INTL FCStone Sees Gold Prices Faring Better In July
INTL FCStone looks for goldprices to perform better in July than they did during a “miserable” month forthe metal in June. Analysts expressed surprise that gold fell last month,considering the dollar index “flatlined,” Treasury yields fell, inflationpicked up in the U.S. and Europe and equity markets were wobbly. They chalkedup gold’s declines to the general rout in commodities. In a monthly commoditiesoutlook, INTL FCStone says “we are loathe to pick market bottoms, particularlywhen prices are falling, but have to suspect that gold will do somewhat betterin July and doubt that the same set of aforementioned variable factors (shouldthey persist) will contribute to another leg lower. In fact, so far in July,gold’s tone has improved somewhat and we see that continuing as we head deeperinto the month; we see prices trading between $1,225-$1,295 in July.” Analystslist a potential July range of $15.60 to $16.60 for silver prices.
By Allen Sykoraof Kitco News; asykora@kitco.com
TD Securities Looks For U.S. Dollar To Fizzle
Monday July 09, 2018 09:50
TD Securities looks for theU.S. dollar to continue to lose steam. “This view rests on a few key driversbut mostly boils down to a mix of growth, valuation and positioning,” TDS says.The bank calls U.S. President Donald Trump a “wild card but in most casesshould weaken rather than support the dollar.” TDS says the U.S.economic-growth story is “showing increasing signs of fatigue” while growthpicks up in the rest of the world (ROW). “Our tracking of relative datasurprise momentum shows the USD remains seemingly frothy versus the pickup inthe ROW,” TDS says. Inflation should start to tick higher outside the U.S. aswell as in it, TDS says. “Trade wars will exasperate these trends as supplychains lose efficiency,” TDS continues. “The result is the gradual withdrawalof stimulus, firming liquidity and tighter credit conditions. This backdropcontinues to bode well for the international creditors like EUR and JPY (evenCHF) against the debtors like the dollar bloc. It also signals a top in the DXY[dollar index] as growth looks less exceptional yet positioning and valuationappear stretched.” Metals traders tend to closely monitor moves in the U.S.dollar since base and precious metals alike often move inversely to the U.S.currency.
By Allen Sykoraof Kitco News; asykora@kitco.com
SP Angel: Soft Prices Likely Mean Cutbacks In Platinum Supply
Monday July 09, 2018 09:50
Weak platinum prices, whichslumped to a nine-year low last week, may prompt mine-supply cutbacks, sayscommodities broker SP Angel. Analysts note that theworld’s second-largest producer, Impala Platinum Holdings Ltd., cut 2,500 jobsin the first half of 2018, with further losses possible. Only three of 10shafts at Rustenburg mining complex were profitable as of March, SP Angel says.“Implats isn’t facing the issue alone, with more than half of the industry’sproduction estimated to be unprofitable,” SP Angel says. “Rival Lonmin Plc iscutting 12,600 jobs over three years and its future hinges on the speedyapproval of a merger deal with Sibanye Gold Ltd.” Analysts note that platinumprices have dropped by more than half since the 2011 peak, as demand for themetal used to curb pollution from diesel cars weakens, partly because of slowersales of the vehicles in Europe. “The selloff in the metal has gained pace thisyear amid concerns that industrial demand could be curbed as trade tensionsescalate,” SP Angel says. Analysts later add: “As the demand outlook remainslimited, falling prices are squeezing high-cost miners, and some supply willneed to be removed.”
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.