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INTL FCStone: Gold Traders To Eye Stock Market

Kitco News

Gold’s near-term fortunes may well hinge on U.S. equities, says INTL FCStone. The metal closed higher last week for the fourth straight week for the longest such winning streak since January, the firm points out. Meanwhile, stocks were on pace for their worst monthly decline in October in eight years, although the futures market is pointing to a higher open for equities on Wall Street Monday morning. “Much of what will transpire in gold over the course of the coming week will ride on the tone of the U.S. stock market,” INTL FCStone says. “Obviously, if the decline continues, gold should likely work higher, but the strength in the dollar is somewhat surprising and seems to be capping a more robust [gold] rally. We remain neutral on the [precious-metals] complex here, as the somewhat limited scope of gold’s overall movements within a still-tight trading range does not warrant the risk of initiating a position either way.”

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

 

MKS: Shorts Could Be Forced Out Of Market If Gold Tops $1,245

Monday October 29, 2018 08:12

MKS (Switzerland) S.A. sees potential for traders with short, or bearish, positions in gold to be forced out of the market if the metal can break up through $1,245 an ounce on the technical charts. As of 7:58 a.m. EDT, spot gold was down $2 to $1,228.90 an ounce after hitting a three-month high just below $1,242 on Friday. “We continue to see $1,235 as a pivot point for a further test through $1,240 with global equities and the dollar likely to remain under pressure,” MKS says. “Recent buying interest has been predominately driven by the instigation of fresh long positioning and there is still scope for recent shorts to be squeezed on a move through $1,245, with further demand through $1,250.”

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

 

Commerzbank Sees Palladium Backing Off To $1,000/Oz Next Year

Monday October 29, 2018 08:12

Commerzbank looks for palladium to ease from its recent record highs around $1,150 an ounce and trade closer to $1,000 next year. Auto-catalyst demand now accounts for more than 80% of total palladium demand, analysts say in a research report released just ahead of the weekend. The market remains in a supply deficit. “However, the trade conflict between the U.S and China could have a negative impact on the economic outlook and car sales figures there,” the bank says. “The two countries are the world’s largest auto markets, and highly gasoline-dominated. The fact that the premium on the palladium price as compared with the platinum price is at a historically high level is likely to have substitution effects. Although the possibilities for substitution in gasoline auto catalysts are limited due to the superior technical properties of palladium, the use of palladium in diesel auto catalysts could be reduced again nonetheless. The abating impact of the tax reform and the higher interest rates also threaten to put the brakes on the U.S. economy next year, making for a gloomier fundamental environment for palladium.” Much of the recent strength in prices was due to speculative buying, Commerzbank says. “Palladium is therefore likely to shed its latest gains again and to trade next year at around $1,000 per troy ounce.”

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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