INTL FCStone: Dollar Reversal Pushes Comex Gold Lower
Preciousmetals and commodities generally are moving lower, pressured mainly by a modestreversal higher in the U.s. dollar, says INTL FCStone. The approach of aFederal Reserve meeting this week may be leading to some dollar short covering,especially considering that bets against the dollar hit record highs, based onthe most recent data from the Commodity Futures Trading Commission, INTLFCStone says. “The precious metals group is feeling the impact of the dollar'ssurge most...,” the firm adds. As of 9:28 a.m. EST, Comex April gold was $9.20softer at $1,348 an ounce.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: U.S. Has Not Launched ‘Currency War’
Monday January 29, 2018 08:44
The U.S. did not abandon the "strong-dollar policy" orbegin a currency war, says Brown Brothers Harriman. Treasury Secretary U.S.Treasury Secretary Mnuchin initially roiled markets last week when he suggesteda soft dollar was good for the U.S., although the administration quickly saidit still favors a strong-dollar policy. “Not only did Mnuchin clarify his comments, but PresidentTrump gave as near a full-throated endorsement of the strong-dollar policy asimaginable,” BBH says. “While Mnuchin's remarks fueled criticism from other G7[Group of Seven] officials, they did not retaliate by trying to talk down theirown currencies. The much-talked-about ‘currency war’ has not begun.” BBH saysthe strong-dollar policy of recent administrations was really the“de-weaponization” of the foreign-exchange market. “In that little phrase, theU.S. signaled it would no longer use the dollar to elicit policy concessions orreduce its debt burden,” BBH says. “Mnuchin did not suggest otherwise. Now theG7 and the G20 have endorsed this principle, which briefly stated is thatforeign-exchange rates ought to be set by the market.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM: Traders Focused On State Ofthe Union, FOMC, Jobs Report
Monday January 29, 2018 08:44
The State of the Union speech, ameeting of the Federal Open Market Committee and monthly jobs report are allkey events in the U.S. that could influence the dollar this week, says Hussein Sayed, chief market strategist at FXTM. Trump is scheduled to deliver his first State of theUnion address to Congress on Tuesday. “Although he is highly likely to declarea victory over the tax overhaul, and how his actions boosted the Americaneconomy and stock returns, investors will be focused on any details surroundingthe infrastructure bill, trade tensions, and border wall funding,” Sayed says.Meanwhile, the analyst says the FOMC is expected to leave monetary policyunchanged when it announces the rate decision on Wednesday. “Given this is thelast meeting chaired by Janet Yellen, I don’t expect much out of it,” Sayedsays. However, any tweaks in the statement may be slightly hawkish sinceinflation expectations have risen to its highest levels since 2014, the analystsays. The jobs report on Friday is always one of the biggest news events of anymonth for financial markets. “Aftera disappointing figure in December, markets are anticipating 175,000 nonfarm payrollshave been added in January,” Sayed says. “Moreover, since the return ofinflation is becoming a hot topic, wage growth will be under the traders’microscope once again. This is where we might see a surprise, driven byincreased bonuses following the tax reforms.”
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: GoldTo Attract Buying Interest Around $1,340-$1,345
Monday January 29, 2018 08:44
MKS(Switzerland) S.A. looks for gold to draw buying interest in the $1,340-$1,345region, which is around current levels. As of 8:24 a.m. EST, spot metal wasdown $5.10 to $1,344.20 an ounce. The metal ran into headwinds on a dollarrecovery during Asian-Pacific trade, reports Sam Laughlin, seniorprecious-metals trader with MKS. “Into month-end, expect the yellow metal to trade heavily around$1,350 in lieu of any major dollar moves; however, any dips toward$1,340-$1,345 are likely to garner solid interest to restrict further downsidemoves,” he says.
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.