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Societe Generale Sees $1,400 Gold In 1Q 2020

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Gold prices are likely to tick higher into early next year, says Societe Generale. “We forecast gold prices to progressively rise over the year as investors seek refuge from risk assets going into a recessionary period in 2020,” the bank says in a research note released just ahead of the weekend. “We forecast gold prices to average $1,400/oz in 1Q20. The monetary U-turn of the Fed and the ECB [European Central Bank] in recent weeks also offers some respite to non-yielding assets. As we no longer expect the Fed to raise rates this cycle, and with the ECB on perpetual hold … real rates are likely heading near zero, if not negative, which should make gold relatively easier to carry in a portfolio.”

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

Barclays: Commodity Assets Under Management Rise In 1Q

Monday April 8, 2019 09:01

Global commodities assets under management (AUM) – including precious metals -- rose to $319 billion in the first quarter from $280 billion at the end of last year, Barclays says. Investment inflows totaled $14.7 billion amid positive sentiment towards risk assets. Price and yield gains contributed $23.7 billion to the gain. This reversed most of the losses in AUM during the fourth quarter, when investors withdrew funds as prices collapsed, Barclays reports. Energy posted the biggest increase in AUM, rising by $21.1 billion to $98.9 billion, Barclays reports. Despite a “relatively sluggish price performance,” precious-metals AUM increased by $8 billion to $135 billion, while industrial metals AUM climbed by $3.9 billion to $26.8 billion, helped by both stronger copper prices and investor flows, Barclays says. Agriculture AUM gained $5.3 billion to $58 billion.

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

RBC’s Gero: Gold Recovering From ‘Oversold’ Level

Monday April 8, 2019 09:01

Gold is rebounding from “oversold” levels, helped by bullishness associated with a pullback in the U.S. dollar, more worries  about U.S. and global political headlines, Brexit and the economy, says George Gero, managing director with RBC Wealth Management. Further, in the U.S., some analysts are worried about earnings going forward and potential for a pullback in stocks, Gero says. “All this contributes to bids for gold,” he adds. Additionally, Gero says that open interest, volume and moving averages are all higher. As of 8:44 a.m. EDT, Comex June gold was $10.2 higher to $1,305.80 an ounce.

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

Commerzbank: Gold Aided By Technicals, Trump Call For Lower Rates

Monday April 8, 2019 09:01

Gold is testing the $1,300-per-ounce level as a new trading week begins, helped by both the technical picture and President Donald Trump’s continued efforts to influence monetary policy, says Commerzbank. The technically important 100-day moving average held late last week, as it did in early March, thereby lending support to the price, Commerzbank says. “What is more, prices at around $1,280, the lowest seen so far this year, appear to be generating buying interest on the market and preventing prices from sliding any further,” Commerzbank says. “Gold is also likely to have received tailwind this morning by remarks made at the weekend by U.S. President Trump, who harshly criticized the U.S. Federal Reserve’s interest-rate policy once again. As well as calling for rate cuts, Trump even demanded quantitative easing.” As of 8:55 a.m. EDT, spot gold was $11.30 higher at $1,302.70 an ounce.

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

BBH: Markets Await Data To ‘Crystallize Their Views’

Monday April 8, 2019 09:01

Several key U.S. economic reports are on the calendar this week as investors look for more clarity on the U.S. economy, says Brown Brothers Harriman. The Consumer Price Index is scheduled for release on Wednesday, followed by the Producer Price Index Thursday. The market also gets minutes of the last meeting of the Federal Open Market Committee on Wednesday. “Last week’s data did not provide much clarity on the state of the U.S. economy,” BBH says. “February retail sales readings were mixed, as were the March jobs data.  Yet we think the takeaway is that the U.S. economy is in better shape this year than what many anticipated.  That leaves markets waiting for more data to crystallize their views.”

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