Monday Metals Market Update – Precious Metal Price News (10 June 2024)

 

Monday Metal Market Update – Precious Metal Price News (10 June 2024)

Prices crashed in all three major precious metal markets last week after favorable NFP data dampened expectations for a rate cut from the Federal Reserve. Gold, silver, and platinum logged their biggest retractions in several weeks in the lead-up to the Fed’s next meeting, which is scheduled for June 13. 

Gold, silver, and platinum all saw modest recoveries this morning. Gold is up around $18 since last Friday, and silver jumped over half a dollar since market open. Platinum also recovered marginally, appreciating nearly $12 on the day. Bullish investors in gold and silver markets are working to stabilize the two metals amid a massive selloff in response to better-than-anticipated job creation data released last week. 

The near-term future is uncertain for precious metal markets. The Fed’s June 13 meeting is not expected to result in any change to the federal interest rate, and investors should expect yet another selloff once the Federal Reserve Board confirms that rates will remain at their current high. 

Markets Rebound Modestly After Massive Selloff 

Complicating the bulls’ fight for gold stability above the $2,300 level is China’s ongoing retraction in its gold buying efforts. China stopped buying gold last week, prompting fears that the metal may be overvalued at $2,300. The impact on the gold market was immediate. China’s retraction from the gold market paired with promising jobs data last Friday, culminating in gold losses of over $80 on the day. 

The gold-silver ratio fell to $77.57 early this morning as silver recovered over $.50 following last week’s price retraction. 

Monday morning was a brief reprieve for gold, silver, and platinum bulls after last week’s unexpected downturn. All three metals are up on the day, but it remains to be seen whether or not the recovery will continue into the rest of this week. 

Precious Metal Market Forecasts (June 10, 2024)

The June 13 Fed meeting is the next key event that should give investors more cues on where the metal markets may be heading. A statistical analysis from Federal Reserve watchdog CME Group puts the probability that the Fed will cut interest rates during the June 13 meeting at just .4%. 

If this prediction is accurate and the Fed retains its current target rate of 525-550, expect a difficult path for gold bulls seeking to stabilize gold above that key $2,300 support level. Precious metals – and particularly gold – will depend on a few additional key indicators to determine how they will truly react in the face of unchanged June federal interest rates. 

JPM and Citi scrapped their calls for a July rate cut after last Friday’s jobs report.

Most sell-side economists and other professional Fed watchers now anticipate one or two rate cuts this year in either September or December pic.twitter.com/x9tUD06Pmi

— Nick Timiraos (@NickTimiraos) June 10, 2024

What’s Behind Gold’s Latest Crash?

Gold dropped more than $80 last Friday, marking the metal’s biggest single-day price crash in over one month. Analysts say that the metal’s drop was caused by two factors. 

First is the Non-Farm Payroll (NFP) data, which showed that U.S. job creation continues to grow. The report, released last Friday, seriously impacted the probability that the Federal Reserve will make its first of three promised rate cuts in their June meeting. Speculation involving when – and how many times – these rate cuts will occur has played a vital role in gold’s price-action all year. 

Second is China’s choice to stop buying gold in May. Gold prices hit record highs in May, which may have motivated the People Bank of China’s decision to suspend its mass gold-buying efforts. In 2023, China was the world’s largest buyer of gold. Market reaction was swift, driving gold to a month-long low as investors sold amid fears that the metal will become overpriced as China backs off. 

Big move up in US dollar and down in gold today. Stronger US jobs data, higher real interest rates and news China’s gold buying has stretch stopped having big impact. pic.twitter.com/jwDin1WV7W

— Kathy Jones (@KathyJones) June 7, 2024

Combined, these factors helped justify a massive gold selloff among retail and institutional investors. The market continues to react, so it is difficult to say where gold will go from here. Obviously, surprising news from the Fed regarding interest rates during their June 13 meeting would be an immediate win for gold bulls. 

Silver Price Analysis – Fundamentals Remain Strong

Silver also saw a modest recovery this morning, climbing over $.50 after market open. Last Friday’s single-day silver crash was the largest in three years and comes on the heels of a massive surge just one day before. 

Despite the resistance, the metal’s supply shortfall suggests that the silver bull still has legs heading into Q3 of 2024. With a supply deficit of 215 million ounces forecasted in 2024, silver’s fundamentals remain exceptionally strong. The metal’s price-action will certainly hinge on how the Fed chooses to address interest rates during its meeting on Thursday. 

But even in the very likely case that the Federal Reserve holds firm on interest rates this week, strong supply-demand dynamics in the silver market may keep the bull run going.

Platinum Price Forecast (10 June 2024)

Despite a modest recovery from last week’s crash, platinum is still down over $100 from its May 17 monthly high. On the year, platinum is down 1.26%. The World Platinum Investment Council finds that platinum deficits will continue this year, although the popularity of electric vehicles will remain an important obstacle to the metal realizing gains based on industrial demand. 

However, PR Newswire reports another increase to platinum demand in the automotive industry, particularly due to slowing demand for electric vehicles. Like gold and silver, platinum price-action will hinge on how the Fed addresses interest rates this Thursday. Lower interest rates will boost prices across all three precious metals. 

Aside from the Fed’s interest rate calls, expect industrial demand to continue to play a pivotal role in how – and when – platinum prices begin to visibility reflect record-breaking supply deficits in 2024. 

Investors Turn to June 13 Fed Meeting For Metal Market Price-Action Cues

Gold, silver, and platinum bulls will continue their push to stabilize the three metals above key support lines in the coming weeks. For most investors, the next major event to look forward to will happen this Thursday when the Federal Reserve meets to consider interest rates. Rate cuts, which were promised by Fed Chair Jerome Powell earlier this year. 

For now, expect modest recovery to dominate all three markets as the battle rages on between bull and bear.