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BMO: 'We Expect Continued Inflows Into Gold'

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Gold prices are having their best week in three years as the world’s major central banks all sounded dovish tones, with holdings in exchange-traded funds on the rise, said BMO Capital Markets. Prices traded up to around $1,411 an ounce overnight, their highest level in more than five years. Dovish commentary from the Federal Open Market Committee, European Central Bank and Bank of Japan, coupled with rising geopolitical tensions in the Middle East, have contributed to the upside momentum, BMO said. Meanwhile, U.S. dollar weakness offered additional support to the precious metal. Global exchange-traded-fund holdings of gold are up 2.85% for the month to date to 72.65 million ounces, climbing back towards the January peak of 73.3 million, BMO said. Analysts added that “we expect continued inflows into gold and gold-backed ETFs in the run-up to the July FOMC meeting.”

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

 

UBS: Gold Breaks Resistance As Rates Fall, Dollar Under Pressure

Friday June 21, 2019 08:36

Gold has broken through resistance with “relative ease,” said UBS. The metal hit a five-year high near $1,411 an ounce overnight and was trading $8.10 higher to $1,396 an ounce as of 8:28 a.m. EDT. “Gold continues to trade well despite equities rallying to all-time highs,” UBS said. “U.S. [market-set] rates remain depressed and the dollar under pressure. More broadly, global yields have been falling, making gold attractive to a broad range of investors. Gold broke through important resistance levels with relative ease, an impressive performance considering it has previously failed at these levels on several attempts over the past few years.”

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

 

UBS: China’s Stricter Emissions Rules To Support Palladium

Friday June 21, 2019 08:36

China’s move toward stricter emissions rules should boost palladium demand, said UBS. The metal is used by catalytic converters to scrub pollutants from exhaust systems. “We remain bullish given the fundamental backdrop; the early adoption of stricter emissions standards in China should be positive for palladium demand,” UBS said. “Our auto analyst notes that despite the official switch to China VI emissions standard is not due until July next year, 16 provinces/cities have voluntarily brought forward compliance to July this year. While this could weigh on carmakers' margins and on car sales as China V inventory clears up, the ramp-up in China VI-compliant car production should be positive for palladium demand as loadings increase.”

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

 

FXTM: ‘Gold Is Set To Push Higher’

Friday June 21, 2019 08:36

Gold is likely to build on its gains due to the dovishness of central banks, said Lukman Otunuga, research analyst at FXTM. “It has been an incredibly bullish trading week for gold, which has blasted past the $1,400 level for the first time since 2013,” the analyst said. “The combination of dollar weakness, speculation over lower U.S. interest rates and geopolitical tensions has encouraged investors to sprint to the hills and pick up gold in their portfolio. With major central banks signaling potential rate cuts in the future, gold is set to push higher, especially when considering how the precious metal performs well in low interest-rate environments.” Gold has topped $1,400 an ounce. “A weekly close above this level is seen encouraging a move towards $1,413,” the analyst concluded.

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