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SP Angel: Gold Headed For Fourth Straight Monthly Gain

Kitco News

Gold is already up 2.5% this year and is heading for a fourth straight monthly gain, says commodities brokerage SP Angel. Meanwhile, the U.S. dollar index has eased over the last couple of months. “The metal is seeing strong renewed interest as a store of value as investors weigh prospects of fewer U.S. rate hikes this year and track signs of slower global growth amid the U.S.-China trade war,” SP Angel says. Spot gold traded as high $1,315.50 an ounce earlier Wednesday, its highest level in eight months. “While the Fed hiked four times last year, officials have indicated a willingness to be patient and flexible in their approach to additional increases,” SP Angel says. Analysts later add, “Investor sentiment in gold remains strong, with holdings in bullion-backed exchange traded funds at the highest since April 2013 after about 61 [tonnes] were added this year.”

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

 

FXTM: Gold Has Strong Week As Investors Seek Safe Havens

Wednesday January 30, 2019 09:25

Gold has had “an incredibly positive trading week” as a result of caution in the broader markets and investors avoiding riskier assets in favor of so-called safe-haven investments, says Lukman Otunuga, research analyst at FXTM. “For as long as U.S.-China trade tensions, concerns over slowing global growth and Brexit drama continue to weigh on risk appetite, gold is seen shining throughout the trading week,” the analyst says. “The zero-yielding metal is poised to receive a welcome boost if the Federal Reserve adopts a dovish tone. With the fundamentals driving gold marrying the technical, we see vast upside potential.” A daily close above $1,308 an ounce could open a path towards $1,316 and $1,324, respectively, Otunuga says. As of 9:05 a.m. EST, spot gold was down $1.40 to $1.309.90 an ounce but earlier hit an eight-month high of $1,315.50.

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

 

Bannockburn: Fed On Hold During Early Part Of 2019

Wednesday January 30, 2019 09:25

Marc Chandler, chief market strategist with Bannockburn Global Forex, says “there is no doubt” that the Federal Open Market Committee is on hold during the first part of 2019. “While the market anticipates that the Fed is likely on hold all year, many economists still look for a hike or two,” he says. Policymakers are wrapping up a two-day meeting Wednesday. “The FOMC statement should be succinct,” Chandler says. “While it maintains the roughly balanced risk outlook, the forward guidance will likely be replaced with the emphasis on patience, flexibility and data dependence. Although the impact of the balance sheet reduction is controversial, we look for some rhetoric that will ease the anxiety in some quarters.” Chandler says Fed Chair Powell is likely to emphasize the balance sheet will remain much larger than before the Great Financial Crisis. “He is unlikely to announce a target in time or size,” Chandler adds.

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

 

MKS: Asian Gold Demand To Abate During Chinese New Year

Wednesday January 30, 2019 09:25

Demand from China was “decent” overnight but may abate next week as markets in the country close for the Lunar New Year, says MKS (Switzerland) S.A. Gold hit a fresh multi-month high overnight. “Decent demand seen once again from Chinese investors, with the physical premium for onshore investors now sitting at around $11-12 over the spot price,” MKS says. However, MKS later adds, “With the Chinese NY [New Year] period encroaching (4-10 Feb.) and no SGE [Shanghai Gold Exchange] during that period, much of this buoyant demand throughout Asia will be stripped out of the market. So could we be in for a slight pullback over the next week?”

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