Metals Focus: 'Limited' Impact On Silver Industrial Demand From Trade War
Globally, a trade war likely will have limited impact on theindustrial use of silver, says the consultancy Metals Focus. Analysts offeredthe assessment after the International Monetary Fund this week downwardlyrevised its forecast for global economic growth in 2018 and 2019 due mainly tothe U.S.-China trade war. Generally, investors have shrugged off trade-warfears, as reflected by a strong stock market, Metals Focus says. Nevertheless,analysts cite data showing that industrial demand is important to the silvermarket. They look for industrial silver demand to rise 0.2% to 514 millionounces, which would be the highest total of the decade. “In terms of overallsupply/demand, industrial offtake now accounts for 54% of the global total (vs.50% in 2010),” Metals Focus says, calling this demand a “success story” despiteefforts to thrift on silver. “Regarding the direct impact of the trade war onsilver consuming industries, in most cases we believe that, at least at aglobal level, this will be limited,” Metals Focus says. “A globalized supplychain should allow many manufacturers to shift sourcing and production acrossdifferent geographies. Naturally, there will be winners and losers, but theindustry as a whole should be able to adapt to the new regime.” Still, MetalsFocus says it looks for a market surplus this year of 48 million silver ounces,noting that other forms of demand, such as physical investment, have declined.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: IMF Economic Forecast Improves Gold Outlook
Wednesday October 10, 2018 09:52
Commerzbank says the International Monetary Fund’s downwardlyadjusted forecast for growth in the global economy in 2018 - a decline of 0.2percentage points to 3.7% -- should help the outlook for gold. “Above all, thismeans less tailwind for the stock markets, which have already fallen noticeablyin recent days,” the bank says. “Gold should profit as soon as this isreflected in rising risk aversion.” Analysts also note that there have not beenany further significant outflows from gold exchange-traded funds lately,although there likewise have not been fresh inflows. “For the gold price tomake any marked gains, the negative sentiment among speculative financialinvestors also will have to turn,” Commerzbank adds.
By Allen Sykoraof Kitco News; asykora@kitco.com
U.S. Deficit Growing At Record Pace Outside Of A Recession -BNP Paribas
Wednesday October 10, 2018 09:17
The economic team at BNP Paribas is highlighting growinggovernment debt in the U.S. Jean-Luc Proutat,head of OECD economies, notes that U.S. deficits are exploding as thegovernment pushes massive economic stimulus measures. “While supporting thebusiness climate, these actions have exploded the Federal deficit, whichactually reports one of its biggest increases ever outside of a recession,” hesays. “One could say it is no big deal for the United States, thanks to thedollar’s international status. Yet, the fiscal boost has its limits. In manyrespects, US policy consists of accelerating an engine that is already close tofull speed.” Proutat’s comments come as U.S. 10-year yields trade neartheir highest levels in seven years.
By Neils Christensen of Kitco News; nchristensen@kitco.com
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