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Commerzbank: ‘Limited Additional Downside Potential For Gold’

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Treasury yields, with technical-chart selling accelerating the move. “We see only limited additional downside potential for gold,” Commerzbank says. Speculators in the futures market have already trimmed their net-bullish positioning since summer, so this form of selling pressure should abate, the bank says. “Meanwhile, the low price level should stimulate physical buying interest,” Commerzbank continues. “The geopolitical tensions in the Middle East (violent protests in Gaza, uncertainty over the Iranian nuclear agreement) point to solid demand for gold as a safe haven, as does the Korea conflict that is flaring up again.” North Korea canceled a high-level summit with South Korea and there is now uncertainty on whether a planned summit between the leaders of the U.S. and North Korea next month will occur.

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

 

BMO Disagrees With Majority View Palladium To Keep Outperforming Platinum

Wednesday May 16, 2018 09:45

Those taking part in Platinum Week activities think palladium will continue to outperform sister metal platinum, but BMO Capital Markets does not share this view, analysts with the bank say. They report attending a panel discussion on platinum group metals, which featured speakers from a number of major producers. Since September, palladium has had a price premium over platinum, which previously had not occurred since 2001. Palladium has benefited in part from strong sales of gasoline-powered autos, which require this metal. Platinum is used in diesel-powered cars, which have lost market share in recent years. “The panel suggested a $200-300 discount might warrant switching in gasoline catalysts,” BMO says. “Interestingly, a poll conducted at the event suggested that 90% of participants expect palladium to continue to outperform. This is not a view we agree with, owing to higher-than-expected levels of substitution.”

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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