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TDS Sees 'Significant Room' For Rally In Silver Prices

Kitco News

TD Securities sees potential for a silver rally in 2018. “Silver continues to underperform gold, weighed down by its industrial characteristics amid growing trade-war fears, with silver specs [in the futures market] printing the most bearish net position on record,” TDS says. “However, given that we remain skeptical on the prospects of a full-blown trade war materializing, and expect an attractive precious-metals environment, we see significant room for a rally this year.” Spot silver has been stuck in a range with a $16 handle since early February. As of 8:07 a.m. EDT, spot silver was unchanged for the day so far at $16.28 an ounce.

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

 

TD Securities: Platinum Would Outperform Palladium In Trade War

Thursday April 05, 2018 08:14

Platinum is likely to outperform sister metal palladium if a full-blown trade war erupts between the U.S. and China, says TD Securities. Both metals are used to scrub exhaust in auto catalysts, with palladium primarily used in the large auto markets of the U.S. and China that are gasoline-powered, while platinum is used in diesel-powered vehicles popular in Europe. “Amid trade tensions and souring risk sentiment, China's announcement of tariffs targeting U.S. autos was an additional factor contributing to lower platinum prices,” TDS says. Spot platinum early Thursday fell as far as $907.80 an ounce, its weakest level since mid-December. “However, given platinum's lower exposure to the U.S. and Chinese auto markets than that of palladium, if these tariffs are implemented, platinum could outperform palladium. Trade tensions aside, we expect platinum to perform well this year as we see favorable fundamentals for the metal moving forward.” TDs adds that palladium, which fell below its 200-day moving average at the end of March, could bounce, as money managers have exited positions and thus have room to extend upside exposure again, with one possible catalyst being improved risk appetite if trade tensions dissipate. “But given palladium’s sensitivity to Chinese demand, we would not be surprised to see investors stay on the sidelines for a while longer,” TDS adds.

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

 

BMO: Gold In ‘Good Spot’ For Second-Quarter Rally

Thursday April 05, 2018 08:14

BMO Capital Markets is upbeat on gold prices during the current quarter and looks for physical demand to return. Analysts issued a research note on the 2018 Gold Focus report from the consultancy Metals Focus on Tuesday, adding in the BMO view. “Despite the general lack of interest, gold is in a good spot at present,” BMO says.In an inflationary environment, overlaid with rising trade friction, we expect a return of retail buyers where the need to increase allocation to gold as a hedge is rising once more. Meanwhile, in the near term, the rising geopolitical risk is set to keep macro asset allocators interested in gold. This could create a sweet spot into Q2 where macro and micro are for once aligned on the positive side.” BMO notes physical demand has “collapsed,” citing Metals Focus data showing that demand for bullion, bars and coins fell 3% year-on-year in 2017, with U.S. investment slumping 59%. “Metals Focus is cautious about this coming back, but given the rising trade friction and increased equity volatility, we are slightly more confident,” BMO says.

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

 

Commerzbank: Diesel-Powered Auto Sales Play Role In Platinum Weakness

Thursday April 05, 2018 08:14

Platinum has softened lately with a number of other commodities but may be facing extra weakness due to softer German sales of diesel-powered motor vehicles, says Commerzbank. The metal is required for catalytic converters in diesel-powered vehicles, which are most popular in Europe. “Platinum…is nearing the $900 mark, [and] the slump in diesel car sales in Germany [is] apparently playing its part in this,” Commerzbank says. “Although more new cars were registered overall in the first quarter, according to the German Association of the Automotive Industry, sales of diesel passenger cars plummeted by 21% year-on-year. Diesel cars accounted for only 32.3% of all new car registrations in the first quarter, as compared with 42.7% during the same period last year.”

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