Standard Chartered: 'Subdued' Gold In August, Then September Recovery
Standard Chartered looks for gold-priceaction to remain “subdued” in August but recover next month. “August is aseasonally slow period for demand, and we believe it is likely that gold priceswill recover after the September FOMC [Federal Open Market Committee] meeting,when we think the Fed will hike for a third time this year, and seasonal demandstarts to materialize,” Standard Chartered says. “A lingering concern is thatIndia’s monsoon forecast has weakened.” A weaker monsoon could mean lower farm incomesin the key consuming nation, thus hurting demand. “The relative strengthindicator suggests gold prices are hovering around oversold territory andshould find technical support around $1,194,” Standard Chartered says.“However, price action is likely to remain soft near term given extreme shortpositioning and around 210 tonnes of loss-making ETF [exchange-traded-fund]positions.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Metals Focus Sees Rising Silver Prices Outperforming Gold
Wednesday August 8, 2018 09:50
Metals Focus sees silver rising later this year, suggesting themetal may outperform gold. Headwinds for the precious metals may last for awhile yet, the consultancy says, listing ongoing trade tensions that have ledto U.S. dollar strength and investors rotating out of emerging-market bonds andequities into U.S. Treasury notes. The consultancy also says a silver supplysurplus is building, noting that Comex silver warehouse stocks have hitall-time highs. Further, retail investment has been soft. “In spite of theseheadwinds, we believe that silver prices will start to recover in late 2018,”Metals Focus says. Analysts say they look for the dollar to turn lower, sincetwo more U.S. rate hikes this year are already factored into prices. Further,many suspect equity prices have peaked, the consultancy continues. Moneymanagers hold a net-short position in silver futures, which may prompt ashort-covering rally when they buy to exit, Metals Focus explains. “Moreover,when conditions start to turn more positive for precious metals, there is scopefor silver to reassert itself and so outperform the yellow metal,” analystsconclude.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: India’s Gold Demand ‘Picking Up Again’
Wednesday August 8, 2018 09:50
Indian gold demand is showing signs of life but the People’sBank of China remains absent from the gold market, says Commerzbank, citingreports involving the world’s two largest gold-buying nations. “Gold demandappears to be picking up again somewhat in India,” Commerzbank says. Analystscite preliminary data from the Ministry of Finance showing that gold importsclimbed to 65.6 tonnes in July, up 20% from the same month a year ago.“Year-on-year, Indian gold imports have thus risen for the first time thisyear,” Commerzbank says. “The new goods and services tax was introduced inIndia on 1 July 2017 and initially prompted restraint among Indian consumers.”Analysts suggested full-year Indian imports may be at the lower end of theWorld Gold Council’s forecast of 700 to 800 tonnes of gold this year, meaningthey likely will fall short of last year’s 763 tonnes. Meanwhile, Commerzbankcites data from the International Monetary Fund showing that the Chinesecentral bank bought no gold in July. “The PBOC’s gold holdings were last toppedup in October 2016...,”Commerzbank says. “It was recently speculated on themarket that the PBOC had been using its currency reserves to stabilize theChinese currency. Its reserves rose slightly in July, however.”
By Allen SykoraFor Kitco News
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