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Higher gold prices drag China and India imports down: BMO

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Surging gold prices have not benefited everyone, says BMO Capital Markets managing director of commodities research Colin Hamilton. Some consumers, especially in China and India are “clearly struggling to digest higher costs,” Hamilton writes. “China and India imports have dropped, with the former down 61% y/y in July and the latter reportedly seeing an 84% y/y decline in August on the back of a hike in import duties from 10% to 12.5%.” Due to these developments, Q3 imports could hit multi-year lows, Hamilton adds. “Jewellery sales are [also] starting to struggle, and should this market drop, it could take a number of years to recover.”

By Anna Golubova of Kitco News; agolubova@kitco.com

 

Risk-on sentiment to push gold lower - TD Securities

Thursday August 20, 2019 09:37 

Renewed risk-on sentiment following positive U.S.-China trade headlines is putting pressure on gold, according to strategists at TD Securities. “The recent round of risk-on sentiment also has the potential to further weigh on precious metals, as gold prices struggle to hold onto the upward trend initiated by the August 01 tariff announcement,” the strategists write. If progress in trade talks continues, gold might consolidate lower, they add. On top of that, markets could be disappointed by the Federal Reserve’s rate decision in September. “Financial conditions have not tightened materially, which could embolden the Fed to ultimately disappoint the market's rate cut expectations,” TD Securities strategists point out. 



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