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Standard Chartered Remains Upbeat On Gold Prices

Kitco News

The outlook for gold prices remains positive, with the metal still retaining the $1,300-an-ounce level that the market reclaimed late last month, says Standard Chartered. Among other factors, the bank points out that Federal Reserve policymakers reiterating a patient stance on further tightening of monetary policy has offset the impact to gold of an equity-market recovery. “Indeed, the dovish Fed has not only put the notion of further hikes on hold, but also raised speculation about rate cuts,” Standard Chartered says. “The stronger-than-expected U.S. unemployment report [for January] has stalled gold’s rally, for now, but the floor for prices remains robust. The latest data shows that central-bank buying in 2018 was the second-strongest on record and ETP [exchange-traded-product] holdings have reached six-year highs.” As of 8:54 a.m. EST, spot gold was trading $3.15 higher to $1,309.45 an ounce.

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

 

BMO: Jan. Silver ETF Holdings Decline While Those In Gold Rise

Thursday February 7, 2019 09:15

Holdings of silver by global exchange-traded funds have fallen this year even though they rose in the case of gold ETFs, reports BMO Capital Markets. The World Gold Council issued a report Wednesday showing that physical holdings in gold-backed ETFs rose 72 tonnes in January to 2,513, the highest level of total holdings since March 2013. The amount of metal in storage by ETFs rose along with a 3.5% increase in gold prices during the month. “Somewhat contrary to the inflows seen in gold ETFs throughout January, silver ETF flows have been moving in the opposite direction despite recent price gains, decoupling somewhat from the momentum seen in gold, with total known holdings down 1.6% throughout the month while the gold/silver ratio remains well above the five-year average of 74, currently sitting just above 83,” BMO says.

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

 

Standard Chartered: China’s Holiday Gold Demand Rises From Year Ago

Thursday February 7, 2019 09:15

Indicators hint that China’s holiday-related gold demand has improved from a year ago even though the Lunar New Year came earlier this year (Feb. 5, 2019 versus Feb. 16, 2018), says Standard Chartered. “Shanghai gold premia firmed in January, the volume traded on the Shanghai Gold Exchange was up 14% [year-on-year] and local prices have edged higher,” the bank says. ”Bar and coin demand was flat y/y in 2018 but still firm, driven by concerns over currency weakness and stock-market volatility; jewelry demand edged higher. China’s gold imports from major hubs were up 16% y/y in 2018, suggesting an inventory build, but the introduction of 3D Hard Gold, which contains up to 50% less metal than traditional pieces, is likely to cap demand growth.” Standard says it looks for Chinese gold demand to stabilize in 2019.

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

 

RBC’s Gero: ‘Gold Bargain Hunters Still Waiting In The Wings’

Thursday February 7, 2019 09:15

Traders and investors looking to take advantage of a pullback in gold prices to buy again are still holding off for now, says George Gero, managing director with RBC Wealth Management. The metal has pulled back in recent sessions on U.S. dollar strength. Analysts have cited softer economic data in Europe as a factor hurting the euro against the greenback, and this in turn has pressured gold since it often moves inversely to the dollar. “It’s still all about the dollar,” Gero says, noting that the number of open Comex positions has “hardly budged” lately. He later adds, “For now, gold bargain hunters [are] still waiting in the wings after [the] recent pullback.” As of 8:52 a.m. EST, Comex April gold was down $1.20 for the day to $1,313.10 an ounce. The metal peaked at $1,331.10 an ounce last week, its most muscular level since early summer.

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

 

Analysts: Political Uncertainties Should Underpin Gold

Thursday February 7, 2019 09:15

Gold has pulled back so far this month due to a stronger U.S. dollar, but the metal is likely to remain in demand amid political uncertainties, analysts say. Spot metal fell as far as $1,302.60 an ounce overnight, its softest level since Jan. 29. It has recovered to $1,309.35 an ounce as of 8:53 a.m. EST. The decline appears related to exchange-rate developments since gold in euro terms has held around €1,150, Commerzbank says. “We believe that gold should remain in good demand – after all, the political risks appear to be increasing again,” Commerzbank says. “According to Italian media reports, the European Commission has drastically reduced its GDP [gross domestic product] estimate for Italy, meaning that the Italian government’s deficit target – which was the subject of much dispute in the autumn – will probably no longer be achievable.” Adds MKS (Switzerland) S.A., “Uncertainty over U.S.-China trade relations and the potential for another U.S. government shutdown continue to underpin interest toward $1,300 and should see supportive price action remain over the near term.” 

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