INTL FCStone: Gold Traders To Eye Stock Market
Gold’s near-term fortunes may well hingeon U.S. equities, says INTL FCStone. The metal closed higher last week for thefourth straight week for the longest such winning streak since January, thefirm points out. Meanwhile, stocks were on pace for their worst monthly declinein October in eight years, although the futures market is pointing to a higheropen for equities on Wall Street Monday morning. “Much of what will transpirein gold over the course of the coming week will ride on the tone of the U.S. stockmarket,” INTL FCStone says. “Obviously, if the decline continues, gold shouldlikely work higher, but the strength in the dollar is somewhat surprising andseems to be capping a more robust [gold] rally. We remain neutral on the[precious-metals] complex here, as the somewhat limited scope of gold’s overallmovements within a still-tight trading range does not warrant the risk ofinitiating a position either way.”
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Shorts Could Be Forced Out Of MarketIf Gold Tops $1,245
Monday October 29, 2018 08:12
MKS (Switzerland) S.A. sees potential fortraders with short, or bearish, positions in gold to be forced out of themarket if the metal can break up through $1,245 an ounce on the technicalcharts. As of 7:58 a.m. EDT, spot gold was down $2 to $1,228.90 an ounce afterhitting a three-month high just below $1,242 on Friday. “We continue to see$1,235 as a pivot point for a further test through $1,240 with global equitiesand the dollar likely to remain under pressure,” MKS says. “Recent buyinginterest has been predominately driven by the instigation of fresh longpositioning and there is still scope for recent shorts to be squeezed on a movethrough $1,245, with further demand through $1,250.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank Sees Palladium Backing Off To$1,000/Oz Next Year
Monday October 29, 2018 08:12
Commerzbank looks for palladium to ease from its recent record highs around$1,150 an ounce and trade closer to $1,000 next year. Auto-catalyst demand nowaccounts for more than 80% of total palladium demand, analysts say in aresearch report released just ahead of the weekend. The market remains in asupply deficit. “However, the trade conflict between the U.S and China couldhave a negative impact on the economic outlook and car sales figures there,”the bank says. “The two countries are the world’s largest auto markets, and highlygasoline-dominated. The fact that the premium on the palladium price ascompared with the platinum price is at a historically high level is likely tohave substitution effects. Although the possibilities for substitution ingasoline auto catalysts are limited due to the superior technical properties ofpalladium, the use of palladium in diesel auto catalysts could be reduced againnonetheless. The abating impact of the tax reform and the higher interest ratesalso threaten to put the brakes on the U.S. economy next year, making for agloomier fundamental environment for palladium.” Much of the recent strength inprices was due to speculative buying, Commerzbank says. “Palladium is thereforelikely to shed its latest gains again and to trade next year at around $1,000per troy ounce.”
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