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Barclays: Silver Shines But Record Positioning Could Mean Correction

Kitco News

Silver has shined so far in 2017 but its outlook could be dulled by record speculative positioning in the futures market, says Barclays. Traders monitor weekly positioning data, released on Friday afternoons by the Commodity Futures Trading Commission, to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be due for price corrections. “Precious metals were the best-performing commodity class during Q1, and silver and palladium increased more than the rest,” the British bank says. “Year-to-date, silver has returned 15%, assisted by a weaker dollar and weaker rates. Although silver may have some room to run, managed-money positioning has hit record levels, and this combined with price action, suggests that upside price momentum is stalling and silver could correct lower. We believe silver is likely to move lower from here, given the strength of the rally, the metal’s failure at key resistance levels of $18.40-18.60, and stretched positioning.”

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

 

Barclays: Precious Metals Lift 1Q Commodity ETP Assets Under Management

Thursday April 20, 2017 09:45

Assets under management in global exchange-traded products for commodities rose in the first quarter, largely boosted by precious metals, says Barclays. Commodity ETP assets rose by $12 billion in the quarter, helped by a combination of rising prices and net inflows, the bank says. “Precious metals, which account for roughly 70% of total AUM in ETPs, were the largest contributor to flow and returns during the quarter,” Barclays says. Commodity ETPs saw inflows of $5.2 billion during January-March quarter, with precious metals accounting for 80%, or $4.1 billion in inflows. Meanwhile, rising prices, particularly in precious metals, accounted for $6.3 billion in increased commodity ETP AUM during the quarter, the bank says.

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

 

Commerzbank: Gold ETF Holdings Rise 10 Straight Days

Thursday April 20, 2017 09:45

Commerzbank reports that an inflow of 1.5 tonnes of gold into global exchange-traded funds on Wednesday marked the 10th straight day of daily inflows. This comes after gold ETFs recorded inflows of 56 tonnes in the first quarter. Gold ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares.

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

 

Metals Focus: Palladium’s Fundamentals Better Than Platinum’s

Thursday April 20, 2017 09:45

Palladium should continue outperforming platinum based on more favorable supply/demand fundamentals; still, there are some reasons for caution on palladium, says consultancy Metals Focus. Palladium prices recently hit a two-year high, and the platinum/palladium ratio fall to a year-to-date low of 1.18 as of the end of March, the consultancy says. Even though growth in car sales in key markets such as China and the U.S. have moderated so far this year, overall palladium demand has remained “healthy,” Metals Focus says. “With palladium auto-catalyst demand expected to hit another record high this year, the palladium market is forecast to remain in a hefty physical deficit,” the consultancy continues. Meanwhile, platinum has gotten has gotten “disappointing news on both sides of the supply/demand balance,” with little prospect of “much-needed” mine production cuts in South Africa, while demand prospects appear “uncertain” due to growing anti-diesel rhetoric in the all-important European market, Metals Focus says. “Given such contrast(ing) trends in their supply-demand fundamentals, palladium’s outperformance of platinum seems justified, as would further relative gains over the medium term,” Metals Focus says. “That said, we have adopted a cautious stance, due to several near-term factors. First, given their small market size, both metals are vulnerable to speculative investor activity.” Additionally, palladium’s above-ground stocks remain plentiful, meaning “genuine tightness” is unlikely any time soon. Further, the metal traditionally has been positively correlated to U.S. equities, meaning a stock-market decline could pressure palladium prices, Metals Focus says.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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