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Price Group's Flynn: Worries About Economy Lift Gold Prices

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Worries about the economy and building expectations for a Federal Reserve rate cut are underpinning gold, said Phil Flynn, senior market analyst with at Price Futures Group. As of 8:58 a.m. EDT, Comex August gold was $6.4 higher at $1,337.60 an ounce. Flynn cited worries about the economy, with weakness in oil prices a sign of this. These worries are leading to safe-haven buying of gold, especially at a time when financial markets are starting to factor in rate cuts, Flynn said. “You still have some geopolitical factors at play in the market,” he added, listing tensions with Iran and the U.S.-China trade war.

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

 

Commerzbank Looks For Two Fed Rate Cuts To Support Gold

Wednesday June 12, 2019 09:15

Commerzbank looks for two Federal Reserve rate cuts in 2019, which analysts said should be supportive for gold prices. Rate cuts reduce the so-called opportunity cost, or lost income, from holding gold instead of a yield-bearing asset. Lower rates also tend to undermine the U.S. currency, which is supportive for gold. Analysts said the precious metal has been helped Wednesday morning by the latest comments from U.S. President Donald Trump, who said he won't complete a trade agreement with China unless Beijing returns to the terms negotiated earlier in the year. “What is more, Trump has repeatedly criticized the U.S. Federal Reserve recently and urged it to cut interest rates,” Commerzbank said. “In his opinion, rates are ‘far too high.’ Fed Chair [Jerome] Powell had already hinted last week that the Fed would rethink its strategy. We envisage two rate cuts before the year is out, which should lend buoyancy to gold.”

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

 

RBC’s Gero: Gold Futures Rise As Traders ‘Buy The Big Dip’

Wednesday June 12, 2019 09:15

Gold prices are stronger again Wednesday after a decline on Tuesday. George Gero, managing director with RBC Wealth Management, cited a mentality in the market to “buy the big dip, sell the big rally.” The most recent bounce was helped by traders again focusing on tariffs affecting the economy, leading market participants to buy “known havens like gold.” He also cited expectations for the Federal Reserve to loosen monetary policy. As of 8:58 a.m. EDT, Comex August gold was $6.40 higher at $1,337.60 an ounce.

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

 

TDS: Further weakness In Stocks Would ‘Reinvigorate Appetite For Gold’

Wednesday June 12, 2019 09:15

Gold is increasingly taking its cue from moves in the equity market, said TD Securities. The market is also focused on next week’s meeting of the Federal Open Market Committee. “In fact, the market has already priced 77% probability of a cut by July, which could be a disappointing factor to watch for risk assets,” TDS said. “While gold has also been benefiting from a rising chance that the Fed's next move is a cut, rising appetite for diversifiers has also become a key market theme to watch. We suspect that further weakness in equity performance should reinvigorate appetite for gold, providing an offsetting force to normalizing rate expectations, which should keep gold prices firm and upside momentum robust.” The metal is higher early Wednesday while the futures contract for the Dow Jones Industrial Average is around 50 points lower.

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