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TD Securities: Gold Prices Range-Bound Amid Opposing Influences

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Range-bound gold may draw support from fears about a trade war but at the same time be held back by expectations for Federal Reserve interest-rate hikes, says TD Securities. “Rex Tillerson's departure from the White House [as secretary of state] provided a bid, but we expect that it will be short-lived as is typical of similar event-driven rallies,” TDS says. “Meanwhile, increasing chatter of four hikes this year and a potential shift in the Fed dots next week are weighing on gold, but fears of a trade war continue to prevent a major liquidation.” By “Fed dots,” analysts are referring to the so-called dot-plot showing policymakers’ rate-hike expectations. Meanwhile, TDS analysts say silver could become the top-performing precious metal “as waning mine supply prompts hefty metal inventories to top out and money managers reallocate to silver as it becomes evident the Fed will err on the cautious side regarding rate increases.”

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

 

TDS Looks For Palladium Prices To Return To $1,100/Oz

Wednesday March 14, 2018 10:39

TD Securities looks for palladium to recover from a recent pullback and eventually rechallenge $1,100 an ounce. Spot prices fell from around $1,132 an ounce in mid-January to roughly $960 in early February and early March, but now are back around $1,000 again. TD Securities attributes the pullback to a bout of profit-taking. Analysts say they “do not anticipate that any weakness will persist amid a tight market and now significantly healthier spec positioning. As money manager allocations are now near neutral levels relative to the prior three years and ETF [exchange-traded-fund] holdings remain low, palladium prices could look to return to $1,100/oz later this year.”

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

 

FXTM: Gold Remains Below 50-Day Moving Average

Wednesday March 14, 2018 09:42

Gold prices remain under pressure technically as they hold below the 50-day moving average, says Lukman Otunuga, research analyst at FXTM. Gold bulls could benefit from current political uncertainty, although in the medium to longer term, expectations of higher U.S interest rates are likely to create headwinds for the metal, says Otunuga. “From a technical standpoint, the yellow metal remains under pressure on the daily charts as prices are below the 50[-day] simple moving average, while the MACD [Moving Average Convergence/Divergence] trades to the downside,” the analyst says. “A solid daily close above $1,330 could bring bulls back into the game, with the next level of interest at $1,340. Alternatively, if prices fail to keep above $1,324, gold remains at risk of sinking back to $1,313.” The 50-day average currently stands at $1,330.80 for spot metal. Shortly before 9:30 a.m. EDT, spot gold was $2.85 lower at $1,323.35 an ounce.

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

 

CIBC Sees ‘General Weakening Of The U.S. Dollar’

Wednesday March 14, 2018 09:42

CIBC looks for the U.S. dollar to soften. “Solid U.S. growth and a climbing Fed funds rate are supportive of the greenback, but fully priced in,” the Canadian bank says in a monthly outlook on the foreign-exchange market. “The prospect for ongoing trade deficits, monetary tightening overseas next year, and less fiscal stimulus for the U.S. in 2019-20 will be the story behind a general weakening of the U.S. dollar.” Metals traders closely monitor the greenback since base and precious metals alike often move inversely to the U.S. currency.

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

 

Metals Focus: Turkey’s Gold Market Becoming More Prominent In Region

Wednesday March 14, 2018 09:42

Turkey’s gold market is enjoying “greater regional prominence” despite some challenges, says Metals Focus. Analysts with the consultancy traveled to Istanbul last week. “In spite of the heightened political uncertainty and greater scrutiny recently imposed on foreign-exchange and gold traders, there was still a sense of optimism, especially given the new tax regime introduced in the UAE,” Metals Focus says. Challenges include a new regulation calling for all transactions to be recorded, which has meant “considerable expense.” Furthermore, companies that export gold must secure advance payment, something that does not apply to banks or refiners, Metals Focus points out.  “Leaving aside the growing regulatory burden, the jewelry supply chain is now benefiting from the country’s jewelry and diamond infrastructure,” Metals Focus says. Analysts say they were surprised by the growing presence of jewelry and diamond wholesalers from across the Middle East. Last year, official Turkish gold jewelry exports rose by some 24% to 99 tonnes, the consultancy points out. “On the basis of our research, which suggests that further onshore relocations are likely in 2018, we could see jewelry shipments this year strengthen further,” Metals Focus says. “However, souring relations with northern Iraq have seen shipments to this key market fall sharply, from around 8.5t to 2.5t/quarter. The prospects of a healthy recovery in northern Iraq appear unlikely in the near term, which may therefore offset some of the growth achieved in other export markets.”

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

 

MKS: Gold Prices Range-Bound For Now

Wednesday March 14, 2018 09:42

Gold may remain range-bound in the near term, says Sam Laughlin, senior trader with MKS (Switzerland) S.A. “Offers toward $1,330 and broadly beyond this between $1,335-$1,340 remain formidable resistance levels for bullion; however, conversely the metal continues to find layered bids underneath $1,320, with extensions toward $1,310,” he says. “Near-term price action should remain with the recent range, leaning toward a sustained break higher once ETFs [gold exchange-traded funds] awaken from their recent slumber and Asian physical demand picks up as we move through the typically muted March flows.”

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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