Make Kitco Your Homepage

Rally or not, risk to gold is still to the downside - TD Securities

Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

The balance of risks to gold prices is still to the downside despite Wednesday’s rally, says TD Securities. “Gold prices continue to drift higher as equities pare back some gains ahead of Powell's first speech since the Fed's Pause 2.0, and as public impeachment hearings begin. However, we think the balance of risks still rests on the downside,” write strategists at TD Securities. “Bloated long positioning will likely continue to weigh on prices at a time when loss aversion is a tough sell.” A key breakeven level to watch is $1,438, the strategists add. “Open interest still sits near all-time highs, which suggests that a shake-out of the excess length has yet to take place. Meanwhile, our estimated breakeven entry point for the bulls stands close to market pricing at $1438/oz, suggesting that the pain trade is still to the downside in the near-term.”

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

 

Risk-aversion creeping back in, all eyes on Powell — FXTM 

Wednesday November 13, 2019 09:48

Risk aversion is back and it is helping the precious metals sector, according to FXTM market analyst Han Tan. “Risk aversion appears to be creeping back into markets, allowing safe haven assets to trim their month-to-date losses. Gold has breached $1,460,” Tan writes. All eyes now turn to Federal Reserve Chair Jerome Powell as he testifies before Congress. “Considering that President Donald Trump’s latest speech offered no new clues surrounding the U.S.-China trade deal, the Dollar will now turn its immediate attention to the incoming U.S. economic data, as well as Fed chair Jerome Powell’s testimony,” Tan says. Investors will be watching if Powell provides any more clues in terms of future policy moves. “Powell is expected to reiterate that U.S. monetary policy is currently in a ‘good place’, with markets expecting the Fed to stand pat on U.S. interest rates at least through the first half of 2020. However, should Powell make what is perceived to be a dovish comment, that could prompt some immediate softness in the Dollar.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.