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Epstein: Gold Breakout To Determine Direction Into Year End

Kitco News

Gold’s breakout from its sideways trading pattern may well dictate which direction the precious metal travels for the rest of the year, says veteran futures trader Ira Epstein. Since bottoming at $1,167.10 an ounce on Aug. 16, Comex December gold rallied but then stalled, leaving the market sideways, says the director the Ira Epstein division of Linn & Associates. The metal has not been able to benefit from a “host of normally bullish” factors such as trade wars, political intrigue and an emerging-market crisis, Epstein says. The low price came during a currency crisis in Turkey and Venezuela. “My guess is that both countries sold gold as their currencies were in free falls,” Epstein says. Meanwhile, trade talks continue. Epstein says that prices have been sideways for the first time since the start of the year after previous weakness. “The way the market breaks out of this pattern will, in my opinion, likely be the direction…into year end,” Epstein says.

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

 

Commerzbank: Palladium Surges On Relief That Tariffs Not Even Higher

Wednesday September 19, 2018 09:07

Palladium has been bolstered this week on news that the U.S. did not slap additional tariffs on Chinese goods as high as many may have expected, says Commerzbank. Spot palladium was up $14 to $1,022.15 an ounce as of 8:44 a.m. EDT. This followed a sharp rise on Tuesday when the metal topped $1,000 for the first time since June. “Market participants appear relieved that the reciprocal [U.S.] tariffs have initially been set at ‘only’ 10% rather than the 25% that some feared,” Commerzbank says. “Palladium has benefited most from this development, rising by almost 3% yesterday and costing more than $1,000 per troy ounce again for the first time in three months. Used chiefly in the auto industry, palladium profited also from the relief rally enjoyed by base metals. Because platinum hardy kept pace at all, the price gap between palladium and platinum widened to just shy of $200.”

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

 

BBH: U.S. Dollar Softer Despite Rising Yields But More Gains Likely

Wednesday September 19, 2018 09:07

U.S. dollar weakness is likely only a correction, coming despite rising Treasury yields and an ongoing trade war, says Brown Brothers Harriman. The 10-year yield of 3.06% is the highest since May 23, with the market poised to test the May 18 high near 3.13%, BBH says. The two-year yield hit 2.80%, the highest since July 2008. “Meanwhile, trade tensions continue to ratchet up,” BBH says. The U.S. announced 10% tariffs on another $200 billion of Chinese imports, and China responded with tariffs on $60 billion of U.S. goods that become effective on Sept. 24. Meanwhile, the U.S. has threatened yet more tariffs on Chinese imports. “Yet despite these dollar-positive drivers, the greenback remains on its back foot,” BBH says. As of 8:52 a.m. EDT, the spot dollar index was down 0.57 point to 94.583. “Granted, the dollar remains largely within recent ranges, the major exceptions being sterling and yen,” BBH says. “For now, we view this current dollar softness as a correction within an ongoing uptrend. As Fed tightening expectations adjust further upward, the dollar should get more traction.” Dollar moves are important for metals traders since precious and base metals alike tend to move inversely to the U.S. currency.

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

 

MKS: Gold Underpinned On Report China Won’t Devalue Its Currency

Wednesday September 19, 2018 09:07

Gold got a lift overnight when Premier Li Keqiang said any conjecture that China would devalue its currency to gain a trade advantage was “groundless,” says MKS (Switzerland) S.A. Around 9 a.m. EDT, spot gold was $7.20 higher to $1,205.10 an ounce. “A positive session for the precious complex during Asian trade today, reclaiming $1,200 following headlines out of China from Premier Li Keqiang noting that they will not engage in competitive currency devaluations,” MKS says. “USD/China turned offered on the headlines, broadly weighing upon the greenback to support gold higher. The metal pushed above $1,200 into the Chinese lunch break and continued to see interest throughout the afternoon.”

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.

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