Goldman Sachs 'Constructive' On Commodities, Including Gold
Goldman Sachs is upbeat on commodities despite recent weakness,looking for gold to be among the markets that rise. Following financialmarkets, commodity prices sold off sharply over the past week, with the S&PGSCI down 5.6% from the Jan. 26 peak. “This sell-off, however, was less thanthe 10.2% decline in the S&P 500,” Goldman says. “Ironically, the catalystfor the equity move was rising inflation concerns in the face of strongeconomic activity indicators, which further reinforces our view that commoditymarkets are set to outperform other asset classes once the current liquidationflows subside. As is the case for equities, we view this move as primarilypositioning, technical and USD [U.S. dollar] driven, with the magnitude of thedeclines well correlated to both the strength of the prior price trend and thelevel of speculative length. Despite the sell-off, we find that recent fundamentaldata is still supportive of our constructive view on the asset class.” OnThursday, Goldmanupped its one-year gold forecast to $1,450 an ounce. Goldman analysts citedexpectations for recovering demand in emerging-market nations.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Investors Sell Gold ETF HoldingsTo Offset Stock Losses
Friday February 09, 2018 08:56
Some investors have liquidated their holdingsin gold exchange-traded funds this week to raise cash due to the sell-off inequities, says Commerzbank.” Gold is in demand as a safe haven in the current marketenvironment,” analysts report. “It is trading at just shy of $1,320 per troyounce after having dipped for a time yesterday to $1,307. So far, however, thebuying interest is not evident in the gold ETFs - on the contrary, since thebeginning of the week they have seen outflows of nearly 15 tonnes. ETF investorsare probably selling gold to offset their losses on the stock markets.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM:Expectations For Higher U.S. Rates Pressuring Gold
Friday February 09, 2018 08:56
Goldremains pressured by a stabilizing U.S. dollar and rising expectations ofhigher U.S. interest rates, says Lukman Otunuga, research analyst atFXTM.“Investors would usually expect gold to benefit from increased stock-marketvolatility, but this has so far not been the case,” the analyst says. “Ifspeculation continues to increase over developed central banks increasingrespective interest rates, gold is at risk to further selling pressure.Focusing on the technical picture, the yellow metal is bearish on the dailycharts. Previous support at $1,324.15 could transform into a possible ‘top,'potentially encouraging further declines towards the lower $1,300s.”
By Allen Sykoraof Kitco News; asykora@kitco.com
RBC's Gero: Gold Held Back By ‘RushTo Cash'
Friday February 09, 2018 08:56
Gold continues having trouble gaining traction despite this week'sweakness in equities, says George Gero, managing director with RBC Wealth Management. A “rush to cash continues as mutual funds see outflows, so gold is still off their [investors'] radar,” Gero says. Meanwhile, he notes that a budget deal thatpassed Congress averts a government shutdown but adds to deficits. This is important for gold buyers in the long term, as they will recognize inflation, Gero adds. As of 8:37 a.m. EST, Comex Aprilgold wasdown $1.70 to $1,317.40 an ounce.
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.