BBH: Investment Climate Faces Several Challenges
The investment climate faces a challengingenvironment due to U.S. monetary/fiscal policies, trade tensions andimmigration issues, says Brown Brothers Harriman. “All three of the major central banks met last week and confirmed thatmonetary policy would continue to diverge for at least another year,” BBH says.“Theclarity of the trajectory of monetary policy reduces the impact ofhigh-frequency economic data. There are three major disruptive forces[that] make for a challenging investment climate just the same: the U.S. policymix, trade tensions, and immigration.” Analysts note that the mix of tighter monetary policy and looser fiscalpolicy in the U.S. is “in extremis.” While the Federal Reservesays monetary policy is accommodative, the central bank has clearly signaled anintention to restrict policy. Meanwhile, “the fiscal stimulus that is beingprovided in the form of tax cuts and spending cuts are larger than in2008-2009,” BBH points out. On another issue, the “aggressive U.S. trade stance makes investors uneasy,” BBH says. TheU.S. has gone ahead with plans to implement tariffs starting July 6 and Chinahas responded with similar amounts and time. “The U.S. is in no mood fora compromise,” BBH says. “Indeed, the confrontation with China is one area[that] draws support for the administration's critics.” Meanwhile, as the U.S. is embroiled in its divisive immigrationcrisis and turning asylum seekers away, Europe's refugee crisis threatens totopple two governments, the bank points out.
By Allen Sykoraof Kitco News; asykora@kitco.com
MKS: Gold Muted In Asian Trade; SupportLies Around $1,275
Monday June 18, 2018 08:12
Gold was muted in overnight Asia-Pacifictrading after Friday’s heavy sell-off, says Samuel Laughlin of precious-metalssales with MKS (Switzerland) S.A. “The yellow metal opened underneath Friday'sclose, however, was generally well supported in early flows to push back above$1,280,” he says. “A modest bid to the greenback in the afternoon created someheadwinds to drag bullion back underneath the figure; however, the metal held anarrow range into the European open and didn't extend much lower.” Movement inthe U.S. dollar is likely to be the main drive of driver of price action in theshort term, Laughlin says. He lists support around $1,275 and resistance at therecently broken May low of $1,282, with an extension to $1,285. “Downside riskscontinue to build as ETF positioning remains buoyant and should outflows drivea break of $1,275 we could see an extension as far as $1,250 - $1,236 (December2017 low),” Laughlin adds. Asof 8 a.m. EDT, spot gold was nearly steady - down 40 cents to $1,278.50 anounce.
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.