Standard Chartered: ETP Gold Holdings Pick Up In January
Inflows ofgold into physically backed exchange-traded products hit 32 tonnes in Januaryafter a lackluster fourth quarter, when holdings rose by a modest 10 tonnes,says Standard Chartered. “ETP inflows since the start of 2017 are at profitablelevels; only if prices fall below $1,200/oz do almost 250 tonnes becomeloss-making, which is not our base-case scenario,” the bank says in a researchnote late last week. As of 8:46 a.m. EST, spot gold was $3.85 higher to $1,336.35 anounce. “Gold prices havestalled, but we think consolidation at lower levels bodes well for prices inthe coming months, particularly as the recent move higher was not accompaniedby broad investor interest,” Standard Chartered adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
RBC's Gero:Stock Sell-Off Helps Gold; Buying Of Metal Could Pick Up
Monday February 05, 2018 09:00
Thecontinued sell-off in equities is offering some support to gold prices,although this has been “muted” so far, says George Gero, managingdirector with RBC Wealth Management. As of 8:46 a.m. EST, spot gold was $3.85higher to $1,336.35 an ounce. The March S&P 500 futures were another 7.40points lower after a sell-off on Friday. “Continued rush to cash in equities and margin calls [is] helpinggold see some bids, but as traders often have stock and commodity positions,lack of new cash inhibits gold buyers to some extent,” Gero says. He lateradds: “Gold may pick up later in the week as equity sellers asset allocate moreto precious metals.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Gold/Silver Ratio Pokes Back Above 80
Monday February 05, 2018 08:29
The gold/silver ratio on Friday poked back over 80 again for thefirst time in nearly two years, says Commerzbank, although it returned justbelow this again early Monday morning. The ratio measures how many ounces ofsilver it takes to buy an ounce of gold, with a larger number meaningunderperformance by silver. The price of gold fell Friday after a strong U.S.jobs report prompted a rise in U.S. Treasury yields, thereby benefiting theU.S. dollar and undercutting precious metals. “Silver’s heavy losses on Fridayare probably also attributable to technical selling given that silver droppedbelow the technically important 100- and 200-day moving averages,” Commerzbanksays. “The silver price thus looks embattled from a technical perspective,meaning that the price slide might well continue.” Shortly after 8 a.m. EST, spot gold was up$3.30 to $1,335.80 an ounce, while silver was up 25 cents to $16.809. The100-day average for silver stood at $16.8263 and the 200-day at $16.8256.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: Too SoonTo Say If Stock-Market Bull Run Is Over
Monday February 05, 2018 08:29
The biggest developments in the capitalmarkets lately have been the sharp drop in equities after a significant rallysince late last year, along with a rise in Treasury yields, says Brown BrothersHarriman. The firm says the stock-market sell-off was an overdue correction,but also added that it’s too soon to say whether the bull market is over. “Thedrop in the S&P 500 has unwound about half of this year’s gains,” BBH says.The German, Swiss,and Canadian markets have fallen even more and are now down on the year. “According to various valuation metrics, many equity markets were over-valuedbefore last month’s rally,” BBH says. “The one-week decline, as dramatic as itmay have been, is of little substantive significance. The importance lies inthe signal of a shift in risk appetites and an end to the recent market phase. It is too early to conclude that themulti-year bull market is over. Discipline and prudence would advise thatthe initial operative assumption is that it is an arguably overdue correction. Many accounts of the stock market rise, whether attributed to speculationor earnings growth, do not seem to fully appreciate the role of low interestrates as a discounting mechanism, as a reduction in corporate debt servicingcosts, and in terms of competing assets.”
By Allen Sykoraof Kitco News; asykora@kitco.com
TD Securities:Return Of Volatility Is Significant Market Development
Monday February 05, 2018 08:29
Volatility isback, says TD Securities, describing this as a significant development over thepast few weeks. The CBOE Volatility Index, a measure of market expectations fornear-term volatility based on the S&P 500 stock-index options, posted thesharpest spike since the U.S. election over the past month. “FX vols havestarted to take notice as well, with high-beta currencies leading the movelower over the past week,” TDS says. “The sell-off in rates has begun to dentsentiment, which is bleeding into equities and risk appetite.” The key for theforex market may be whether the interest-rate market is selling off for “good”or “bad” reasons, TDS says. “A good rate selloff is one where rates arenormalizing to match the strength of the global economy, which could keepglobal financial conditions loose,” TDS says. “A bad one is purely a re-pricingof the term premium where inflation starts to outpace growth. The NFP [U.S.nonfarm payrolls report] showed the latter with wages pushing higher but hoursworked missing expectations.”
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.