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CFTC: Money Managers Trim Gold Positioning In Week To Feb. 26

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Money managers modestly reduced their net-long (bullish) position in gold to 78,559 futures contracts in the week to Feb. 26 from 82,377 as of Feb. 19, the most recent CFTC data show. These accounts had been net long by 50,184 lots as of the end of 2018. Meanwhile, in silver, money managers upped their net long to 47,762 lots from 38,800 the prior week. This had stood at 30,046 contracts as of the end of 2018. The CFTC fell behind on its weekly reporting due to the five-week U.S. government that began in late December. Since the government reopened, the CFTC has been issuing two reports per week, with the releases coming out in chronological order until the government gets caught up. With the next report, on data through Tuesday and due out on late Friday, the government will be caught up on its reporting. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.

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

 

FXTM: Gold Under Pressure But Long-Term Prospects Favor Bulls

Wednesday March 6, 2019 09:20

Lukman Otunuga, research analyst at FXTM, says gold weakness could continue in the near term, but the analyst is upbeat for the longer term. Around 9 a.m. EST, spot metal was $3.30 lower to $1,284 an ounce, continuing the slide from a longtime high of $1,346.45 on Feb. 20. “While the near-term outlook for the precious metal points to further downside amid dollar strength and U.S.-China trade optimism, the medium- to longer-term outlook remains in favor of bulls,” Otunuga says. “With geopolitical risks, concerns over global growth, and expectations over the Fed taking a break on monetary tightening this year being dominant market themes, gold still has upside potential.” Turning to the technical charts, Otunuga says the yellow metal could depreciate toward $1,278 as long as the psychological $1,300 level acts as resistance. “A breakout back above this psychological level will bring bulls back into the game,” the analyst concludes.

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

 

Aberdeen: Investors Taking Shine to Platinum

Wednesday March 6, 2019 09:20

Investors may be starting to warm up to platinum, after shunning it while sister metal palladium rose sharply during the first two months of the year, says Maxwell Gold, director of investment strategy with Aberdeen Standard Investments. Declining sales of diesel-powered vehicles, which require platinum for catalysts, have hurt the metal. “However, recent buying driven by traders as well as exchange-traded funds has seen a dramatic turnaround for platinum so far this year,” Gold says. “This turning point is likely driven by the severe price discount of platinum to palladium, which is at a record low of approximately 45%. The previous trough in the platinum-palladium ratio in December 2000 was followed by a multi-year rally for platinum.” Gold says the investor sentiment appears to be that “platinum is simply too cheap to resist,” resulting in year-to-date net inflows of 12.9 metric tons into platinum ETFs, the strongest two-month period since May and June of 2013. Further, total platinum ETF holdings globally stood at 85.1 metric tons as of February, only 6% below the all-time high of 90.25 from August 2015. “Current platinum prices remain slightly below the base case scenario of $875-$925/ounce, but given the cheap relative valuations and diverse usages of platinum, the outlook for the metal is looking stronger,” Gold says. “A sustained increase in investment demand may be the spark platinum has needed to help further close the gap to its precious metal peers.”

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

 

MKS: Dollar, ETF Outflows Restricting Gold Upside

Wednesday March 6, 2019 09:20

MKS (Switzerland) S.A. says the muscular U.S. dollar and exchange-traded-fund activity may make it tough for gold to break back above nearby chart resistance. As of 9 a.m. EST, spot gold was down $3.30 to $1,284 an ounce. “Gold looks to trying to base around $1,280-$1,285 following the sharp 4.5% fall since the $1,346 cycle high printed on Feb. 20; however, top-side moves toward $1,295-$1,300 remain restricted by ETF [exchange-traded-fund] outflows and generally positive dollar moves,” MKS says.

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

 

Metals Focus: U.S. Precious-Metals Jewelry Market Starts Year Mixed

Wednesday March 6, 2019 09:20

The U.S. precious-metals jewelry market is mixed so far in 2019 although the general tone appears to have improved since late 2018, when sentiment was hurt by the U.S. government shutdown, says the consultancy Metals Focus. “After 2018’s 4% rise, the market is currently looking at further if slower growth in gold-jewelry consumption this year,” Metals Focus says. “This may surprise given closures of bricks [and] mortar stores and big box retailers cutting their fine jewelry offerings. We are also seeing ongoing losses in wedding bands to platinum and non-precious metals such as titanium. However, this is being countered by a still strong plain gold basics market, resilience for dynamic and/or high end independents and booming online sales.” Platinum has been the “star performer” and could post double-digit-percentage growth in 2019, Metals Focus says. In addition, platinum-jewelry demand has been helped by “attractive pricing” and promotional efforts. “After a disappointing 2018, silver-jewelry sales could well improve slightly this year as a result of strategy changes in the key branded sector and strong results for artisans/independents,” Metals Focus says. “Competition from base metal alternatives is also reported as less of an issue.” Analysts described palladium jewelry as the worst performer among the precious metals. “Firstly, the already trivial niche of 950 purity pieces continues to shrink in the face of high prices,” Metals Focus says. Further, the metal’s use in white gold alloys has begun to fall steeply, particularly as more producers are using rival whitener nickel instead and those still using palladium have cut the percentage share of the alloy.

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