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Metals Focus: U.S. Retail Gold, Silver Demand To Rise In 2019

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U.S. retail investment demand for gold and silver should pick up in 2019 on a bounce from a weak 2018, as well as higher prices by end of the year, says the consultancy Metals Focus. Retail gold demand, such as bars and coins, peaked at nearly 3 million ounces in 2016, the highest level since 2010, but subsequently fell to under 1 million in 2018, Metals Focus says. The U.S. Mint’s combined sales of American Eagle and Buffalo gold coins fell from 1.2 million ounces in 2016 to less than 400,000 last year, Metals Focus points out. Sales of both gold and silver coins jumped to two-year highs in January, but then slumped again in February, the consultancy continues. “Looking ahead though, we still forecast modest full-year gains for both gold and silver retail investment in the U.S.,” the consultancy says. “Part of this reflects the comparison against very poor totals in 2018.” However, analysts say, “we expect gold and silver prices to strengthen before end-2019. Although this will generate some profit taking, we believe this will be offset by more significant levels of retail demand, delivering single-digit percentage gains for both metals.”

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

 

TDS: Gold Boosted As U.S. Dollar Index Stalls

Wednesday March 13, 2019 09:35

Precious metals have ticked higher as strength in the U.S. dollar index abates, says TD Securities. As of 9:29 a.m. EST, spot gold was up $6.30 to $1,307.70 an ounce, while silver was 4 cents stronger to $15.45. The spot dollar index was down 0.099 point to 96.836. “Gold and silver prices continue to firm as the DXY [dollar index] weakens after having failed to sustainably make a new high above the 97.7 mark,” TDS says. “We continue to expect the yellow metal’s prices to firm over the coming months as macroeconomic data deteriorates, and as the metal should continue to have an asymmetric reaction to the upside on any data disappointments. And, we think CTAs [Commodity Trading Advisers] could add to upside flow in gold should prices break above the $1320/oz range.”

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

 

Commerzbank: Brexit, Halt To Fed Rate Hikes Support Gold

Wednesday March 13, 2019 09:35

Commerzbank says the continuing uncertainty about the U.K.’s exit from the European Union, dubbed Brexit, and expectations that the Federal Reserve is done hiking interest rates for a while should underpin gold. The U.K. Parliament Tuesday rejected a second Brexit deal that had been negotiated by the government of  Prime Minister Theresa May, and a vote is planned Wednesday on whether to leave the EU without a deal. ”The never-ending Brexit chaos should keep demand for gold as a safe haven at a high level,” Commerzbank says. Analysts also comment that “subdued” inflation data in the U.S. is likely to encourage the U.S. Federal Reserve to maintain its cautious approach. “As we do not expect any Fed rate hikes this year, gold should remain an attractive alternative investment,” Commerzbank says. “This is also suggested by the low real interest rates, which have even been negative for many maturities in some countries like Germany.”

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

 

MKS: Gold Consolidating Above $1,300/Oz

Wednesday March 13, 2019 09:35

Gold is consolidating above the psychological $1,300-an-ounce level after recent strength, says MKS (Switzerland) S.A. As of 9:29 a.m. EST, spot gold was up $6.30 to $1,307.70 an ounce. “Strong interest through Globex coupled with a heightened on-shore premium in China toward $14 kept pricing buoyant throughout the [Asian] session, while the dollar eased modestly to underpin gains,” analysts say of the early-day move. They note that 125,000 ounces of inflows were recorded by gold exchange-traded funds Tuesday. “Supportive interest toward $1,300 holds the key for a constructive move higher from here, while resistance cuts in $1,310-$1,315,” MKS adds.

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