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Metals Focus anticipates recovery in silver coin, bar demand

Kitco News

Retail investment in silver coins has been weak in the early part of 2020 but should recover, said Metal Focus. The consultancy pointed out that sales of U.S. silver Eagle coins fell to 4.5 million in the first two months of the year from 6.18 million in the same period of 2019. A range-bound silver price has been a “challenge” for investment, Metals Focus said. Also, a number of retail investors have turned to silver-backed exchange-traded funds instead, Metals Focus said, with ETF silver holdings rising to 742 million ounces at the end of February from 729 million at the start of the year. “Looking ahead though, we still expect this year to see an eventual recovery, albeit modestly, in U.S. silver coin and bar demand,” Metals Focus said. “This is premised on our expectation that the silver price will break out to the upside, which in turn will encourage retail buying on two counts. First, given our view that institutional investment will strengthen (partly benefiting from positive spillover effects from gold), this will contribute to increased price volatility. As a result, the price dips that emerge will generate bargain hunting. Second, as positive price expectations emerge, some retail investors may buy into a rising market, with a view to gaining exposure to silver before prices strengthen further.”

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

 

Metals Focus: institutional investor appetite for gold to rise

Thursday March 5, 2020 08:25

The consultancy Metals Focus looks for gold to find support even once coronavirus fears fade, with analysts anticipating increased institutional buying. Gold has been higher this week, but could temporarily ease again if stocks come under renewed pressure and investors have to sell gold to offset losses in other markets, as occurred Friday, Metals Focus said. However, “once the coronavirus outbreak retreats and with it market uncertainty, we still expect the gold rally to resume,” Metals Focus said. “Indeed, early expectations for a V-shape rebound in the global economy now look too optimistic. The direct impact of the coronavirus outbreak on the global economy is likely to be more pronounced than previously expected, at a time when China accounts for roughly 20% of world GDP [gross domestic product], against a mere 4% during the 2003 SARS outbreak.” Meanwhile, the world faces a number of uncertainties, such as the U.S. presidential election, Brexit negotiations and Middle East tensions. “Taken together, these conditions should all raise institutional investor appetite for gold, an essential catalyst for meaningful price upside,” Metals Focus said.

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

 

Commerzbank: easier monetary policy to support gold

Thursday March 5, 2020 08:25

Looser central-bank monetary policy should continue to boost gold prices, Commerzbank said. So far this week, the Reserve Bank of Australia, Bank of Canada and U.S. Federal Reserve have all cut interest rates. “And other central banks are likely to follow, such as the ECB [European Central Bank], which we expect to act next week,” Commerzbank said. “The loosening of monetary policy by many central banks in a bid to combat the economic threat posed by coronavirus should support demand for gold and thus also the gold price.”

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

 

SP Angel: gold higher on coronavirus worries

Thursday March 5, 2020 08:25

Investors are continuing to buy gold on worries about what the coronavirus will do to the global economy, said commodity brokerage SP Angel. As of 8:22 a.m. EST, spot gold was $17.60 higher to $1,653.80 an ounce. “Gold continued to edge higher this morning, as investors continue to worry about the virus outbreak as it spreads to over 80 countries,” SP Angel said. Analysts added that gold is “showing resilience” despite the bounce in equities that occurred Wednesday.

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.