U.S. Dollar Due For Short-Term Bounce - TD Securities
Much of the bad news surrounding the U.S. governmentshutdown has been priced into the U.S. dollar, thus the greenback could be duefor a short-term correction higher, according to foreign-exchange analyst at TDSecurities. However, the bank is maintaining is an overall bearish view of the U.S.dollar, despite the risk of a short-term rally. “As the circus plays out, weexercise caution on chasing the [dollar] lower over the next week few weeks,however. Instead, we look to use any positioning-inspired rallies in the buckto get fresh short exposure at better levels,” they say. Many commodityanalysts have noted that U.S. dollar weakness has been the most significantsupport for gold prices, which are only slightlydown from their recent four-month highs. They have warned that renewed strengthin the U.S. dollar could create some profit-taking in gold.
By Neils Christensen of Kitco News; nchristensen@kitco.com
Mitsubishi:Gold Still ‘Fairly Elevated’ Amid U.S. Government Shutdown
Monday January 22, 2018 08:18
Gold is downfrom last week’s highs but remains “fairly elevated” with the U.S. governmentshutdown in its third day, says Mitsubishi. Gold last week rose for the fifthstraight week, with spot metal at one point trading near $1,345 an ounce, whichwas the highest level since September. “Gold was supported by a weaker dollarfor much of the week on heightened concerns that the U.S. Congress will fail toreach an agreement on government funding, leading to a government shutdown,”Mitsubishi says. A shutdown did occur on Saturday. “Having priced this in latelast week, gold came under light selling pressure as markets reopened butremained fairly elevated, with the potential to rally further if the shutdowngoes on for an extended period, leading to a decline in investor confidence inthe U.S. growth story and heightened volatility,” Mitsubishi says. However,analysts point out, equities remained strong in the U.S. and elsewhere.“Strongly performing equities and other risk assets tends to be negative forgold; however, increasingly evidence of hedging of riskier equity and corporatebond trades in gold helps explain why bullion is continuing to hold its own inthis ostensibly challenging environment,” the firm says. Around 8 a.m. EST,spot metal was up 45 cents to $1,331.50 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
Mitsubishi:Platinum On Six-Week Winning Streak
Monday January 22, 2018 08:18
Platinum wasthe strongest precious metal last week with a gain of 1.7%, boosted by ideasthat supply/demand fundamentals could improve, says Mitsubishi. Analysts pointout that platinum has now risen for six straight weeks, which is the longestwinning streak since April-May 2016. Investors in the Nymex futures marketexpanded their net-long positioning to over 2 million ounces for the first timesince mid-September, while holdings in platinum-backed exchange-traded fundssurged to the highest level since June, rising 2.7% last week, Mitsubishipoints out. The majority of the ETF increase was from a single fund: theDeutsche Bank physical platinum product denominated in euros. “More generally,the recent improvement in investor sentiment has been driven by hopes thatcarmakers will use increasing volumes of platinum in place of palladium sinceplatinum has been trading at a substantial discount to its sister metal sinceSeptember and palladium reached new all-time highs last week,” Mitsubishi says.“Together with a high likelihood that this year will bring more restructuringof mines in South Africa - which will have a bigger impact on platinum suppliesthan palladium - there are reasons that this rally could have longer-termlegs.”
By Allen Sykoraof Kitco News; asykora@kitco.com
SP Angel: ETF Gold Holdings Up 1.1% In 2018
Monday January 22, 2018 08:18
Holdings of gold by global exchange-tradedfunds are higher so far in 2018, reports commodities broker SP Angel. “Exchange-tradedfunds added 250,728 troy ounces of gold to their holdings in the last tradingsession, recording the fourth straight day of growth,” the firm says. Gold heldby ETFs has climbed 1.1% so far this year to 72.3 million ounces, SP Angeladds. Meanwhile, Commerzbank analysts report that Bloomberg data show gold ETFsregisteredinflows of 21.5 tonnes on Thursday and Friday combined, with the majoritycoming from the SPDR Gold Trust in the U.S.
By Allen Sykoraof Kitco News; asykora@kitco.com
StandardChartered: Gold Could Test Five-Year Highs In 2018
Monday January 22, 2018 08:18
StandardChartered sees potential for gold to hit a multi-year high during 2018.Analysts forecast an average of $1,324 an ounce, with the high end of the rangeput at $1,450. “Not only do we believe the price risks for gold are skewed tothe upside in 2018, we think gold prices could test five-year highs amidcontinued geopolitical and political uncertainty,” analysts say in a recentreport. “Gold has found support at increasingly higher levels over the pastyear, and the physical market has adapted to a higher price environment. The macrobackdrop looks set to evolve favorably for gold given our expectations for thedollar to weaken further, the U.S. Treasury curve to continue to flatten, andthe Fed to hike twice in 2018.” Analysts say rallies in the yellow metal aremore likely to be sustained if investor demand is resilient and broad-based.“The scope for rising inflation, the interest rate-hiking trajectory nearingthe end of its cycle, and a stock-market correction could reignite interest ingold,” analysts say. “On the other hand, the absence of such broad support,further tightening regulations in India, continued outperformance ofalternative assets, and a tighter rate-hiking cycle without inflation remainheadwinds that could cap prices again.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank:ETF Palladium Holdings Decline; ‘Sign Of Tight Supply’
Monday January 22, 2018 08:18
A drop inpalladium holdings of global exchange-traded funds may be a sign of tightsupply as the metal presumably taken for other uses, reports Commerzbank.“Holdings in the palladium ETFs tracked by Bloomberg dipped below 1.3 millionounces again for the first time in eight years towards the end of last week,”the bank says. “Given that ETF sales have long ceased to put the brakes on thepalladium price, the outflows now are probably a sign of tight supply.”
By Allen Sykoraof Kitco News; asykora@kitco.com
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