Market Nuggets
Commerzbank: Gold ETF Holdings Down 45 Tonnes In August
Holdings of gold by global exchange-traded funds are continuing to decline, reports Commerzbank. The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. They give investors exposure to the gold price without incurring certain expenses such as assaying and storage. “ETF investors – [who] tend to take a longer-term view – are continuing to withdraw,” Commerzbank says. “The gold ETFs tracked by Bloomberg registered outflows of 4.5 tonnes yesterday, their highest in two weeks. Holdings have been reduced by a good 45 tonnes in August so far. By contrast, silver ETF holdings have remained largely stable, and platinum and palladium ETFs have even recorded inflows of 25,000 and 40,000 ounces, respectively, since the start of the month.”
By Allen Sykora of Kitco News; asykora@kitco.com
MKS: Gold Break Of $1,215/Oz Would Make Shorts 'Nervous'
Wednesday August 29, 2018 08:45
MKS (Switzerland) S.A. sees gold drawing support below $1,200 an ounce, with likely nervousness among bearish traders, known as shorts, if prices rise above $1,215. Around 8:36 a.m. EDT, spot metal was up $2.80 to $1,203.30 an ounce. “We feel dips below $1,200 should be supported for the interim and look for a retest of $1,215 in the near term, a break of which will make shorts nervous,” MKS says. This could prompt short covering, which is when traders buy to exit from bearish trades. MKS describes gold trading as “reserved” during Asia-Pacific hours but “making a slow and steady push” higher to start the day. There was “modest demand” in Shanghai trading, although volume was “a little disappointing” considering Tuesday’s retreat in prices, MKS says. “The premium still remained healthy though and in the middle of the recent range at around $6-6.50 over the loco London price,” MKS says.
By Allen Sykora of Kitco News; asykora@kitco.com
BBH: U.S. Faces Tight Timeframe In Pushing Through NAFTA Changes
Wednesday August 29, 2018 08:45
While the Trump administration is putting pressure on Canada to renegotiate a trade deal within days, the U.S. may actually be the country running out of time for any deal to be ratified by Congress, explains Brown Brothers Harriman. The government has announced a deal with Mexico and insinuated the U.S. will go on without Canada, but BBH says Canada plays a more significant role than the U.S. wants to admit. “The trade-promotion authority he [Trump] was granted by Congress was the renegotiation of a trilateral agreement,” BBH says. “It is not clear to Washington insiders that Congress would approve a deal that excluded Canada, which is the main foreign trading partner of 36 of the 50 U.S. states.” Meanwhile, the schedule is not flexible, BBH explains. Mexico’s next president takes office Dec. 1. “If Congress can be notified on Aug. 31, that means that a revised NAFTA bill Congress can vote on is Nov. 30,” BBH says. “The 115th Congress is likely to conclude in early December. A lame-duck session of Congress could be called to vote on it, but this seems less probable, especially after the first week or so of the December. That could leave it in the hands of the 116th Congress, which will be decided in November, and as is typically the case, the polls show the party occupying the White House will lose seats in both chambers.”
