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Adrian Day: Political, Economic Scenarios Supportive For Gold

Kitco News

A number of potential economic and political themes should favor gold, says Adrian Day, chairman and chief executive officer of Adrian Day Asset Management. “Potentially higher government spending and a larger deficit help gold,” he says in his first-quarter portfolio review. “Protectionism, in as much as it would hurt the dollar and dent the U.S.’s image as a stable country, would help gold. Inflation obviously would ignite gold. The slow pace of rising interest rates, with rates lagging inflation, would help gold. The general uncertainty and sense of unpredictability surrounding the U.S. administration helps gold. And the political tensions in Europe and geopolitical flashpoints around the world also support gold. This year could see gold move up sharply, certainly to last year’s highs, but possibly breaking out above that.”

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

 

MKS: 200-Day Moving Average Remains Resistance For Gold

Wednesday April 5, 2017 08:07

Gold continues to trade near its 200-day moving average but remains unable to penetrate upward through this, points out Sam Laughlin, precious-metals dealer with MKS (Switzerland) S.A. Tuesday was the fifth time since late February that the metal had broken through resistance around the 200-day average, only to run into heavy offers and pare gains, he says. As of 7:45 a.m. EDT, the 200-day average for spot gold was $1,257.90 an ounce, while gold was $4.40 softer at $1,254. “The failed consolidation above the 200 DMA has no doubt hit investor confidence; however, we do still continue to see solid interest for the metal at current levels and may once again test through the figure once the FOMC (Federal Open Market Committee) minutes have been digested in the U.S. today,” Laughlin says. “Broad support for the metal sits around $1,250-$1,255 and below this $1,245, while as previously stated a close above the 200 DMA at $1,258 will signal a further leg higher.”

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

 

OptionsXpress: Chart Resistance Emerges Near $1,265 For Gold

Wednesday April 5, 2017 08:07

Comex June gold has run into resistance around the $1,265 level, says optionsXpress. The contract put in daily highs just below this on March 27 and Tuesday. “If gold can clear this hurdle, prices may test the $1,300 level on the upside,” says Rob Kurzatkowski, senior commodity analyst with optionsXpress. “Failure to do so could result in further range-bound trading between $1,200-$1,300.” Gold futures have been in a range lately despite a rebound in the U.S. dollar index, he continues. “The metal started the week on a strong note after New York Fed President William Dudley said it made sense for the central bank to raise interest rates at a gradual pace during the year,” Kurzatkowski says. “After the March rate increase, this was welcomed by gold bulls concerned the Fed could move more aggressively than initially thought.”

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

 

Commerzbank: Palladium Vulnerable To Correction If Car Sales Soften

Wednesday April 5, 2017 08:07

Palladium has been strong lately despite disappointing U.S. vehicle sales last month, but the metal could correct lower if car-sales figures do not pick up, says Commerzbank. Spot metal edged above $810 an ounce briefly Tuesday despite what the bank termed as “weak” U.S. March car sales. “In doing so, it neared the two-year high it achieved a week and a half ago,” Commerzbank says. “This morning, it is still trading above the $800 mark. Given that there were hardly any inflows into the palladium ETFs (exchange-traded funds), buying is likely to have been on the futures market. It seems that speculative financial investors are particularly engaged here; they are likely to have further expanded their net-long positions in recent days after having previously increased them to their highest level in 2½ years. In our opinion, this gives rise to correction potential if the weak car sales figures turn out not to be just a flash in the pan and if speculative financial investors choose to take profits.”

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