RBC's Gero: Gold Up On Bargain Hunting But Interest Rates Are Concern
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Gold has ticked modestly higherearly Wednesday as some market participants use the recent price plunge as abuying opportunity, says George Gero, managing director with RBC WealthManagement. As of 9:14 a.m. EST, Comex April gold was $1.30 higher to $1,319.90an ounce but earlier traded as high as $1,322.60. “Small bargain huntersthis morning after yesterday’s selling triggered by Fed’s Powell...and outlookfor rate hikes, which are headwind for gold,” Gero says. He was referring tocongressional testimony from new Fed Chair Jerome Powell, who signaled acontinued gradual rate-hiking approach. “Rate hikes are a double trouble asthey make gold more expensive in dollar terms and present alternate interestbearing assets,” Gero adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
INTL FCStone:Precious Metals Stabilize But ‘Vulnerable’
Wednesday February 28, 2018 09:36
Precious metalshave stabilized Wednesday but remain “vulnerable” after Tuesday’s heavysell-off, says Edward Meir, commodities consultant with INTL FCStone. As of 9:14a.m. EST, Comex April gold was $1.30 higher to $1,319.90 an ounce after fallingby $14.20 on Tuesday. May silver was 1.6 cents higher to $16.45. “Precious metals got hit hard yesterday in the wake ofstronger dollar and rising bond yields, but seem to be holding their groundtoday, although we still see them as being vulnerable in the short term,” Meirsays.
By Allen Sykoraof Kitco News; asykora@kitco.com
Metals Focus: Silver Output In Mexico, Peru To Grow Further
Wednesday February 28, 2018 08:22
Silver production is likely to keep growing in key producingnations Mexico and Peru, says Metals Focus. Analysts from the consultancy madea research trip to the countries. Mexican output rose by an estimated 5% lastyear while Peruvian production rose 1%, compared to a 4% decline in globaloutput, Metals Focus says. “Feedback from our contacts reaffirmed theiroptimism about silver production in the coming years, as a few new mines areexpected to come on stream and many we spoke to are keen to explore newprojects both domestically as well as in other parts of Latin America,” MetalsFocus says. “In some cases, this reflects the still-healthy margins forprimarily silver mines. Meanwhile, silver is also expected to benefit from therecovery in the base-metal sector.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: Market Moves To Fully Factor In Third U.S. 2018 Rate Hike
Wednesday February 28, 2018 08:22
Tuesday’s congressional testimony by Federal Reserve Chair JeromePowell prompted the financial markets to factor in three rate hikes this year,but not four, says Brown Brothers Harriman. “Many marketparticipants think they heard Fed Chair Powell give a fairly strong signal thathe favored a more aggressive course,” BBH says. “The implied yield on the DecemberEurodollar futures rose five basis points to 1.535%. The December Fed fundsfutures contract rose three basis points. The market moved not to pricing in a fourth hike this year,but to fully price in the third hike, which the December dot-plots implied. Athird hike would bring the effective Fed funds rate to 2.17% and the impliedyield of the January 2019 Fed funds futures contract is 2.155%. It tookPowell's apparent comfort with a more aggressive path to convince the market ofsomething the Fed's dot-plot indicated more than two months ago.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank:China’s Gold Imports From Hong Kong Rise
Wednesday February 28, 2018 08:22
The approach ofChinese New Year festivities helped boost China’s gold imports from Hong Konglast month, says Commerzbank. Analysts cite Hong Kong data showing Chinaimported a net 51.6 tonnes of gold from Hong Kong in January. “This wasapproximately 20 tonnes more than in December and than in last January, as wellas the highest import figure in six months,” Commerzbank says. “One role wasprobably played by the Chinese New Year’s Festival, ahead of which jewelersdoubtless topped up their stocks.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Key Chart Level For Gold Lies At $1,324.15
Wednesday February 28, 2018 08:22
Gold needs toreclaim failed support at $1,324.15 an ounce for the bulls to regain theirfooting, says Lukman Otunuga, research analyst at FXTM. The metalcame under heavy selling pressure on Tuesday due to a stronger dollar.“The yellow metal’s downside was fueled by hawkish remarks from Federal ReserveChairman Jerome Powell, which heightened speculations of higher U.S. interestrates this year,” Otunuga says. He describes the technical charts as nowbearish for gold, with prices below the 50-day simple moving average, whilemoving average convergence/divergence has crossed to the downside. “Previoussupport at $1,324.15 could transform into a dynamic resistance that encouragesa decline to $1,310 and $1,300, respectively,” Otunuga says. “For bulls to jumpback into the game, gold prices need to break back above $1,324.15.”
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.