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RBC’s Gero: Buy Stops Accelerate Gains In Comex Gold

Kitco News

Comex gold has continued its rally on short covering, with buy stops activated around $1,260 an ounce, accelerating the gains, says George Gero, managing director with RBC Wealth Management. The move is partly connected to a Comex options expiry Thursday, he says. Gero also cites bargain hunting, recent U.S. dollar weakness, political worries and issues involving nations such as Greece, North Korea, Venezuela and Brazil. Further, Gero adds, the market has already factored in expectations for another rate hike at the next meeting of the Federal Open Market Committee, thereby taking away a potential bearish influence. As of 9:03 a.m. EDT, Comex June gold was $8.60 higher to $1,265 an ounce. The metal peaked at $1,268, its strongest level since May 1.

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

 

Commerzbank: Physical Gold Demand Strong; Indian Buying To Abate

Friday May 26, 2017 07:49

Commerzbank says physical gold demand from key consuming nations such as India and China has been strong lately, although Indian demand may wane. Analysts cite data from the Census and Statistics Department of Hong Kong showing that China imported 74.2 tonnes of gold from Hong Kong on a net basis in April. “Although this was less than in the previous month, it was 8% up year-on-year,” Commerzbank says. “India also imported a large amount of gold last month – namely 94 tonnes, according to figures from the Indian central bank. A good half of this total came from Switzerland. Thus physical gold demand in the core demand countries has remained very robust of late. Nonetheless, there are growing doubts on the market that India will maintain this high import level throughout the year.” Analysts note that both the World Gold Council and Thomson Reuters GFMS believe that gold demand there could slow in the second half of the year – normally a period of high demand – because a goods and services tax is to be introduced in India on 1 July. “Jewelry retailers may well continue to build up their stocks of gold until that point, however,” Commerzbank says. “GFMS therefore expects to see relatively high gold imports (450 tonnes) in the first half year, followed by relatively low imports (250 tonnes) in the second half. Predicting imports of only around 525 tonnes for the year as a whole, the WGC is taking a considerably more pessimistic view.”

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

 

FXTM: ‘Gold Should Remain Buoyed Moving Forward’

Friday May 26, 2017 07:49

FXTM looks for gold to remain underpinned by uncertainty about any further monetary tightening in the U.S. after next month and the recent political turmoil facing U.S. President Donald Trump. The metal early Friday was above $1,260, which FXTM has often said is a key technical level. “Although expectations are high that there will be a U.S interest-rate increase in June, the longer-term hiking path remains uncertain, consequently weakening the greenback,” says research analyst Lukman Otunuga. “With uncertainty over Trump likely to impact the Fed and pressure the dollar further, gold should remain buoyed moving forward. From a technical standpoint, the yellow metal is regaining momentum on the daily charts with bulls pressuring the $1,260 resistance. A breakout and daily close above $1,260 should encourage a further incline higher towards $1,275.”

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

 

BNP Paribas Still Bullish On U.S. Dollar But Trims Forecast

Friday May 26, 2017 07:49

BNP Paribas has trimmed its U.S. dollar forecast although the bank says it remains bullish. “We have scaled back the extent of USD appreciation we anticipate versus the core currencies, in recognition of a delayed timetable for implementation of fiscal-stimulus measures,” BNP Paribas says. “However, we remain significantly bullish on the USD versus all G10 currencies, and view the gains in EURUSD and losses in USDJPY in Q2 as presenting opportunities to add to USD exposure.” The good news for the dollar, the bank continues, is a U.S. economy that remains strong, with the jobless rate declining to 4.4% in April. BNP Paribas now looks for the euro to be at $1.04 in the fourth quarter, compared to a previous forecast of $1. The bank looks for dollar/yen to be at 120 yen by year-end, compared to 128 previously. As of 7:37 a.m. EDT, the euro was at $1.12079 and dollar/yen was at 110.971 yen.

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