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RBC's Gero: Gold Traders In 'Wait-And-See' Mode

Kitco News

Gold is largely sideways with a “wait-and-see” attitude by traders at the moment, says George Gero, managing director with RBC Wealth Management. Key events the markets will be focusing on include Tuesday night’s State of the Union speech by U.S. President Donald Trump, developments in Brexit, economic data and any major political headlines. The markets are also awaiting end of Chinese New Year to see if demand in the nation picks up for the metals, Gero adds. As of 8:51 a.m. EST, Comex April gold was 30 cents higher at $1,319.60 an ounce.

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

 

BBH: U.S. Dollar’s ‘Continued Resilience Is Remarkable’

Tuesday February 5, 2019 09:16

The U.S. dollar’s “continued resilience is remarkable,” helped by weak economic conditions in other nations, says Brown Brothers Harriman. The greenback has been recovering since the Federal Open Market Committee’s dovish posture last week, with U.S. market-set interest rates staging a reversal from last Thursday’s lows, BBH says. As of an early-day BBH research note, the 10-year yield had risen to 2.73% and the two-year yield to 2.54%, both post-FOMC highs. “Yet Fed tightening expectations for this year remain virtually non-existent,” BBH says. “The implied yield on the January 2020 Fed funds futures contract stands at 2.40%, which suggests no move either way this year. As uncertain as things are here in the U.S., the outlook has deteriorated everywhere else. This makes the dollar shine on a relative basis.” This was underscored by weak euro-zone and U.K. economic data, BBH says. Still, “until U.S. rates rise more…, it will likely take some time for the dollar to stage a deeper turnaround,” BBH concludes. Around 8:49 a.m. EST, the March dollar index was up 0.55 point to 95.625.

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

 

Commerzbank Reviews China’s Gold Market

Tuesday February 5, 2019 09:16

With Chinese markets closed for the country’s New Year celebration, Commerzbank lists a number of statistics to show the state of the country’s gold market. The bank cites data from the China Gold Association showing that the nation’s demand grew by 5.7% to 1,151 tonnes last year. “As such, growth was significantly lower than a year earlier,” Commerzbank says. “Though demand increased, supply decreased by almost 6%. For years, China has been using imports to plug the gap. Last year, Hong Kong and Switzerland were the main suppliers.” Commerzbank notes that the gold demand reported by the China Gold Association is almost 200 tonnes higher than the one from the World Gold Council. “That said, the WGC’s figure does not include China’s industrial gold demand, which grew sharply last year,” Commerzbank says. “This year, it expects Chinese gold demand to remain largely unchanged at 950-1,000 tonnes.”  

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