EDITOR'S NOTE: Don’t Miss a Beat! Sign-up for the Kitco News Weekly Roundup– our newsletter highlighting our most popular features, articles and videos! Register Here

Gold May Rebound Further As Dollar Retreats – DailyFX

Tuesday October 07, 2014 1:05 PM

A correction in the U.S. dollar is fueling a bounce in gold, says David Song, currency analyst at DailyFX. "Gold may continue to pare the sharp decline to $1,182 as the near-term correction in the U.S. dollar gathers pace. The fresh batch of Fed (Federal Reserve) rhetoric may undermine the bullish sentiment surrounding the greenback as FOMC (Federal Open Market Committee) voting members Narayana Kocherlakota and William Dudley remain in no rush to normalize monetary policy, and bullion may trade higher going into the next interest rate decision on Oct. 29 as it breaks out of the bearish momentum carried over from back in July,” Song says. Yet he adds the outlook for softer global growth could mean a bearish long-term outlook for gold “the precious metal may continue to carve a series of lower-highs and lows in the second-half of 2014 as the Fed looks to remove the zero-interest rate policy in the year ahead."

By Debbie Carlson of Kitco News; dcarlson@kitco.com

 

Societe Generale Most Bullish On Nickel Among Base Metals

Tuesday October 07, 2014 1:05 PM

Societe Generale sees a mixed outlook for base metals as a Chinese economic slowdown impacts metals differently, listing itself as most constructive on nickel. Base metals have been on the defensive since summer, hurt by slowing growth in China, the eurozone and U.S., perceptions of a more hawkish Federal Reserve and other factors. “We are sticking to our view that increasing copper mining output, which is now well under way, will over time ease the current tightness in the refined market,” Societe Generale says. “While global copper consumption growth is expected to strengthen this year helped by moderately higher global economic growth, serious structural oversupply in China's housing sector and tightened credit conditions are likely to cap both Chinese and global copper consumption growth. There is scope for the other metals to rally to varying degrees on tightening markets coincident with seasonal demand strength typically associated with Q4. However, as ever, much will depend upon China. We are most bullish towards nickel. While the refined nickel market remains well supplied at present, this is likely to change from next year. The nickel market has changed dramatically as a result of Indonesia's ban on nickel ore exports, which we expect to be enforced. This one factor alone is likely to shift the nickel market from structural oversupply to a balanced outcome this year, with sizeable deficits probable over the coming years.”

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

 

Adrian Day: 'Fundamentals For Gold Remain Positive'

Tuesday October 07, 2014 7:56 AM

The fundamentals for gold remain positive, with a stronger U.S. dollar the main culprit hurting the metal in the last couple of months, says Adrian Day, president of Adrian Day Asset Management, in a quarterly portfolio review. The greenback was boosted by a growing divergence between the U.S. economies and anticipated monetary policy. “Dollar strength lays the seeds of its own destruction,” Day says, noting this could hurt the U.S. trade picture. “The U.S. economy is not so strong that it can withstand a higher dollar; already several Fed officials have expressed concern and if the balance of future economic reports turns soft, one can expect more dovish comments from the Fed.” Meanwhile, he says the “fundamentals for gold remain positive,” with new mine supply growing at only a moderate rate and good demand expected from China, India and the Middle East. “Central banks continue to accumulate, with suspicions China is looking to build reserves,” Day says. He also cites concerns about “monetary fragility, easy money around the world, and debt levels increasing even (as) economic growth slows, making debt service more problematic.” Gold could be “close to a turn,” Day says. “The dollar has moved too far, too fast, in defiance of fundamentals. Gold is testing a level where it has found support three times in the past year. And the commitment of traders report, showing over 20% short interest, is also a level from which we have seen strong rallies several times in the past. If we break the current level meaningfully, then it could be exceedingly ugly for the next few months. But if it holds, we could see a very strong rally.”

