Market Nuggets
Metals Focus: gold to benefit from central-bank policies
Gold should remain underpinned by monetary-policy conditions even if other supportive issues – U.S.-Iran tensions and China’s coronavirus – fade into the background, said the consultancy Metals Focus. Gold posted its biggest rise since 2010 last year and started the new year on a strong note, helped by geopolitical tensions after a U.S. drone strike that killed an Iranian general, as well as worries that the spreading virus could hurt the global economy. “Going forward, even if prevailing concerns fade, from a wider macroeconomic perspective, gold is likely to continue benefiting from supportive central-bank policies,” Metals Focus said. “Further ahead, we expect global slowdown concerns to re-emerge, which should lead to rising volatility in equity markets and, in turn, encourage higher allocations into gold and other precious metals.” As a result, Metals Focus said it expects gold prices to average $1,515 an ounce this year and trade as high as $1,650 in the fourth quarter.
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: silver ETF holdings rise despite recent price weakness
Wednesday January 29, 2020 08:39
Silver prices have taken a hit in recent sessions, but investors are turning to exchange-traded funds again, said Commerzbank. The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. Silver lost some 3.5% Tuesday and the gold-silver ratio climbed nearly 90, its highest level since July. A higher ratio means underperformance by silver versus gold. “Because silver dipped below the technically important 100-day moving average yesterday, the price slide could continue somewhat,” Commerzbank said. “Silver has seen increased investor interest of late, however, with over 200 tons of inflows into the silver ETFs already this week. This has largely reversed the outflows during the first days of the year.” As of 8:33 a.m. EST Monday, spot silver was 2 cents higher to $17.44 an ounce.
By Allen Sykora of Kitco News; asykora@kitco.com
TDS: virus may have been trigger to sell markets ‘with too much optimism’
Wednesday January 29, 2020 08:39
Periodic stock-market weakness on coronavirus worries could be a case of investors using the epidemic as an excuse for selling in markets that otherwise may have “too much optimism and momentum,” said TD Securities. “Risk appetite has stabilized to some degree, though caution prevails across markets,” said a research note from the TDS forex team. “The initial impact of the coronavirus seems to have peaked, but the situation remains fluid. This leaves markets apprehensive to jump back in to risk trades.” TDS said the virus may be “simply a trigger for markets that we see toying with too much optimism and momentum. Most prices have diverged significantly from economic realities.” U.S. equities tumbled sharply Monday on virus worries before bouncing on Tuesday. The futures are pointing to a higher open on Wall Street early Wednesday.
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: Swiss gold exports to China rise in December, down for 2019
Wednesday January 29, 2020 08:39
Swiss gold exports to China fell in 2019 but picked up in the last month of the year, Commerzbank pointed out. December exports to China were 41.5 metric tons, the most since August 2018, the bank pointed out, citing data from the Swiss Federal Customs Administration. “At a good 180 tons, gold exports for the year as a whole were just shy of 60% down on the previous year; however, this was presumably due first and foremost to the high prices in the second half of the year,” the bank said. Meanwhile, Swiss gold exports to India decreased by 9% to 231 tons in 2019.
