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Commerzbank: 2014 Chinese Gold Imports 'To Fall Well Short' Of Last Year'

Friday September 26, 2014 7:46 AM

Chinese gold imports from Hong Kong remain subdued, says Commerzbank. Analysts cite data from Hong Kong’s Census and Statistics Department showing China imported only 27.5 metric tons of gold on a net basis from the former British crown colony in August. “This puts net imports only slightly above the previous month’s low level, which constituted the lowest figure since June 2011,” Commerzbank says. “Chinese net gold imports from Hong Kong have totaled 497 tons since the beginning of the year, 33% down on the corresponding period last year. Chinese gold demand looks set to fall well short of last year’s total even if it picks up in the next few months. The weak gold demand in China is one key reason for the slump in the gold price over recent months. So far, the price slide has not sparked any revival of physical demand. Evidently buyers in Asia are holding back in anticipation of even lower prices. Thus the gold price remains more dependent on Western investment demand.”

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


TDS Sees Softer Tone For Industrial Commodities, Precious Metals In Coming Month

Friday September 26, 2014 7:44 AM

TD Securities looks for more weakness in industrial commodities and precious metals over the next month. The firm cites expectations for demand growth outside the U.S. to slow, gradual reductions in Russia-NATO tensions, the start of a seemingly successful campaign against ISIS in Iraq and Syria, plus a growing consensus that the U.S. Federal Reserve is likely to start removing monetary accommodation “sooner rather than later” with rates moving toward normalization at a quicker pace. “Due to these factors, base metals, crude oil and other industrial commodities are likely to be somewhat depressed in the coming month,” TDS says. “While the U.S. economy is set to perform fairly well, especially when compared to Europe, it will not offset the relative weakness for physical commodities coming from China and Europe. Meanwhile, while higher yields and the resulting strong greenback are set to keep the interest of speculative investors in the sector fairly low. Still-lackluster gold physical demand coming from China and India along with the growing risk the Fed starts to get serious about removing monetary accommodation also makes us somewhat bearish with respect to gold and silver performance into the next quarter. But we acknowledge that the poor global environment and the lack of inflation in the U.S. likely means gold and silver will show some stability before heading lower.”

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


BNP Paribas: U.S. Dollar Upside Momentum Vs. Euro To Remain Intact

Friday September 26, 2014 7:43 AM

BNP Paribas looks for the U.S. dollar to maintain its positive momentum despite the sharp fall in the U.S. S&P 500 equity index Thursday, along with a pullback in U.S. two-year yields. The bank’s economists have written about a potential negative impact on markets as liquidity is withdrawn with the imminent ending of the third round of U.S. quantitative easing. “Such a reduction in risk sentiment occurred with the ending of QE1 and QE2,” BNP Paribas says. “The latest EUR/USD move to a new low may have caught markets by surprise amid the performance elsewhere, but we see this as an indication that the market is comfortable holding (euro) shorts given ECB’s (European Central Bank’s) apparent endorsement of EUR weakness. Eurozone data remain weak.” The euro on Thursday hit its lowest level since 2012.

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


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