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SP Angel: stronger U.S. dollar halts gold rally

Kitco News

Gold has given back some of its recent strength due to a stronger U.S. dollar, said SP Angel. Previously, gold prices were rising due to concerns about economic fallout from China’s coronavirus outbreak, said a research note from the commodities brokerage. Spot gold rose to a nearly three-week high Monday. “Gold prices have risen for the past four sessions; however, the rally in gold prices came to a halt this morning as a stronger dollar outweighed rising concerns over the virus,” SP Angel said. Around 8:20 a.m. EST, spot gold was down $8.30 to $1,573 an ounce. The March dollar index was 0.133 point higher to 97.900.

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

 

TDS: gold giving back some safe-haven gains

Tuesday January 28, 2020 08:25

Gold is easing as investors tip-toe back into so-called risk assets following Monday’s sell-off in the stock market, said TD Securities. “It is no surprise that the safe-haven flow is reversing, adding some pressure on prices, but we argue that a firm CTA [Commodity Trading Adviser] bid in Treasuries could keep prices from entirely retracing their gains ahead of this week's FOMC [Federal Open Market Committee meeting]. While we don't anticipate any fireworks, we suspect the meeting may quell any lingering concerns that the Fed will be looking to take back its cuts any time soon.” Around 8:20 a.m. EST, the futures for the Dow Jones Industrial Average were up by around 140 points ahead of the open on Wall Street. Spot gold was down $8.30 to $1,573 an ounce.

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

 

BBH: markets fully factoring in one Fed rate cut in 2020

Tuesday January 28, 2020 08:25

Financial markets have factored in a rate cut for 2020, said Brown Brothers Harriman, but adding that markets may have been too aggressive. “One of the most notable developments of the recent price action was the sharp increase in implied probability of Fed easing this year,” BBH said. “According to the Bloomberg model, a rate cut is fully priced in by the September meeting. This is up from about a 35% probably priced in at the start of the year.” The coronavirus in China poses a new tail risk, should it spread and impact the global economy. Still, BBH said the U.S. economy is holding up well and most negative factors have receded. “Markets might have moved a bit ahead of themselves here” BBH said.

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