Nervous Investors 'Go For The Gold' - OptionsXpress
Gold futures are among the "few bright spots for commodity bulls," with prices poised to test their 2017 high, says Mike Zarembski, senior commodities analyst with optionsXpress. Comex August gold on Tuesday threatened the $1,300-an-ounce level for the first time since mid-April, with investors moving some assets to so-called "safe havens" like gold and U.S. Treasury notes, he says. Factors cited by traders for moving into gold include recent terrorist attacks and an important election in the U.K. Thursday, along with recent weakness in the U.S. dollar, which is trading at lows not seen since the spike low immediately following U.S. elections, Zarembski says. "In addition, data out of Asia seems to confirm that physical gold demand has been increasing in both China and India, which is adding support to physical gold prices," he continues. "With psychological resistance at $1,300 just a few ticks above current price levels, we may see gold prices begin to accelerate higher should resistance fail to hold and trend-following commodity funds add to positions on a breakout to new highs for the year." As of 8:51 a.m. EDT, Comex August gold was down $3.40 for the day to $1,294.10 an ounce after hitting a Tuesday high of $1,298.80.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: TradersPrepare For Most Important Day Of The Quarter'
Wednesday June 07, 2017 08:56
Thursday "may bethe most important day of the quarter for investors," says Brown BrothersHarriman. Market participants will be watching for the outcome of a EuropeanCentral Bank meeting, and U.K. voters go to the polls. In the U.S., JamesComey, the former director of the FBI, is scheduled to deliver congressionaltestimony. He was fired by President Donald Trump last month while overseeingan FBI investigation of Russian influence in last autumn's U.S. elections."Ahead of these significant events, the global capital markets are mostlyquiet, with some pockets of activity," BBH says.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank:Indian Gold Demand Robust' But May Wane
Wednesday June 07, 2017 08:25
Physical golddemand in India still appears "extremely robust," although this could be curbedby higher prices in the month ahead, says Commerzbank. Analysts cite data fromThomson Reuters GFMS showing that Indian gold imports in May climbed to 103tonnes, roughly four times as high as in the same month a year ago, althoughCommerzbank notes May of 2016 was a weak month. In the first five months of2017 combined, imports totaled 424 tonnes, a year-on-year gain of 144%. "Thishigh level will not be maintained, however," Commerzbank says. "The significantlyhigher price level is likely to slow gold buying in India, as should theintroduction from 1 July of the 3% goods and services tax, ahead of which weshould see purchases brought forward though."
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Gold MayConsolidate Ahead Of Major Risk Events'
Wednesday June 07, 2017 08:25
Gold remains poised to push above $1,300 an ounce although the market could meander sideways for a while before a number of major upcoming events, says Alex Thorndike, senior precious-metals dealer with MKS (Switzerland) S.A. Spot metal briefly poked above $1,296 on Tuesday. "A test of $1,300 seems almost inevitable from here...," Thorndike says. "A lot will be riding on the political outcomes of the British election Thursday and [former FBI Director James] Comey's congressional testimony, which threatens to damage [the] Trump administration, and the ECB over the next 48 hours." Then attention turns to next week's meeting of the Federal Open Market Committee, with markets factoring in a roughly 90% probability of a rate hike, Thorndike continues. "If the Fed holds on this, a correction in the precious -- particularly gold and silver -- could be sharp and severe," he says. "For now, we see the metal consolidating around $1,280-1,300, leading into these risk events."
By Allen Sykoraof Kitco News; asykora@kitco.com
Metals Focus: Gold GST Rate Will Help The Industry Over The Long Term'
Wednesday June 07, 2017 08:25
Metals Focus saysthe 3% goods and service tax (GST) on gold, announced over the weekend, shouldbe helpful for gold in the long term since it was not as high as some feared.The GST was passed in August 2016. Since, the GST Council has met 15 times to settax rates for various commodities, the consultancy explains. During a weekendmeeting, gold-market participants watched to see what the council would decidefor precious metals and jewelry. The GST on precious metals was one of the lastitems to be finalized, reflecting a lack of consensus among council membersover the past several months, Metals Focus says. Consuming states wanted ahigher GST rate, whereas the manufacturing states called for a lower rate.After intense lobbying, the council announced a 3% GST on precious metals andjewelry. "This announcement is significant, as there was a growing fear amongthe industry that the council might announce a GST of 5% or higher, especiallyas a section of the government wanted a higher rate," Metals Focus says. "Priorto this decision, the council had already approved tax bands of 0%, 5%, 12%,18% and 28% for goods and services. As such, the 3% band for precious metalsappears to be a special rate which highlights the importance of the industry tothe government. We believe that this rate will help the industry over the longterm."
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 precious metal products, 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.  |