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Mitsubishi: Asian Buying Likely To ‘Cushion Further Price Drops In Gold’

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Asian buying of gold has picked up lately as the price has fallen, and this may slow any further price declines in the precious metal, says Mitsubishi. “With gold prices down at six-month lows, Chinese buyers have been very assertive of late,” the firm says. Turnover on the Shanghai Gold Exchange’s gold contract has been 11.5% higher in the last 10 days, compared to the same period in 2017, the firm says. “The average local price of gold has been 21% lower in this period than a year ago, leading to a good deal of opportunistic buying from the local jewelry and bar fabrication business, despite the retail market in general being quite quiet,” Mitsubishi continues. “Chinese and wider Asian buying demand ought to continue to cushion further price drops in gold.”

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

 

Mitsubishi: U.S.-European Trade War Would Dent Platinum Demand

Monday July 2, 2018 10:34

The price of platinum, which fell 6.2% in June and 8.4% in the second quarter, could slide some more if the U.S. dollar keeps appreciating and there is a trade war between the U.S. and Europe, says Mitsubishi.  Analysts point out that the European auto manufacturers’ association says the U.S. is the biggest destination of European Union car exports in terms of both units (20%) and value (29%). “Fewer exports to the U.S. may show up in reduced platinum demand since diesel vehicles make up a large share of European production, and many models that tend to be popular in the U.S. -- such as large European luxury SUVs -- are sold in diesel variants,” says Mitsubishi. Diesel-powered vehicles require platinum for catalytic converters. “A tariff-related slowdown in European SUV exports to the U.S. may result in less platinum demand since a U.S.-made gasoline SUV may be bought in place of a European diesel,” Mitsubishi adds.

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

 

Analysts: Gold ETFs Holdings Fall In June But Still Higher For 2018

Monday July 2, 2018 08:46

Holdings of gold by global exchange-traded funds fell last month by the most in 11 months but remain higher for the first six months of 2018, bank analysts report. ETFs trade like a stock but track the price of the commodity, with the precious metal put into storage to back the shares. “The gold ETFs tracked by Bloomberg registered outflows of nearly 48 tonnes in June – the largest outflows in any month since July 2017,” Commerzbank reports. Meanwhile, BMO Capital Markets pointed out that silver and gold ETF holdings went in different directions last week, with a 406,000-ounce reduction in ETF gold holdings amid U.S. dollar strength, but a 1.43 million-ounce increase in silver holdings. Year to date, however, gold ETF holdings are up 2.4%, with silver now down just 0.1%, BMO added.

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

 

BBH: U.S. Companies Expected To Post Higher 2Q Earnings

Monday July 2, 2018 08:46

Analysts look for higher earnings from U.S. companies during the second quarter, says Brown Brothers Harriman. With the quarter ended, earnings reports will start to come out soon. “Earnings growth for the S&P 500 is projected to [rise] by 20% by Factset, which if true, would the second strongest since Q3 2010,” BBH says. “Unusually, but for the second consecutive quarter, bottom-up analysts boosted their earnings forecast (0.8%) during the quarter.  More typically, analysts shave their forecasts by an average of around 5%.”

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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