Market Nuggets
U.S.-China trade headlines to dictate gold price direction this week: MKS PAMP Group
Gold’s future price direction will be influenced by any U.S.-China trade headlines as interest remains significant just below the $1,500 level, according to MKS PAMP Group. “Interest in bullion continues to be heavy underneath USD $1,500 … Trade headlines leading into discussions between the U.S. and China this Thursday and Friday will no doubt be watched closely and dictate near-term pricing,” MKS says. Initial support in gold is around the $1,480 level.
By Anna Golubova of Kitco News; agolubova@kitco.com
Gold prices rally on geopolitical uncertainty: RBC Wealth Management
Tuesday October 8, 2019 09:21
The geopolitical situation is unclear as ever, which is driving gold prices higher on Tuesday, says RBC Wealth Management managing director George Gero. “Gold rally today is responding to negatives in stocks, adding worries to usual China, Eurozone tariffs, Brexit, South American worries, Middle East and now Turkey. Investors are more worried by no clarity and upcoming China talks are deemed even more uncertain now,” Gero writes. Investors are looking at gold as a sensible answer at times of such uncertainty, he adds. “Everywhere investors look around the globe they find reasons for worry and owning gold is one of the answers … Still looking at gold holding $1,500 area, improving later as more headlines appear that are political, geopolitical and causing risk aversion.”
By Anna Golubova of Kitco News; agolubova@kitco.com
Case for holding gold: ‘Earnings recession’ similar to 2015-2016 is a rising risk — TD Securities
Tuesday October 8, 2019 09:21
A case for holding the precious metals as a hedge remains strong, according to TD Securities. “Another ‘earnings recession’ similar to 2015-2016 is seen as a rising risk, along with the risk of a downward multiple reset particularly for growth stocks. In this context, the case for holding precious metals as a tail risk hedge for equities is still growing, with ETF purchases soaring some 20% year-on-year and showing no sign of slowing down as of yet,” strategists at TD Securities write. The interest rate environment is also contributing to the pro-gold camp. “A high proportion of real rates in negative territory further strengthens the case for gold bugs as purchasing gold as an alternative to bonds is particularly attractive given the paradigm shift narrative," the strategists add.
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