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SP Angel: ETF Gold Holdings Rise Six Days In A row

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Holdings of gold by exchange-traded funds has now risen for six days in a arrow, the longest run in nearly six months, says commodities brokerage SP Angel. The ETFs track the price of the commodity but trade like a stock, with metal put into storage to back the shares. ETF holdings climbed to 2,107.2 tonnes on Tuesday, the most since Sept. 10, analysts report, citing data compiled by Bloomberg. “Gold is drawing more attention…as tensions between the U.S. and Saudi Arabia over the disappearance of journalist Jamal Khashoggi continue to simmer, while the market continues to weigh the economic outlook and the U.S.-China trade war,” SP Angel says. The firm cites news reports quoting U.S. President Donald Trump as saying it “would be bad” if Saudi Arabia’s crown price and king knew about the disappearance of Khashoggi.

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

 

Commerzbank: Hungarian, Polish Central Banks Increase Gold Holdings

Wednesday October 17, 2018 09:16

Central banks are increasing the amount of gold they hold for reserves, says Commerzbank. Analysts cite news that the Hungarian central bank increased its gold reserves 10-fold to 31.5 tonnes in recent months. “This would mean gold accounts for 4.4% of Hungary’s total currency reserves, which would put them on a par with the average of other central banks in the region,” Commerzbank says. “According to the central bank, the gold purchases, which include the repatriation of gold reserves from London to Budapest, are intended to improve the safety of its holdings and the security of the nation’s wealth.” Hungary is the second European Union nation after Poland to report recent gold purchases, as Poland bought around nine tonnes in July and August.

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

 

RBC’s Gero: Gold Has Supportive Influences Despite Slight Pullback

Wednesday October 17, 2018 09:16

Gold has eased slightly so far Wednesday but the metal has a number of factors offering support, says George Gero, managing director with RBC Wealth Management. As of 8:39 a.m. EDT, Comex December gold was 80 cents softer to $1,230.20 an ounce. Gero blames this on a stronger U.S. dollar and caution ahead of minutes from a Federal Open Market Committee meeting due out Wednesday afternoon. Gero adds that there could be some volatility ahead of an approaching options expiration, since options in the money become futures positions the next day and would require margin money, meaning traders either sell or buy ahead of that. “Gold has many reasons to be steady and even rally,” Gero says, citing unfolding headlines between the U.S. and China over the death of a journalist, midterm U.S. elections now only 20 days away, deficits, trade issues and Brexit developments.

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

 

TDS: U.S. Midterm Elections May Impact Markets More Than Normal

Wednesday October 17, 2018 09:16

Early-November U.S. midterm elections for the Senate and House of Representatives could have more impact on markets than normal, says TD Securities. Based on polling, Congress may be divided. Democrats are expected to have a slight majority in the House, while the Republicans are expected to maintain control of the Senate. “Political risk is notoriously difficult for markets to predict,” TDS says. “This is in part due to the increasing unreliability of polls to determine election outcomes, as was the case in the 2016 U.S. presidential election. There is also uncertainty about the policy outcome even if the results of the election are known. Historically elections have not had a significant market impact….However, we wouldn't be surprised by a larger reaction this time around given how much of the equity and rate move was driven by the Trump tax cuts in late 2017.” The key may be sentiment toward U.S. equities. “A divided government would most likely leave investors wondering how the U.S. would generate above-trend growth once the fiscal support fades,” TDS says. “At the same time, the recent growth upgrades…argue the market has already priced in lots of good news for the year ahead. The result is that expectations are high, but a divided government may sow the seeds of uncertainty that leads to disappointment.”

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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