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TD Securities: Gold Pressured Lately By Profit-Taking; Better Days Ahead

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Gold and silver, along with crude oil, pulled commodity indexes lower over last week, with investors selling the precious metals to capture profits, says TD Securities. However, analysts see better days ahead for the metals. Spot gold has fallen to a current level of $1,285.80 an ounce after peaking at $1,346.45 on Feb. 20. TDS notes that market rumors of possible monetary accommodation in China, as well as a U.S.-China trade deal, led many traders to believe the Federal Reserve and other central banks may consider additional rate hikes. Further, stronger data, including rising inflation, left traders wondering if the Fed will remain tilted toward a dovish stance, thereby helping the U.S. dollar and undercutting gold, TDS says. “As such, precious metals were hit hard as money managers took profits, with gold seeing its biggest weekly decline since November,” TDS says. “The combination of higher USD opportunity costs, the redirection of capital flows into equities and the recent rejection at $1,350/oz all helped to persuade traders to take profits.” Thus, gold has fallen back below $1,300 an ounce. “However, we expect additional upside once economic data worsens later in the year,” TDS says.

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

 

SP Angel: Investors Pulling Cash From Gold ETFs

Tuesday March 5, 2019 08:32

Investors are pulling cash from the world’s largest gold exchange-traded fund at the fastest pace in more than a year as easing trade tensions push buyers out of safe-haven assets, says commodities brokerage SP Angel. “The $33 billion SPDR Gold Shares ETF, or GLD, saw a net withdrawal of $496 million on Friday, the most in a single day since February 2018,” SP Angel says. “That pushed the five-day total to about $720 million, marking the fourth consecutive week of outflows.” Analysts say a stronger U.S. dollar and rebounding equity market have eroded demand for bullion, particularly amid optimism the U.S. and China could reach a trade accord. “ETFs tracking gold miners have also lost cash lately,” SP Angel says. “Investors pulled $148 million from the VanEck Vectors Gold Miners ETF and $142 million from the VanEck Vectors Junior Gold Miners ETF last week.”

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

 

Commerzbank: Gold-Silver Ratio Hits Highest Level Since Christmas

Tuesday March 5, 2019 08:32

Silver has fallen along with gold in recent days, and the gold/silver spread has moved to its highest level since late December, says Commerzbank. The ratio measures how many ounces of silver that it takes to buy an ounce of gold, and a higher number means underperformance by silver, and vice-versa. “Once again, silver is unable to ignore gold’s weakness and has dipped to $15 per troy ounce,” Commerzbank says. “Because silver has actually fallen more sharply than gold of late, the gold/silver ratio has climbed to over 85 again – its highest level since Christmas. Unlike the gold ETFs, however, silver ETFs have been relatively stable in recent weeks. It is possible that speculative financial investors have taken profits from silver and further reduced their previously high net-long positions.”

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

 

Mitsubishi: Investors Taking Notice Of Platinum Again

Tuesday March 5, 2019 08:32

Platinum has bounced 8% from its early-year lows as investors take notice of the metal again. As of 8:17 a.m. EST, spot metal was $3 higher to $837 an ounce. “Platinum’s performance since the lows of $780 in mid-January has been underpinned by a resurgence of investor interest, particularly in the physically backed exchange-traded fund (ETF) market together with concerns about labor disruption in South Africa…,” says Mitsubishi. “Since the beginning of this year, investors have been piling into ETFs and holdings have surged by 15% to a 4-year high of 2.7 Moz [million ounces], in response to platinum being an under-owned and undervalued asset on a relative and absolute basis.” As of a Monday research note, Mitsubishi analysts say the largest increase in holdings has been in Deutsche Bank’s ETF, for which holdings are up by around 175,000 ounces, or 172%, since the beginning of this year, but with substantial inflows into several other products as well.

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