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SocGen Sees Palladium Outperforming Platinum

Societe Generale looks for palladium to continue outperforming sister metal platinum. “Platinum and palladium prices have recently diverged significantly, with platinum prices having dropped while palladium prices have risen,” SocGen says. “We expect palladium to continue outperforming and recommend buying palladium on dips against platinum. Palladium is widely regarded as the most ‘industrial’ metal of the two, while platinum is more correlated to gold due to its higher use in jewelry.” As of 1:22 p.m. EST Friday, Nymex December palladium was up $5.50 to $742.90 an ounce, while January platinum was down $21.30 to $909.80. Platinum has followed gold lower since the Nov. 8 U.S. presidential election, while palladium earlier this week hit its highest level of the year at $748.90 an ounce.

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

 

MKS: Shanghai Gold Premium Jumps To $30 Thursday, Then Pulls Back

Friday November 25, 2016 08:30

The gold premium on the Shanghai Gold Exchange soared as high as $30 Thursday before easing back to a still historically high level of around $15 on Friday, reports MKS (Switzerland) S.A. On Thursday, the “feature of the day was the SGE premium, which rose to an amazing $30 over the loco London gold price, the loftiest levels seen since 2013,” says Sam Laughlin, precious-metals trader with MKS. “The difference between then and now, however, is now the high premium seems to be more a factor of a supply shortage in mainland China as opposed to outright demand. As a result, despite the high premiums this week, the turnover has not been anything enormous.” The premium fell by roughly half on Friday, he continues. “While still elevated, we did some fatigue creeping into the Shanghai premium today, 'easing' to around $15 relative to loco London gold.”  

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

 

Commerzbank: Higher U.S. Treasury Yields Pressuring Gold

Friday November 25, 2016 08:30

The swift rise in Treasury yields in recent weeks is one of the main factors that has hurt gold prices, says Commerzbank. Higher yields both boost the U.S. dollar, which in turn tends to pressure gold, and increases the so-called opportunity cost, or lost income from holding a non-yielding asset like gold instead of an interest-rate product. Comex December gold fell as far as $1,170.30 an ounce overnight, its lowest level since February, although it bounced back as far as $1,188 as of 8:25 a.m. EST. “We believe that the steep rise in interest rates in the U.S. is one of the main reasons for the latest gold-price slide,” Commerzbank says. “Within two weeks, 10-year rates there climbed from 1.7% to 2.4% p.a. Many market participants clearly expect the U.S. Federal Reserve to hike interest rates several times over the next few months as inflation looks set to rise in the wake of Donald Trump’s (U.S. presidential) election victory, and are therefore selling gold. Gold does not yield any interest, after all.”

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

 

Commerzbank: China’s Oct. Gold Imports From Hong Kong Up From Prior Month

Friday November 25, 2016 08:30

Gold imports from Hong Kong by key consumer China picked in October, says Commerzbank. “According to data from the Census and Statistics Department of the Hong Kong government, China imported 61.1 tonnes of gold from Hong Kong on a net basis last month,” Commerzbank says. “This is 16% more than in the previous month. Nonetheless, imports remained 15% down year-on-year. Consequently, Chinese net gold imports from Hong Kong from January to October were still only marginally up on the same period last year.”

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

 

 

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