TDS Sees 'Significant Room' For Rally In Silver Prices
TD Securities sees potential for a silverrally in 2018. “Silver continues to underperform gold, weighed down by itsindustrial characteristics amid growing trade-war fears, with silver specs [inthe futures market] printing the most bearish net position on record,” TDSsays. “However, given that we remain skeptical on the prospects of a full-blowntrade war materializing, and expect an attractive precious-metals environment,we see significant room for a rally this year.” Spot silver has been stuck in arange with a $16 handle since early February. As of 8:07 a.m. EDT, spot silverwas unchanged for the day so far at $16.28 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
TD Securities: Platinum Would OutperformPalladium In Trade War
Thursday April 05, 2018 08:14
Platinum is likely to outperform sistermetal palladium if a full-blown trade war erupts between the U.S. and China,says TD Securities. Both metals are used to scrub exhaust in auto catalysts,with palladium primarily used in the large auto markets of the U.S. and Chinathat are gasoline-powered, while platinum is used in diesel-powered vehiclespopular in Europe. “Amid trade tensions and souring risk sentiment, China'sannouncement of tariffs targeting U.S. autos was an additional factorcontributing to lower platinum prices,” TDS says. Spot platinum early Thursdayfell as far as $907.80 an ounce, its weakest level since mid-December.“However, given platinum's lower exposure to the U.S. and Chinese auto marketsthan that of palladium, if these tariffs are implemented, platinum couldoutperform palladium. Trade tensions aside, we expect platinum to perform wellthis year as we see favorable fundamentals for the metal moving forward.” TDsadds that palladium, which fell below its 200-day moving average at the end ofMarch, could bounce, as money managers have exited positions and thus have roomto extend upside exposure again, with one possible catalyst being improved riskappetite if trade tensions dissipate. “But given palladium’s sensitivity toChinese demand, we would not be surprised to see investors stay on thesidelines for a while longer,” TDS adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
BMO: Gold In ‘Good Spot’For Second-Quarter Rally
Thursday April 05, 2018 08:14
BMO Capital Markets isupbeat on gold prices during the current quarter and looks for physical demandto return. Analysts issued a research note on the 2018Gold Focus report from the consultancy Metals Focus on Tuesday,adding in the BMO view. “Despite the general lack of interest, gold is in agood spot at present,” BMO says. “In aninflationary environment, overlaid with rising trade friction, we expect areturn of retail buyers where the need to increase allocation to gold as ahedge is rising once more. Meanwhile, in the near term, the rising geopoliticalrisk is set to keep macro asset allocators interested in gold. This couldcreate a sweet spot into Q2 where macro and micro are for once aligned on thepositive side.” BMO notesphysical demand has “collapsed,” citing Metals Focus data showing that demandfor bullion, bars and coins fell 3% year-on-year in 2017, with U.S. investmentslumping 59%. “Metals Focus is cautious about this coming back, but given therising trade friction and increased equity volatility, we are slightly moreconfident,” BMO says.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank:Diesel-Powered Auto Sales Play Role In Platinum Weakness
Thursday April 05, 2018 08:14
Platinumhas softened lately with a number of other commodities but may be facing extraweakness due to softer German sales of diesel-powered motor vehicles, saysCommerzbank. The metal is required for catalytic converters in diesel-poweredvehicles, which are most popular in Europe. “Platinum...isnearing the $900 mark, [and] the slump in diesel car sales in Germany [is]apparently playing its part in this,” Commerzbank says. “Although more new carswere registered overall in the first quarter, according to the GermanAssociation of the Automotive Industry, sales of diesel passenger carsplummeted by 21% year-on-year. Diesel cars accounted for only 32.3% of all newcar registrations in the first quarter, as compared with 42.7% during the sameperiod last year.”
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.