Standard Chartered: Trade-War Fears Put Floor Under Gold
Worries about a trade war halted the slide in gold last week thathad threatened to carry prices below $1,300 an ounce, says Standard Chartered.“Expectations of a steeper hiking trajectory have weighed on gold, coupled witha stronger USD [U.S. dollar], but gold also caught a safe-haven bid on the backof the uncertainty surrounding the possibility of a global trade war,” the banksays. “Rising inflation expectations could lift prices longer term but hedgingagainst heightened geopolitical tensions is more likely to provide a short-termprice lift.” Analysts are referring to a Trump administration announcement thatofficials are considering a 10% tariff on imported aluminum and 25% tariff onsteel. Spot metal early Wednesday climbed as high as $1,329.55 an ounce, itsmost muscular level this month so far, before backing down to $1,331.20 around8:47 a.m. EST.
By Allen Sykoraof Kitco News; asykora@kitco.com
Standard Chartered: Diesel News ‘Stubborn Hurdle’ For Platinum
Wednesday March 07, 2018 08:50
Negative news reports about diesel-powered vehicles are a“stubborn hurdle” for platinum for now, but the metal is likely to hold up overthe longer term, says Standard Chartered. As of 8:42 a.m. EST Wednesday, spotmetal was down $8.65 at $960.20 an ounce after last trading above $1,000 onFeb. 27. On that day, a German court ruling allowed cities to ban dieselvehicles showed that platinum prices remain highly sensitive to dieselair-pollution headlines, Standard Chartered says. The metal is used forcatalytic converters in diesel-powered vehicles. The bank says its Europeanauto-catalyst demand forecast for platinum is almost 200,000 ounces lower thanthe forecast two years ago mainly due to diesel engines’ falling market share.“Further exacerbating demand for platinum this year is the projected lowerloadings due to 6d-TEMP regulations that are expected to drive a shift towardsnon-PGM [platinum group metals] technology,” Standard Chartered says. “However,we believe the floor is better supported than previously for several reasons:increasing price-elastic demand emerging from China’s jewelry sector; fuel-cellvehicles gaining traction, albeit from a low base; the heavy-duty diesel sectoris set to grow in India and China; and perhaps most importantly, CO2 emissionshave risen in markets where diesel is losing market share, thus in order tomeet targets, diesels will not be entirely neglected. We see some downside riskto near-term prices, but expect platinum to be trading back above $1,000/oz ona more sustained basis in H2.”
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: Investors Anxious OverRenewed Threat Of Trade War
Wednesday March 07, 2018 08:50
The resignation of White House chief economic advisor Gary Cohn has “sentripples through the capital markets,” says Brown Brothers Harriman. Analystscall him one of the few "globalist" advisers in the administration. “Stocks have been markeddown across the world,” BBH says. “The prospects of a trade war are also notgood for growth and it may be adding to the pressure on yields.” BBH cites twoconsequences of Cohn’s resignation. “As Cohn goes, so does the last-ditcheffort of forces within the administration seeking to deter the tariffs,” BBHsays. “Treasury Secretary [Steve] Mnuchin seems more supportive, thoughprobably would have preferred a more targeted approach. The industry summitCohn was trying to arrange has been canceled. That means that Congress is thenext potential check on the unilateral trade power of the executive, which haslargely been transferred from the legislative branch. Second, wesuspect that investors are also responding to the implications for future tradepolicy. It means thatthe Ross and Navarro wing will set the tone. This signals a more confrontationaland aggressive trade policy.”
By Allen SykoraFor Kitco News
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