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Commerzbank: ETF Gold Holdings Rise By 8 Tonnes

Kitco News

Gold-backed global exchange-traded funds posted a large inflow Wednesday, says Commerzbank. This came as the U.S. Dow Jones Industrial Average fell by more than 800 points. Meanwhile, “the gold ETFs tracked by Bloomberg registered an inflow of around eight tonnes yesterday,” Commerzbank says. “This is attributable to the SPDR Gold Trust in the U.S. and was the first daily inflow into this ETF since July.” Gold ETFs track the price of the commodity, with metal put into storage to back the shares. They give investors exposure to the price of gold without costs such as assaying and storage.

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

 

BBH: Equity-Market Correction Unlikely To Sway Fed On Tightening

Thursday October 11, 2018 09:55

Brown Brothers Harriman doubts the equity-market sell-off on Wednesday will stop the Federal Reserve from its monetary tightening. The Dow Jones Industrial Average lost more than 800 points, prompting President Donald Trump to declare that the Fed is “crazy.” All of this has left market participants wondering if an equity-market correction will stay the Fed’s hand in December, BBH says. “The short answer is no,” analysts continue. “The long answer is that short of a plunge along the lines of 1987 or 2008, Fed policy will not be impacted. Still, it’s worth noting that Bloomberg’s WIRP page shows the odds of a December hike falling to 73% today from 81% Tuesday.” Analysts remind that the Fed has a dual mandate of full employment and price stability. “The unofficial third mandate is financial stability,” BBH says. “This doesn’t mean it has to prop up the equity market. What it does mean is that the Fed can and will act if financial stability is being threatened for whatever reason. Recall that in 2008, it wasn’t just a precipitous plunge in equity markets, but a near-collapse of the global financial system. Thankfully, we’re nowhere near that yet.” BBH adds that “ it’s very unhelpful” for the president to say that the Fed “has gone crazy.” Still, analysts add, “We do not think jawboning will have any impact on Fed policy. That said, continued criticism will likely keep markets nervous.”

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

 

RBC’s Gero: Bargain Hunters Snap Up Gold At Low Prices

Thursday October 11, 2018 09:55

Gold again is back over $1,200 an ounce as bargain hunting set in and the U.S. dollar eases, says George Gero, managing director with RBC Wealth Management. The metal got a boost from weak equities Wednesday. However, an easier U.S. dollar has also helped gold, Gero says. He notes that rate hikes by the Federal Open Market Committee have provided headwinds for gold for some time now, while rises in Treasury yields competed for safe-haven flows. “However, recent low prices for gold attracted bargain hunters as open interest increased this week,” Gero says. As of 9:40 a.m. EDT, Comex December gold was $16.70 higher to $1,210.10 an ounce. The December dollar index was down 0.292 point to 94.885.

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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