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UBS Upbeat On Gold But Says 'Caution Remains Warranted'

Kitco News

UBS is upbeat on gold but nevertheless offers some caution for the short term. The metal hit a fresh six-year high this week on dovish Federal Reserve comments. UBS said that global economic policy uncertainty has increased since the financial crisis, likely a result of shifting politics, growth fears and populism. “Risks to the outlook include trade tensions, Brexit, the U.S. debt ceiling, among other things,” UBS said. “gold tends to do well in this type of environment; we think interest in gold as a diversifier, alternative asset and/or hedge against tail risks has room to extend and will be the key driver for higher gold prices ahead.” Still, UBS said that dovish Fed expectations are already factored into prices, so “some caution remains warranted in our view.” Gold could rally toward $1,485 an ounce if the outcome of a Federal Open Market Committee meeting this month is “sufficiently dovish,” yet could also fall below $1,400 and potentially test $1,380 if the Fed outcome is viewed to be hawkish relative to market expectations. “That said, we see a reasonable possibility that any dip ends up being shallow given the expectation that most market participants would likely view a pullback as an opportunity to build positions.”

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

 

Commerzbank: Silver ETF Inflows Outpacing Those For Gold

Friday July 19, 2019 10:00

The pace of inflows into silver exchange-traded funds has exceeded that for gold lately, said Commerzbank. Analysts noted that silver has risen to a 13-month high of nearly $16.50 per ounce. “Once again, it outperformed gold yesterday,” Commerzbank said. “The silver price is continuing to find support from strong ETF inflows; 285 tonnes were reported for yesterday alone. Silver ETF holdings are now at a two-year high. In relative terms, silver ETFs are currently in much greater demand than gold ETFs. Since the beginning of the month, silver ETF holdings have been increased by 5.5% and gold ETF holdings by 1.1%.” Analysts noted that gold ETF inflows Monday were nearly 14 tonnes.

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

 

UBS: ETF Gold Holdings Back Above 80 Million Ounces

Friday July 19, 2019 10:00

Holdings in global gold-backed exchange-traded funds have topped 80 million ounces for the first time in six years, said UBS. The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. “Gold ETFs added a sizeable 370koz yesterday, bringing the MTD [month-to-date] change to +900koz, with total holdings crossing above 80moz for the first time in six years,” UBS said. “Investor interest in gold continues to strengthen against the backdrop of dovish policy expectations and elevated uncertainty.”

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

 

TDS: Gold Pares Gains But Central-Bank Backdrop Provides Support

Friday July 19, 2019 10:00

Gold futures remain higher although they have backed down from their peak after the Federal Reserve attempted to tone down remarks from New York Fed President John Williams on Thursday, said TD Securities. As of 9:27 a.m. EDT, Comex August was up $8.90 to $1,437 an ounce after peaking at $1,454.40. “Gold rallied to the upper bound of the range as the Fed's Williams sounded a dovish tone, but prices have since eased off the highs as the N.Y. Fed clarified the speech was not intended for the July meeting,” TDS said. “But, nonetheless the dovish central-bank backdrop continues to lend support to the yellow metal.”

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