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Commerzbank: Physical Demand Would Support Gold Around $1,300

Kitco News

Commerzbank figures gold should hold around $1,300 on any pullback since physical demand tends to be encouraged at this level. “On a number of occasions recently, gold has been seen to respond more to bearish than to bullish news,” analysts say. “This could signal an upcoming correction which could take the gold price back down towards the $1,300 mark. We do not believe the price will fall much below this, however, as this level has sparked increased physical buying interest in recent months.” As of 8:46 a.m. EDT, spot gold was down $1.20 for the day to $1,332.20 an ounce.

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

 

BBH: CPI To Be Most Important U.S. Report Of Week

Monday April 09, 2018 08:50

The March Consumer Price Index, due out on Wednesday, will be the most important U.S. economic report of the week, says Brown Brothers Harriman. “Even if the headline is flat, as the median forecast in the Bloomberg survey suggests, the base effect means that the y/y [year-on-year] rate will rise to 2.4% from 2.2%,” BBH says. “It would be the highest since March 2017.  More importantly, the core rate may be firmer (0.2% on the month), with the y/y rate moving back above 2.0% for the first time since last May.” The data may impact market expectations for a U.S. rate hike, which in turn impacts a number of markets, including gold and the U.S. dollar. BBH says there is room for the markets to “become more confident” of a Fed rate hike. “Bloomberg and CME calculations of the probability of a hike by June [are] nearly identical at ~78% and 80%, respectively,” BBH says. “However, there is a significant difference in the May calculation. Bloomberg's model suggests there is nearly a 26% chance of a hike at the May meeting; the CME model has it at 1.6%.”

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

 

Ira Epstein: ‘I Have More Of A Bearish Than A Bullish Bias’ On Gold

Monday April 09, 2018 08:50

Veteran futures trade Ira Epstein says he’s more bearish than bullish but, as of a Friday report, also says he cannot make a strong trading recommendation. “There’s nothing clear cut,” says the director of the Ira Epstein division of Linn & Associates LLC. “The longer-term weekly bar chart has bullish bias, as prices have been able to stay over all the key moving average of closes. The shorter-term daily bar chart has a negative bias due to prices [late last week] closing under the 18-day moving average of closes. As for trends, there’s none at work on the daily chart as the chart pattern is one of a higher high and lower low pattern. The weekly chart, however, stays bullish if $1,306.60 -- the low of March 23rd -- is not taken out. Support on the weekly chart is $1,317.30, the 18-week moving average of closes, while support on the daily chart comes in at the 100-day moving average of closes, $1,319.30. Therefore, how the market holds up if these levels are attacked will answer what if gold is going to break down and expand prices to the downside.” The next question for traders will be what if these levels are not challenged? “The answer is that if prices start moving higher, the first upside PriceCount is $1,364.40, a number just missed recently. More important would be that if the upside is attacked, a bullish year pattern would, according to the seasonal chart pattern, kick in. Right now, I have more of a bearish than a bullish bias.”

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