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FXTM: Improved Risk Sentiment Hurts Gold Prices

Kitco News

Renewed optimism over U.S.-China trade talks has lifted global stocks so far Friday and has hurt gold, says Lukman Otunuga, research analyst at FXTM. Still, Otunuga offers some caution on risk sentiment, pointing out that Brexit and U.S. government shutdown have not been resolved. A bearish mood set into gold Friday after a previously muted week, Otunuga says. “At $1,285 at the time of writing, bullion is en route to concluding the trading week negative – breaking four consecutive weeks of gain,” the analyst says. Later, the analyst concludes, “Safe haven assets, including bullion, may see resistance if global risks become less pronounced by way of substantial positive developments on Brexit and U.S.-China trade talks.” As of 8:27 a.m. EST, spot gold was $9.60 lower to $1,281.70 an ounce. The futures contract for the Dow Jones Industrial Average was around 150 points higher.

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

 

SP Angel: Emissions Rules To Support Palladium

Friday January 18, 2019 08:30

Stricter emissions limits may keep underpinning palladium even if car sales slow, says commodities brokerage SP Angel. The metal topped $1,400 an ounce for the first time ever on Thursday, pulled back, but is back above that level again Friday. “Palladium surge[d] to fresh highs, breaking the $1,400/oz level, to extend its rally even amid signals global vehicle sales are slowing,” SP Angel says. “The fundamental emissions-controlling metal used in the auto industry for catalytic converters has surged more than 60% since the middle of August, driven by an acute shortage of immediate supply. Investors are shrugging off signs of automotive weakness in key markets, with annual car sales in Europe falling for the first time since 2013.” Chinese sales also declined last year, while sales in the U.S. barely rose, SP Angel notes. “However, ever stringent emissions controls are expected to sustain demand as governments seek to match CO2 targets.”

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

 

Commerzbank: ‘Bubble’ May Be Forming In Palladium Prices

Friday January 18, 2019 08:30

Palladium has been “firing on all cylinders” but may have reached “bubble” territory, says Commerzbank. The metal traded above $1,400 an ounce for the first time ever Thursday and early Friday. Commerzbank says much of the move may be fueled by speculative buying, although data that could confirm this is not being released by Commodity Futures Trading Commission during the U.S. government shutdown. Further, hedge funds that may have been bearish on expectations for a correction lower now may have been forced to buy in order to cover those positions. “Judging by the price movement, it looks to us as if a bubble is forming – and we believe it is only a question of time until the bubble bursts,” Commerzbank says. “Last year, palladium peaked in mid-January and then corrected significantly. Following its sharp price rise since yesterday, palladium is more than $600 per troy ounce more expensive than platinum. The gap has never before been so big. And palladium is trading at a premium of nearly $130 per troy ounce as compared with gold.”

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