INTL FCStone: 'Stale Longs' Exiting From Gold Positions
Bulls are exiting from “stale” positionsin gold futures, says INTL FCStone. The market is sliding and has lost theupward momentum from earlier in the year. INTL FCStone analysts say “we are quite surprised to see a big selloff hitting gold,”with prices falling to a six-month low. “The fact that the precious metal hasnot been moving higher despite falling global equities and a rather restraineddollar has prompted stale longs to exit their positions,” INTL FCStone says.“In fact ...overall fund length in gold hit a 2 1/2 -year low this past week,according to the latest CFTC [Commodity Futures Trading Commission] report.”
By Allen Sykoraof Kitco News; asykora@kitco.com
TDS: Better Days May Be Ahead For GoldAmid ‘Trade Angst’
Tuesday June 26, 2018 08:36
Gold has not fared well lately despite risingglobal trade tensions that have knocked down equities, but the yellow metal“may do better on growing trade angst,” says TD Securities. Gold has been hurtby expectations for more Federal Reserve hikes, says Bart Melek, head ofcommodity strategy with TDS. Further, the U.S. dollar rose - which hurts gold -after dovish signals on European monetary policy, Melek points out. “However,given the recent equity-market correction and talk of a trade-driven slowdownin the global economy, it is likely that the market will start to get a lotless enthusiastic about aggressive Fed tightening and the USD [U.S. dollar],”Melek says. “In addition, the yield curve and rates across the curve arefalling, which decreases both carry and opportunity cost, while risk ofsentiment should see investors start returning to the paper gold market.”Further, bullish positioning by speculators fell sharply in the most recentreport from the Commodity Futures Trading Commission. “With low longpositioning and risk reversals starting to move convincingly towards puts, evena modest risk that a trade war may materialize, a weaker USD or Fed statementswalking back from aggressive hike rhetoric have the potential to very quicklyspike gold into the $1,300s,” Melek concludes.
By Allen Sykoraof Kitco News; asykora@kitco.com
Analysts: ETF Gold Holdings Continue To Decline
Tuesday June 26, 2018 08:36
Gold holdings of global exchange-traded funds continue to decline,analysts report. Reuters reported that holdings by 12 gold-backedETFs tracked by the news organization were down 3% from 57.8 million ounceslast month to 56.2 million as of Friday, with holdings on pace for the weakestmonth since July 2017. Analysts reported further declines in ETF data releasedMonday. “Besides the withdrawal of speculative financialinvestors, ETF investors are also continuing to jettison gold,” says a researchnote from Commerzbank. “Gold ETFs saw outflows of 4.3 tonnes again yesterday.”Adds MKS(Switzerland) S.A.: “The precious complex is struggling against ETF outflows (holdings down1.5 million ounces in June), while failing to find support from ongoing 'tradewar' headlines as President Trump turns focus from China to Europe.”
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: ‘Reduced RiskWillingness’ May Eventually Support Gold
Tuesday June 26, 2018 08:36
Gold mayeventually profit from “nervousness” in the financial markets, Commerzbanksays. “Despite the numerous risks, gold is still not in demand as a safehaven,” Commerzbank says. “That said, the nervousness among market participantsis growing. The VIX index, which shows the fluctuations in the S&P 500stock index in the U.S., rose sharply for a time yesterday, while our in-houserisk index - the ARPI - also indicates a somewhat reduced risk willingnessamong market participants. This is not reflected in the gold price as yet,however, though it could signal an upcoming shift in mindset among marketparticipants. If so, gold should finally profit.”
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.