Commerzbank: Gold ETF Holdings Post Weekly Decline Of 21 Tonnes
The slide ingold prices last week was accompanied by pronounced outflows from globalexchange-traded funds, including 6.5 tonnes on Friday, says Commerzbank. “Thegold ETFs tracked by Bloomberg decreased by a good 21 tonnes last week, therebyreversing the lion’s share of the inflows seen since the start of the year,”Commerzbank says. Most gold ETFs trade like a stock but track the price of thecommodity, with metal put into storage to back the shares.
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Limited Gold BuyingSuggests No Panic Over Global Economy
Monday February 12, 2018 08:50
The limited interest in gold lastweek may be a sign that stock-market weakness was simply a correction ratherthan due to a major scare about the global economy, since gold lost ground,says Jameel Ahmad, global headof currency strategy and market research at FXTM. “One ofthe main reasons why I am not concerned that the stock market sell-off fromlast week was a sign of mass panic from investors is because of the limitedbuying interest in gold, in spite of the heightened stock-market volatility,” Ahmad says. “Gold usually benefits from anincrease in interest as a safe-haven instrument during uncertain times in themarket, but the lack of interest in gold over the past week has surprised a fewin the market. I personally think that the losses in gold last week can be seenas a positive factor, because it provides more confidence to investors that thesell-off in the markets was a correction, and not a sign of panic over theglobal economy.”
By Allen Sykoraof Kitco News; asykora@kitco.com
SP Angel: Gold Higher; MarketAwaits U.S. Inflation Data
Monday February 12, 2018 08:50
Gold prices ticked higher at thestart of the week as the U.S. dollar initially slipped, says commoditiesbrokerage SP Angel. Meanwhile, a key focus for the market this week will be therelease of U.S. inflation data, which will give investors a clue on theintensity of expected interest-rate increases, the firm says. “U.S. consumerprice data will be released on Wednesday that is expected to give a clearerindication on the pace of inflation and therefore the frequency of theanticipated interest-rate rises,” the firm says. “Consumer price data is alsoexpected to confirm concerns of rising inflation, which triggered the globalequity drop last week.” As of 8:27 a.m. EST, Comex April gold was up $4.80 to$1,320.50 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: ‘Too Much Of A Good Thing Is Bad’
Monday February 12, 2018 08:50
The recent sell-offin equities - which had some spillover effect on precious metals - came after along period of low volatility, and “too much of a good thing is bad,” saysBrown Brothers Harriman. Many financial instruments were constructed to profit from lowvolatility, such as exchange-traded products and futures contracts, BBH says.Some allowed investors enhanced leverage, which acts like a “forcemultiplier.” BBH points out that therewas a stretch of around 400 days without a 5% correction in the S&P 500.“The longer it took, the greater the positions betting that it would continue,the larger the shock, the greater the drama,” BBH says. “Stability leads to instability. Thelong stretch of low volatility led to the historic jump in volatility as if themusic of the financial instruments created an echo-chamber like a horrorhouse. It is not very pretty, andquite painful for many, but this is how the markets mature.
By Allen SykoraFor Kitco News
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asykora@kitco.com 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.