Make Kitco Your Homepage

INTL FCStone: Dollar Reversal Pushes Comex Gold Lower

Kitco News

Precious metals and commodities generally are moving lower, pressured mainly by a modest reversal higher in the U.s. dollar, says INTL FCStone. The approach of a Federal Reserve meeting this week may be leading to some dollar short covering, especially considering that bets against the dollar hit record highs, based on the most recent data from the Commodity Futures Trading Commission, INTL FCStone says. “The precious metals group is feeling the impact of the dollar's surge most…,” the firm adds. As of 9:28 a.m. EST, Comex April gold was $9.20 softer at $1,348 an ounce.

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

 

BBH: U.S. Has Not Launched ‘Currency War’

Monday January 29, 2018 08:44

The U.S. did not abandon the "strong-dollar policy" or begin a currency war, says Brown Brothers Harriman. Treasury Secretary U.S. Treasury Secretary Mnuchin initially roiled markets last week when he suggested a soft dollar was good for the U.S., although the administration quickly said it still favors a strong-dollar policy. “Not only did Mnuchin clarify his comments, but President Trump gave as near a full-throated endorsement of the strong-dollar policy as imaginable,” BBH says. “While Mnuchin's remarks fueled criticism from other G7 [Group of Seven] officials, they did not retaliate by trying to talk down their own currencies. The much-talked-about ‘currency war’ has not begun.” BBH says the strong-dollar policy of recent administrations was really the “de-weaponization” of the foreign-exchange market. “In that little phrase, the U.S. signaled it would no longer use the dollar to elicit policy concessions or reduce its debt burden,” BBH says. “Mnuchin did not suggest otherwise. Now the G7 and the G20 have endorsed this principle, which briefly stated is that foreign-exchange rates ought to be set by the market.”

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

 

FXTM: Traders Focused On State Of the Union, FOMC, Jobs Report

Monday January 29, 2018 08:44

The State of the Union speech, a meeting of the Federal Open Market Committee and monthly jobs report are all key events in the U.S. that could influence the dollar this week, says Hussein Sayed, chief market strategist at FXTM. Trump is scheduled to deliver his first State of the Union address to Congress on Tuesday. “Although he is highly likely to declare a victory over the tax overhaul, and how his actions boosted the American economy and stock returns, investors will be focused on any details surrounding the infrastructure bill, trade tensions, and border wall funding,” Sayed says. Meanwhile, the analyst says the FOMC is expected to leave monetary policy unchanged when it announces the rate decision on Wednesday. “Given this is the last meeting chaired by Janet Yellen, I don’t expect much out of it,” Sayed says. However, any tweaks in the statement may be slightly hawkish since inflation expectations have risen to its highest levels since 2014, the analyst says. The jobs report on Friday is always one of the biggest news events of any month for financial markets. “After a disappointing figure in December, markets are anticipating 175,000 nonfarm payrolls have been added in January,” Sayed says. “Moreover, since the return of inflation is becoming a hot topic, wage growth will be under the traders’ microscope once again. This is where we might see a surprise, driven by increased bonuses following the tax reforms.”

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

 

MKS: Gold To Attract Buying Interest Around $1,340-$1,345

Monday January 29, 2018 08:44

MKS (Switzerland) S.A. looks for gold to draw buying interest in the $1,340-$1,345 region, which is around current levels. As of 8:24 a.m. EST, spot metal was down $5.10 to $1,344.20 an ounce. The metal ran into headwinds on a dollar recovery during Asian-Pacific trade, reports Sam Laughlin, senior precious-metals trader with MKS. “Into month-end, expect the yellow metal to trade heavily around $1,350 in lieu of any major dollar moves; however, any dips toward $1,340-$1,345 are likely to garner solid interest to restrict further downside moves,” he says.

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.