Make Kitco Your Homepage

TDS: Gold Price May Fall Back To $1,280 Again, Then Recover

Kitco News

Gold could fall back toward the $1,280-an-ounce area in the run-up to the next Federal Open Market Committee meeting, but then bounce once again, says TD Securities. The metal rose last week, ending a downward spiral that had been prompted by rising Treasury yields and a stronger U.S. dollar. Last week’s recovery was helped in large part by the latest FOMC minutes, which gave no indication that policymakers will accelerate the pace of interest-rate, hikes TDS says. In fact, yields fell back after Philadelphia Fed President Patrick Harker suggested that policymakers could no longer need to raise interest rates any further sometime in 2019, leading many gold traders to believe that real rates will be low, TDS says. Still, TDS says, more rate hikes are coming for now. “As such, as we get closer to another FOMC and so long as U.S. data remains robust, precious metals could underwhelm,” TDS says. “The continued USD [dollar] strength will likely drive the yellow metal back down test lows near $1,280/oz. But any data weakness would very likely see specs rebuild length, with short covering helping to propel prices higher north of $1,300/oz.” As of 8:34 a.m. EDT, spot gold was $1.25 higher to $1,298.95 an ounce.

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

 

FXTM: Gold Gets Bounce But Dollar, Interest Rates To Limit Headway

Tuesday May 29, 2018 08:48

Gold got a lift as political uncertainty in Europe accelerated the flight to safety, although headwinds remain in the form of U.S. dollar strength and higher U.S. interest rates, says Lukman Otunuga, research analyst at FXTM . In fact, gains have already been capped by a muscular dollar, Otunuga says. “Although risk aversion has the ability to support gold in the short term, an appreciating dollar and expectations of higher U.S. interest rates are likely to continue weighing heavily on the yellow metal in the medium to longer term,” Otunuga says. “Focusing on the technical picture, prices have breached above the $1,300 psychological level. A daily close above this key level could encourage an incline towards $1,324. Alternatively, a failure for bulls to maintain control above $1,300 may invite a decline back towards $1,280.” As of 8:34 a.m. EDT, spot gold was $1.25 higher to $1,298.95 an ounce.

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

 

Commerzbank: Chinese Gold Imports From Hong Kong Are Soft

Tuesday May 29, 2018 08:48

Data from the Census and Statistics Department of the Hong Kong government suggest soft Chinese demand for gold, says Commerzbank. Net Chinese gold imports from Hong Kong fell to 38.4 tonnes in April, down 35% month-on-month and 48% year-on-year. “At 182.6 tonnes, net gold imports in the first four months of the year were 31% lower than in the same period last year,” Commerzbank says. “The fact that the Chinese central bank has not bought any more gold for months now is likely to have played one part in this.” 

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

 

TDS Foresees Upside Movement In Platinum Prices

Tuesday May 29, 2018 08:48

Improving supply/demand fundamentals and long-term strategic investor positioning should underpin platinum group metals, but “unloved platinum” should outperform palladium over the next 18 months, says TD Securities. TDS analysts say they are looking for platinum to average 20% above current levels during the fourth quarter and 26% above in final three months of 2019. “Prices are projected to progressively start strengthening in the second half of the year amid sharply lower mine supply, stabilizing industrial demand, a somewhat weaker USD [U.S. dollar] and a more favorable U.S. monetary policy environment for precious metals,” TDS says. TDS projects platinum will average $1,150 an ounce in the fourth quarter of 2019. “Price levels above that, which are needed to assure new supply given the industry cost and risk structures, are also in the cards in the latter part of 2019 as fundamental tighten,” TDS says. Palladium, which has already outperformed, is projected by TDS to also average $1,150 over the same period.

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.

Precious Metal Charts

Follow Kitco News