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MKS: Gold Draws Buying On Price Dips; Caution On Sky-High Palladium

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Gold has been underpinned by buying that has occurred on pullbacks, while some caution may in order on palladium as this metal remains at historically high prices, says Alex Thorndike, senior precious-metals dealer with MKS (Switzerland) S.A.  Comex February gold topped $1,300 on the final day of 2017 and has remained above this so far in 2018. “The support for the gold continues to emerge on dips despite us seeing the majority of flows here on the left-hand side,” Thorndike says. “January has historically been a strong month for gold, with prices rising on average a little over 4% for the past 10 years. This has traditionally been tied into strong physical demand leading into Chinese New Year, which has yet to materialize this year.” Meanwhile, he points out that palladium hit $1,100 an ounce Thursday for the first time since 2001. “We tend to remain a little cautious here, however, with a test of the all-time highs having the potential to trigger a consolidation,” Thorndike says. “Net-long positions are elevated at over 80% of the all-time high, so some consolidation may be warranted to take some of the froth out.” As of 8:14 a.m. EST, February gold was down $3.20 to $1,318.40 an ounce, while Nymex March palladium was down $3.15 to $1,091.60.

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

 

Commerzbank: Dec. U.S. Auto Data Supports Palladium, But Sales May Sag In 2018

Friday January 05, 2017 08:26

December U.S. auto sales appeared to add to strength in palladium this week, although expectations are these sales will decline in the new year, says Commerzbank. The main industrial use for the metal is catalytic converters. Commerzbank cites data from Ward’s Automotive Group showing that the seasonally adjusted and annualized sales rate in December was higher than anticipated at 17.76 million vehicles. “Once again, it was pickups and SUVs that were particularly popular – a trend that had already been seen throughout the year,” Commerzbank says. Still, analysts point out that at 17.13 million units, U.S. vehicles sales in 2017 registered their first decline in eight years, mainly because of weak sales of sedans. “The consensus is that 2018 will see a further decline as higher interest rates put the brakes on demand,” Commerzbank says. “What is more, more used SUVs will be available. By contrast, more cars were sold in Germany last year, though the proportion of diesel vehicles decreased significantly.” 

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 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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