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Commerzbank: gold eases on profit-taking; ETF holdings decline

Kitco News

Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It's a showdown of global proportions, so don't miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.

Commerzbank is chalking up the retreat in gold prices to selling in the form of profit-taking, adding that holdings of the metal by exchange-traded funds fell sharply since the middle of last week. As of 8:42 a.m. EST, spot metal was down $7.80 to $1,554.30 an ounce. Friday’s U.S. jobs report showed that a lower-than-expected 145,000 new jobs were created in December, while wages grew less sharply than expected. “Nonetheless, the labor market continues to play an important role in supporting private consumption and thus the economic upswing in the U.S.,” Commerzbank said. Thus, the softer data will not lend buoyancy to the gold price for any length of time, the bank said. “Instead, we expect the profit-taking in gold to continue, as already happened last week,” Commerzbank said. “The gold ETFs tracked by Bloomberg have seen outflows of nearly 20 tons since mid-last week.”

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

 

BMO: rhodium to remain underpinned amid tight supplies

Monday January 13, 2020 08:53

BMO Capital Markets looks for high-flying rhodium prices to remain underpinned. The thinly traded platinum group metal has risen by some 225% over the past year, outpacing sister metal palladium, BMO said. Rhodium prices posted by catalyst manufacturers over the past week have been over $8,000 an ounce. “This is not an all-time high for rhodium; in mid-2008, it flirted with $10,000/oz, though by January 2009 it was around a tenth of this level,” BMO said. “With no obvious supply-side reaction to rising prices in the short term, and with Chinese auto sales recovering, rhodium is likely to be well-supported over the coming months, though as with palladium, the medium-term risk of substitution and thrifting is increasing.”

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

 

Bannockburn: investor focus turning from tensions to macroeconomic data

Monday January 13, 2020 08:53

With Mideast tensions abating for now, investors are likely to turn their attention to macroeconomic data, but markets can be expected to respond if tensions flare up once again, said Marc Chandler, chief market strategist with Bannockburn Global Forex. Markets last week concluded recent U.S.-Iran tensions have de-escalated, but Chandler says he doubts that Iran’s missile strike on U.S. bases in Iraq brought “meaningful closure,” saying “cessation of hostilities should not be confused with peace.” Chandler later added, “Investors tend to ignore the low but constant geopolitical jockeying for position, like the background echo of the Big Bang that scientists can detect.  However, when it geopolitical tensions escalate, the market spasms.  With the tensions subsiding, investors’ attention will likely return to macroeconomic news in a chock-full week of high-frequency reports.”

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.