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TDS: gold under pressure but to be underpinned by negative real rates

Kitco News

Precious metals are being weighed down by a reversal of safe-haven flows, with equities having a stronger tone, said TD Securities. However, analysts look for the metal to ultimately find support as “capital seeks protection from negative real rates.” They continue: “With central bankers suppressing real rates across the globe, we expect this theme to remain prevalent. In the near term, however, we could see some liquidations from the record stockpile of ETF [exchange-traded-fund] holdings and extended positioning, but we reiterate that dry-powder analysis suggests that the risk of a rush to the exits is limited given position sizes per trader are not extreme.” As of 8:45 a.m. EST, spot gold was down $13.20 to $ 1,563.30 an ounce, while spot silver was steady at $17.65.

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

 

Commerzbank: palladium surges but rise could be ‘excessive’

Tuesday February 5, 2020 08:55

Palladium has climbed sharply but the move could be “excessive,” said Eugen Weinberg, head of commodity research with Commerzbank. As of 8:45 a.m. EST, spot metal was $67 stronger to $2,282 an ounce. “Now that optimism has returned to the financial markets, it seems that market participants have forgotten their fears of how the spread of the coronavirus might affect demand,” Weinberg said. Base metals and Chinese stocks have gained ground. “Nonetheless, the consequences for China, the main consumer of palladium, are likely to be very serious,” Weinberg said. “Last year’s pronounced decline in new-car registrations is likely to worsen, at least in the short term. What is more, the production of cars and car parts will be disrupted temporarily by the factory closures in Wuhan and elsewhere. We regard the palladium price rise as excessive.”

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

 

CME Group: Jan. metals volume jumps by 49% from year ago

Tuesday February 5, 2020 08:55

Exchange operator CME Group reports that average daily volume in metals increased in January by 49% from the same month a year ago to 839,000 contracts per day. Gold-futures volume was an average of 468,000 contracts daily last month. In the options market, daily average metals volume rose 63%. For the three-month period ending with January, average daily metals volume was 723,000, up from 652,000 for the three-month period ending with December but down from 746,000 for the three-month period ending with November.

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

 

FXTM: gold struggling near key technical-chart area

Tuesday February 5, 2020 08:55

Gold has “struggled” so far this week and has fallen near to a key technical-chart support area, said Lukman Otunuga, senior research analyst at FXTM.The pullback in the precious metal occurred even though markets are still wary of the impact of the coronavirus on the economy. The precious metal could extend its losses in the short term as investors direct their focus back towards economic data, Otunuga said. “Nevertheless, gold bulls still remain in a position of dominance in the medium to longer term due to the coronavirus outbreak and the negative impact it may have on the global economy,” the analyst said. He described $1,565 as a key chart point. Gold has dipped below this, but not by much, trading down $13.20 to $1,563.30 an ounce around 8:45 a.m. EST. “If this level proves to be reliable support, prices could rebound back towards $1,580,” Otunuga said. “However, a breakdown below $1,565 should open the doors towards $1,555.”

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