Monday April 20, 2015 11:00 AM

Greece’s uncertain future in the eurozone, global quantitative easing, loose monetary policies and continued demand out of Asia will all provide much needed support for the gold market, but these factors might not be enough to create another bull market, say commodity analysts at Morgan Stanley. They expect prices to fall over the next two years as investors leave the marketplace. “Our Global Cross Asset team highlight in their report that negative rates will continue to drive flow into USD credit, supporting both the house view of ongoing USD strength and our unchanged generally subdued gold price outlook,” they say.

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

 

U.S. Dollar Entering Consolidation Phase – BBH

Monday April 20, 2015 11:00 AM

After declining for four consecutive sessions, the U.S. dollar is finding some support Monday, which analysts is not pressuring gold prices. Currency analysts from Brown Brothers Harriman are not ready to call an end to the current U.S. dollar bull market. They expect to see increased volatility but no collapse in the greenback. “The price action reinforces our sense that after trending for several months, the dollar has entered a consolidative phase. Trading is choppy, and positioning is still stretched, but the divergence of monetary policy trajectories will likely prevent sharp dollar losses,” they say.

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

 

USD Strength To Continue While Greece Pressures EUR – BNP Paribas

Monday April 20, 2015 10:45 AM

Although the U.S. dollar has been somewhat volatile, analysts at BNP Paribas expect the greenback’s strength to continue. “We do not expect an immediate re-start to USD rally but we remain confident of our medium-term view,” they say in their FX daily strategist research note. “[We] maintain a short EURUSD recommendation via spot and a long USDJPY recommendation via options.” They add that they expect U.S. economic data to improve, which would also be dollar positive. Looking at the euro, analysts note that the currency is likely to remain under pressure as Greece’s negotiations with creditors stalls. “Our economists now argue that an imminent deal for the release of the last tranche of bailout funds is fairly unlikely as eurozone finance ministers prepare to meet on 24 April,” they say.

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

 

Fed Rate Hikes To Drive Gold Prices In Near-Term – Barclays

Monday April 20, 2015 10:41 AM

The timing of the Federal Reserve’s U.S. rate hike remains the dominant driver of gold prices in the short term, say analysts from Barclays, adding that the bank’s economist still expect a first move in September. They say that uncertainty in Europe, particularly Greece, and weaker-than-expected U.S. economic data have also been supportive of gold prices. “Despite encouraging initial economic data from Europe, the possibility of a Greek default could potentially support short-term interest in gold as a safe-haven asset,” they note. Fundamentally, physical demand from India ahead of the gold buying festival of Akshaya Tritiya has also offered gold prices a soft floor, they add. However, they note that although investor flows have moved positive for gold, they say holdings remain “vulnerable”. “Modest inflows of 5 tonnes over the past week have been insufficient to overturn the net redemptions for the month,” they say. While the macro environment remains bullish for gold, the analysts note that they expect prices to average around $1,190/oz this quarter and $1,183/oz for the year.

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