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BNP Paribas: Silver 'Most Oversold Precious Metal'

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BNP Paribas says silver, which with natural gas is one of only two commodities in which speculators have net bearish positions, is “oversold.” Analysts explain: “Our proxy for silver positioning is the net speculative allocation reported by Comex, adjusted by the total open interest and normalized on a scale of zero to 10. To further assess how the market is allocated, we used the total known ETF [exchange-traded-fund] holdings since 2003 and normalized, using the same approach. There has been a considerable co-movement between speculators and silver since 2014. Silver positioning score is 1.3. The non-parametric probability of reversal is 3.9%, making silver the most oversold precious metal.”

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

 

CIBC: U.S. Dollar 'Still In The Line Of Fire'

Tuesday April 17, 2018 08:13

CIBC looks for the U.S. dollar to weaken over the remainder of the year as central banks in other countries take steps toward tightening monetary policy. The greenback has been stable in recent months; however, CIBC says the dollar is “still in the line of fire” and won’t be saved by further Federal Reserve rate hikes. “Markets are already braced for two more interest-rate increases,” CIBC says. “And, despite some talk of a faster pace, that’s all the tightening U.S. central bankers will be able to pull off in 2018. In contrast, investors continue to under price the end of expansionary policies in other jurisdictions. While still taking a gradual approach to the removal of stimulus, the ECB and BOJ [European Central Bank and Bank of Japan] are likely move earlier than what’s implied by current market pricing.” Further, foreign-investment flows don’t appear to be flooding into the U.S. at a pace fast enough to offset what has been a further deterioration in the current-account deficit, CIBC says. “So while fiscal stimulus has been somewhat positive for growth prospects, a patient Fed, wider current-account deficit and more hawkish outlook for foreign central banks will add up to a weaker U.S. dollar over the remainder of the year.” Metals traders closely monitor moves in the U.S. dollar, as base and precious metals alike often move inversely to the greenback.

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

 

Commerzbank: Palladium’s Premium Over Platinum Grows Again

Tuesday April 17, 2018 08:13

Recent strength in palladium prices have widened the premium over sister metal platinum again, Commerzbank points out. Palladium has been back above $1,000 ounce again, although it dipped back below ahead of New York trading, with spot metal last down $6.40 to $995.60. “Much like aluminum, albeit less dynamically, palladium is also ‘profiting’ from the U.S. sanctions against Russia,” Commerzbank says. In fact, the metal has rallied some 11% since U.S. sanctions were announced on April 6. “Physical buying interest appears to have increased considerably, even if this is not evident from the palladium ETFs [exchange-traded funds], which have seen outflows of 13,000 ounces since 6 April,” Commerzbank adds. Palladium has been as much as $75 per troy ounce more expensive than platinum again, the biggest differential between the two metals since late January, Commerzbank adds.

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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