BMO: Strong Dollar Pushes Gold To Six-Week Low
Spot gold has hit a six-week low as the U.S. dollar benefits fromstrong U.S. economic data, says BMO Capital Markets. “Gold prices aretrading towards six-week lows as a stronger dollar was buoyed by upbeat U.S.economic data as spot prices trade towards $1,181/oz early on this morning,”BMO says. “Building on momentum from Wednesday's Fed rate hike, yesterday sawthe release of initial jobless claims as well as final Q2 GDP [second-quartergross-domestic-product] data, which both supported a bullish outlook for theU.S. economy, pushing the dollar almost 1% higher against a basket ofcurrencies this week.” Global exchange-traded-fund holdings of gold havedeclined by almost 5 million ounces since May, while spot prices have lost 13%since April and have struggled to hold above $1,200/oz, BMO says. As of 8:01a.m. EDT, spot gold was up 20 cents to $1,182.60 an ounce after bottoming at $1,181.05.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Weak Gold Price Vs. Euro Is‘Mystery’
Friday September 28, 2018 08:06
Gold remains under pressure as the U.S. dollar firms in the wake ofrobust U.S. economic data and renewed budget uncertainty in Italy, saysCommerzbank. However, analysts are puzzled that the precious metal was weak ineuro terms on Thursday. Gold has been as soft as $1,181.05, its weakest levelsince mid-August. “While this is understandable to some extent in view of theUSD [U.S. dollar] strength, it is becoming increasingly difficult to explainthe weakness of the gold price in euros,” Commerzbank says. “In the budget fornext year that it presented yesterday, the Italian government is targeting adeficit of 2.4%. This is well above the target agreed with the EU [EuropeanUnion], and has resulted today in a sharp rise in yields on Italian governmentbonds. Italy could thus trigger a new debt crisis, as can be seen from thesignificant depreciation of the euro against the U.S. dollar. It is a mysterywhy the gold price in euros dropped to its lowest level since early 2016nevertheless.”
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Gold ‘Susceptible ToPost-FOMC Greenback Strength’
Friday September 28, 2018 08:06
Gold remained soft in overnight trading, inparticular vulnerable due to strength in the U.S. dollar since Wednesday’smeeting of the Federal Open Market Committee, says MKS (Switzerland) SA. “Dollar strength continues to be the main driver of downward pressureon prices, with a mild bid tone out of China reversed in late-afternoon tradeas the greenback extended higher,” MKS says. “Shanghai saw the metal toward an$8 premium to provide underlying supportive price action; however, sellers soonwrestled back control to see the yellow metal ease through the New York lowprint as Europe filtered in. Bullion continues to be susceptible to post-FOMC greenbackstrength as well as month/quarter end USD demand, pressuring the metal towardsupport at $1,180, with risks extending through $1,172 to the August low printof $1,160.” MKS notes that a Chinese holiday next week will remove physicalinterest from the market during Asian trading hours. As of 7:53 a.m. EDT, spot was 15 centslower to $1,182 an ounce.
By Allen SykoraFor Kitco News
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