EDITOR'S NOTE: Catch the all new Kitco.com Market Data and Bitcoin sections!

Barclays: Russian Palladium Shipments Through Switzerland Remain Subdued

Friday April 25, 2014 1:18 PM

Barclays looks for the softer trend of Russian palladium shipments through Switzerland to continue, although the bank also cautions there could be a temporary spike at some point. Analysts closely monitor Swiss trade data on ideas that much of the palladium to leave Russia goes through Switzerland. The most recent Swiss data show these shipments remained subdued in March at roughly 6,500 ounces, Barclays says. The bank notes there were two temporary monthly spikes in these shipments last year. “In March, shipments remained in line with the broad trend over the past year, and we expect the general trend lower in shipments to continue, though we cite the continued risk of a one-month spike in shipments,” Barclays says. “Overall, we expect limited Russian state stock releases this year and maintain our expectation for the palladium market to deliver a sizable deficit in 2014, thus leaving long-term fundamentals very constructive for prices. In the short term, however, recent price strength likely means the near-term upside for palladium has largely diminished, absent significant trade sanctions against Russia.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Deutsche Bank Reiterates Positive Outlook For PGMs

Friday April 25, 2014 8:56 AM

Deutsche Bank says it continues to favor platinum group metals, even though a lengthy South African strike has not meant materially higher platinum prices yet. The bank cites several supportive influences, including the 13-week-old strike, political crisis surrounding Ukraine which has led to worries about sanctions against key PGM producer Russia, the launch of two palladium exchange-traded funds in South Africa and robust sales of motor vehicles, which use PGMs for catalysts. However, the platinum price reaction to the 13-week-old strike has been “muted” since the market was well supplied, as producers had built up stockpiles ahead of time, Deutsche Bank says. Still, the strikes will eventually eat into above-ground stocks, the bank continues. “Although the absolute levels of above-ground stocks in palladium are higher, we estimate that these will be drawn down far quicker than platinum stocks,” Deutsche Bank says. “As a result, this remains our preferred metal within the PGM sector.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Deutsche Bank: Copper Helped By Chinese Restocking

Friday April 25, 2014 8:56 AM

Copper’s slight gain over the past week has been supported by possible Chinese State Reserve Bureau buying and seasonal demand from end-users, says Deutsche Bank. The bank cites a Reuters report saying the SRB may have bought up to 500,000 tons of refined copper in the year to date, with purchases of 300,000 in January and 200,000 in March-April. Deutsche Bank estimates that Chinese bonded warehouse inventory has declined moderately to 650,000 to 700,000 tons from 700,000 to 750,000. As a result, the bonded physical premium has increased nearly 30% to $110 per ton this week, the bank continues. “With refined copper production recovering to a three-month high and strong import levels, apparent consumption remains elevated,” Deutsche Bank says. “Our China copper inventory model indicates that China continued to restock copper this year. However, we expect that the pace of restocking is likely to slow in the coming months.” As of 8:31 a.m. EDT, three-month copper on the London Metal Exchange was trading at $6,753.50 a ton, up from the prior week’s settlement of $6,649.

By Allen Sykora of Kitco News; asykora@kitco.com

 

INTL FCStone: Ukraine Situation Remains Supportive Factor For Gold

Friday April 25, 2014 8:20 AM

Geopolitical tensions surrounding Russia and Ukraine remain a supportive influence for gold, says INTL FCStone. “Outlook wise, we have been warn­ing about the headline risk out of the Ukraine for some time now, something we felt the bears should not get too complacent about,” the firm says. “Thursday’s upside reversal (after an initial selloff) was an illustration of this and something that we should keep in mind going forward.” In a research note released Thursday night, INTL FCStone predicted prices would climb heading into “another unpredictable weekend,” and they are in fact stronger. As of 8:07 a.m. EDT, Comex June gold was $9.90 higher to $1,300.50 an ounce. “We also suspect that (a) new round of sanctions against the Russians will likely be announced soon, perhaps by early next week, and so for the time being, we would prefer to tip our trading books towards the long side.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Ira Epstein: ‘Gold Lacks A Bull Story…To Launch Itself Higher’

Friday April 25, 2014 8:20 AM

Ira Epstein, director of the Ira Epstein division of the Linn Group, says “gold lacks a bull story from which to launch itself higher” from current levels. The key question for the market will be whether geopolitical tensions “heat up enough” in the Ukraine to keep moving gold higher, he says. For now, inflation in most developed countries is a “non-issue,” he says. “I don’t see the world going to war over the Ukraine, especially when Europe has no appetite to put its energy supplies from Russia at risk,” Epstein says. “They might change their stance when other (sources) of energy are available, but that’s a ways off. Stock indices remain in the bull camp which is a detriment to higher gold prices. World economies are on the mend as seen just recently by the success of Greece’s debt offering.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

BMO Sees Potential For Above-Trend Metals Demand In U.S.

Friday April 25, 2014 8:20 AM

U.S. metals demand should pick up as the economy improves, says BMO Capital Markets. After the government reported 2.6% growth in March orders for durable goods on Thursday, BMO’s economics team raised its equipment investment forecast to 4% for 2014 from 3.5%, with further growth of 5.3% projected for next year. The outlook for business capital-expenditure spending growth remains strong, BMO says, noting U.S. companies are sitting on a record amount of cash and need to replace old equipment. “Further, finished goods inventory levels have stabilized and remain at reasonable levels, suggesting manufacturing growth should follow improving sales going forward,” BMO says. “From a commodities perspective, the U.S. represents a minor portion of global consumption. However, the potential for metals demand to grow above trend over the next couple of years in the U.S. is positive for sentiment. The metals with the greatest exposure to better relative U.S. growth are palladium and silver, followed by aluminum, platinum and copper. Steel prices should continue to benefit from positive sentiment as well.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

UBS: Swiss Data Show Exports To Hong Kong Slow

Friday April 25, 2014 8:20 AM

Swiss gold trade statistics for March show a “sizeable slowdown” in gold outflows to the Hong Kong and China region, says UBS. Data Thursday show that Swiss exports to Hong Kong fell to 24.9 metric tons from a “weighty” 98.5 in February. The decline for China was much less dramatic, at 26 tons in March after 36.9 in February. “The soft exports for March can be explained by the well-documented weakness in Chinese gold demand for the month, amidst ample local stocks. April should reveal a similar story,” UBS says. “Another reason may be due to a decline in the volume of gold used in commodity trade financing. It's difficult to get any kind of quantitative grasp on this, but we have heard it anecdotally. “Meanwhile, shipments to India rose modestly to 31.9 tons in March from 29.2 the previous month. “Given that more private banks were granted permission to import gold last month, it's somewhat surprising that exports in March weren't higher,” UBS says.

By Allen Sykora of Kitco News; asykora@kitco.com

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart