Commerzbank: ETF Gold Holdings Rise By 8 Tonnes
Gold-backed global exchange-traded funds posted a largeinflow Wednesday, says Commerzbank. This came as the U.S. Dow Jones IndustrialAverage fell by more than 800 points. Meanwhile, “the gold ETFs tracked byBloomberg registered an inflow of around eight tonnes yesterday,” Commerzbanksays. “This is attributable to the SPDR Gold Trust in the U.S. and was thefirst daily inflow into this ETF since July.” Gold ETFs track the price of the commodity, with metal put intostorage to back the shares. They give investors exposure to the price of goldwithout costs such as assaying and storage.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: Equity-Market Correction Unlikely ToSway Fed On Tightening
Thursday October 11, 2018 09:55
Brown Brothers Harriman doubts the equity-market sell-off on Wednesdaywill stop the Federal Reserve from its monetary tightening. The Dow JonesIndustrial Average lost more than 800 points, prompting President Donald Trumpto declare that the Fed is “crazy.” All of this has left market participantswondering if an equity-market correction will stay the Fed’s hand in December,BBH says. “Theshort answer is no,” analysts continue. “The long answer is that short of aplunge along the lines of 1987 or 2008, Fed policy will not be impacted. Still,it’s worth noting that Bloomberg’s WIRP page shows the odds of a December hikefalling to 73% today from 81% Tuesday.” Analysts remindthat the Fed has a dual mandate of full employment and price stability. “Theunofficial third mandate is financial stability,” BBH says. “This doesn’t meanit has to prop up the equity market. What it does mean is that the Fed can andwill act if financial stability is being threatened for whatever reason. Recallthat in 2008, it wasn’t just a precipitous plunge in equity markets, but anear-collapse of the global financial system. Thankfully, we’re nowhere nearthat yet.” BBH adds that “it’s very unhelpful” for the president to say that the Fed “has gone crazy.” Still,analysts add, “We do not think jawboning will have any impact on Fed policy.That said, continued criticism will likely keep markets nervous.”
By Allen Sykoraof Kitco News; asykora@kitco.com
RBC’s Gero: Bargain Hunters Snap Up GoldAt Low Prices
Thursday October 11, 2018 09:55
Goldagain is back over $1,200 an ounce as bargain hunting set in and the U.S. dollar eases, says George Gero, managing director with RBC WealthManagement. The metal got a boost from weak equities Wednesday. However, aneasier U.S. dollar has also helped gold, Gero says. He notes that rate hikes bythe Federal Open Market Committee have provided headwinds for gold for sometime now, while rises in Treasury yields competed for safe-haven flows. “However, recent low prices for gold attracted bargainhunters as open interest increased this week,” Gero says. As of 9:40 a.m. EDT,Comex December gold was $16.70 higher to $1,210.10 an ounce. The Decemberdollar index was down 0.292 point to 94.885.
By Allen SykoraFor Kitco News
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