Wednesday February 4, 2015 2:55 PM

Gold’s attention has been focused on central banks’ easing policies, rather than the inflationary or deflationary issues surrounding weaker oil prices, say analysts at Triland Metals. “[T]he short-term oversupply [in oil] will seemingly continue and the bounce in prices could be premature…what does this mean for precious metals? Not a great deal actually,” they say. The analysts note that, given recent investor flows, a positive sentiment has manifested itself into the gold market and dips are being bought for the first time since 2012, which could explain why the metal is struggling to breach resistance. “Last week’s commitment of traders report also shows another 13% increase in net gold positioning – which may help to explain some of the offloading we saw ahead of $1,300,” they add.

By Sarah Benali of Kitco News; sbenali@kitco.com

 

Third Year In Presidential Cycle Historically Positive For U.S. Equities – Barclays

Wednesday February 4, 2015 10:55 AM

Despite a ‘poor start’ for U.S. equity markets, Barclays says that based on historical data, 2015 should prove to be a positive year for American stocks. “American equity indices were clear underperformers during the first month of 2015,” says Lynnden Branigan, vice president of technical research for the bank. “Positive third year presidential cycle statistics for the [Dow Jones Index] help to keep us bullish for the year end in the US,” he adds, referring to Barclay’s ‘Top 10 charts for 2015’ report released in early January. Back in its January report, analysts for Barclays had said, “our statistical studies utilising over 100 years of Dow Industrial Average data point to the upcoming year as likely giving the best returns of the four-year cycle.” “[A]n increase in the index of approximately 12% would give us targets in the 19960 area, while stripping the data down to the third year of a second  presidential term would yield average returns of over 6%, which would imply an upside objective in the 19000 area,” said the January report.

By Sarah Benali of Kitco News; sbenali@kitco.com

 

Market Awaiting Fresh Cues: BBH

Wednesday February 4, 2015 10:19 AM

The greenback is consolidating yesterday's losses as the market awaits fresh cues, says Brown Brothers Harriman (BBH).  “Dollar bullishness has not been broken, but short-term participants are looking for fresh incentive,” BBH writes on Wednesday. Doubts about the timing of the Fed's lift off “crystallized” around two data points, BBH explains.  “The first was the weakness in hourly earnings in the December employment.  The second was the weakness in December retail sales, especially when excluding autos, gasoline, and building materials.” On the topic of retail sales, BBH says it was not an accurate reflection of US consumption.  “The Q4 GDP report showed the biggest rise in consumption in several years.  The offset to the decline in average hourly earnings needs the next jobs report, which is due Friday.  Earnings are expected to rebound by 0.3% after falling 0.2%.”  

By Daniela Cambone of Kitco News; dcambone@kitco.com

 

We Could See $1300 Gold In Coming Weeks – TD Securities

Wednesday February 4, 2015 9:30 AM

Precious metals are slightly firmer this morning after initially testing lower during the Asian trading session, says TD Securities in its Wednesday report. It notes that Shanghai premiums have been heading higher lately and that this activity may continue ahead of the Chinese New Year. TD  also comments on India’s near 50% pick-up in gold imports to some 945 tons in the first 10 months of the year ending Mar 31st – that, despite a weaker currency. “I have been concerned about gold testing lower because of the long positioning in gold, but it has now held the 200-day moving average twice - spot (last week) and futures (yesterday). It could now be supported by rising geopolitical tensions in the Middle East,” writes Steve Scacalossi of TD Securities. “We could very well see $1300 gold in the coming weeks,” he says.

By Daniela Cambone of Kitco News; dcambone@kitco.com

 

Gold/EUR An Important Component To Global Market - iiTrader

Wednesday February 4, 2015 8:57 AM

Gold priced in euro terms is slowly recovering from Tuesday’s sharp selloff and traders need to watch gold priced in euro terms as further unwinding of this trade could signal weakness in the global market, says Bill Baruch, senior market strategist at iiTrader.com. “[Y]esterday the Euro rallied nearly two cents while gold retreated, signaling an unwinding of the long gold in euros trade, something that was so popular over the last month and a half as investors prepared for the ECB to deliver QE.” Spot gold/EUR last traded at $1,108.75 an ounce, up more than 1% on the day.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

Bullish Calls For PGMs, Euro Gains To Weigh On Gold - HSBC

Wednesday February 4, 2015 7:42 AM

Gold’s inverse relation to the euro saw the metal weaken on Tuesday in the wake of a strong European currency, and HSBC says further gains for the currency will weigh on gold. “Since the start of this year, gold’s historical positive correlation to the EUR has flipped to become inversely correlated. We believe this is attributed to gold’s appeal as a perceived safe haven asset,” the bank says. “That said, further EUR gains may weigh on gold, in our view.” On the flip side, HSBC is confident that platinum group metals (PGMs) prices will rise. “The PGMs moved higher, as platinum outpaced palladium after U.S. auto makers reported stronger U.S. auto sales data for January,” the bank report says. HSBC explains that U.S. light vehicle sales reached 526,144 in January, an increase of 16.1% year-on-year. “Further strength in the automotive sector and, thus, PGM demand is a supportive case for higher prices, in our view. We remain bullish on the PGMs,” the bank adds.

By Sarah Benali of Kitco News; sbenali@kitco.com