (21 June 2024) | Gold, Silver Tumble After Promising PMI Data

 

Precious Metal Market News (21 June 2024) | Gold, Silver Tumble After Promising PMI Data Released

Gold and silver dipped this morning after favorable PMI data further quashed investor hopes for an early interest rate cut from the Federal Reserve. Gold fell more than $35, dropping dangerously close to the $2,300 support line. Silver lost over $1 this morning, dipping below $30 for the first time all week. 

Analysts say that the most recent Purchasing Manager’s Index (PMI) report may be to blame for today’s dips in the precious metal markets. The report, released early this morning, suggests that the U.S. economy may be recovering more quickly than expected. Promising data from the PMI report may minimize investor bets that the Fed will cut interest rates during one of its next few meetings, spelling trouble for precious metal investors hoping for easing rates. 

Gold Struggles to Hold Above $2,300 Support Line

The price of gold dropped over $36 early this morning. PCI data released earlier today set a 26-month manufacturing record in the United States, which spells trouble for gold bulls hoping for early rate cuts at the Federal Reserve’s July 21 meeting. The recent dip comes on the heels of a relatively steady gold recovery over the past ten days. The precious metal trended up until this morning, when optimistic manufacturing performance data from the Purchasing Manager’s Index drove the metal to a new weekly low at $2,326.56.

Gold bulls will continue their bid to stabilize gold above the $2,300 support line. The yellowish metal’s spot price dipped below $2,300 only once this month, on June 7th. The rest of today’s price-action should give investors cues on whether or not gold prices are likely to retain their position above $2,300. 

Gold Price Forecast – 21 June 2024

Some gold market analysts predict a strong July heading into early August, with a $2,800 all-time high gold price not out of the question. The precious metal will need some help from the Federal Reserve to log such dramatic gains in Q3, though. In particular, the Fed’s July 21st meeting should shed some more light on how the board interprets recent economic signals – including today’s promising manufacturing data.

The next report to look out for is the Personal Expenditures Price Index (PCE), which will become public on June 28th. After that, expect some gold price-action after Consumer Price Index (CPI) report, which is due for release on July 11th. This report should provide the Federal Reserve with more perspective on whether or not rate cuts are necessary to curb inflation. Gold prices will likely shift in the lead up (and following) both reports as investors place their bets on the odds of interest rate cuts from the Fed. 

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Together, CPI and PCE reports help the Fed to determine the state of the U.S. economy. These two data sets tend to give investors early insights into if and when 2024’s promised interest rate cuts are coming. 

Silver Dips Below $30 Support

It looks like silver will end this week in the red after dropping over $1 on the day. After spending most of the week below $30, the metal briefly peaked at a weekly high of $30.77 before dropping again early Friday morning. Logging the biggest percentage loss of any precious metal on the day, silver fell to $29.64 per ounce. It appears that the metal is following closely behind gold, dipping as new PMI data quells investor hopes for a July rate cut from the Federal Reserve. 

The gold-silver ratio jumped today as silver prices declined, peaking at nearly 78.5:1 by midday. As the market nears an 80:1 GSR, expect some investors to flip from gold to silver. 

Complicating the price-action equation for silver is the metal’s strong supply-demand dynamics. A projected supply shortfall of 215.3 million ounces and record industrial demand suggest that silver prices have quite a bit of room to grow. 

Silver Market Analysis – Will Silver Retain $30 Support Level?

Silver’s biggest fight for now is along the $30 line. The precious metal briefly crested above $30 yesterday, but today’s promising PMI report make establishing $30 as a strong support an uphill battle for silver bulls. Given silver’s strong industrial demand within the growing solar power sector, it is not unreasonable to suggest that the precious metal may approach August trending well above $30 per troy ounce. Traders paying close attention to the GSR might consider swapping from gold to silver once the ratio hits 80:1, which could be a great thing for silver bulls hoping for a strong Q3. 

Analyst Christopher Lewis of FX Empire argues that silver’s strong supply-demand dynamics suggest the metal is primed for another 2024 breakout: 

The silver market continues to see a lot of noisy behavior, as they have seen yet another push higher at this point in time. This is a market that is moving on multiple factors, such as green technology, and reaction to central banks.

Barring a late-June breakout, expect silver prices to closely follow gold’s price-action as new key economic indicators provide insight into where the Fed may take interest rates later this month. 

Platinum, Palladium Log Major Late-Week Gains

Platinum and palladium markets seem unaffected by today’s strong PMI data. This is not particularly surprising, considering the high industrial demand for platinum group metals. Both metals logged gains on the day. Platinum prices jumped over $15, cresting above the $1,000 line for the first time since June 6. Palladium gains were even more dramatic; the industrially useful metal climbed nearly $38 on the day, putting it in the green by over $100 since the beginning of this week. 

Precious metal prices are likely to settle heading into next week, but both gold and silver will most probably end June 21st in the red.