MKS: SoftDollar Supports Gold; Holiday Period To Curb Physical Demand
U.S. dollar weakness has supported gold so far Tuesday, although theabsence of traders from certain Asian gold-buying nations during the upcomingChinese New Year holiday period could take away physical buying for a spell,says Sam Laughlin, senior trader with MKS (Switzerland) S.A. Gold rose inAsia-Pacific trade, underpinned as the U.S. dollar fell against the Japaneseyen, he explains. Bullion moved through broad resistance around $1,325 to $1,326, triggering a brief but sharp stop-loss runhigher, before profit-taking set in, Laughlin says. “Recent price action isindicative of short-term positioning, with expectations of strength toward$1,335-$1,340 as shorts are further tested,” he says. “The caveat to ashort-term push higher, however, is the upcoming Chinese New Year holiday,which will remove physical demand from the market.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank:Silver Faring Better Than Gold In Recent Trade
Tuesday February 13, 2018 08:17
Silver hasoutgained gold so far this week, pushing the gold/silver ratio back just below80 early Tuesday, although the ratio remains historically high, says Commerzbank.The ratio measures how many silver ounces can be bought with an ounce of gold,with a smaller number meaning silver outperformance and vice-versa. The metalshave been underpinned by a weaker U.S. dollar. “Silver has madedisproportionate gains in gold’s slipstream...driving the gold/silver ratio backbelow 80,” Commerzbank says. “This still leaves it well above the historicalaverage, however, which since 2003 has been just shy of 63. Silver ispresumably also profiting from the firm base metals prices this morning.Furthermore, short positions are likely to have been covered after speculativenet-long positions were almost entirely eliminated during the last CFTC[Commodity Futures Trading Commission] reporting week. Shortly after 8 a.m. EST, spot silver was up0.4% to $16.584 and gold was up 0.3% to $1,326.50.
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Potential For Higher U.S. Rates CouldLimit Gold Gains
Tuesday February 13, 2018 08:17
Prospects for higher U.S. interest rates couldlimit gold’s upside, says Lukman Otunuga, research analyst atFXTM. Higher rates tend to boost the dollar, which hurts gold, and alsoincrease the so-called “opportunity cost” of holding a non-yielding assets suchas precious metals instead of assets that pay interest. Gold rose Monday on asoftening U.S. dollar and is up again so far Tuesday. “While dollar weaknesscould in the short term offer the yellow metal further support, gains arelikely to be limited by rising expectations of higher U.S. interest rates,”Otunuga says. “Focusing purely on the technical picture, the yellow metal remainsunder pressure on the daily charts. A failure for prices to keep above the$1,324.15 level could inspire a decline towards $1,300. Alternatively, if bullsare able to hold their ground above $1,324.15, prices could venture towards$1,340.” Shortly before 8a.m. EST, spot gold was $5.25 higher at $1,327.85.
By Allen SykoraFor Kitco News
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