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Aberdeen's Gold: 'Upside Risks' Larger Than 'Downside Risks' In Precious Metals

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Maxwell Gold, director of investment strategy at Aberdeen Standard Investments, sees upside potential for gold and silver. Investor interest in the metals has been lackluster in recent months despite continued low real interest rates and unresolved geopolitical tensions, the strategist says. Gold prices eased in April, while global exchange-traded-fund holdings of the metal dipped by 44 metric tons, which was the third straight monthly decline. Further, speculators were net short (bearish) in gold and silver for much of last month. “While this may cast a negative outlook for gold and silver, in recent years when investor sentiment in the futures market turned negative, it signaled a bottoming in the market and [was] succeeded by strong price rallies,” Gold says. “Given that the investor complacency appears to be settling in again and that global growth continues to slow, the upside risks to both gold and silver currently appear larger than the downside risks.” Furthermore, Gold notes that  the physical market for silver posted a slight deficit in 2018, driven by strong jewelry and investment demand coupled with lower mine production. “The improved fundamental layout paints a positive outlook for silver, particularly against a backdrop of low prices, which tend to spark bargain buying as was the case in 2015.”

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

 

Commerzbank: Platinum Supplies At Risk Of Disruption Due To Wage Talks 

Wednesday May 15, 2019 09:38

Commerzbank says there is a risk of a supply disruption in the platinum market due to upcoming wage negotiations in South Africa, where platinum producers are preparing for collective negotiations with the unions. “The first talks on the way towards a three-year collective agreement are to be held before this month is out,” Commerzbank reports. “Because the radical AMCU [Association of Mineworkers and Construction Union) will probably enter the negotiations with unrealistic demands again, there is the risk of a strike that could reduce supply on the global platinum market.” 

Wednesday May 15, 2019 09:38

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

 

TDS: Economic Data Could Prompt Allocations Into Gold

Wednesday May 15, 2019 09:38

TD Securities sees potential for money managers to move into gold as U.S. data soften, especially in the event of a trade war. “While U.S. equities soared as the market gained hopes that trade negotiations could still come to a agreement, gold prices still remained relatively well contained,” TDS says. “We do note, however, that the ‘perma-hold’ narrative, which has been embedded into prices since the start of 2019, is being increasingly challenged by the market, which is increasingly pricing a Fed cut before this year's end. We expect that the growing risks of deterioration in the U.S. data, for which the trade war could be a near-term catalyst, will prompt money managers to grow their allocations to the yellow metal.” 

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