Market Nuggets
BMO: Gold, Platinum ETF Holdings Rise In 2019
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Holdings of gold and platinum by global exchange-traded funds are higher so far in 2019, says BMO Capital Markets. Precious-metals ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. “Heading into a busy week of macroeconomic updates, we note that gold ETFs added to their holdings for a third straight day on Friday, bringing total year-to-date net inflows to 1.02moz [1.02 million ounces],” BMO says. “Bloomberg data shows that total gold held by ETFs has risen 1.4% this year to 72.1moz. Despite limited price activity so far this year, platinum ETFs have seen considerable net inflows in 2019 with holdings rising 22% year-to-date to 2.8moz.”
By Allen Sykora of Kitco News; asykora@kitco.com
MKS: Gold Stronger, May Face Resistance Around $1,320
Monday March 25, 2019 09:26
Gold is finding support from safe-haven buying but could face some chart resistance not far above current price levels, says MKS. As of 8:53 a.m. EDT, spot metal was $6.25 stronger to $1,319.40 an ounce. “Expect bullion to see resistance around $1,320; however, a move through this level will open further top-side gains with extension toward $1,346,” MKS says. “Supportive pricing remains evident around $1,311 and below this $1,300.” Analysts note that gold firmed when trading for the week began during Asia-Pacific hours, as investors moved into safe-haven assets amid worries about equities. U.S. dollar strength on Friday also abated on Monday. Chinese demand also helped gold, with the on-shore premium in Shanghai around $13 an ounce, MKS adds.
By Allen Sykora of Kitco News; asykora@kitco.com
TDS: Gold May Head Toward $1,364 'Sooner Than Anticipated'
Monday March 25, 2019 09:26
Gold should benefit from growing market sentiment that the next move by the U.S. Federal Open Market Committee could be a rate cut, with interest-rate markets now pricing more than a 50% probability of a cut before the year's end, says TD Securities. “From our vantage point, we expect gold to head towards our target of $1,364/oz sooner than anticipated,” TDS says. “While prices have thus far avoided closing above levels that would imply substantial CTA [Commodity Trading Adviser] buying, the bar is low for algorithmic trend followers to substantially add to their length above $1315/oz.”
By Allen Sykora of Kitco News; asykora@kitco.com
Bannockburn: Inverted Yield Curve Normally 'Good Indicator' Of Recession
Monday March 25, 2019 09:26
The inversion of the U.S. yield curve, with the three-month yield higher than the 10-year, historically has been a “fairly good indicator of a recession” but there are two caveats, says Marc Chandler, chief market strategist First, the curve must stay inverted,” he says. “A drive-by does not count. Second, the lead time can be more than a year. While it is always dangerous to assume things are different this time, the context does matter.” There are two aspects to this inversion that does make it “usual,” Chandler says. First, he notes that the drop in U.S. yields took place after poor euro-zone Purchasing Managers Index data, with the German Bund yield going negative for the first time in three years. “The increase in negative-yielding instruments makes U.S. Treasuries more attractive nearly regardless of one's macroeconomic views,” Chandler says. “Second, there are unusual supply considerations. U.S. government debt managers are issuing more debt at the shorter end of the curve.”
