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TDS: 'We Still See A Place In Many Portfolios To Hold Gold'

While gold’s performance in the immediate future may hinge on economic data and Federal Reserve rate-hike expectations, analysts with TD Securities “still see a place in many portfolios” for the yellow metal. Gold has fallen in October, but expectations for a December Federal Reserve rate hike are already factored into the market and many longs have already exited the futures, which may help the metal now hold chart support, TDS says. If U.S. economic data are strong, gold and silver could probe still lower. “But we still see a place in many portfolios to hold gold, with expectations of historically low global real yields, debt prospects remaining high, and the potential for some type of risk off move still threatening the equity markets, as the main attractors for maintaining the metals as a hedge,” TDS says. “And from these levels, even more-so if prices tripped down to $1,200/oz, the case for getting long grows, as we still expect that prices are headed toward $1,350/oz in 2017 under the current environment.”

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

 

Commerzbank: Gold-Futures Liquidation Significant But Should Abate

Tuesday October 18, 2016 10:27

Commerzbank says the long liquidation in gold futures of more than 106,000 contracts during the last two reporting weeks amounts to 331 tonnes of gold – albeit only on paper – although this selling is likely to ease up. Traders liquidate futures positions to book profits or limit losses, often based on views of where prices are headed next. The amount in gold terms corresponds to 5 ½ weeks of global gold-mining production the bank says. “And it shows how much gold can be shifted around via the futures market. After all, the physically backed gold ETFs (exchange-traded funds) recorded inflows of a mere 14.4 tonnes in the period under review. Based on the average ETF daily inflow of three tonnes so far this year, ETF investors would have to buy gold on 112 days of trading or for a good five months in order to offset the sales on the futures market in the two-week period under review.” Another way to illustrate the selling would be to consider the average monthly gold imports of 70 tonnes so far this year from key consuming nations China and India, Commerzbank says. “We believe that the selling pressure from speculative financial investors should abate, however,” Commerzbank continues.

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

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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