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FXTM: Gold Remains Bullish On Daily Price Charts

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Gold’s technical picture remains constructive even though a bounce in the U.S. dollar has pressured the precious metal lately, says Lukman Otunuga, research analyst at FXTM. “Gold found itself under pressure during Tuesday’s trading, amid renewed market expectations of higher U.S. interest rates this year,” the analyst says. Otunuga later adds: “Although gold may witness further losses in the short term amid U.S. rate-hike expectations, the yellow [metal] still remains bullish on the daily charts above $1,300. A weekly close above $1,320 could signal further upside, with $1,333 acting as the next level of interest.”

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

 

RBC’s Gero: Profit-Taking Pressures Comex Gold Futures

Tuesday January 09, 2018 08:58

Gold has run into some profit-taking, says George Gero, managing director with RBC Wealth Management. Around 8:45 a.m. EST, Comex February gold was $7.60 softer at $1,312.80 an ounce.  Gero says some profit-taking was expected as tensions on the Korean Peninsula abate, stocks remain strong and the U.S. dollar rises. He looks for some support in the $1,310 area as “traders await new headlines here, concerned with taxes [and] U.S. politics.”

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

 

TDS Sees Potential For Further Gains In Gold Price

Tuesday January 09, 2018 08:40

Gold prices could make a run to $1,357 or even $1,375 an ounce, says TD Securities. The metal topped $1,300 on the final day of 2017 and has remained above this so far in 2018, with a multi-month high of $1,325.95 on Jan. 4. The precious metal has backed off modestly since and was trading at $1,314.55 as of 8:30 a.m. EST. Gold drew support last week from a softer U.S. dollar and a growing view that the U.S. Federal Reserve will not aggressively tighten monetary policy as long as inflation remains below target, TDS says. Further, there is a view that new U.S. tax legislation will not push the economy on an accelerated growth trajectory. “Considering that investors seem ready to take hefty long gold positions, even as equity markets are surging, it is quite possible that the yellow metal could attempt to hit $1,357/oz in the not-too-distant future,” TDS says. “A move toward $1,375/oz is also possible should the market believe the U.S. central bank will be gentle in their-rate hike signaling. The lack of inflation, weaker U.S. economic data in the coming months or a slumping USD could all be catalysts for more gold upside.”

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

 

Commerzbank: Palladium Prices Continue Ascent

Tuesday January 09, 2018 08:40

Palladium, the strongest performing commodity of 2017, has continued its ascent in 2018, hitting a fresh record high, reports Commerzbank. Spot metal has been as high as $1,113.10 an ounce, while the Nymex March futures have traded up to $1,107.80. “The diesel scandal still appears to be the key factor here, as it is generating high demand for gasoline-powered cars,” Commerzbank says. Analysts cite figures from the China Passenger Car Association showing that car sales in China rose for the 27th consecutive year in 2017. The U.S. and China are the world’s two largest car markets and both consist of mainly gasoline-powered vehicles, which use palladium rather than platinum for catalysts. As of 8:23 a.m. EST, March palladium was $6.05 stronger at $1,101.95 an ounce.

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

 

BBH: U.S. Dollar Continues To Correct Higher

Tuesday January 09, 2018 08:40

The U.S. dollar has continued its correction higher, says Brown Brothers Harriman. As of 8:15 a.m. EST, the March dollar index was up 0.145 point for the day to 92.245. Previously, this index fell from a mid-December high of 93.825 to a Jan. 2 low of 91.470. The one currency against which the greenback has lost ground Tuesday, however, is the Japanese yen. BBH lists two factors driving market moves, other than traditional factors such as U.S. rates and the recent advance in equities. “First, there is unwinding of long-euro, short-yen positions that had been established,” BBH says. Analysts also cite the Bank of Japan’s decision Tuesday to reduce of buying of long-dated bonds (10 to 25 years) by 10 billion yen to 190 billion yen. “It is the first reduction since 2016,” BBH says. “The BOJ's yield curve-targeting strategy has required it to buy fewer JGBs [Japanese government bonds] than the JPY80 trillion declaratory objective. This seems more like a technical adjustment than a substantive policy change.  Many who look for the BOJ to adjust policy this year anticipate a higher target for the 10-year JGB. Metals traders tend to monitor moves in the greenback since precious and base metals alike often move inversely to the U.S. currency.

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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