Make Kitco Your Homepage

Aberdeen Strategist: Dovish Fed Boosts Gold Outlook

Kitco News

A recently dovish tone from the Federal Reserve drives a more bullish outlook for gold and silver over the next year, says Maxwell Gold, director and investment strategist with Aberdeen Standard Investments. Consensus expectations are for no more Fed rate hikes this year, he says. “These accommodative comments by the Fed have essentially put a cap on real interest rates as well as the dollar rally from 2018,” he says. “Gold historically performs well when real rates are below 2%, and real rates have retreated back below 1% in recent weeks. A pause on rate hikes also diminishes the short-term outlook for the dollar, while the medium-term dollar outlook remains bogged down by fiscal and recessionary concerns.” The greenback remains in a “structural bear market” driven by rising debt, deficits, and now a potential slowdown in the balance-sheet normalization by the Fed, the strategist continues. “Gold historically outperforms during U.S. dollar bear markets, which on average last 5.5 years and have seen 20-30% declines over these multi-year periods,” he says. Gold adds that “what’s good for gold is good for silver.”

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

 

INTL FCStone: Gold Rises As U.S. Dollar Retreats

Tuesday February 12, 2019 08:28

Gold and silver have a stronger tone as the U.S. dollar index dips, says Edward Meir, commodities consultant with INTL FCStone. As of 8:10 a.m. EST, Comex April gold was up $5.50 to $1,317.40 an ounce, while March silver was 10 cents stronger to $15.79. The March dollar index was down 0.142 point to 96.715. “Precious metals are up today after selling off yesterday,” Meir says. “We suspect the group is teeing off against a slightly weaker dollar and expectations of some sort of trade accommodation between the U.S. and China.” \

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

 

Bannockburn : U.S. Dollar Buying Subsides

Tuesday February 12, 2019 08:28

The dollar index's eight-day advance is in jeopardy, says Marc Chandler, chief market strategist 
with Bannockburn Global Forex, LLC. “Although the greenback recorded new highs against some major currencies, the momentum appears to be stalling,” Chandler says. “The news stream is constructive as a compromise seems to have been reached to avoid another U.S. government shutdown, and there is some optimism that the U.S. and China will strike a deal even if not by March 1.” As of 8:10 a.m. EST, the March dollar index was down 0.142 point to 96.715.

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.