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Commerzbank: Outflows Continue From Gold ETFs

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Outflows from gold-backed exchange-traded funds continued on Friday despite the rally in prices, says Commerzbank. “Although gold gained by $15 at its peak on Friday, Bloomberg is once again reporting ETF outflows,” Commerzbank says. “At seven tonnes, they were even fairly high, meaning that outflows since the beginning of the month have totaled 27.5 tonnes. Not much remains of the strong inflows seen in January.”

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

 

BMO: Palladium Still Has ‘Decent Potential For Further Upside’

Monday March 11, 2019 08:43

The palladium market remains in a “heavy” supply-demand deficit and prices may well keep rising for a while, although eventually car manufacturers will start to substitute away from the metal, says BMO Capital Markets. Analysts say the supply of palladium is “stagnant” at a time of higher catalyst loadings for gasoline-powered vehicles. “And with substitution being a slow burn rather than an immediate fix, there remains decent potential for further upside,” BMO says. “However, in a market with very concentrated end use, a higher near-term price could mean more aggressive substitution and potentially a resultant medium-term demand void. Commodity markets typically have a great ability to solve for shortage situations.” Palladium prices soared in late 2018 and so far in 2019, rising nearly 70% since mid-August, BMO points out. Following years of deficit, the market does look to have reached a point where available inventory is now extremely limited,” BMO says. Auto catalysts account for some 80% of global demand, and manufacturers have increased loadings to meet stricter emissions standards, BMO adds. Eventually, there will be substitution away from palladium considering its hefty premium over sister metal platinum, BMO says. However, this switch may not be immediate,” BMO says. “Qualifying a new catalyst is an expensive and time-consuming process, and we would expect this to occur only when the next range of vehicle models emerges.”

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