HSBC: Iraqi Gold Purchases Reinforce Gold’s Role As Diversifier Tuesday March 25, 2014 3:02 PM News that the Central Bank of Iraq accumulated 36 metric tons of gold in March “reinforces gold’s rose as a portfolio diversifier,” says HSBC. Iraq’s central bank doubled its gold holdings, and the purchase was the largest monthly gold accumulation for a central bank since the Mexico added 78.5 tons of gold in March 2011, says HSBC. “Central banks, most notably from the emerging markets, have been accumulating bullion since 2010 as a means to diversify away from the USD,” HSBC says. “We expect central banks bullion accumulation to total 400t this year.” Recent Gold Trade Correlated With Economic News – optionsXpress Tuesday March 25, 2014 11:06 AM Gold might be back to reacting to economic news more-so than geopolitical tensions such as those surrounding Russia and Ukraine, says optionsXpress. The Comex April futures hit a low of $1,306 early Tuesday that was their weakest level in more than a month, although they have since turned higher for the day. “Gold futures have fallen in recent sessions, as trade reflects more of a correlation with economic activity rather than trading on uncertainty,” optionsXpress says. Comments from Federal Reserve Chair Janet Yellen last week exerted some pressure on the precious metal. Weaker Chinese manufacturing data at the start of the week was seen as a sign that a softer economy could hurt physical demand there, the firm continues. Still, optionsXpress adds, “While this could be seen as a negative sign for gold, the weakness in manufacturing may spur the Peoples Bank of China to move forward with a fresh round of stimulus.” Technically, the recent decline in gold means the Relative Strength Index has gone from “overbought to near oversold levels,” optionsXpress adds. UBS Looks For More Gains In Platinum/Gold Ratio Tuesday March 25, 2014 8:24 AM UBS looks for the platinum/gold ratio to rise as a strike continues against South African platinum producers and supplies tighten. “Platinum inventories, including those in the pipeline, have likely been drawn down by now or at most are dwindling,” UBS says. “We expect that from April, producers will struggle to meet contractual commitments with customers. Considering the severity of the situation, platinum prices seem rather benign at these levels, over $50 off the peak at the beginning of the month.” The platinum/gold ratio, which measures how many ounces of gold it takes to buy an ounce of platinum, is around 1.09, the highest in the last couple of weeks, UBS says. “But at these levels, the ratio is still considerably lower than the 2 ½-year high of 1.18 posted at the beginning of the year,” UBS says. “With gold under pressure right now and the strike in South Africa continuing, the platinum/gold ratio could have scope for further upside in the near-term.” MKS: $1,296-$1,308 Area Critical Support For Gold Tuesday March 25, 2014 8:18 AM Gold is holding just above a key support region, says MKS (Switzerland) SA. Just after 8 a.m. EDT, spot gold was at $1,311.30 an ounce. This is just above a Fibonacci support level near $1,308, psychological support of $1,300 and the 200-day moving average of $1,296.80, MKS points out. “We feel that this $1,296-1,308 zone is critical to maintain the yearly upward momentum,” MKS says. MKS: Palladium Recent Stalwart Among Precious Metals Tuesday March 25, 2014 8:17 AM “A Perfect Storm has been brewing for palladium this month,” pushing the premium for sponge (metal in powder form) to $8 last week, says UBS. Palladium has been underpinned by the planned start of two exchange-traded funds in South Africa this week, a strike against producers of platinum group metals in the country and worries about potential trade sanctions against Russia. “With demand for palladium sponge and ingot high right now, premiums should only rise and so too could lease rates,” UBS says. “And if no resolution is found in SA in the next few weeks, we think metal tightness will only intensify if producers are forced to source metal in the market. April could be a very interesting month for palladium, and platinum also.” Spot palladium peaked at $800.20 an ounce overnight, its strongest level since August 2011. TDS Anticipates Copper Rebound With Healthy Chinese Demand Tuesday March 25, 2014 8:17 AM TD Securities looks for a “modest” rebound in copper. The metal recently hit 3 ½-year lows on worries about the economy and credit conditions in China, in particular the potential for a selloff of inventory used to back loans. “Many investors worry that there may (be) a 400,000-(metric)-ton surplus in 2014, as increases in production and imports outpace the growth in real consumption,” TDS says. Still, copper has bounced from its recent lows on a realization that global demand is no worse than mid-2010 and on prospects for Western economies to continue absorbing supply, in turn prompting short covering, TDS says. “As far as we are concerned, China copper and base metals demand will continue to be healthy into 2014, and we expect a modest rebound,” TDS says. “The current problem is more of an inventory adjustment problem, rather than structural demand deterioration in China.” Just after 8 a.m. EDT, three-month copper on the London Metal Exchange was up $90.25 to $6,563.25 a ton, up 3.8% from last week’s $6,321 longtime low.
Posted on: Wed, 26 Mar 2014 19:02:57 +0000
Trending Topics
Recently Viewed Topics
© 2015