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Commerzbank: ETFs Increase Gold Holdings By 5.4 Tonnes

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Holdings of gold by global exchange-traded funds posted their biggest inflow in weeks on Monday, reports Commerzbank. The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. Holdings have been declining lately along with the price of gold. However, “the gold ETFs tracked by Bloomberg saw inflows of 5.4 tonnes yesterday – their highest daily inflow in many weeks,” Commerzbank says. “Clearly bargain hunters were lured in by the low price. Whether this will prove sustainable will only become apparent in the next few days, however. After all, the lion’s share of inflows were attributable to the SPDR Gold Trust in the U.S., which was also chiefly responsible for the pronounced outflows in the weeks before.”

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

 

FXTM: Gold Outlook Lacks Luster Despite Small Uptick

Tuesday July 24, 2018 09:02

The outlook for gold remains weak despite a modest bounce so far Tuesday, says Lukman Otunuga, research analyst at FXTM. As of 8:36 a.m. EDT, spot gold was $1.60 higher to $1,225.60 an ounce, getting what Otunuga calls a “temporary lifeline in the form of dollar weakness.” Still, the analyst says, “Market expectations over the Federal Reserve raising rates gradually are likely to prompt investors to shun the zero-yielding metal, while a broadly stronger dollar is poised to threaten any meaningful upside gains. With the fundamental drivers behind the dollar’s appreciation in recent months [are] still firmly intact, gold looks to be in trouble.” He describes the technical charts as still “heavily bearish” for gold, including consistently lower lows and lower highs, while the moving average convergence/divergence trades to the downside. “A weakening dollar could elevate gold prices back towards $1,234 and possibly $1,245,” Otunuga says. “However, bears may exploit the rebound to pull prices back towards $1,213. Alternatively, a decisive break down below $1,213 may open a path towards the psychological $1,200 level.”

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

 

BBH: China’s Focus On Stimulus Weighs On Yuan

Tuesday July 24, 2018 09:02

The Chinese yuan has weakened as officials consider economic stimulus, says Brown Brothers Harriman. However, the country’s stock market got a boost. “Following a record injection via the medium-term lending facility yesterday, China's officials unveiled a set of policies designed to support the weakening economy that soon could face a substantial drag from U.S. tariffs,” BBH says. “The effort focuses on boosting domestic demand.  Measures include targeted tax cuts and accelerating new infrastructure.  This is a clear shift away from the deleveraging campaign, and it appears that the State Council dropped the ‘neutral’ characterization of monetary policy.” Metals traders eye economic developments in the country since China is the world’s largest consumer of gold.

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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