Epstein: Gold Breakout To Determine Direction Into Year End
Gold’s breakout from its sideways tradingpattern may well dictate which direction the precious metal travels for therest of the year, says veteran futures trader Ira Epstein. Since bottoming at$1,167.10 an ounce on Aug. 16, Comex December gold rallied but then stalled,leaving the market sideways, says the director the Ira Epstein division ofLinn & Associates. Themetal has not been able to benefit from a “host of normally bullish” factorssuch as trade wars, political intrigue and an emerging-market crisis, Epsteinsays. The low price came during a currency crisis in Turkey and Venezuela. “Myguess is that both countries sold gold as their currencies were in free falls,”Epstein says. Meanwhile, trade talks continue. Epstein says that prices havebeen sideways for the first time since the start of the year after previousweakness. “The way the market breaks out of this pattern will, in my opinion,likely be the direction...into year end,” Epstein says.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Palladium SurgesOn Relief That Tariffs Not Even Higher
Wednesday September 19, 2018 09:07
Palladium has been bolstered this week onnews that the U.S. did not slap additional tariffs on Chinese goods as high asmany may have expected, says Commerzbank. Spot palladium was up $14 to$1,022.15 an ounce as of 8:44 a.m. EDT. This followed a sharp rise on Tuesdaywhen the metal topped $1,000 for the first time since June. “Market participants appearrelieved that the reciprocal [U.S.] tariffs have initially been set at ‘only’10% rather than the 25% that some feared,” Commerzbank says. “Palladium hasbenefited most from this development, rising by almost 3% yesterday and costingmore than $1,000 per troy ounce again for the first time in three months. Usedchiefly in the auto industry, palladium profited also from the relief rallyenjoyed by base metals. Because platinum hardy kept pace at all, the price gapbetween palladium and platinum widened to just shy of $200.”
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: U.S. Dollar Softer Despite RisingYields But More Gains Likely
Wednesday September 19, 2018 09:07
U.S. dollar weakness is likely only acorrection, coming despite rising Treasury yields and an ongoing trade war,says Brown Brothers Harriman. The 10-year yield of3.06% is the highest since May 23, with the market poised to test the May 18high near 3.13%, BBH says. The two-year yield hit 2.80%, the highest since July2008. “Meanwhile, trade tensions continue to ratchet up,” BBH says. TheU.S. announced 10%tariffs on another $200 billion of Chinese imports, and China responded withtariffs on $60 billion of U.S. goods that become effective on Sept. 24.Meanwhile, the U.S. has threatened yet more tariffs on Chinese imports. “Yetdespite these dollar-positive drivers, the greenback remains on its back foot,”BBH says. As of 8:52 a.m. EDT, the spot dollar index was down 0.57 point to94.583. “Granted, the dollar remains largely within recent ranges, the majorexceptions being sterling and yen,” BBH says. “For now, we view this currentdollar softness as a correction within an ongoing uptrend. As Fed tighteningexpectations adjust further upward, the dollar should get more traction.” Dollar moves are important for metalstraders since precious and base metals alike tend to move inversely to the U.S.currency.
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Gold Underpinned On Report China Won’t Devalue Its Currency
Wednesday September 19, 2018 09:07
Gold got alift overnight when Premier Li Keqiang said any conjecturethat China would devalue its currency to gain a trade advantage was“groundless,” says MKS (Switzerland) S.A. Around 9 a.m. EDT, spot gold was$7.20 higher to $1,205.10 an ounce. “Apositive session for the precious complex during Asian trade today, reclaiming$1,200 following headlines out of China from Premier Li Keqiang noting thatthey will not engage in competitive currency devaluations,” MKS says.“USD/China turned offered on the headlines, broadly weighing upon the greenbackto support gold higher. The metal pushed above $1,200 into the Chinese lunchbreak and continued to see interest throughout the afternoon.”
By Allen SykoraFor Kitco News
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