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INTL FCStone Sees Gold Rising, Dollar Easing In October

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INTL FCStone looks for the U.S. dollar to ease in October, while gold and silver gain some traction. “We see gold and silver likely doing better in October and were heartened to see gold rising over the last few days despite a stronger dollar,” the firm says in its monthly commodities outlook. “A relative high concentration of short positions in both complexes could also lead to more upside for each.” However, the firm says gold needs to take out $1,220-per-ounce resistance to attract more fund buying, but adds that the metal may well do so during the month. Meanwhile, INTL FCStone lists several factors that could push the U.S. dollar lower during the month. “For one thing, trade tensions seem to be easing – generally bearish for the greenback. Secondly, the Fed’s rate hike is out of the way and the next one is not until December, giving investors time to push the dollar lower. Third, we are starting to see some tentative signs of the U.S. economy slowing.” In particular, INTL FCStone cites data for sales of cars and existing homes.

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

 

Mitsubishi: Rising Oil Prices, Short Covering Could Lift Gold

Wednesday October 3, 2018 09:30

Mitsubishi sees potential for higher energy prices and short covering to provide a lift to gold. The yellow metal fell a combined 10% in the second and third quarters for the worst performance in two successive quarters since the first two in 2013, Mitsubishi says. Crude oil has hit its highest levels since 2014, Mitsubishi continues. “The dual impact of a strong U.S. economy together with a cut in Iranian crude shipments due to U.S. sanctions has helped drive WTI [West Texas Intermediate crude oil] prices up by over $20 since August, despite Saudi Arabia quietly increasing production and Russian output hitting a record high as the country captures market share from Iran,” Mitsubishi says. The firm says that “inflationary tailwinds due to rising crude oil prices could give gold a boost in the medium term.” Further, non-commercial accounts in Comex futures hold a record net-short position of over 700,000 ounces, Mitsubishi points out. “We believe that this leaves gold open to short covering, especially in the light of the recent rally back above $1,200,” Mitsubishi says.

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

 

INTL FCStone: Platinum To Rise In October; Palladium ‘Overdone’

Wednesday October 3, 2018 09:30

INTL FCStone is upbeat on platinum prices for October but figures palladium is already “overdone” after recent gains.  “We are constructive on platinum, especially now after it recently traded at a whopping $250/ounce discount to palladium, a 20-year low,” the firm says in its monthly commodities outlook. “Although auto makers will not immediately start retooling their plants to take advantage of this markdown, some will surely start thinking about it. However, we think traders may not be a gun-shy and perhaps start to leg into the spread, giving platinum a bit of a boost, while pressuring palladium in the process.” Further, INTL FCStone says palladium may be “a bit overdone” at current prices since car sales are slowing in the key U.S. and Chinese markets. Platinum and palladium are used in automotive catalytic converters.

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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