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

 

Adrian Day; Fed 'May Find It Easier To Talk About Tightening Than To Act'

Tuesday October 07, 2014 7:53 AM

Federal Reserve policy-makers “may find it easier to talk about tightening than to act,” says Adrian Day, president of Adrian Day Asset Management. He says a “healthy dose of skeptism” is in order. “After the original quantitative easing program, the Fed said there would be no new QE program,” Day says. “That was back in early 2010. Since then we have had more QEs and QEs under other names (like) ‘Operation Twist,’ each time with promises that this would be the last; we’ve seen thresholds come and thresholds go -- 6.5% unemployment rate was to trigger the end of stimulus, recall,” he says. He later adds, “already the Fed is backing away from its comments about raising interest rates by mid-2015, now saying that short-term real rates will remain negative through the end of 2015 -- not necessarily contradictory, but certainly a different emphasis.”

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

 

TD Securities: Zinc, Lead, Nickel Set To Beat Peers In 2015

Tuesday October 07, 2014 7:52 AM

Zinc, lead and nickel are poised to outperform their peers in 2015, says TD Securities. “China demand uncertainty, elevated metals product inventories and technicals should continue to provide downside price pressure on the base metals complex in early autumn,” the firm says. “Ironically, zinc and nickel -- which have tight supply/demand fundamentals -- are among the most at risk of a sharp correction should demand expectations deteriorate further, as they have rallied the most in anticipation of tight fundamentals. Aluminum also faces downside owing to its chronic physical oversupply situation. Once the global economic outlook starts to look firmer, supply-side constraints, inventory adjustments and a rise in global industrial demand should propel zinc, lead and nickel materially above current levels, making them base metal star performers in 2015. Meanwhile copper and aluminum will continue to be pressured lower by projected surpluses and a strengthening U.S. dollar, as the Fed normalizes policy.” The firm’s 2015 average forecasts include copper, $6,393 a metric ton; zinc, $2,480; lead, $2,436; nickel, $20,982; and aluminum, $1,924.

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

 

Commerzbank: Market Will Be Eyeing Chinese Gold Demand When Holiday Ends

Tuesday October 07, 2014 7:52 AM

Traders will be watching to see if the Chinese snap up gold after the recent price retreat when they return from Golden Week holidays, with buying appearing to have already picked up elsewhere at lower prices, says Commerzbank. “Tomorrow will see Chinese traders returning to the market after their festival week,” Commerzbank says. “It will be interesting to see whether they take advantage of the low price level to buy up gold opportunistically. If so, this would doubtless shore up the gold price. On the other hand, gold will probably continue its downswing if the Chinese were to exercise further restraint. Then the low of $1,180 per troy ounce that the gold price hit mid-last year would no doubt be put to the test.” Meanwhile, citing data from the Istanbul Gold Exchange, Commerzbank notes Turkey imported 12.6 metric tons of gold in September, the most since June after just two tons were imported in August. “Evidently advantage was taken of the previous month’s price slide to buy gold,” Commerzbank says. “The low prices also appear to have resulted in increased gold purchases in the U.S., as reflected in robust coin sales in the first days of the month.”

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

 

Deutsche Bank Sees Supply Deficits In PGMs For Next Five Years

Tuesday October 07, 2014 7:51 AM

Deutsche Bank looks for supply deficits in the platinum group metals to continue for the next half decade. “Given the risks of a more permanent reduction in South African productive capacity, in part driven by an increase in loss-making sections of the mines, we not only expect PGM production in South Africa will be unable to reach pre-strike levels but that it will help to sustain market deficits across the complex over the next five years,” the bank says. Meanwhile, pollution issues in China should sustain a drive to improve emissions, meaning more demand for PGMs. “This will likely mean China is the largest source of palladium demand growth globally over the next five years,” Deutsche Bank says. “We would also expect rhodium to be another beneficiary, not least since investment participation in this market is low compared to platinum and palladium.”

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

 

 

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart