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Market Nuggets: Societe Generale Say It Remains Bearish Gold

Tuesday June 4, 2013 8:55 AM

Societe Generale says it is maintaining its bearish view on gold, saying it expects the Federal Reserve to begin tapering its purchases of bonds to stimulate the U.S. economy. The bank notes while exchange-traded fund redemptions have slowed, the market is dealing with the impact of the sales. "Net redemptions over the month of May were 125 (metric tons), taking the sales for the year-to-date to 481 (tons). In the first five months of 2012, the funds absorbed just 13 (tons)," they say. The bank plans on issuing a new outlook for gold soon.

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


Market Nuggets: 'Strong Fundamental Catalyst' Needed To Uproot Gold Short Positions- UBS

Tuesday June 4, 2013 8:53 AM

With speculative traders holding record short positions according to CFTC data, gold is struggling to push higher, says UBS. These short holders are likely wary of anything that could cause the market to rally; however, UBS says "it would require a strong fundamental catalyst to unnerve the vast majority of (short traders) in the near-term." UBS says watch for Friday's U.S. monthly jobs data for a potential catalyst. "While a strong print is likely to embolden shorts and potentially threaten the resolve of longs, a negative surprise is likely to trigger a stronger positive response considering the amount of (short) gold trades around at the moment," they say.

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


Market Nuggets: Platinum Traders Watching South Africa News - UBS

Tuesday June 4, 2013 8:51 AM

Platinum prices are weaker in early North American dealings, but saw gains on Monday following news reports of a miner shot dead and another injured, causing workers at Lonmin (LON) to go on strike, says UBS. The bank says while palladium also gained, platinum outperformed in part because of platinum’s closer ties to South African news and on ideas the metal needed to catch up with palladium. The South Africa situation bears watching, they say. “The latest news out of South Africa highlights the reality that the situation remains very tense. This comes after Lonmin expelled several NUM (National Union of Mineworkers’) shop stewards for falsifying documents to make it look like the union had more members than it actually had. To put the situation into context, NUM currently has until July 12 to demonstrate that its membership accounts for more than half of the workforce. Our colleagues in equities do not think NUM will meet this threshold, as during the last count, the union had less than 20% of the workforce.”

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


Market Nuggets: Platinum Prices Could Rebound – Societe Generale

Tuesday June 4, 2013 8:50 AM

Platinum prices could rebound after April's sell-off, says Societe Generale. "This will be driven by a gradual improvement in the economic outlook and the market's perception of the prospects for the European auto sector in particular. For the time being, sentiment in the auto sector in Europe remains bearish. Light vehicle sales in Europe were down 14% in the first quarter of this year," they note. Offsetting some of the auto sales weakness, jewelry sales are picking up in parts of Europe, and Chinese jewelry demand is expected to improve. On the supply side, the bank notes the tensions in South Africa between workers and mining companies continue to be an issue. Speculative positions for Nymex platinum contracts are the lowest since August 2012, too. "Platinum therefore has scope for a short covering rally on any supply disruption," they note, adding that palladium may get a similar boost, it wouldn't be at the same magnitude as platinum. Resistance stands at $1,510 an ounce, with good support at $1,420, they add.

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


Market Nuggets: USD Vulnerable To Selling – BNP Paribas

Tuesday June 4, 2013 8:48 AM

The U.S. dollar slid Monday after weaker-than-expected manufacturing data. BNP Paribas says the softer trade was surprising given that U.S. Treasury yields were firmer and two Federal Reserve governors talked up the idea of the Fed tapering its quantitative easing program by summer or autumn. "The market reaction suggests that the U.S. (dollar) long trade may be overcooked heading into this week. While we do think the U.S. (dollar) will trade stronger as the market prices in Fed tapering - having reflected this in our forecasts - at current levels of positioning, U.S. (dollar) may be vulnerable to softer data," they say. Metals traders watch action in the U.S. dollar versus other currencies since a stronger dollar can pressure metals prices.

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


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