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RBC's Gero: Dovish Fed Still Underpinning Comex Gold

Kitco News

Gold futures remain higher as any worries about Federal Reserve hawkishness abate, meaning a lower so-called “opportunity cost,” which is the lost interest income from holding a non-yielding asset like precious metals instead of interest-rate products, said George Gero, managing director with RBC Wealth Management. Additional supportive influences are worries about geopolitical tensions in the Middle East, the supply of crude oil and political uncertainty. “More worries about global economic weakness means possible more stimulus from central banks, and additional worries that tariff conflicts are not yet abating and may increase with Europe,” Gero said. “The new higher trading range for gold is still $1,400 to $1,450.” As of 9:12 a.m. EDT, Comex August gold was $5.20 higher to $1,417.70 an ounce.

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

 

SP Angel: ETF Gold Holdings Highest In Six Years; Fed Comments Support Gold

Thursday July 11, 2019 08:16

Gold has been boosted by dovish comments from Federal Reserve Chair Jerome Powell, with holdings of the metal by exchange-traded funds climbing to the highest level in six years, said commodities brokerage SP Angel. The metal reclaimed $1,400 an ounce Wednesday after Powell gave congressional testimony suggesting policymakers are about to cut interest rates for the first time in a decade. “Exchange-traded funds backed by the precious metal also received a boost, as holdings climbed to 2,311.3 [tonnes], the highest level since 2013,” SP Angel said. “Gold is trading near a six-year high on the prospects of lower rates, which boost the appeal of non-interest-bearing assets, with geopolitical and trade tensions also spurring demand. Minutes from the June meeting [of the Federal Open Market Committee] also confirmed inclination among officials to ease policy, with Powell stressing downside risks stemming from uncertainties over trade and slowing momentum in some economies.” As of 8:11 a.m. EDT, spot gold was trading 90 cents higher at $1,419.30 an ounce.

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

 

Commerzbank: Palladium Gets Added Lift From Strike Worries

Thursday July 11, 2019 08:16

Palladium prices early Thursday threatened their record high hit earlier this year, drawing support from worries about a potential strike in the South African mining sector for platinum group metals, Commerzbank said. Palladium, which has been strong in 2019 due to an expected supply deficit amid strong demand for use of the metal in auto catalysts, rose with the entire precious-metals complex Wednesday after dovish congressional testimony from Federal Reserve Chair Jerome Powell. Spot metal has traded above $1,600 an ounce, taking it within striking distance of the March record of $1,614.90, before backing off to $1,585.50 as of 7:55 a.m. EDT. “Besides being supported by firm base metals, palladium and platinum may have profited from concerns about a possible strike in the South African platinum-mining industry,” Commerzbank said. “Initial talks about a new collective agreement began the day before yesterday between the producers and the radical AMCU union. There is a huge gap between their respective expectations.”

 

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