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Mitsubishi: 'Medium- To Longer-Term Conditions For Gold Are Still Favorable'

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Gold has been under pressure lately, yet the outlook for interest rates and investor interest should be supportive in the longer term, says Mitsubishi. The metal was hurt last week by U.S. dollar strength and muscular equities, keeping prices at four-month lows, the firm says. Short-term speculators have been taking out short positions in the yellow metal. “Despite this, with U.S. interest rates on hold plus lower real rates, medium- to longer-term conditions for gold are still favorable,” Mitsubishi says. “Investors of various sorts are cognizant of this; holdings of physically-backed ETFs [exchange-traded funds] remain close to all-time highs of over 70 million ounces while physical demand for gold in key markets has been strong.” Mitsubishi also cites continued central-bank buying, with Russia added 600,000 ounces to its reserves in March, followed by Turkey, 546,000 ounces; China, 360,000; and Kazakhstan, 161,000. “Physical demand in China has picked up from a low level according to recent Swiss customs data, with over 1 million ounces exported from Switzerland to China and Hong Kong during March – the highest since the 1.7 million ounces in November 2018,” Mitsubishi adds.

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

 

RBC’s Gero: Gold Pressured By Stronger Dollar, Stocks

Tuesday April 23, 2019 08:48

Gold prices are on the defensive again in response to a stronger U.S. dollar and equities, says George Gero, managing director with RBC Wealth Management. He comments that investors are not seeking safe havens at the moment, particularly with earnings season under way for U.S. companies and few negatives so far. As of 8:35 a.m. EDT, Comex June gold was $3.30 softer to $1,274.30 an ounce. The Dow Jones Industrial Average futures were 63 points lower, and the June dollar index was 0.130 point higher to 97.085. Gero describes a “calm before the storm” as range-bound metals await new headlines, both political and economic, as well as direction of the dollar.

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

 

Commerzbank: Investors Holding Back On Gold Purchases

Tuesday April 23, 2019 08:48

Gold is “stuck in its tracks,” with the metal unable to rebound despite increased geopolitical risks, says Commerzbank. “Financial investors are still holding back on buying gold, as can be seen among other things from the holdings in gold ETFs [exchange-traded funds],” the bank says. “Holdings have even been reduced by over 26 tonnes since the start of the month. Demand for gold coins has also been very muted so far in April, meaning that the gold price is likewise finding no support at present from this side.” Analysts also point out that futures speculators were betting on lower prices, flipping to a net-short position of 15,387 futures contracts as of the Commodity Futures Trading Commission report through April 16.”At [approximately] 15,400 contracts, net-short positions were at their highest level since the end of November,” Commerzbank says.

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

 

FXTM: Stabilizing Dollar Hurts Gold; Bears In Control Below $1,280

Tuesday April 23, 2019 08:48

Gold’s performance has suffered in recent weeks in large part due to a stabilizing dollar, easing concerns over slowing global growth and rising equity markets, says Lukman Otunuga, research analyst at FXTM. “While the yellow metal is likely to edge lower in the near term, the medium- to longer-term outlook still points in favor of further upside,” the analyst says. He cites geopolitical risks, U.S.-China trade developments, lingering concerns over slowing global growth, Brexit and a dovish Federal Reserve as factors that could boost gold. For now, however, much of the market focus will be on an end-of-the-week report on U.S. gross domestic product in the first quarter. “Should the GDP data disappoint expectations, gold is seen rechallenging $1,280 and potentially $1,300,” Otunuga says. “Focusing on the technical picture, bears still remain in control below the $1,280 level. Sustained weakness below this point could open the gates towards $1,260.”

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