Monday February 16, 2015 11:50 AM

Greece and its European creditors kicked off a second round of refunding negotiations, and, although analysts are expecting to see a last-minute deal made, it won’t happen just yet. Edward Meir, commodity consultant at INTL FCStone, says gold prices could end up trending lower as a result of potential agreement talk, but also warns that investors should expect to see volatility in the near-term. “This crisis is very much a fluid situation and so we would not necessarily advocate aggressively going short at this stage either,” he says.

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

 

Barclays: Gold Market Shifting Focus To India And Lower Tariffs

Monday February 16, 2015 9:54 AM

With the Chinese Lunar New Year quickly approaching, commodity analysts at Barclays say that the focus in the gold market will start to shift towards India. The government is currently in the process of debating whether or not to drop the import tariffs on gold, which was raised to 10% from 2% in 2013 in an effort to reduce the country’s massive current account deficit. However, with oil prices down sharply, the government has flexibility in the gold market and is expected to announce a reduction in the tariffs in budget, to be released Feb. 28. Barclays analysts add that it might take a while for lower duty costs to impact the gold market. “Although a duty cut is likely to lend support in the medium-term, inventory levels are still healthy and the cut would need to be sufficient to promote demand above and beyond the smuggled gold,” they say.

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

 

MKS: Asian Demand Helping To Support Gold In Quiet N.A. Session

Monday February 16, 2015 8:38 AM

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Electronic trading for Comex gold futures is light Monday morning as the market is closes early at 1 p.m. and most traders are taking the day off in celebration of Presidents’ Day. With little activity in American markets, the gold market will focus on Asian demand ahead of the Chinese Lunar New Year Celebrations. Samuel Laughlin, precious metals analyst at MKS, says that he expects Asian physical demand to keep prices between $1,220 and $1,235 an ounce. Comex April gold last traded at $1,233.30 an ounce on Globex, CME Group’s electronic exchange. “Potentially, there is some downside risk later in the week as physical demand is removed from Asia…” says Laughlin.

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

 

BBH: There Is No Currency War, Central Banks Are Fighting Deflation

Monday February 16, 2015 8:37 AM

European Central Banks continue to adopt negative interest rates, with Sweden’s Riksbank the latest to join the fray introducing a negative 0.10% repo rate. However, currency strategists at Brown Brothers Harriman (BBH) don’t see this as a growing currency war and continue to reiterate that central banks are doing what they have to support their economy. “What do all the countries that have adopted negative interest rates have in common? Not a strong currency, but deflation. Central banks are fighting deflation with the only weapons it has--the price of money and the balance sheet,” they say. “The reporters and analysts seem almost to be egging on the conflict the way adolescents might a high school brawl, and to what end?”

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