Make Kitco Your Homepage

Standard Chartered 'positive' on gold prices but cites contrasting dynamics

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

Standard Chartered looks for gold to be stronger in the second quarter but nevertheless pointed out that there is a variance in underlying market dynamics. Holdings of the metal by exchange-traded products are at a record high and retail investor demand is soaring after three years of “tepid interest,” the bank said. ETP gold holdings are already up by 40 metric tons in April following the strongest quarter since 2016, as inflows for the January-March period totaled 298 metric tons, Standard Chartered said. Gold held by physically backed ETPs are now at record 3,225 tons, the bank continued, while U.S. Mint sales of gold coins are the strongest since 2016. “However, jewelry demand remains weak, and with the exception of Turkey, central-bank buying has slowed,” Standard Chartered said. Preliminary data show that March imports by key gold consumer India fell to the lowest level in six and one-half years amid record high prices in the local currency, Standard Chartered pointed out. Russia’s central bank announced it will no longer add to gold reserves starting this month. Still, Standard Chartered said, “Given the unprecedented global fiscal and monetary stimulus, we maintain a positive view on gold. Gold continues to track real yields; we expect prices to average $1,725/oz in Q2-2020.”

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.