Market Nuggets
Commerzbank: palladium boosted by improved risk sentiment
Improved risk appetite in markets generally is having a “very noticeable impact on palladium,” said Commerzbank. After surging Tuesday, the metal has risen sharply again Wednesday, trading up $49 to $2,367 an ounce as of 8:10 a.m. EST. At the peak earlier in the day, the metal was only around $100 short of its January record high, Commerzbank pointed out. Analysts added that “the movement of the palladium price was also sparked by the futures market, as palladium ETFs [exchange-traded funds] recorded further outflows. Since the beginning of the year, outflows have meanwhile totaled 65,000 ounces.”
By Allen Sykora of Kitco News; asykora@kitco.com
Metals Focus: coronavirus impacts gold prices, Chinese demand
Wednesday February 5, 2020 08:26
The coronavirus outbreak in China will play a role in both gold prices and Chinese demand for the metal, said the consultancy Metals Focus. The outbreak has killed roughly 500 people, and the total infections has already exceeded the count during the 2003 SARS outbreak in the country, Metals Focus pointed out. Equities have bounced this week on ideas the epidemic will be short-lived. “Against this backdrop, while ongoing uncertainty will retain gold’s safe-haven appeal, the upside for the yellow metal is likely to be limited,” the consultancy said. “By contrast, if the spread of the virus continues to accelerate or develops into a pandemic, prolonged weakness in the Chinese economy and its impact on the global market should provide a strong boost to gold.” Meanwhile, the virus has dented physical demand in China, the world’s No. 1 gold-consuming nation, Metals Focus said. Even ahead of the virus, Chinese demand was facing headwinds, including the sharp rise in prices and weak consumer sentiment. Metals Focus estimated that that Chinese gold-jewelry consumption dropped by 7% to a seven-year low in 2019. “As the outbreak has forced the general public to stay home, the decline in jewelry sales could turn out to be particularly acute, given that the Chinese New Year has traditionally been the busiest period for gold sales,” Metals Focus said. “Going forward, even if most people resume work next week, footfall to jewelry stores will remain low until fears of the virus ease considerably.”
