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Market Nuggets: BAML Forecast Average 2013 Gold Price At $1,478/Oz

Tuesday May 28, 2013 3:17 PM

A lack of bullish macroeconomic drivers are weighing on gold and silver, prompting analysts at Bank of America Merrill Lynch Global Research to lower their 2013 average prices for gold and silver to $1,478 an ounce and $24.40 an ounce, respectively. In a report, the analysts say a stronger U.S. dollar and no inflation are “headwinds” for gold and silver. Still, they add, there are pockets of demand which are preventing a “complete meltdown.” Even though gold prices are weaker, they say the gold bull market is just pausing. “We believe the structural rally is not broken, and we see several scenarios that could push prices higher again. To pick just one, more affluent emerging markets could increase metal purchases to an extent that gold could trade at $2,000/oz, even if investors bought only a third of the gold they purchased in 2012,” they said.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nugget: Swiss Palladium Trade Data For April Reverts To Trend – Barclays

Tuesday May 28, 2013 1:22 PM

The latest Swiss trade data for palladium showed shipments of the metal from Russia in April were 6,496 ounces, just 2% of the 295,000 ounces shipped in March, suggesting that there is a reversion to last year’s trend, says Barclays. The average amount of palladium released over the past 12 months by Russia was 6,800 ounces, they say. “Although the March data highlighted that an element of surprise still exists, consecutive months of elevated shipments would have weakened our constructive view on palladium. Russian shipments to other major ports have not revealed a surge in imports,” the firm notes. Russian supplies of palladium are a state secret, and the industry looks at trade data to get a handle on the current inventory size. It’s believed that state stockpiles are dwindling. “For now, the increase in March looks to be consistent with the view that the metal was shipped previously and priced in March. The decline in April helps support our view that metal from state stock releases is likely to fall this year,” they say. The firm says it forecasts that Russia will sell about 200,000 ounces from its stockpiles in 2013.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Outflows From Gold-Backed ETFs Continue

Tuesday May 28, 2013 8:19 AM

Gold-backed exchange-traded funds continue to see outflows, while retail demand for coins and bars and ongoing purchases by central banks, such as Russia, Turkey, Azerbaijan and Kazakhstan are so far offsetting each other, says Alex Thorndike, senior trader, precious metals and foreign exchange at MKS Capital. Edward Meir, commodities consultant at INTL FCStone, cites a Reuters story that total gold holdings in the largest gold ETF, the SPDR Gold Trust, are at their lowest in more than four years. The Reuters story quotes Australian bank Macquarie that ETF selling in 2013 so far is at about 450 metric tons, equal to mine output from all of Africa and South America, but that the strong retail demand for physical gold is keeping prices supported. “We would agree with (Macquarie’s) view, but what makes things unnerv­ing for the gold bugs going forward, is that expected retail buying may not be there if prices dip again, since the initial group of buyers will likely move to the sidelines (having bought at much higher prices already), while those who are looking to get in may want the markets to settle before pulling the trigger,” Meir says. Citing Bloomberg data, Commerzbank notes 291 tons of outflows occurred in the gold ETFs Bloomberg tracks in the second quarter alone. “Against this backdrop, the 30 tons or so of gold purchased by central banks in April … thus appear to be but a drop in the ocean,” Commerzbank says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Platinum ETF Inflows Rise – Commerzbank

Tuesday May 28, 2013 8:17 AM

Gold-backed exchange-traded funds are seeing outflows, but Commerzbank says platinum inflows are rising. This is “attributable mainly to the introduction of a new platinum ETF in South Africa. In this context, total platinum ETF holdings exceeded the 2 million ounce mark for the first time ever at the end of last week. The deficit on the global platinum market this year could thus turn out to be higher than many market players anticipate,” they say.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


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