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Citi: China’s Impact On Gold Market Likely To Grow

Kitco News

As the largest buyer of physical gold, China’s influence on global price discovery seems likely to increase, says Citi. Shanghai still holds a prominent position as the largest gold futures market outside of the U.S., despite a reduction in Shanghai Futures Exchange volume for the year to date to around 450 million ounces, Citi says. By comparison, New-York based Comex gold volume has grown 15% year-on-year to around 2.1 billion ounces. “Hence, while market participants continue to reference the LBMA 3 p.m. close and spot gold prices (both in $/oz), Shanghai prices (RMB/g) should eventually play an increasingly important role,” Citi says. Analysts later add, “we could see London 10 a.m. prices, in particular, derive more market sentiment from China over the mid-term.”

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

 

FXTM: Gold ‘Turning Bullish On The Daily Charts’

Monday May 12, 2017 08:46

Gold is in the process of forming a bullish pattern on daily charts, with a break above $1,260 an ounce portending further strength, says FXTM research analyst Lukman Otunuga. Troubles surrounding U.S. President Donald Trump have “turbocharged” gold bulls this month, the analyst says. “With political unrest in Washington hastening the flight to safety, investors sprinted to gold as a form of protection,” Otunuga says. “The yellow metal is in the process of turning bullish on the daily charts, and a vulnerable dollar should inspire bulls to conquer $1,260. From a technical standpoint, a breakout above $1,260 may open a path higher towards $1,275.” As of 8:25 a.m. EDT, spot gold was up $2.80 to $1,257.80 an ounce.

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

 

BBH: ‘Politics Looks To Continue To Trump Economics’

Monday May 22, 2017 08:46

It appears that U.S. political news will continue to overshadow economic news for the foreign-exchange and other markets, says Brown Brothers Harriman. The administration of new U.S. President Donald Trump “has provided its share of melodrama” in its first four months, analyst says. “It is still early days of the three ongoing investigations into Russia's involvement in the U.S. election (Senate, House of Representatives and FBI),” BBH says. “Once again, the cover-up may prove to be more problematic than the offense in the first place.”  Former FBI Director James Comey, fired by Trump, is scheduled to testify before the Senate Intelligence Committee after Memorial Day. “However, already it seems the lines are being drawn,” BBH says. “It is his word against the president's.” Analysts say until Trump “manages to get ahead of the curve and stop the hemorrhaging… the Russian investigation will consume more attention and resources, and sap the enthusiasm for the economic program.” The bottom line, analyst later comment, is that “politics looks to continue to trump economics.”

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