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RBC's Gero: gold pulls back as 'winds of war' recede

Kitco News

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George Gero, managing director with RBC Wealth Management, said the “winds of war” have receded, pulling gold down after the metal had climbed sharply early in the week on heightened U.S.-Iran tensions. As of 8:41 a.m. EST, Comex February gold was $7 lower to $1,553.20 an ounce. “A pullback today in gold was expected sooner or later as profit-taking prior to Friday [monthly U.S. jobs] numbers after yesterday’s ADP [strong private-sector employment] numbers,” Gero said. With the U.S.-Iran headlines now less worrisome, gold is “back to basics,” looking at macroeconomic factors, Gero explained. He said gold remains in a higher range of $1,550 to $1,580 for now due to a number of factors, with central banks looking at further attempts to stimulate economies and remaining gold buyers themselves, the ongoing U.S. impeachment saga, and “holders of currencies in South American countries looking for [a] haven

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

 

Commerzbank: gold slides as Mideast tensions abate

Thursday January 09, 2020 08:56

Gold has fallen back as U.S.-Iran tensions seemingly de-escalate, but the metal remains higher than where it was before a U.S. drone airstrike killed an Iranian general last week, said Daniel Briesemann, analyst with Commerzbank. As of an early-morning Commerzbank research note, gold was down $70 from Wednesday’s high. “The tensions in the Middle East appear to be easing,” Briesemann said. “Though U.S. President Trump announced yesterday that further economic sanctions would be imposed on Iran in reaction to the Iranian missile attack on U.S. military facilities in Iraq, he has not opted for a military response. This has led to higher risk appetite among market participants and sparked profit-taking in gold.” This is reflected in an outflow of eight tons from gold-backed exchange-traded funds, Briesemann reported. “While it still seemed yesterday morning that gold could climb further on the back of the escalating situation in the Middle East, the price correction is likely to continue in the event of a de-escalation,” he said. As of 8:41 a.m. EST, spot gold was $3.50 lower at $1,552.50 an ounce.

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

 

FXTM: markets do ‘about-turn,’ taking on risk again

Thursday January 09, 2020 08:56

Investors have done an “about-turn” over the last 24 hours, shifting from initial defensive positioning to risk taking, said FXTM. Amid U.S.-Iran tensions on late Tuesday, oil surged, gold topped $1,600 an ounce, safe-haven currencies rallied and U.S. 10-year Treasury bond yields fell to their lowest levels since early November. “By the time European markets opened on Wednesday, most of the panic was over and losses in stocks were reversed after [U.S.] President [Donald] Trump addressed the nation, sending clear signs of de-escalation by downplaying the missile attack,” FXTM said. Both countries now appear to have stepped back from direct confrontation. “Yet even if a conflict has been averted, the road ahead remains bumpy and investors should remain on standby for further possible retaliatory measures,” FXTM said. “However, fundamentals are quickly returning to the fore after being dominated by geopolitical factors this week.” FXTM noted that oil has now fallen 9% from the Wednesday high. Shortly before 5:30 a.m. EST Thursday, spot gold was down $4.10 to $1,551.90 an ounce, and February West Texas Intermediate crude oil futures were 8 cents higher to $59.69 a barrel. The Dow Jones Industrial Average futures were around 89 points higher for the day.

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