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FXTM: 'fundamentals remain in favor of the bulls' in gold

Kitco News

Gold has bounced this week after experiencing its worst single-day decline since 2013 on last Friday. “Although the technical picture suggests that gold could extend losses, the fundamentals remain in favor of the bulls,” said Lukman Otunuga, senior research analyst at FXTM. “Concerns over slowing global growth remain rife amid the coronavirus outbreak, especially after the Organization for Economic Cooperation and Development downgraded its 2020 global growth forecast from 2.9% to 2.4%. The general unease and speculation around loose monetary policy should support appetite for gold, especially amid the potential for a weaker dollar.” Technically, however, gold remains under pressure on the daily charts, FXTM said. “Sustained weakness below $1,600 may encourage a decline back towards $1,579 in the near term,” FXTM said. “Alternatively, a breakout above $1,600 could open the doors towards $1,620.” As of 8:09 a.m. EST, spot gold was up $13.90 to $1,603 an ounce.

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

 

CME Group metals-trading volume hits record high in February

Tuesday March 3, 2020 08:15

Exchange operator CME Group reports that volume in metals trading jumped by 73% year-on-year to record a daily average of 909,000 contracts in February. Volume for all CME Group contracts hit a daily average of 30.1 million contracts last month. This was a new all-time high and year-on-year rise of 58%. Record-high average daily trading volume was also also posted for equity indexes, interest rates and energy products.

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

 

BBH: Fed easing expectations remain elevated

Tuesday March 3, 2020 08:15

Expectations for easing by the U.S. Federal Open Market Committee remain elevated, said Brown Brothers Harriman. The next FOMC meeting is March 18, and a forecasting tool known as World Interest Rate Probability suggests that a 25-basis-point cut is fully priced in and a 50-basis-point cut is partially priced in by financial markets, BBH said. Either way, atotal of 50 basis points is fully priced in by the April 29 meeting and another 25 basis points is largely priced in by the July 29 meeting, BBH said. “Expectations then tail off, with one more 25-bp cut partially priced in by early 2021,” BBH said. “These implied four cuts would take the Fed funds target range down to 0.5-0.75% and seems way too overdone to us.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.