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BBH: U.S. Dollar Remains Strong In Wake Of FOMC

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The U.S. dollar rally has resumed in the wake of last week’s meeting of the Federal Open Market Committee, says Brown Brothers Harriman. “U.S. rates are headed higher, while event risk in the euro zone and the U.K. remain in place,” BBH says. Analysts say the news flow this week is expected to be dollar-supportive.  Consensus estimates call for the October U.S. Consumer Price Index on Wednesday to rise 2.5% year-on-year, while the core rate excluding food and energy rises 2.2%. This would come on the heels of a larger-than-expected rise in the Producer Price Index reported last week.  Then markets expect a Thursday report to show U.S. retail sales rose 0.5% last month. Strong data should underpin U.S. Treasury yields, BBH says. “The Fed basically signaled last week that a December hike will be seen,” BBH says.

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

 

Commerzbank: Gold Pressured By Strong U.S. Dollar

Monday November 12, 2018 08:31

Gold has fallen to its lowest level in more than a month on strength in the U.S. dollar, says Commerzbank. As of 8:14 a.m. EDT, spot metal was down $4.15 to $1,205.20 an ounce, while the dollar index was up 0.476 point to 97.210. “There is a risk of further technical selling if it [gold] drops under $1,200,” Commerzbank says. “Weighing on its price is the much firmer U.S. dollar, which has climbed on a trade-weighted basis to its highest level in more than 16 months.”

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

 

SP Angel: Investors Not Fleeing Gold ETFs Despite Price Drop

Monday November 12, 2018 08:31

Exchange-traded-fund investors and hedge funds “are showing no signs of abandoning” gold, even as the precious metal gives back the October rally, says commodities brokerage SP Angel. “Holdings in exchange-traded funds backed by gold have risen for five straight weeks, the longest stretch in more than a year,” SP Angel says. Holdings in SPDR Gold Shares, the world’s largest such ETF, stood at 755.23 tonnes at the end of last week, after they had stood at 730.17 one month earlier.

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

 

MKS: Dollar Strength May Mean Gold Falls Below Support

Monday November 12, 2018 08:31

Gold likely will not be able to hold support around $1,205-an-ounce level if the U.S. dollar keeps rising, says MKS (Switzerland) S.A. The metal declined starting in Asia-Pacific trade overnight after falling below the 100-day moving average at the end of last week, MKS says. “The post-FOMC bid tone to the dollar continues to put downwards pressure on the precious complex…,” MKS says. Analysts later add: “We are seeing a modest level of support broadly around $1,205; however, sustained greenback strength is likely to see this level make way for a test underneath $1,200, with downside targets extending to $1,195 and $1,180.” 

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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