Standard Chartered: Floor For Gold Price To Keep Rising
Standard Chartered says “the floor for prices has risen” in the gold market without requiring significant physical demand to cushion the downside. The precious metal remains range-bound – although at the lower end of the band – but price dips have not been deepened by a soft physical market, the bank says. “We continue to expect prices to test the downside in the lead-up to the June FOMC [Federal Open Market Committee] meeting as the market re-prices the Fed hiking trajectory and India enters its seasonally slow period for gold consumption,” Standard says. “But beyond this, a good monsoon season forecast for India and the market adapting to the country’s new goods and services tax regime should support demand, and continue to provide a rising price floor for gold.”
By Allen Sykora of Kitco News; firstname.lastname@example.org
Commerzbank: Gold May Yet Benefit From Iran Uncertainty
Wednesday May 9, 2018 09:38
Gold has not benefitted yet from U.S. President Donald Trump’s decision to withdraw from the nuclear agreement with Iran, but the metal could still draw support, says Commerzbank. Analysts say the weakness earlier Thursday was due to the U.S. dollar, which on a trade-weighted basis climbed to a 4½-month high following Trump’s decision. “We would have expected gold to be in demand as a safe haven and to make noticeable gains, as Trump’s decision is likely to spark instability in the region and tensions between the U.S. and the rest of the world,” Commerzbank says. The key now will be how Iran and European countries respond, analysts continue. “They have strongly criticized the U.S. withdrawal from the nuclear accord,” Commerzbank says. “If economic relations with Iran are suspended again nonetheless, Iran could decide to relaunch its nuclear weapons program. This latent geopolitical risk should lend support to the gold price, in our view.” As of 9:22 a.m. EDT, Comex June gold was 60 cents higher at $1,314.30 an ounce but earlier traded as low as $1,304.20. The June dollar index was down 0.108 point to 92.8950 but earlier traded as high as 93.260.