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BMO: ETF Gold Holdings Rise Most Since Mid-February

Kitco News

Gold exchange-traded funds collectively just posted their largest daily accumulation of metal in roughly a month, says BMO Capital Markets. “Amid rising political friction and increased security concerns as the Washington Post suggested President Trump plans to remove his national security adviser, gold ETF holdings saw the largest one-day increase since mid-February,” BMO says. A 180,000-ounce rise brings this year’s net purchases to 801,000, BMO adds. “With geopolitical risk rising and inflation concerns re-emerging, even with a strengthening dollar, gold could be entering a period where it benefits from both macro and micro asset allocation gains,” BMO adds. Gold ETFs trade like a stock but track the price of the metal, with metal put into storage to back the shares.

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

 

Commerzbank: Safe-Haven Buying To Support Gold; Fed Meeting Limits Upside

Friday March 16, 2018 08:17

A number of geopolitical and political events may provide safe-haven support for gold, even though the approach of a Federal Reserve meeting may limit upside potential in the near term, says Commerzbank. Analysts suggest the recent price pullback has been used as a buying opportunity, citing Bloomberg data showing that gold exchange-traded funds registered inflows of 5.6 tonnes Thursday, while silver ETFs posted inflows of 36 tonnes. “Gold is also likely to remain in solid demand as a safe haven, for the political crisis between the U.K. and Russia is worsening,” Commerzbank says. “In response to the British sanctions imposed in connection with the poison attack on a former Russian spy in England, Russia intends to expel British diplomats in its turn. Meanwhile, France, Germany and the U.S. have rallied behind the U.K. and likewise hold Russia responsible for the poison attack. In addition, the U.S. itself has imposed sanctions on Russia – for influencing the U.S. presidential election roughly 1½ years ago.” Analysts also cite continuing “political chaos” in the U.S. administration, including news reports that President Donald Trump is about to sack National Security Advisor Herbert Raymond McMaster. “Such political uncertainties should shore up the gold price,” Commerzbank says. However, analysts point out that the market’s focus is shifting toward next week’s Fed meeting, with expectations for another rate hike. “This is likely to preclude any noticeable recovery of the gold price in the short term,” Commerzbank says. “Gold tends to show weakness in the run-up to Fed meetings.”

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

 

SP Angel: Gold Headed For Weekly Loss Due To Strong Dollar

Friday March 16, 2018 08:17

As of early Friday morning, gold was on track for weekly decline due to dollar strength after comments from Larry Kudlow, the new national economic adviser for President Donald Trump, favoring the sale of gold and purchase of the U.S. dollar, points out commodities brokerage SP Angel. Analysts also cite market talk that continuing strength in the U.S. economy is exerting downward pressure on bullion. As of 8:04 a.m. EDT, Comex April gold was down $3.50 for the week so far to $1,320.40 an ounce. However, SP Angel also lists factors limiting gold’s downside. “Precious-metal prices are receiving support over uncertainty over Trump’s administration and concerns about potential U.S.-led global trade war,” SP Angel says. “Growing U.S. political uncertainties following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration have also left investors worried. Rising political tensions between the United Kingdom and Russia also drove some safe-haven investment, as Moscow said it would retaliate against London’s move to expel 23 Russian diplomats over a nerve toxic attack on a Russian former double agent in Britain.”

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