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Standard Chartered: ETPs, Central Banks Still Adding Gold

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Exchange-traded-product holdings of gold have risen so far this month and for the year to date, while central banks remain net buyers of the precious metal, says Standard Chartered. “ETP holdings are now up 19t [tonnes] for November, taking inflows up 13t YTD,” Standard Chartered says. “ETP holdings have proven resilient in recent weeks.” Analysts say that physical-market weakness “has been largely offset the resilience of ETP investors and continued central-bank buying – the latest data shows that new entrants continue to emerge.” The most recent official-sector figures for October shows that Russia remained a net buyer of gold, adding 29.9 tonnes and taking year-to-date additions to 227.4, Standard Chartered points out. Kazakhstan added 6 tonnes for its largest monthly purchase since August 2014. “The IMF [International Monetary Fund] statistics show that Malaysia added 1.2t for the first time since January 2017, and Qatar added 4.7t in September, its first purchase since August 2017,” Standard adds.

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

 

FXTM: Gold Shines After Powell Speech

Thursday November 29, 2018 09:39

Gold is “shining” while the U.S. dollar has been “dethroned” by remarks Wednesday from Federal Reserve Chair Jerome Powell, says Lukman Otunuga, research analyst at FXTM. Powell said rates have risen to the point where they are just below “neutral” levels, which markets construed dovishly since he previously said rates were still a ways away from neutral. This led to ideas that the Fed may pause in hiking U.S. rates next year, Otunuga says. “The price action seen today simply highlights how gold’s direction remains dictated by the dollar’s performance and speculation around U.S. interest rates,” the analyst says. “With the dollar possibly weakening further in the near term, the yellow metal has the potential to break above the $1,228 resistance level. A daily close above this point may encourage an incline towards $1,240.” As of 9:22 a.m. EST, spot gold was $5.15 higher to $1,226 an ounce.

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

 

SP Angel: Palladium Remains Underpinned By Tight Supplies

Thursday November 29, 2018 09:39

Palladium has continued its ascent to fresh record highs, fueled by expectations for a tight supply-demand scenario, says commodities brokerage SP Angel. Spot palladium peaked at $1,183.55 overnight before backing off to $1,180.05, down $1.70 for the day, as of 9:22 a.m. EST. “Spot palladium touched fresh highs on signals of diminishing supplies…,” SP Angel says. “Prices have been supported by projections for supply deficits amid strong and growing demand for its use in automobile pollution-controlling catalytic converters. This became most apparent as holdings of exchange-traded products backed by palladium fell 1.4% Tuesday to the lowest since February 2009 as users of the metal lease material from ETF holders to meet their needs.”

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

 

INTL FCStone Looks For ‘A Few More Rate Increases’ Despite Powell Comments

Thursday November 29, 2018 09:39

INTL FCStone expects a few more U.S. interest-rate hikes despite dovishly construed remarks Wednesday from Federal Reserve Chair Jerome Powell, who suggested the tightening may be bringing rates close to a “neutral” level. “We should also point out that although Powell said rates may be nearing neutral readings, he did not tell us how far away from neutral we actually are,” says commodities consultant Edward Meir. “For all practical purposes, we still could be two or three more rate hikes away before we get there and so that is something to keep in mind.” In the meantime, the next focus for markets will be this weekend’s Group of 20 meetings, in particular whether the U.S. and China “carve out a truce” in their trade war, Meir says. As for U.S. interest rates, the analyst adds, “We think that the Federal Reserve still has a few more rate increases to go and cannot ‘throw in the towel’ just yet given that inflation readings remain elevated (although still close to target), wage growth is pushing higher and the economy is generally growing at a fairly strong clip, although decelerating somewhat of late.” 

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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