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RBC's Gero: Further Selling In Gold May Attract Bargain Hunting

Kitco News

Gold slipped to its lowest price in nearly a month but the market does have some supportive influences that could mean bargain hunting, thereby limiting further falls, says George Gero, managing director with RBC Wealth Management. Comex August gold bottomed at $1,244.10 an ounce, its weakest level since mid-May. Renewed selling occurred at the start of the week after New York Federal Reserve President William Dudley’s comments hinted at further rate hikes down the road, Gero notes. This boosted the U.S. dollar. “However, enough worries persist in geopolitics, U.S. politics, North Korea, Brazil, Venezuela, [and with] Italian bank issues to keep bargain hunters interested if we have further dip today,” Gero says.

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

 

Metals Focus Sees Lower U.S. Silver Investment In 2017

Tuesday June 20, 2017 09:44

U.S. retail silver-investment demand is headed for a drop in 2017, says the consultancy Metals Focus. Analysts note that U.S. silver coin and bar demand fell 18% last year. One factor is range-bound prices, with many dealers suggesting that a decline to around $14 to $15 would attract retail investors. “This scenario had occurred as recently as 2015, which saw weak demand over the first five months quickly replaced by a steep upturn in silver coin and bar sales in the U.S.,” Metals Focus says. However, the consultancy adds that the market has become “saturated,” with a combined 560 million ounces (17,400 tonnes) of silver coins and bars purchased by U.S. retail investors between 2011 and 2015, an average of some 113 million ounces (3,500 tonnes) per annum. “By any standard, this is an impressive performance, but at the same time raises the question as to whether a similar pace can be maintained going forward,” Metals Focus says. Analysts also suggest the Trump presidency could be reducing demand, since a “mistrust of the previous administration in some areas of the country appears to have contributed to elevated demand for guns and silver. Conversely, since late November, gun sales have fallen back.” Analysts add that many silver holders have also sold their metal back into the secondary market. “Taken together, these factors help explain the weakness in retail investor demand so far in 2017,” Metals Focus says. “For the year as a whole, our expectation calls for a 20% y/y decline, to an estimated 78Moz (2,432t); this would comfortably be the lowest level this decade.”

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

 

TDS: Gold Traders Eye Data For Clues On Whether Fed To Remain Hawkish

Tuesday June 20, 2017 08:19

Precious-metals traders will be closely scrutinizing upcoming U.S. economic data to decide on whether Federal Reserve officials will be as hawkish as some have sounded lately, says TD Securities. The market was caught off guard by hawkish signals after a policy meeting last week, with rates and the U.S. dollar rising, in turn putting the precious complex under pressure. Comex August gold fell as far as $1,244.10 an ounce overnight, its weakest level since May 17. “Should the data improve and reverse the recent underperforming trend, then the yellow metal could lose further ground and drift toward $1240/oz, but ultimately, TD Securities believes a major rout below this level is unlikely as investors will remain interested due to global uncertainties such as the investigation surrounding the Trump administration, growing tensions in Syria, and Brexit negotiations,” TDS says. “On the other hand, should data continue to disappoint, gold would likely catch a bid off these recent lows.” The U.S. economic calendar this week includes the current-account deficit Tuesday, existing-home sales Wednesday, jobless claims Thursday and new-home sales Friday. Also, a number of Federal Reserve officials are speaking this week, with traders eying their comments for clues on future monetary policy.

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

 

Commerzbank: Global Silver ETFs Post Outflows

Tuesday June 20, 2017 08:19

Holdings of silver by global exchange-traded funds have fallen in recent sessions, reports Commerzbank. ETFs for precious metals trade like a stock but track the price of the commodity, with metal put into storage to back the shares. “The silver ETFs tracked by Bloomberg have recorded outflows of nearly 130 tonnes in the last two days of trading,” the bank says. “Outflows since the start of the month have thus risen to a good 150 tonnes, since which time the silver price has fallen by almost 5%.”

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

 

BBH: Markets Watching to See If Policymakers ‘Clarify’ Positions

Tuesday June 20, 2017 08:19

Financial-market participants will be watching to see if a slew of Federal Reserve speakers this week “clarify their positions,” says Brown Brothers Harriman. On Monday, New York Fed President William Dudley and Chicago Fed President Charles Evans argued that economic conditions continued to require a gradual removal of accommodation, BBH points out. “The Fed's Vice Chairman [Stanley] Fischer did not address U.S. monetary policy directly but did note that housing prices were elevated and that low interest rates have contributed,” BBH says. “The comments (and more Fed officials are speaking today—[Boston Fed President Eric] Rosengren and [Dallas Fed President Robert] Kaplan--and four more over the next three days) -- come as many market participants have been critical of the Fed's decision to hike rates.” The Federal Open Market Committee hiked U.S. interest rates by 25 basis points last week and comments by Fed Chair Janet Yellen were construed to be more hawkish than markets had anticipated.  

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