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FXTM: Gold Awaits Fresh Market-Moving Catalyst

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Gold needs a fresh catalyst, says  Lukman Otunuga, research analyst at FXTM. Otherwise, the yellow metal remains in a range, with $1,300 acting as a psychological pivotal point. “Price action continues to suggest that gold needs a fresh directional catalyst to make its next significant move,” Otunuga says. “A U.S. interest-rate increase in June, coupled with expectations of further rate hikes during the second half of the year, could spell trouble for zero-yielding gold.” Technically, market participants will continue observing how gold fares around the $1,300 level, the analyst continues. “A breakout above $1,300 could trigger an incline towards $1,324,” Otunuga says. “Alternatively, a failure for bulls to conquer $1,300 is likely to result in a decline back to $1,280.”

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

 

MKS: Gold ETF Holdings Decline Over Last 10 Days

Wednesday June 13, 2018 08:38

Holdings of gold by global exchange-traded funds have declined over the last 10 days, reports Alex Thorndike, senior precious-metals dealer with MKS (Switzerland) S.A. The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. Thorndike cites Bloomberg data showing that ETF gold holdings dipped “somewhere in the realm of 1 million ounces of gold over the past 10 days -- from 72 million to 71 million ounces. Any significant acceleration on sales in this space could see a sharp downside flush-out through $1,285-90 support.” The main catalysts this week are a meeting of the Federal Open Market Committee that ends Wednesday and a Thursday meeting of the European Central Bank. In particular, the gold market will be watching the impact of these meetings on the U.S. dollar and euro, Thorndike adds.

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

 

Commerzbank: Gold, Palladium Premiums Over Platinum Widen

Wednesday June 13, 2018 08:38

Platinum prices have fallen back below $900 an ounce and its discount to palladium and gold have widened, points out Commerzbank. Gold’s premium over platinum has widened to around $400 an ounce, analysts note. “The price discount of platinum as compared to palladium has likewise increased again [to around] $125 per troy ounce,” Commerzbank says. “Besides good fundamental data – car sales in the U.S. and China were robust in May – the technical picture for palladium has improved noticeably recently, which has clearly attracted further buyers and lent support to the price.” 

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

 

BBH: FOMC One Vote From Signaling Four Hikes In 2018

Wednesday June 13, 2018 08:38

Brown Brothers Harriman points out that the voting makeup of the Federal Open Market Committee is only one vote away from hiking interest rates four times this year rather than three. Policymakers wind up a two-day meeting Wednesday. They are expected to hike interest rates another 25 basis points, but traders will be watching for clues of future monetary policy, including the Fed’s so-called dot-plot that shows expectations for future monetary policy by individual policymakers. For the median forecast to move to four hikes this year…only one member has to shift their vote,” BBH says. “It is that close. Failing to do so would be seen by some as a dovish hike, though the Fed funds futures strip does not show the market is convinced of an accelerated pace.” Investors will also be trying to gauge the pace of tightening in 2019.  “The Fed itself seems split, with most of the regional presidents appearing more concerned about the risks of an inversion of the yield curve than the board of governors,” BBH says.

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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