* European Central Bank policy meeting due on Thursday * More platinum deficits loom after record 2020 undersupply – WPIC * Platinum prices likely to reach $1,300/oz over 12 months – UBS (Updates prices) By Shreyansi Singh March 10 (Reuters) – Gold eased on Wednesday after registering its biggest jump in two months in the last session, as higher U.S. Treasury yields and a stronger dollar remained a stumbling block for bullion. Spot gold was down 0.2% at $1,711.21 per ounce by 1207 GMT after rising more than 2% on Tuesday. U.S. gold futures fell 0.5% to $1,709.20. U.S. yields regained momentum on Wednesday, raising the opportunity cost of holding bullion, while the dollar also gained. “Gold prices are likely to remain under pressure, while concerns about inflation are front of mind for the market,” said CMC Markets UK’s chief market analyst, Michael Hewson, adding a stronger dollar could be a further drag on bullion prices over the next few days.
Gold is attempting to stabilize at the 2019-2021 uptrend at $1667 but the yellow metal needs to do more work to negate the downside pressure, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, reports.
See – Gold Price Analysis: XAU/USD to near the confluence support zone at $1,660-$1,670 – DBS Bank
“The market has sold off towards the $1670 June low and the $1667 2019-2021 uptrend. This is currently holding the downside.”
“Initial resistance is offered by the $1760/$1772 band, which is the May high and previous 50% retracement and the short-term downtrend in order to alleviate downside pressure and signal recovery to the 200-day ma at $1861.”
GOLD TALKING POINTS
The price of gold attempts to retrace the decline from the beginning of March as the US 10-Year Treasury yield pulls back from a fresh yearly high (1.62%), but key market themes may keep the precious mental under pressure as the Federal Reserve appears to be in no rush to alter the path for monetary policy.
FUNDAMENTAL FORECAST FOR GOLD: BEARISH
The price of gold bounces back from a fresh weekly low ($1688) as the initial reaction to the 379K rise in US Non-Farm Payrolls (NFP) dissipates, and the recent weakness in longer-dated Treasury yields may lead to a larger rebound in the precious metal even as the Federal Open Market Committee (FOMC) maintains a dovish forward guidance.
Courtesy of MarketWatch By William Watts
A stronger U.S. dollar helped to push gold futures lower Wednesday, with the precious metal failing to find haven-related demand despite a global equity selloff sparked by a continued rise in COVID-19 cases in Europe and the U.S., analysts said.
December gold GCZ20, -1.77% fell $26, or 1.4%, to $1,886.10 an ounce, while December silver SIZ20, -4.92% was down 70.5 cents, or 2.9%, to $23.86 an ounce.
European equities fell and U.S. stock-index futures pointed to heavy losses for Wall Street as European countries weighed imposing a new round of lockdowns to contain the pandemic and the U.S. saw a continued surge in new cases.
The number of new U.S. cases daily rose back above 70,000 on Tuesday after hitting a record above 80,000 at the end of last week. The U.S. has reported a record 500,000 cases over the past week, the New York Times reported, while the seven-day average of confirmed new cases hit a record of 69,967 on Monday, according to a Wall Street Journal analysis of data from Johns Hopkins University.
The fallout from the US Fed’s new inflation strategy continued on Friday, with investors finding comfort that policy will remain accommodative. This saw the ANZ China Commodity Index ending the session up 0.2%. This capped off a positive week for commodities, with the CCI rising 0.6%. Industrial metals led the complex, with nickel and copper recording strong gains. Precious metals were also stronger, with gold rising 1.3% over the week. Crude oil gained, sending the energy sector higher. Bulk commodities ended the week lower, as iron ore fell. Agriculture was down over the course of the week.
Gold slumps when its inflation-adjusted price is as high as it is now
Gold today is nearly as overvalued as it’s ever been over the past five decades. That’s the conclusion reached by just-released research from Campbell Harvey, a finance professor at Duke University; Claude Erb, a former commodities portfolio manager at TCW Group, and Tadas Viskanta, founder and editor of the investment blog AbnormalReturns.com.
Their research couldn’t be more timely. In the wake of gold GC00, 0.01% breaking above the $2,000 level, enthusiasm for the yellow metal has reached a fever pitch. Earlier this week, for example, MarketWatch reported that a fund manager forecasted that gold could double to to $4,000 an ounce.
Before I discuss this new research, let me emphasize that its conclusion has nothing to do with the extreme bullishness that has prevailed for several weeks now among short-term gold timers. That’s a bearish omen, as I noted three weeks ago, and gold’s price nevertheless has continued to jump ever higher into all-time high territory.
This new research focuses instead on gold’s fundamental value, in much the same way that Wall Street analysts calculate a stock’s fair value. The fundamental justification for a higher gold price that is most often mentioned is inflation. This rationale is repeated so frequently, in fact, that few of us stop to subject it to historical scrutiny. If we did, we would find that it enjoys little statistical support.
Courtesy of Kitco News byAllen Sykora
Monday March 25, 2019 10:59
Kitco News – Fund managers sharply increased their bullish positioning in gold futures during the most recent reporting week for data compiled by the Commodity Futures Trading Commission.
Markets seemingly were factoring in a more dovish U.S. Federal Reserve even before policymakers gave markets a dovish surprise for the second straight meeting, analysts said.
During the week-long period to March 19 covered by the report, Comex April gold rose by $8.40 to $1,306.50 an ounce, while May silver dipped 4.1 cents to $15.372.
Net long or short positioning in the CFTC data reflect the difference between the total number of bullish (long) and bearish (short) contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.
The CFTC’s most recent “disaggregated” report showed that money managers increased their net-long position in gold to 30,475 futures contracts as of March 19 from 17,407 the week before.
The cut-off date for the data was one day ahead of the last meeting of the U.S. Federal Open Market Committee, in which policymakers collectively signaled that there may be no rate hikes in all of 2019.
“Money managers aggressively covered their short gold positions and took out new long exposure as they anticipated the FOMC to sound a dovish tone,” said TD Securities. “The significant increase in length was also driven by the concurrent weakening of the USD [U.S. dollar] and renewed economic growth concerns.
“Indeed, the Fed delivered a significantly more dovish message than the market expected as it eliminated a hike this year. This prompted a relief rally, but no surge into a sustained breakout.”
The disaggregated data showed that money managers cut their gross shorts by 12,452 lots. The number of new longs increased by a modest 616.
“Speculative financial investors are … likely to continue betting on rising gold prices after having already stepped up their net-long positions considerably to [nearly] 30,500 contracts in the week to 19 March, according to the CFTC’s statistics,” said Commerzbank. “In our opinion, this further paves the way for gold as it continues on its upswing.”
Meanwhile, in the case of silver, the funds’ net length increased slightly to 9,716 lots from 9,487 as the amount of fresh buying slightly outpaced the fresh selling. Gross longs rose by 814 lots, while total shorts increased by 585.By Allen Sykora
For Kitco News