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Commerzbank: High Palladium Price Not Justified

Kitco News

Commerzbank analysts question whether palladium will be able to maintain upward momentum after the metal poked above $800 an ounce Monday, thus recovering by around $50 from the two-month low it hit at the beginning of last week. “We do not believe that the high price is justified given that auto markets in the U.S. and China have been flagging recently – new data for the U.S. will be published on Thursday evening – and in view of the ETF [exchange-traded-fund] outflows seen in recent weeks,” Commerzbank says. “The high speculative interest entails risks of a more significant price correction.” Palladium’s main industrial use is for catalytic converters in autos with gasoline-powered engines, which make up the bulk of the motor-vehicle markets in the U.S. and China.

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

 

TD Securities: Strong U.S. Data Would ‘Solidify’ June Rate Hike

Tuesday May 30, 2017 09:10

Gold traders will be watching to see if a heavy slate of economic data in the U.S. this week confirms expectations for another Federal Reserve rate hike next month, says TD Securities. Key reports include consumer confidence, the Institute for Supply Management’s manufacturing and service-sector surveys, the ADP private-sector report and nonfarm payrolls. “Strong data this week would certainly solidify the June rate hike, and probably get the market back on board with expectations of a second rate hike this year as the Fed will see this as confirming Q1 was only transitory,” TDS says. “This would see the curve steepen up a bit and the USD recover from recent lows, thus seeing gold take back some of the recent gains. On the other hand, continued poor data would raise some real doubts about the strength of the U.S. economy and keep gold supported at the upper bound.”

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

 

FXTM: $1,260/Oz Key Technical Level For Gold Prices

Tuesday May 30, 2017 09:10

Technically, a key for gold will be the metal’s ability to hold above the $1,260-an-ounce area, says Jameel Ahmad, FXTM vice president of market research. Around 9 a.m., spot metal was at $1,261.80 an ounce, backing off from an earlier high of $1,270.45. “Gold managed to conclude trading last week above $1,260, and the outlook is that there is room for further appreciation towards $1,275 as long as the precious metal is able to keep its feet above $1,260,” the analyst says. “There are a couple of factors that can encourage a supportive view towards a stronger valuation in gold over the coming weeks, including the probable U.S. interest-rate increase in June already being priced into the financial markets and any market uncertainty over the impending UK general election, encouraging a rally for safe-haven assets.”

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.