Standard Chartered: ETP Investors Increase Exposure To Gold Prices
Exchange-traded-product investorsincreased their exposure to gold over the past week, says Standard Chartered.The products trade like a stock but track the price of the commodity, withmetal put into storage to back the shares. Gold ETP holdings rose 9 tonnes.However, investors reduced their exposure to the other precious metals,Standard Chartered points out. Silver outflows reached 343 tonnes over the pastweek, platinum net redemptions reached some 10,400 ounces and those forpalladium reached 12,500 ounces.
By Allen Sykoraof Kitco News; asykora@kitco.com
CME Group: April Metals TradingVolume Rises 24% Year-On-Year
Wednesday May 2, 2018 09:27
CME Group reports thatmetals-trading volume averaged 682,000 contracts per day in April, up 24%from 548,000 in the same month in 2017. Average daily volume for goldfutures and options grew 28% year-on-year to 371,000 contracts, while the samefor silver climbed 14% to 134,000 contracts. On a rolling three-month basis,metals volume averaged 685,000 contracts for the period ending with April. Thisis down from 713,000 for the three-month period ending in March but up from662,000 for the comparable period ending with February and 684,000 for theperiod ending with January.
By Allen Sykoraof Kitco News; asykora@kitco.com
Standard Chartered: ChineseTrends Point To Palladium Demand
Wednesday May 2, 2018 09:27
Underlyingautomotive trends in China bode well for palladium during the remainder of2018, says Standard Chartered. The main industrial use of the metal is forcatalytic converters that scrub emissions from auto exhaust. Prices have fallenback lately, but Standard notes the market remains in backwardation, in whichnearby contracts are more expensive than the deferred and which is seen as asign of a tight market. The bank looks for U.S. auto sales to ease this year. However,analysts point out, the most recent data show China’s auto sales rose by 3%year-on-year in March and are 2.6% higher year-on-year so far in 2018. Further,the inventory of autos started to rebound in the first quarter after a seasonaldecline in December. “China is rolling out stricter emissions standards andrequires vehicles to meet ‘China VI’ standards (based on European and U.S.standards) by mid-2020,” Standard Chartered says. China’s palladium importsrose 2% year-on-year in March, although they are still down for the year todate. “Despite lingering concerns around auto sales and new energy vehicles,underlying trends in China suggest palladium demand is likely to be supported,at least this year,” Standard concludes.
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: PriceAction In $1,300 To $1,310 Area Important For Gold
Wednesday May 2, 2018 08:55
Gold hasreached a key area on the charts, says Alex Thorndike, senior precious-metalstrader with MKS (Switzerland) S.A. Spot gold fell to the $1,302 area Tuesdaybefore bouncing, trading at $1,309.95 as of 8:18 a.m. EDT. The area from $1,300 to $1,305area is “critical” for the gold since this includes the 200-day moving average,a 50% Fibonacci retracement level and the psychologically important $1,300round number, he says. “If we break and close below $1,300, it opens the riskof a move back toward $1,263-65,” Thorndike says. “That being said, there isalso a case to be made that this could be the ideal place to watch for areversal in the metal. We have bounced off this area ($1,300-1,307) three timessince January, and having now completed a multi-month corrective phase, wecould punch higher. Bottom line -- how price action develops in this$1,300-1,310 area will likely be important....”
By Allen Sykoraof Kitco News; asykora@kitco.com
Metals Focus: Gold-OilRatio To Remain Soft For Now But Eventually Recover
Wednesday May 2, 2018 08:55
Metals Focus says thegold-oil ratio could fall some more before recovering later in the year. Theratio, which measures how many barrels of oil it takes to buy an ounce of gold,has fallen to 17.5, its lowest level since December 2014. “This reflected bothweakness in gold and gains for oil, the latter driven partly by concerns aboutthe Iranian nuclear deal,” Metals Focus says. “As a result, although the ratiomay edge lower in the near term, taking a longer-term view, we expect gold tomove higher, which in turn will also see the gold-oil ratio rise.” The ratio hit a record high in February 2016 of 41.5. Since, the ratio hasbeen slumping again as oil moves higher on concerns about reduced OPEC supply,fears over the scrapping of the Iran nuclear deal and broader geopoliticalconcerns in the Middle East. At the same time, gold has been hurt as risingTreasury yields boost the U.S. dollar. While the gold-oil ratio could fall furtherin the short term, Metals Focus says the downside should be limited sinceupside risks in oil have been factored into prices and speculative longpositions outnumber shorts by around 20 to one. Looking ahead to the secondhalf of 2018, Metals Focus says “our view remains broadly unchanged -- thatequities will experience a sharper correction. In addition, the recent upturnin the trade-weighted dollar is likely to be unwound, led by a firmer euro. Asa result, we may see the gold-oil ratio start to recover, albeit modestly,during the latter part of this year.”
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: Fed Key To ‘Newfound Respect’ ForU.S. Dollar
Wednesday May 2, 2018 08:55
Brown Brothers Harriman says the Federal Reserve’s inclination tokeep hiking interest rates is the key to “newfound respect” for the stronger U.S.dollar. BBH says there is a “stark contrast” between the major central banksaround the world. “The Federal Reserve is likely to confirm its intention to continueto gradually guide U.S. rates higher later today, while the ECB [EuropeanCentral Bank] sounds more cautious than confident,” BBH says. “The BOJ [Bank ofJapan] continues to press hard and refuses to even discuss an exit. Thenthere is the Bank of England, where [Governor Mark] Carney -- in all fairness,due to soft data -- once again yanked the football away as it was about to bekicked. A rate hike next week now would be more disruptive than standingpat.”
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.