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FXTM: gold has 'spring in its step' after Apple sales warning

Kitco News

Gold has a “slight spring in its step” after a sales warning from Apple Inc. rekindled worries about the negative impact that China’s coronavirus outbreak cold have on the global economy, said Lukman Otunuga, senior research analyst at FXTM. As of 8:44 a.m. EST, spot gold was $10.70 higher to $1,591.50 an ounce. “The precious metal has gained over 4.5% year-to-date, and could push higher this quarter amid renewed global growth concerns and speculation around looser monetary policy,” Otunuga said. “Focusing on the technical picture, gold has the potential for further upside this week if $1,579 proves to be reliable support. An intraday breakout above $1,589 may trigger a move towards $1,600. Alternatively, a breakdown below $1,579 could encourage a move back towards $1,555.”

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

 

TDS: palladium prices to keep building strength

Tuesday February 17, 2020 08:55

Palladium is likely to keep rising as users have a hard time obtaining metal to meet their needs, said TD Securities. Spot metal has been as high as $2,537.55 an ounce so far Tuesday, within striking distance of the record of $2,556.95 hit on Jan. 20. TDS said “metal scarcity will likely continue to push prices higher. Indeed, while car sales may still be down in Europe, PGM [platinum group metals] palladium loadings on gasoline [auto] catalysts will see another double-digit increase, which along with continued increase in China, will keep palladium in a growing deficit.” Analysts said potential for thrifting and substitution into another metal remains low in the near term.

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

 

Commerzbank: palladium back above $2,500/oz

Tuesday February 17, 2020 08:55

Palladium is flexing its muscles again, with spot metal trading above $2,500 an ounce both days so far this week, said Eugen Weinberg, head of commodity research with Commerzbank. Still, he reiterated the bank’s expectation for a correction lower. The stronger prices “can be only partly explained by the ongoing production problems in South Africa due to power supply disruptions and this year’s renewed high supply deficit,” Weinberg said. “A major South African producer envisages a deficit of 1.9 million ounces in 2020, for example. As we see it, the fact that market participants are focusing on the problems on the supply side means that they are ignoring the risks to demand, which are at least equally as important.” Threats to demand for the industrially oriented precious metal would increase if the global economy weakens as a result of the Covid-19 virus, while car output in China remains “considerably restricted,” Weinberg said. “Increased risk aversion on the financial markets, a strong U.S. dollar and significantly lower new-car registration figures in China and Europa point to a price correction.” He cited fresh data fromthe European Automobile Manufacturers’ Association showing that new car registrations in the European Union fell 7.5% year-on-year to 957,000 vehicles in January.

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