TD Securities: Gold Prices Range-Bound Amid Opposing Influences
Range-boundgold may draw support from fears about a trade war but at the same time be heldback by expectations for Federal Reserve interest-rate hikes, says TDSecurities. “Rex Tillerson's departure from the White House [as secretary ofstate] provided a bid, but we expect that it will be short-lived as is typicalof similar event-driven rallies,” TDS says. “Meanwhile, increasing chatter offour hikes this year and a potential shift in the Fed dots next week areweighing on gold, but fears of a trade war continue to prevent a majorliquidation.” By “Fed dots,” analysts are referring to the so-called dot-plotshowing policymakers’ rate-hike expectations. Meanwhile, TDS analysts saysilver could become the top-performing precious metal “as waning mine supplyprompts hefty metal inventories to top out and money managers reallocate tosilver as it becomes evident the Fed will err on the cautious side regardingrate increases.”
By Allen Sykoraof Kitco News; asykora@kitco.com
TDS LooksFor Palladium Prices To Return To $1,100/Oz
Wednesday March 14, 2018 10:39
TDSecurities looks for palladium to recover from a recent pullback and eventuallyrechallenge $1,100 an ounce. Spot prices fell from around $1,132 an ounce inmid-January to roughly $960 in early February and early March, but now are backaround $1,000 again. TD Securities attributes the pullback to a bout ofprofit-taking. Analysts say they “do not anticipate that any weakness willpersist amid a tight market and now significantly healthier spec positioning.As money manager allocations are now near neutral levels relative to the priorthree years and ETF [exchange-traded-fund] holdings remain low, palladiumprices could look to return to $1,100/oz later this year.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Gold Remains Below 50-Day Moving Average
Wednesday March 14, 2018 09:42
Gold prices remain under pressure technically as they hold belowthe 50-day moving average, says Lukman Otunuga, researchanalyst at FXTM. Gold bulls could benefit from current political uncertainty,although in the medium to longer term, expectations of higher U.S interestrates are likely to create headwinds for the metal, says Otunuga. “From atechnical standpoint, the yellow metal remains under pressure on the dailycharts as prices are below the 50[-day] simple moving average, while the MACD[Moving Average Convergence/Divergence] trades to the downside,” the analystsays. “A solid daily close above $1,330 could bring bulls back into the game,with the next level of interest at $1,340. Alternatively, if prices fail tokeep above $1,324, gold remains at risk of sinking back to $1,313.” The 50-dayaverage currently stands at $1,330.80 for spot metal. Shortly before 9:30 a.m.EDT, spot gold was $2.85 lower at $1,323.35 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
CIBC Sees ‘General Weakening Of The U.S. Dollar’
Wednesday March 14, 2018 09:42
CIBC looks for the U.S. dollar to soften. “Solid U.S. growth and aclimbing Fed funds rate are supportive of the greenback, but fully priced in,”the Canadian bank says in a monthly outlook on the foreign-exchange market.“The prospect for ongoing trade deficits, monetary tightening overseas nextyear, and less fiscal stimulus for the U.S. in 2019-20 will be the story behinda general weakening of the U.S. dollar.” Metals traders closely monitor thegreenback since base and precious metals alike often move inversely to the U.S.currency.
By Allen Sykoraof Kitco News; asykora@kitco.com
Metals Focus: Turkey’s Gold Market Becoming More Prominent InRegion
Wednesday March 14, 2018 09:42
Turkey’s gold market is enjoying “greater regional prominence”despite some challenges, says Metals Focus. Analysts with the consultancytraveled to Istanbul last week. “In spite of the heightened politicaluncertainty and greater scrutiny recently imposed on foreign-exchange and goldtraders, there was still a sense of optimism, especially given the new taxregime introduced in the UAE,” Metals Focus says. Challenges include a newregulation calling for all transactions to be recorded, which has meant“considerable expense.” Furthermore, companies that export gold must secureadvance payment, something that does not apply to banks or refiners, MetalsFocus points out. “Leaving aside thegrowing regulatory burden, the jewelry supply chain is now benefiting from thecountry’s jewelry and diamond infrastructure,” Metals Focus says. Analysts saythey were surprised by the growing presence of jewelry and diamond wholesalersfrom across the Middle East. Last year, official Turkish gold jewelry exportsrose by some 24% to 99 tonnes, the consultancy points out. “On the basis of ourresearch, which suggests that further onshore relocations are likely in 2018,we could see jewelry shipments this year strengthen further,” Metals Focussays. “However, souring relations with northern Iraq have seen shipments tothis key market fall sharply, from around 8.5t to 2.5t/quarter. The prospectsof a healthy recovery in northern Iraq appear unlikely in the near term, whichmay therefore offset some of the growth achieved in other export markets.”
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Gold Prices Range-Bound For Now
Wednesday March 14, 2018 09:42
Gold may remain range-bound in the near term,says Sam Laughlin, senior trader with MKS (Switzerland) S.A. “Offers toward$1,330 and broadly beyond this between $1,335-$1,340 remain formidableresistance levels for bullion; however, conversely the metal continues to findlayered bids underneath $1,320, with extensions toward $1,310,” he says.“Near-term price action should remain with the recent range, leaning toward asustained break higher once ETFs [gold exchange-traded funds] awaken from theirrecent slumber and Asian physical demand picks up as we move through thetypically muted March flows.”
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.