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MKS: 200-Day Average, $1,300 Level To Be Key Support For Gold

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As gold’s slide continues, the 200-day moving average and psychologically important $1,300 level become a key support area for the precious metal, says MKS (Switzerland) S.A. As of 7:55 a.m. EDT, spot gold was $7.40 lower to $1,308.20 an ounce and bottomed at $1,307.70, its weakest level since March. ““Support-wise, we are nearing some key technical levels with the 200 DMA at $1,304 and the psychological $1,300 level below that,” MKS says. On the upside, MKS says gold should find some resistance at the 100-day moving average. This now lies near $1,322.

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

 

BBH: Dollar Index Climbs Above 200-Day Average

Tuesday May 1, 2018 08:08

Brown Brothers Harriman points out that the U.S. dollar index – which measures how the greenback is faring against a basket of currencies – has moved above its 200-day moving average for the first time in more than a year. “Most of the world's financial centers are closed for the May Day holiday, but the lack of participation has not prevented the extension of the U.S. dollar's recovery,” BBH says. “The dollar index has traded above its 200-day moving average for the first time in a year.  No new catalyst has emerged.  The widening interest-rate differential in the dollar's favor over Germany, for example, is unprecedented.  Just like Fed officials can be more confident that their mandates are within reach (than it was before and more than the other major central banks), so too are investors.” The 200-day average for the dollar index stands at 91.85. As of 7:51 a.m. EDT, the index was up 0.425 point to 92.055.

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

 

TDS Sees Gold Recovery In Latter Half Of 2018

Tuesday May 1, 2018 08:08

TD Securities cautions that gold is moving toward $1,300 an ounce on U.S. dollar strength, but also suggests the precious metal could rebound toward $1,350 later in 2018. “If we continue to see the U.S. economy do well and the Fed signals a hawkish tone, with many observers advocating four hikes for the year, this could be bad news for gold for now,” TDS says. “However, considering the fact that the curve has flattened somewhat since the 10-year Treasury yield moved to about 3%, that the momentum in the U.S. is weakening somewhat and that U.S. deficits are reaching spectacularly high levels, the yellow metal should hold its own. While a move toward a low of $1,300/oz is possible in the not-too-distant future, we think there will be a steadier rebound toward $1,350s in the latter half of 2018.” As of 7:55 a.m. EDT, spot gold was $7.40 lower to $1,308.20 an ounce.

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

 

BMO: Declining Diesel Auto Market Share Headwind For Platinum

Tuesday May 1, 2018 08:08

The continuing move away from diesel-powered vehicles is hurting platinum and helping palladium, says BMO Capital Markets. Diesel-powered cars require platinum for catalytic converters, while gasoline-powered ones can use palladium. BMO cites data showing that the European diesel market share has continued to fall, with the World Platinum Investment Council putting this at 38.5% in the first quarter, down from 41.5% in the fourth quarter after it had been over 50% over the course of 2015. “This ongoing fall as customers shy away from diesel vehicles is an ongoing headwind for platinum, which is the staple of the diesel catalyst,” BMO says. “Essentially all this demand has been taken by gasoline vehicles, benefitting palladium and rhodium. Platinum’s $400/oz discount to gold reflects this issue, but we would expect some substitution of platinum into gasoline catalysts given the likelihood of a sustained period of weaker pricing.”

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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