Make Kitco Your Homepage

Commerzbank: Gold, Silver ETF Investors Buy On Price Retreats

Kitco News

Exchange-traded-fund investors appear to be using the recent pullback in gold and silver prices as a buying opportunity, says Commerzbank. The ETFs trade like a stock but track the price of the commodity, with metal moving in and out of storage as necessary to back the shares. The bank says ETF investors, who tend to have a longer-term horizon than speculators in the futures market, “have seized the low prices as a buying opportunity. Following a figure of 5.6 tonnes on Thursday, gold ETFs saw further inflows of 3.2 tonnes on Friday.” The picture is similar for silver ETFs, which registered inflows of roughly 84 tonnes in the past two days of trading, Commerzbank says.

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

 

FXTM: Fed Expectations Leaving Gold Depressed

Monday March 19, 2018 09:47

Expectations for a hike in U.S. interest rates are holding back gold at the start of a new trading week, says Lukman Otunuga, research analyst at FXTM. Meanwhile, the dollar remains buoyed by Fed expectations. “Taking a look at the technical picture, gold is under increasing pressure on the daily charts,” the analyst says. Otunuga points out that prices are trading below the 50-day moving average, while Moving Average Convergence/Divergence “has crossed to the downside. Sustained weakness under $1,314 could encourage a decline towards the psychological $1,300 level.”

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

 

BBH: Fed Expected To Hike Rates As Powell Chairs First Meeting

Monday March 19, 2018 09:47

There is nearly “universal agreement” that the U.S. Federal Open Market Committee will hike interest rates this week at the first meeting chaired by Jerome Powell, says Brown Brothers Harriman. “The failure to raise interest rates would be significantly more disruptive than a hike at this juncture,” BBH says. “Indeed, the focus is not so much on the rate hike, but the forward guidance provided by the FOMC statement and the Fed’s forecasts (dot-plot).” BBH analysts say they anticipate that the post-meeting statement “will look past the recent string of economic data that has prompted downward revisions to Q1 GDP estimates below 2%.” BBH adds: “The confidence Powell expressed in his recent testimony before Congress and the claim that what were headwinds have become tailwinds is unlikely to be undermined by some high frequency data….” BBH notes that there has been speculation that the Fed could signal four rate hikes in all this year, instead of the three expected in the past. However, BBH analysts say they do not look for policymakers to signal a potential fourth rate hike just yet. “By hiking rates at his first meeting, Powell would brandish his ‘hawkish bias,’” BBH says. “To also indicate a fourth hike would be overkill.”

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.