Make Kitco Your Homepage

Phoenix's Grady: Open-Interest Data Hint Shorts Entered Gold

Kitco News

Editor's Note: We hope you enjoy Kitco News' new look! Don't forget to try out our newest feature: Kitco Chat! You will now be able to easily share and comment on all our articles. You can do so with or without signing up, but why not join Kitco's online community? In just a few easy steps, you will be able to create your unique username and password. Make sure to do so quickly, before someone else snags your username!

A rise in the number of open positions in Comex gold futures as of the end of business on Thursday, when prices fell, is a bearish sign for the gold market, says Kevin Grady, president of Phoenix Futures and Options LLC.  Data on the CME Group website show that the number of open positions in gold rose by 3,315 lots Thursday. Meanwhile, the April gold contract fell by $17.10 an ounce the same day. “To me, that shows people are starting to get short (sell as they take out bearish trades) in anticipation of a rate hike coming in March,” Grady says. “It’s going to be hard for gold to rally with that headwind. Gold sometimes does well after a rate hike, but right now I think the initial shock of the rate hike is bearish for gold.”

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

 

LaSalle’s Nedoss: 20-Day Average Key Technical Level For Gold

Friday March 03, 2016 09:31

Technically, a key for Comex gold will be whether the metal can reclaim its 20-day moving average, says Charlie Nedoss, senior market strategist with LaSalle Futures Group. “Yesterday was the first close in some time below it,” Nedoss says. For Comex April gold, the 20-day average is at $1,238.30 an ounce, and the contract was at $1,229 as of 9:24 a.m. EST. The metal has fallen three sessions in a row. Still, “there’s enough uncertainty that people are starting to step in and buy the breaks now,” Nedoss says. “Let’s see what we do over the next couple of hours.”

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

 

FXTM’s Otunuga: Bears Control Gold Market In Near Term

Friday March 03, 2016 09:17

Bears have taken control of the gold market in the short term, although political worries remain supportive for the longer term, says Lukman Otunuga, research analyst at FXTM. “The growing speculation of the Federal Reserve raising U.S. interest rates in March has exposed gold to downside shocks, with the metal booking its biggest one-day loss of 2017 during Thursday’s trading session,” the analyst says. “Sellers have exploited the repeated hawkish comments from Fed officials to pressure the yellow metal, while a strengthening dollar continues to cap upside gains.” Further dollar appreciation and improving sentiment toward the U.S. economy could leave gold vulnerable to further losses, Otunuga continues. “Although the concerns over political risks in Europe, Brexit woes and (U.S. President Donald) Trump developments attract investors to safe-haven assets in the medium to longer term, bears currently remain in control on the daily charts,” the analyst says. “From a technical standpoint, further weakness below $1,220 could encourage a selloff lower towards $1,200.” As of 9:11 a.m. EST, spot gold was down $6.40 to $1,227.85 an ounce.

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

 

INTL FCStone: Any Post-Yellen Gold Selloff A ‘Buying Opportunity’

Friday March 03, 2016 09:17

Gold could fall some more if Federal Reserve Chair Janet Yellen does as her colleagues lately and sounds a hawkish tone when she gives a speech Friday afternoon, but any selloff may end up a buying opportunity, says INTL FCStone in its monthly commodities outlook. Gold could sell off by as much as $15 to $20 an ounce if Yellen suggests the central bank will hike rates at its next meeting, “but the decline should be used as a buying opportunity,” INTL FCStone says. One of the factors that should help the precious metal avoid a significant decline is uncertainty ahead of the French elections, the firm says. INTL FCStone sees a March range of $1,200 to $1,270 an ounce in gold and a $17.25-$18.50 band in silver. Analysts concede that they were wrong on their bearish call for platinum and palladium last month, nevertheless “reiterate our view that the deceleration we are seeing in the U.S. auto sales, coupled with a sharper-than-expected slowdown in Chinese sales, could eventually cause problems for both metals going forward. Car sales in the EU (European Union) are also not going to be that impressive either, expected to grow by about 1% in 2017, a sharp slowdown from last year, this according to the European Automobile Manufacturers Association. More broadly, LMC Automotive expects the global light vehicle market to show growth of 2.5% (year-on-year) in 2017, well off last year’s 4.6% reading.” INTL FCStone sees platinum ranging between $950 and $1,050 during March and palladium between $710 and $800.

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

 

RBC’s Gero: Fed Rate-Hike Worries Pressuring Comex Gold

Friday March 03, 2016 09:17

Comex gold is on the defensive early Friday on worries about potential Federal Reserve rate hikes, says George Gero, managing director with RBC Wealth Management. This comes as a number of recent Fed speakers hinted at a possible rate hike in the near future. Fed Chair Janet Yellen is scheduled to speak at the Executives’ Club of Chicago Friday afternoon. Further, Gero says, there is some “get-me-out-for-the-weekend” selling on a Friday, particularly amid the rate-hike worries. As of 9:08 a.m. EST, Comex April gold was $4.50 lower to $1,228.40 an ounce after falling in the three previous sessions.

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

 

Commerzbank: Bitcoins Not A ‘Suitable Alternative To Gold’

Friday March 03, 2016 09:17

Commerzbank does not consider bitcoins to be a “suitable alternative” to gold despite recent strength in the cryptocurrency. “Following the latest steep rise in bitcoin prices, the cryptocurrency is currently priced at $1,270, making it more ‘expensive’ than a troy ounce of gold for the first time,” Commerzbank says in an early-day research note. “Even though neither bitcoins nor gold have any central administrative body like a central bank that could control the currency, and even though bitcoin prices are determined by market forces, there are many reasons why we do not see bitcoins as a suitable alternative to gold. These include the small size of the market and their low level of distribution, the lack of general understanding of the concept, the short history of bitcoins, their extreme price volatility and the high proportion of speculators.”

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.