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FXTM: Gold 'Incredibly Bullish' As Dollar Faces Headwinds

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Gold has entered December on an “incredibly bullish note” as prices have climbed to their highest level in more than a month, says Lukman Otunuga, research analyst at FXTM. Spot metal was up $10 to $1,240.60 an ounce as 9:56 a.m. EST. “With the dollar facing multiple headwinds in the form of falling U.S. Treasury yields and a Fed that seems to be adopting a dovish tone, this is all good news for zero-yielding gold,” Otunuga says. “Today’s aggressive appreciation continues to highlight how the yellow metal remains primarily influenced by the dollar’s performance.” On the technical charts, the market has consistently higher highs and higher lows, which the analyst describes as bullish. “A solid breakout above the $1,240 resistance level may open a path towards $1,248,” Otunuga concludes.

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

 

Gold Underpinned By Softer U.S. Treasury Yields

Tuesday December 04, 2018 08:13

Gold has been underpinned by declining U.S. Treasury yields amid reduced expectations for U.S. rate hikes, analysts report. As of 8:05 a.m. EST, gold was trading $8.20 higher to $1,238.50 an ounce. “It is finding support from the weaker U.S. dollar and the pronounced decline in bond yields – yields on 10-year U.S. Treasuries have slid well below the 3% mark, while the yields on 10-year German government bonds have dropped to a 3½-month low,” says Commerzbank. Analysts add that as stocks shed some of their gains Monday, gold also became “more attractive again as an alternative investment.” Commodities brokerage SP Angel says gold’s outlook is improving as investors place bets on whether the Federal Reserve’s hiking cycle is nearing an end as 2019 looms, with portions of the Treasury market possibly flashing “warning signs” about the near-term stance. ”On Monday, a section of the U.S. Treasuries yield curve inverted for the first time in more than a decade, signaling some investors may be anticipating the imminent end of the Fed’s tightening cycle,” SP Angel says.

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

 

BBH: U.S. Dollar Eases As Treasury Yields Decline

Tuesday December 04, 2018 08:13

The U.S. dollar is under pressure as Treasury yields fall, says Brown Brothers Harriman. “The 10-year yield broke decisively below 3% yesterday and continues to edge lower today,” BBH says. “At 2.95% currently, it is at the lowest level since Sept. 13 and is well on its way to test the Aug. 22 low near 2.81%.  Odder still, the two-, three-, and five-year portion of the U.S. yield curve has inverted for the first time in over a decade.” As of 7:53 a.m. EST, the spot dollar index was down 0.556 point to 96.484. Metals traders tend to monitor the U.S. currency as base and precious metals alike often trade inversely to the dollar. 

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

 

CME Group: Nov. Metals Volume Down From Year Ago

Tuesday December 04, 2018 08:13

CME Group metals volume averaged 624,000 contracts per day in November 2018, which was down 17% from 749,000 in the same month a year ago, the exchange operator reports. Still, officials report growth in options trading. Average daily volume in precious metals options increased 27% to 53,000 contracts. Gold options volume rose 23% to an average of 45,000 contracts daily, while the same for silver was up 65% to 8,000 contracts. Meanwhile, metals volume averaged 597,000 contracts for the three-month period ending with November. This was down from 598,000 for the three-month period in October, 623,000 for the three-month period ending in September and 644,000 for the three-month period ending with August.

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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