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Standard Chartered: Gold To Rise In Autumn After 'Seasonal Lull'

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Standard Chartered says gold may ease some more in the near term during a “seasonal lull” but then rise in September. Factors that could push gold down some more in the near term include a seasonally slow period for physical demand, bearish investment sentiment as reflected by recent interest in shorting SPDR Gold Shares, and an estimated 200 tonnes of ETF positions that are now in the red, meaning they could be liquidated, Standard says.  “Beyond the current weakness, we expect prices to recover as USD [U.S. dollar] strength fades (we expect EUR-USD to trade at $1.15 at end-2018) and strong seasonal demand materializes in India in September given the good monsoon forecast,” Standard says. “Further, gross short positions are at record highs, suggesting scope for short-covering activity.” Also, Standard adds, the Relative Strength Index technical indicator shows that gold prices are “oversold” in the current environment.

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

 

Commerzbank: China's Gold Imports Pick Up In June

Friday July 27, 2018 09:12

Chinese gold imports have risen lately, perhaps helped by lower prices, reports Commerzbank. Analysts cite data from Hong Kong’s Census and Statistics Department showing that China’s net imports from Hong Kong totaled 80.9 tonnes last month, which was 40% more than in May and the most since March 2017. Switzerland also exported more gold to China in June, Commerzbank points out. “It is possible that the low prices increased buying interest somewhat even though the depreciation of the Chinese renminbi prevented local gold prices from falling any further,” the bank says. “What is more, Chinese gold jewelers are likely to be stocking up ahead of the autumn season of high demand.”

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

 

RBC's Gero: Options Expiry, Strong Dollar Keep Gold Under Pressure

Friday July 27, 2018 09:12

An options expiration this week and U.S. dollar strength have left gold futures under pressure, says George Gero, managing director with RBC Wealth Management. As of 8:56 a.m. EDT, Comex August gold was $3.40 lower to $1,222.30 an ounce. As a result of the options expiry, some 1,200 new shorts were added to open interest, he explains. Traders are still not looking to gold as a safe haven, while September U.S. dollar index futures are holding recent gains to around 94.50, Gero reports. “All this keeps gold on the defensive for now, and the large continued open interest in options…with large puts below key $1,200 may continue volatility all through this quarter,” he says. “If we continue to hold this area, a rally could bring new buyers as well with short covering.”

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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