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INTL FCStone: Nickel Gives Up Gains From ‘Philippines Bounce’

Wednesday September 10, 2014 10:27 AM

Nickel has now given back all of its gains that had been prompted by news reports last week that legislation had been introduced banning the export of raw ore. Three-month nickel on the London Metal Exchange spiked by a two-month high of $19,940 a metric ton on Monday, but fell sharply Tuesday and is down again Wednesday, trading at $18,735 as of 10:19 a.m. EDT. According to news reports, debate among lawmakers on the proposed shipment restrictions – meant to encourage more domestic processing – may not occur until late 2015. Exports from the Philippines increased in importance when Indonesia instituted a ban on exports of raw ore early this year. “Prices in the (base) metals complex cratered yesterday, with nickel leading the way down after it shed a whopping 5% on receding worries about a supply squeeze emanating from the Philippines. Prices are down once again today and we have now given back all the gains generated by the ‘Philippines bounce’ that set in earlier this month,” says Edward Meir, commodities consultant with INTL FCStone.

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

 

HSBC: Gold Could Fall Further If Next FOMC Statement More Hawkish Than Expected

Wednesday September 10, 2014 8:08 AM

HSBC sees potential for gold to ease some more if a statement from the Federal Open Market Committee next week should be more hawkish than expected. The metal hit a three-month low on Tuesday, which HSBC attributes to a reassessment of U.S. interest rate expectations following a recent Federal Bank of San Francisco report. HSBC says the report suggests investors may be underestimating how quickly policy-makers could raise rates. HSBC’s U.S. economic outlook is for growth in U.S. gross domestic product to average 2.5% in the second half and for full-year 2015, with the forecast for next year below consensus estimates. Still, HSBC sees potential for the Fed to start hiking in June 2015 as the labor market improves, forecasting a jobless rate of 5.5% by the end of 2015. HSBC economists expect the FOMC to unveil a new exit strategy at its Sept. 16-17 policy meeting. “While bullion prices at current levels reflect, to an extent, expectations for tighter monetary policies, it does not preclude prices from falling further should the upcoming FOMC statement be viewed as more hawkish than anticipated, in our view.” \

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

 

MKS: Physical Gold Demand From China Remains Soft

Wednesday September 10, 2014 8:08 AM

The spread between gold on the Shanghai Gold and Exchange and London suggests still-soft physical demand, says MKS (Switzerland) SA. “What was interesting was that the SGE was today trading at discount to loco London gold,” the firm says. “The last time that occurred was when the USDCNY moved from 6.05 to 6.28 between March and June of this year. Currently, the USDCNY remains suppressed, so with the gold price lower and the CNY stronger – (around) USDCNY 6.13 -- it still seems that physical demand is still soft from the world's largest bullion consumer. The SGE continued to trade at flat to discount even after the USDCNY fixed lower.”

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

 

Barclays Downwardly Revises Forecast For Euro

Wednesday September 10, 2014 8:08 AM

Barclays looks for further weakness in the euro, calling for the single European currency to fall to $1.27 in one month, $1.22 in three months, $1.17 in six months, and $1.10 in a year. “Despite notable depreciation in the EUR thus far, we have revised our EUR forecasts further lower on the back of substantial deterioration in the euro area economic outlook and the ECB’s (European Central Bank’s) response,” Barclays says. The bank says it now expects a “large, multi-year downtrend” in the euro, although with much of the depreciation likely to come in the next six months. Metals traders tend to monitor major moves in the foreign-exchange market, as these can influence base and precious metals alike.

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

 

BNP Paribas: Scotland Referendum Remains Key Focus For British Pound

Wednesday September 10, 2014 8:08 AM

The British pound should continue to be driven by the uncertainty surrounding Scotland’s referendum taking place next week, says BNP Paribas. Following  neck-and-neck voting intentions in the polls amid an advance of the “yes” vote, Prime Minister David Cameron and his fellow party leaders – Ed Milliband and Nick Clegg – have headed to Scotland to support the “no” campaign, points out the bank. “This follows other key political figures, such as former-Prime Minister Gordon Brown, who have increased their campaigning for the ‘no’ vote this week,” BNP Paribas says. “We therefore expect the upcoming polls to be of significance for the GBP. Any sign of a vote against independence retaking a significant lead could support a relief rally. However, if the political efforts fail to yield results in the upcoming polls, we would expect to see the GBP remain under pressure and for vol (volatility) to continue to head higher.”

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

 

 

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