Commerzbank: ETFs Increase Gold Holdings By 5.4 Tonnes
Holdings of gold by global exchange-traded funds posted theirbiggest inflow in weeks on Monday, reports Commerzbank. The ETFs trade like a stock but track the price of thecommodity, with metal put into storage to back the shares. Holdings have beendeclining lately along with the price of gold. However, “the gold ETFs tracked by Bloomberg saw inflows of 5.4 tonnesyesterday - their highest daily inflow in many weeks,” Commerzbank says.“Clearly bargain hunters were lured in by the low price. Whether this willprove sustainable will only become apparent in the next few days, however.After all, the lion’s share of inflows were attributable to the SPDR Gold Trustin the U.S., which was also chiefly responsible for the pronounced outflows inthe weeks before.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Gold Outlook Lacks LusterDespite Small Uptick
Tuesday July 24, 2018 09:02
The outlook for gold remains weak despite a modest bounce so farTuesday, says LukmanOtunuga, research analyst at FXTM. As of 8:36 a.m. EDT, spot gold was $1.60higher to $1,225.60 an ounce, getting what Otunuga calls a “temporary lifeline in the form of dollar weakness.” Still,the analyst says, “Market expectations over the Federal Reserve raising ratesgradually are likely to prompt investors to shun the zero-yielding metal, whilea broadly stronger dollar is poised to threaten any meaningful upside gains.With the fundamental drivers behind the dollar’s appreciation in recent months[are] still firmly intact, gold looks to be in trouble.” He describes thetechnical charts as still “heavily bearish” for gold, including consistentlylower lows and lower highs, while the moving average convergence/divergencetrades to the downside. “A weakening dollar could elevate gold prices backtowards $1,234 and possibly $1,245,” Otunuga says. “However, bears may exploit therebound to pull prices back towards $1,213. Alternatively, a decisive breakdown below $1,213 may open a path towards the psychological $1,200 level.”
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: China’s Focus On Stimulus Weighs OnYuan
Tuesday July 24, 2018 09:02
The Chinese yuan has weakened as officialsconsider economic stimulus, says Brown Brothers Harriman. However, thecountry’s stock market got a boost. “Following a recordinjection via the medium-term lending facility yesterday, China's officialsunveiled a set of policies designed to support the weakening economy that sooncould face a substantial drag from U.S. tariffs,” BBH says. “The effort focuses onboosting domestic demand. Measures include targeted tax cuts andaccelerating new infrastructure. This is a clear shift away from thedeleveraging campaign, and it appears that the State Council dropped the‘neutral’ characterization of monetary policy.” Metals traderseye economic developments in the country since China is the world’s largestconsumer of gold.
By Allen SykoraFor Kitco News
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