MKS' Nabavi: Dollar Pressures Gold; Favors Buying Gold On Dips
The combination of a stronger U.S. dollar and technical factors has gold under pressure, but the metal could derive support from the Trump administration’s decision to recognize Jerusalem as the capital of Israel, says Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA. As of 7:56 a.m. EST, Comex February gold was $8.90 lower to $1,257.20 an ounce and bottomed at $1,255.50, its weakest level since July. Nabavi points out that gold has fallen as the U.S. dollar strengthens ahead of the U.S. monthly jobs report Friday and a potential U.S. rate hike next week. When gold broke down below $1,260, traders continued to liquidate bullish positions. Nabavi says he would favor buying on dips, however, citing in geopolitical factors. In particular, he called U.S. President Donald Trump’s decision to recognize Jerusalem as the capital of Israel “very, very, very dangerous for the Middle East region.” Already, the Islamist group Hamas has urged Palestinians to launch a new uprising against Israel. “Overall, I would prefer to buy on dips myself, rather than sell on rallies,” Nabavi says.
By Allen Sykora of Kitco News; email@example.com
Commerzbank: Palladium Premium Over Platinum Highest Since 2001
Thursday December 07, 2017 08:00
Palladium’s premium over sister metal platinum is now the widest since 2001, says Commerzbank. Platinum historically was more expensive before palladium gained the upper hand this fall, helped by a wide annual supply deficit while most analysts describe the platinum market as not far from balanced. Both metals are used for catalytic converters, with palladium going into vehicles with gasoline-powered engines that are popular in the large auto markets of the U.S. and China. As of 7:57 a.m. EST, spot platinum was down $1.85 to $898.15 an ounce and was below $900 for the first time in five months. Meanwhile, spot palladium was up $7.55 to $1,001.55. “Ever since platinum fell below the technically important 200- and 100-day moving averages at the end of November, the price has been on a pronounced downward trajectory,” Commerzbank says. “By contrast, palladium is holding its own at around $1,000 per troy ounce, widening the price differential between palladium and platinum to $100. The last time it was any higher was in April 2001.”