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Barclays: Gold Leads Investment In Commodities During First Quarter

Investors appear to be focusing on individual commodities more-so than passively buying the entire sector, with gold a beneficiary, says Barclays. Commodities investment surged in the first quarter, with $24.2 billion of inflows and price appreciation bringing assets under management in commodities to $193 billion, the bank calculates. “Gold has been the primary driver of investment flows so far in 2016, taking over from oil, which was the dominant driver in 2015,” Barclays says. Precious metals had the second-largest quarterly inflows on record at $15.7 billion, the bank says. This was exceeded only by $16.5 billion in the second quarter of 2009, when the global financial crisis spurred substantial buying of gold, Barclays says. “We believe commodities investors have changed their investment style,” Barclays says. “Recent flows suggest that investors are actively selecting individual commodities based on price moves, fundamentals and the macro environment. Investors have also been willing to adjust positions based on short-term price movements. This could mean less concern about inflows creating another ‘super cycle,’ but investment flows may have a larger effect on short-term price movements.”

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

 

TD Securities: Silver Prices ‘Driven By Improved Physical Demand’

Monday April 25, 2016 08:58

Silver has been helped by good physical demand, which should continue to underpin prices, says TD Securities. The metal has risen sharply this year with gold, with the U.S. Federal Reserve seen backing away from its hawkish rate-hiking timeline, TDS says. Besides speculative positioning in the futures market, silver also has been “driven by improved physical demand,” TDS says. For instance, U.S. silver-coin demand “has accelerated” in 2016, while exchange-traded funds have reversed their late-2015 selling pressure. “While the near-term price swings may exhibit some volatility due to the large number of spec positions, the stability of the more passive physical-buying trend should keep silver supported at these higher levels, as we continue to believe the Fed will remain very dovish in their stance on monetary policy,” TDS concludes.

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

 

INTL FCStone: Gold, Other Commodities To Eye Dollar Moves After FOMC

Monday April 25, 2016 08:58

Gold and the commodity sector generally will be watching to see how the U.S. dollar reacts to this week’s meeting of the U.S. Federal Open Market Committee, says INTL FCStone. Commodities have been boosted lately by a softer tone in the dollar, the firm points out. “However, the greenback is showing signs of resilience in recent days and so this week’s signals out of the Fed will be critical,” INTL FCStone continues. “Should the central bank continue to hint at further rate(-hike) delays, we could see the dollar selloff resume, in which case most commodity markets -- including gold -- could push higher. However, gold’s upside will be capped by the fact that funds will be throwing their money at various other markets that are moving up more decisively then gold, while the continued strength in U.S. equities will also act as another drag.”

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

 

TD Securities: South African Supply Situation ‘Quite Positive’ For platinum

Monday April 25, 2016 08:58

South Africa’s supply situation should be constructive for platinum, says TD Securities. Prices did not benefit from a supply deficit in 2015, but outsized flows of the metal from the country last year led to ideas that there may have more supply than thought, perhaps because existing stockpiles were drawn down, TDS says. “So, with the latest trade data indicating a slowdown in metal coming out of South Africa this year and now likely lower stockpiles, the market can return to focus on the deficit situation, which is rather still quite positive for the metal,” TDS concludes.

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

 

 

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