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Commerzbank: Gold ETF Holdings Post Weekly Decline Of 21 Tonnes

Kitco News

The slide in gold prices last week was accompanied by pronounced outflows from global exchange-traded funds, including 6.5 tonnes on Friday, says Commerzbank. “The gold ETFs tracked by Bloomberg decreased by a good 21 tonnes last week, thereby reversing the lion’s share of the inflows seen since the start of the year,” Commerzbank says. Most 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

 

FXTM: Limited Gold Buying Suggests No Panic Over Global Economy

Monday February 12, 2018 08:50

The limited interest in gold last week may be a sign that stock-market weakness was simply a correction rather than due to a major scare about the global economy, since gold lost ground, says Jameel Ahmad, global head of currency strategy and market research at FXTM. “One of the main reasons why I am not concerned that the stock market sell-off from last week was a sign of mass panic from investors is because of the limited buying interest in gold, in spite of the heightened stock-market volatility,” Ahmad says. “Gold usually benefits from an increase in interest as a safe-haven instrument during uncertain times in the market, but the lack of interest in gold over the past week has surprised a few in the market. I personally think that the losses in gold last week can be seen as a positive factor, because it provides more confidence to investors that the sell-off in the markets was a correction, and not a sign of panic over the global economy.”

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

 

SP Angel: Gold Higher; Market Awaits U.S. Inflation Data

Monday February 12, 2018 08:50

Gold prices ticked higher at the start of the week as the U.S. dollar initially slipped, says commodities brokerage SP Angel. Meanwhile, a key focus for the market this week will be the release of U.S. inflation data, which will give investors a clue on the intensity of expected interest-rate increases, the firm says. “U.S. consumer price data will be released on Wednesday that is expected to give a clearer indication on the pace of inflation and therefore the frequency of the anticipated interest-rate rises,” the firm says. “Consumer price data is also expected to confirm concerns of rising inflation, which triggered the global equity drop last week.” As of 8:27 a.m. EST, Comex April gold was up $4.80 to $1,320.50 an ounce.

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

 

BBH: ‘Too Much Of A Good Thing Is Bad’

Monday February 12, 2018 08:50

The recent sell-off in equities – which had some spillover effect on precious metals – came after a long period of low volatility, and “too much of a good thing is bad,” says Brown Brothers Harriman. Many financial instruments were constructed to profit from low volatility, such as exchange-traded products and futures contracts, BBH says. Some allowed investors enhanced leverage, which acts like a “force multiplier.” BBH points out that there was a stretch of around 400 days without a 5% correction in the S&P 500. “The longer it took, the greater the positions betting that it would continue, the larger the shock, the greater the drama,” BBH says. “Stability leads to instability. The long stretch of low volatility led to the historic jump in volatility as if the music of the financial instruments created an echo-chamber like a horror house. It is not very pretty, and quite painful for many, but this is how the markets mature.

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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