Month: February 2019

AFP AFP•February 10, 2019
Christine Lagarde met Imran Khan on the sidelines of the World Government Summit in Dubai
Christine Lagarde met Imran Khan on the sidelines of the World Government Summit in Dubai (AFP Photo/KARIM SAHIB)
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Dubai (AFP) – The International Monetary Fund on Sunday warned governments to gear up for a possible economic storm as growth undershoots expectations.

“The bottom-line — we see an economy that is growing more slowly than we had anticipated,” IMF Managing Director Christine Lagarde told the World Government Summit in Dubai.

Last month, the IMF lowered its global economic growth forecast for this year from 3.7 percent to 3.5 percent.

Lagarde cited what she called “four clouds” as the main factors undermining the global economy and warned that a “storm” might strike.

The risks include “trade tensions and tariff escalations, financial tightening, uncertainty related to (the) Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy”, she said.

Lagarde said trade tensions — mainly in the shape of a tariff spat between the United States and China, the world’s two biggest economies — are already having a global impact.

“We have no idea how it is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets,” she said, warning governments to avoid protectionism.

Lagarde also pointed to the risks posed by rising borrowing costs within a context of “heavy debt” racked up by governments, firms and households.

“When there are too many clouds, it takes one lightning (bolt) to start the storm,” she said.

Published: Feb 8, 2019 8:11 a.m. ET  0 

By William Watts

DEPUTY MARKETS EDITOR  – MarketWatch

Gold futures edged higher early Friday but remained on track for a small weekly loss in the face of a stronger U.S. dollar, though bulls remained encouraged by the haven yellow metal’s resilience.

Gold for April delivery GCJ9, +0.34%  on Comex was up $2.20, or 0.2%, at $1,316.40 an ounce, leaving it down 0.4% for the week. Gold remains up 2.7% since the end of last year. March SIH9, +0.84%  was up 6.7 cents, or 0.4%, to $15.78 an ounce.

Gold bulls said growing concerns about global growth should provide underlying support. The European Central Bank last month took a more dovish-than-expected stance amid continued weakness in European data, while the Federal Reserve last week surprised investors with a dovish pivot, putting future rate moves on hold until further notice. The Reserve Bank of Australia has also struck a dovish tone and the Bank of England on Thursday offered a downbeat outlook for growth amid Brexit uncertainty.

“The fact that we are seeing major central banks turn dovish at the same time is probably alarming for some investors, which may explain why stocks have failed to sustain their rally. But this is good news for bonds and therefore noninterest-bearing and low-yielding assets such as gold and silver,” said Fawad Razaqzada, market analyst at Forex.com, in a note.

“What’s more, with the dollar index having just completed a six-day rally, you would think that these dollar-denominated metals would simultaneously be down for the same number of days. However, over the last six trading days, gold has only been down on three occasions, while silver has been down on 5 occasions, although higher today,” he said.

The ICE U.S. Dollar Index DXY, -0.12% a measure of the U.S. currency against a basket of six major rivals, was up 0.1% on Friday, leaving it on track for a 1.1% weekly rise. A stronger dollar can be a negative for commodities priced in the unit because it makes it more expensive to users of other currencies.

U.S. stock-index futures pointed to a lower start for Wall Street, putting equities on track for a three-day losing streak.

In other metals trade, April platinum PLJ9, +0.59%  was up $2, or 0.3%, at $799.30 an ounce, while March palladium PAH9, +0.59%  rose $17.90, or 1.3%, to $1,376 an ounce.

March copper HGH9, +0.02%  was off 0.6 cent, or 0.2%, at $2.8225 a pound.

Gary Wagner Thursday February 07, 2019 18:13

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

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The Chinese markets might be closed this week, however concerns about the continuation of our looming trade war continues. Resulting in U.S equities closing sharply lower today and as of 4:30 PM Eastern standard time the Dow Jones industrial average is off by well over a full percentage point and currently trading down almost 290 points a net decline of 1.15% on the day. The NASDAQ composite is experiencing deeper losses today currently down approximately 1.5%, and the Standard & Poor’s 500 is down by 1.3%.

At the same time precious metals are not so black and white, as we see major price differences in gold when comparing current futures pricing to that of spot prices. Currently spot gold is fixed at $1310.40, a net increase of $4.20 on the day. At the same time gold futures basis, the most active April contract is currently unchanged at $1314.40.

Most interesting is that today’s moderate gains in the physical price of gold are entirely based on bullish market sentiment, with traders bidding the precious yellow metal higher by $6.00 per ounce. Dollar strength has resulted in a decline of $1.80 limiting today’s upside move in spot gold, this according to the KGX (Kitco gold index).

Although gold futures are showing very little change on the day, most noteworthy is the fact that after trading to a low today of $1306, prices quickly rebounded and are currently range bound between up $.20-$.30, and down $.20-$.40.

Both silver and palladium are trading higher on the day. Currently silver futures basis the most active March contract is trading up almost 2/10 of a percent and currently bid at $15.73. Palladium is exhibiting gains of 6/10 of a percent, which is a gain of $8.10 today. Putting March Palladium futures at $1359.70. Obviously, palladium continues to outshine and outperform the other precious metals in the complex.

It is an uncommon occurrence for spot gold to be trading moderately higher and gold futures to be trading fractionally lower. That being said we have seen this scenario occur twice in the last two weeks of trading. This might be indicating that gold prices will move higher and that the current price correction might in fact be short-lived.

Wishing you as always, good trading,By Gary Wagner