Market Nuggets
Commerzbank: Indian Imports Strong In May Due To Low Prices
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India imported a large amount of gold during May, with buyers encouraged by prices that were low in the country’s currency, Commerzbank said. “According to a government official, imports soared by 49% year-on-year to 116 tonnes,” Commerzbank said. “Ministry of Finance data show that India had already bought 121 tonnes of gold in April. The high imports in May are attributable to the low gold prices in local currency around the Hindu festival of Akshaya Tritiya, which prompted gold jewelers to top up their stocks. However, imports could fall below 80 tonnes in June because the gold price in Indian rupees has picked up again in the meantime, says an Indian gold trader.”
By Allen Sykora of Kitco News; asykora@kitco.com
BMO: Gold-Silver ratio ‘Can No Longer Be Considered An Appropriate Guide’
Wednesday June 5, 2019 09:30
The gold-silver ratio may no longer be an “appropriate” gauge since gold benefits more from exchange-traded-fund flows, says BMO Capital Markets. The recent rally in gold, while silver lagged behind, means the gold-silver ratio has now jumped above 90. The ratio measures how many ounces of silver it takes to buy an ounce of gold, with a rising number meaning an underperformance by silver prices, and vice-versa. The rise in the ratio comes despite improving photovoltaic demand for silver and a return of retail investment, with U.S. Mint coin sales up 42% over the first five months of this year, BMO said. “In our view, this growing disparity reflects the macro asset allocation annuity gold receives through ETF flows which silver does not,” BMO said. “As a result, historical gold-silver ratios can no longer be considered an appropriate guide.”
By Allen Sykora of Kitco News; asykora@kitco.com
TDS: Gold Strong In Wake Of Powell Comments
Wednesday June 5, 2019 09:30
Gold remains underpinned by dovish remarks from Federal Reserve Chair Jerome Powell on Tuesday, says TD Securities. “The market is interpreting Powell’s remarks as an openness to rate cuts, helping gold prices firm as the Fed chair signaled support to a growing chorus of investors calling for a rate cut,” TDS says. “At the same time, CTAs [Commodity Trading Advisers] are still buying gold, as firming momentum signals kick off a surge in interest for the yellow metal and friends.” As of 8:48 a.m. EDT, spot gold was $18 higher to $1,343.10 an ounce.
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