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Phoenix's Grady: Gold Prices Ease But Exit 'Orderly'

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Gold futures are continuing to pull back from the one-month high hit early this week but the retreat has been “orderly,” says Kevin Grady, president of Phoenix Futures and Options LLC. As of 9:44 a.m. EDT, Comex June gold was down $6.20 for the day to $1,291.60 an ounce. It peaked at $1,304.20 on Tuesday. The number of open positions in gold jumped by around 32,000 early this week when the stock market was selling off heavily, Grady points out. Further, the number of open positions climbed some 70,000 to 80,000 lots over a week-long period, he adds. Now some traders are getting out of their trades, particularly as stocks recover, Grady explains. Grady says. However, “it’s a very orderly exit so far,” he continues, citing the absence of any heavy rounds of sell stops in gold. Stops are pre-placed orders activated when certain chart points are hit and can result in outsized moves. However, Grady cautions, selling could accelerate if gold was to break down below roughly $1,289 and again through $1,282. Another key going forward could be the rollover out of the June gold futures ahead of month-end, Grady says. Traders have to exit or roll their positions into a future month if they do not want to take delivery of a commodity. If gold breaks down below chart support, short-term traders may opt to exit from gold, Grady adds.

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

 

Analysts: Auto-Tariff Delay Supportive For Palladium

Thursday May 16, 2019 10:06

News that U.S. President Donald Trump will apparently postpone auto tariffs “could reignite appetite in palladium, with speculative dry powder sitting near all-time highs,” says TD Securities. The metal is used for automotive catalytic converters, and the “dry powder” analogy refers to the low level of bullish positioning in the market currently, meaning potential for more buying. Commerzbank attributes Wednesday’s rise in palladium prices to the auto-tariff news. “During this period [during which any tariffs are postponed], bilateral agreements are to be negotiated with the EU [European Union] and Japan with a view to restricting auto imports to the U.S.,” the bank says. June palladium went from a low of $1,298 Wednesday to a high for the day of $1,350, although it has since backed off to $1,333 as of 9:34 a.m. EDT Thursday.

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

 

FXTM: ‘Gold Bulls Remain In The Driver’s Seat’

Thursday May 16, 2019 10:06

Gold bulls are still in the “driver’s seat,” says Lukman Otunuga, research analyst at FXTM. He says the metal has remained generally supported by trade uncertainty and concerns over slowing economic growth, commenting that prices could test the psychological $1,300-an-ounce level again in the coming days. “Focusing on the technical picture, the precious metal is bullish on the daily charts,” Otunuga says. “A solid weekly close above $1,300 should invite a move higher towards $1,310 and $1,324, respectively. With the catalysts that can significantly reverse the ongoing flight to safety in the near term being limited, gold bulls remain in the driver’s seat.” As of 10 a.m. EDT, spot gold was $5.20 softer to $1,290.90 an ounce.

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