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RBC's Gero: $1,300/Oz Gold 'Still On The Table'

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Comex gold has bounced slightly from Thursday’s multi-week lows, helped by short covering, with $1,300 an ounce still doable, says George Gero, managing director with RBC Wealth Management. Short covering is buying in which traders are exiting short, or bearish, trades. As of 9:02 a.m. EDT, Comex August gold was up $2.20 to $1,256.80 an ounce. Gero blames selling this week on a move higher by the U.S. dollar after the Federal Reserve appeared more hawkish than expected, as well as selling by “disappointed” short-term traders and funds who had expected $1,300-an-ounce gold sooner rather than later. One focus next week is an options expiry, Gero notes.  He looks for “stalling prices in gold until after option expiration unless surprise headlines change prices again,” then “back to basics -- budgets and geopolitical and political worries, as $1,300 is still on the table.”

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

 

Ira Epstein: ‘Gold Is Attempting To Bottom Out’

Friday June 16, 2017 09:21

Veteran futures trader Ira Epstein says “gold is attempting to bottom out.”  Prices peaked in 2011 and are now in a consolidation phase, says the director of the Ira Epstein division of Linn & Associates. “The current triangle formation shows a market with prices narrowing in, made up of well-defined uptrend and downtrend lines,” he says. Epstein follows the 18-month moving average of closes, which he says does a good job of defining both support and resistance levels. “I think longer-term traders are buying right here, against the 18-month moving average of closes and will likely risk their trade to just under $1,214.30, the most recent swingline low,” he says. “If prices get under $1,214.30, the downtrend will be back in place and a move down to the lower Bollinger band of $1,131 is possible.”

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

 

MKS Sees Limited Gold Downside Amid Geopolitical Climate

Friday June 16, 2017 07:39

Gold could slip some more but probably not much, given the geopolitical climate, says MKS (Switzerland) S.A. Spot metal hit a three-week low of $1,251.60 an ounce Thursday before bouncing slightly, trading up $1.35 to $1,255.70 as of 7:27 a.m. EDT. Some demand emerged in Asia at the lower prices. “We saw renewed interest in the metal late in trade once China returned from lunch and as Europe began to open, edging toward $1,255 to print the session high,” says Sam Laughlin, senior precious-metals trader. “We do continue to see some downside risks to the metal as the market contemplates the Fed comments and recent U.S. data releases; however, it's difficult to see the metal extending declines far below $1,240 - $1,250 considering the recent price action and the geopolitical climate.”

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

 

Commerzbank: EU Car Data Suggests ‘Solid Demand For Platinum’

Friday June 16, 2017 07:38

Commerzbank says European auto data are supportive for platinum prices. Analysts cite a report from the European Automobile Manufacturers Association showing that 7.6% more new cars were registered in the European Union in May than in the same month last year. “The German auto market in particular was robust,” Commerzbank says. “After five months of the year, new car registrations in the EU are 5.3% up on the same period last year – this points to solid demand for platinum and should thus lend support to the platinum price.”

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

 

BBH: Central Banks Hinting At Less Monetary Accommodation

Friday June 16, 2017 07:38

A number of central banks are signaling potentially tighter monetary policy, says Brown Brothers Harriman. This has implications for currency rates and therefore gold, since the yellow metal trades inversely to the U.S. dollar. Other than Japan and Switzerland, a number of central banks – including the European Central Bank and Bank of Canada -- have begun preparing the market for a less accommodative stance, BBH says. “The ECB is expected to announce a reduction of its purchases (currently 60 billion euros a month) in September as it extends its purchases into the first part of 2018,” BBH says. “The Bank of Canada signaled it too is reconsidering the extent of accommodation needed given the pick-up in economic activity and strengthening of the labor market.” Meanwhile, there was a surprising dissent at the Bank of England this week as three members favored a rate hike, although the majority left rates on hold. Nevertheless, there are doubts the central bank will hike any time soon given a “backdrop of political uncertainty, weakness in earnings, and a pullback by consumers,” BBH 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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