Market Nuggets
INTL FCStone: 'Stronger Dollar Should Weigh On Gold' In March
INTL FCStone looks for a stronger U.S. dollar and higher bond yields to weigh on gold during March. Barring a trade war, analysts doubt traders will want to establish bearish positions in the greenback ahead of a Federal Open Market Committee meeting around the middle of the month. Further, U.S. bond yields remain high, while other central banks appear reluctant to tighten monetary policy, INTL FCStone says in a monthly commodities outlook. “A stronger dollar should weigh on gold, as should higher U.S. bond yields heading into the March Federal Reserve meeting,” says INTL FCStone. Also, gold does not appear to be benefitting from recent downdrafts in equities, leaving it “more vulnerable to the upward movements we see in both the dollar and interest rates,” INTL FCStone says. The firm says it sees gold trading between $1,285 and $1,360 during the month “as we suspect that the higher rate/higher dollar scenario will return, especially if the tariff talk is toned down.” Silver “should follow gold’s trajectory,” INTL FCStone says. Analysts see this metal ranging between $15.85 and $16.90 an ounce.
By Allen Sykora of Kitco News; asykora@kitco.com
INTL FCStone: Palladium Could Face Setback After ‘Blistering’ 2017
Monday March 05, 2018 08:06
Palladium may be due for a pullback after a “blistering” run higher in 2017, says INTL FCStone. Analysts wrote in a monthly commodities outlook that they see prices in a $925-$1,035 trading range during March. Analysts note that Johnson Matthey expects the global palladium market to remain in deficit in 2018. However, there has been selling in palladium-backed exchange-traded funds since holdings peaked in late 2014, with the trend seen continuing this year. “During March, we see palladium continuing to struggle as the charts no longer look as constructive as they once did,” INTL FCStone says. “In addition, we should note that palladium was the number-one-performing commodity market last year and so a bit of a setback in 2018 should not be considered to be out of the question.” Sister metal platinum is seen trading between $920 and $1,005 during March, easing as a stronger U.S. dollar and higher yields weighs on the precious-metals complex, INTL FCStone says.
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: Italian Political Uncertainty Could Aid Gold Demand
Monday March 05, 2018 08:06
Uncertainty about Italian politics could be supportive for gold, says Commerzbank. Formation of a German government appears to be in the final stages after the Social Democrats approved a grand coalition, Commerzbank says. “Federal Chancellor Angela Merkel is to be appointed for a further term of office next week, and a government should be in place by Easter,” the bank notes. “In Italy, however, forming a government is likely to prove considerably more difficult even than in Germany following the weekend parliamentary elections there. This is because the unclear political situation after the election appears to make it impossible for any government to be formed in the near future. The resulting uncertainty will presumably contribute to solid demand for gold.”
