Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
According to the latest trading data from the US Commodity Futures Trading Commission (CFTC), volatility around US interest rates is putting pressure on gold prices and hedge funds are liquidating long positions. The number of net long positions in gold futures contracts is now down to a two-month low.
Market participants noted that while gold prices are solidly supported above $2,000 per ounce, the change in market sentiment could be bearish for gold prices in the short term.
In an interview with Kitco News, Craig Erlam, senior market analyst at OANDA, said that price action in the precious metal is mired in weakness as the market lacks catalysts to drive prices higher.
As of this week, the market sees more than a 70% chance that the Federal Reserve will cut interest rates in March, which has been a key factor in supporting precious metals prices recently. However, the final result could be that the Fed starts cutting rates much later than expected this year. If this is the case, in the absence of new catalyst factors, the price of gold faces some retracement pressure.
TD Securities commodities analysts pointed out that the latest economic data still does not provide any clear indication, increasing volatility and uncertainty in the precious metals market. The analysts wrote in a report on Friday that with core CPI still well above the 2% target, the market concluded that the Federal Reserve would not ease policy prematurely.
It is worth pointing out that although the gold market now looks like the momentum to go long is failing, commodity analysts point out that no one wants to rush into shorting. As the situation in the Middle East still has the potential to deteriorate, the geopolitical crisis for the price of gold support still exists. The gold price remains relatively safe above $2,000.
At the same time, given the green energy transition and unprecedented solar energy demand, analysts see limited room for silver prices to fall.
