DJIA
Last loading.. Chg. loading..
FTSE
Last loading.. Chg. loading..
NDXI
Last loading.. Chg. loading..
POPULAR NEWS
Gold Set for Worst Run in Five Months as Demand Eases

Gold is set for a third weekly drop, the worst run in five months, as investors weigh goodwill measures on trade from China and the U.S. against fresh stimulus from the European Central Bank and prospects for another U.S. rate cut next week. Palladium fell after hitting a record Thursday. Spot gold little changed at $1,499.41/oz at 7:13am in London; -0.5% this week. Bloomberg Dollar Spot Index -0.1%. Trump administration officials have discussed offering a...

Gold ends lower, suffers a weekly loss as bond yields rise

Gold futures ended lower on Friday, giving up earlier gains to feed a loss for the week as appetite returned for assets perceived as risky and bond yields climb. Gold pared some of its earlier gains then turned lower after data Friday revealed that the University of Michigan consumer sentiment index rebounded to 92 in September from 89.8 in August. U.S. business inventories also increased by 0.4% in July and U.S. retail sales rose 0.4% in August. December gold on Comex lost $7.90, or 0.5%,...

U.S Stocks End Mostly Lower as Dow Extends Seven-Day Streak of Gains

U.S. stocks closed mostly lower on Friday after easing trade tensions and central bank policy moves briefly buoyed investor sentiment earlier in the day. The S&P 500 was down less than 0.1% to end near 3,007. The Dow Jones Industrial Average advanced 36 points, or 0.1%, to finish around 27,219, based on preliminary numbers.The Nasdaq Composite fell 0.2% to end near 8,177. The blue-chip Dow clinched its seventh consecutive gain, its longest such streak since 2018. Both the Dow and the...

Hong Kong Shares End Week With Sharp Gains

Hong Kong stocks finished Friday with a flourish as investors were cheered by easing tensions in the China-US trade row while also betting on another interest rate cut by the Federal Reserve next week. The Hang Seng Index jumped 0.98 percent, or 265.06 points, to 27,352.69. Source : AFP

Hong Kong shares end week with sharp gains

Hong Kong stocks finished Friday with a flourish as investors were cheered by easing tensions in the China-US trade row while also betting on another interest rate cut by the Federal Reserve next week. The Hang Seng Index jumped 0.98 percent, or 265.06 points, to 27,352.69. Source: AFP

Home

Trade Wars Not Building Enough Fear To Push Investors Into Gold - Analysts
Monday, 13 May 2019 13:54 WIB | GOLD CORNER |Gold OutlookGold Corner

Heightened global trade tensions are pumping volatility into financial markets, but there is still not enough fear to drive gold prices materially higher, according to some analysts.

Falling equity markets are helping gold prices end last week in positive territory, but the market remains trapped in a channel, unable to break critical resistance levels above $1,290 an ounce. June gold futures last traded at $1,288.70, up 0.5% from last Friday.

Gold's lackluster performance during a week that saw equity markets drop more than 3.5% is not inspiring a lot of investor confidence in the near term, according to some analysts.

Bill Baruch, president of Blue Line Futures, said that he expects gold prices to struggle as this is traditionally a slow season for the precious metal. He added that despite all the market uncertainty, investors continue to bet on equity markets.

"Many people see the weakness in equities as a healthy correction," he said. "The S&P is only 3% from its all-time highs. There still isn't a lot of fear in the marketplace that would really give gold prices higher."

Baruch said that he is neutral on gold in the near term as there is "solid ground" supporting prices. He added that he would expect gold prices to rally after the summer lull.

Trade Wars Not Driving Gold Prices

Gold's disappointing performance comes as markets digest the news that the U.S. government has increased the tariff to 25% on $200 billion of Chinese imports.

Adam Button, managing director of Forexlive.com, said that one of the reasons there is not a lot of fear of the higher tariffs is because they don't actually take effect for a few more week.

"A lot can happen between now and June and one tweet can change the sentiment around trade," he said.

Button said that investors will have to see weaker economic growth as a result of the tariffs before they seek safe-haven assets like gold.

Jonathan Butcher, principal economist at Wood Mackenzie, warned in a research note Friday that the new tariffs could have a significant impact on global growth.

"The tariffs introduced in 2018 had a clear and negative impact. There was a lag before the effects were realized, but China trade data showed a fall in volumes from the end of 2018 much greater than normally occurs at that time of year. This was not limited to China-US trade; there were clear spill-overs to other economies," he said.

"We estimate that the negative impact of Friday's tariff increase could be even greater. The 10% tariff of 2018 was not fully passed on to U.S. consumers “ importers have absorbed some of the costs through margin compression. A tariff of 25% is much harder to ignore, and will cause more displacement and disruption to trade flows."

The WoodMac economist said that escalating trade wars could drag economic growth to 2.3% to 2.4%, down from current growth forecasts of 2.6%.

U.S. Economy Remains Beacon Of Growth

David Madden, market analyst at CMC Markets, said that even in the face of a growing trade war, the gold market still suffers from the relative strength of the U.S. economy.

He added that even if the U.S. economy weakens, other major economies like Europe are expected to weaken at a greater pace.

"Even if the Fed does turn dovish, it would only be a matter of time before other central banks turn even more dovish and that continues to support the U.S. dollar," he said. "When gold can't surge higher when equities drop 400 points, that kind of tells you that the market doesn™t want to go higher."

Madden said that in the current environment, gold prices could eventually push to $1,300 an ounce, but he added that he doesn't see it going materially higher.

Button agreed that for many investors, the current economic worries are not strong enough to push gold higher.

He added that investors need to see a substantial drop in global economic growth that would prompt central banks around the world to loosen monetary policy.

Expected Rate Hikes Continue To Support Gold Prices

Although some analyst are not expecting gold prices to surge higher any time soon, the bearish case for the yellow metal is also not very strong.

Many analysts have said that rising volatility and the expectation that the Federal Reserve will cut interest rates by the end of the year continue to provide support for the yellow metal.

Bernard Dahdah, precious metals analyst at Natixis, said in a report Thursday that he thinks gold prices are current trading at their lows for the year. He added that prices should start to rise in the second half of 2019.

"We expect that the Fed will cut rates in December of this year. This will reduce the opportunity cost of holding gold and make the metal attractive. Moreover, the rate cut should put further pressure on the dollar, which will also suffer on the back of a widening budget deficit and slower growth," he said.

The bank kept its current gold forecast for the year unchanged, seeing the yellow metal averaging $1,330 an ounce, rising to $1,380 in the fourth quarter.

Ole Hansen, head of commodity strategy at Saxo Bank, said that he also remain optimistic on gold and thinks it's only a matter of time before prices break resistance above $1,292 an ounce. However, he added that it gold needs to see renewed interest from the paper market to make sustainable long-term gains.

"Despite gold's dismal performance last week, I believe it will eventually break above $1,292 to challenge the April high," he said.

The Final Say

With little major economic data to chew on, analysts have said that investors and traders will watch the news headlines for further insight into the trade negotiations between China and the U.S.

One of the economic reports that will garner attention next week will be Wednesday release of April retail sales. Markets will also receive housing construction data Thursday.

Source: Kitco News

RELATED NEWS
Gold to keep bullish trend this week: ECB, U.S. data in focus...
Monday, 9 September 2019 11:35 WIB

After a very volatile session, gold is closing with a second straight week of losses last Friday while analysts remain bullish but slightly more cautious for this week. Seeing gold hit new fresh six-...

Bearish Cracks Appearing In Bullish Gold Market...
Monday, 19 August 2019 15:16 WIB

After three-straight weeks of gains, cracks are starting to appear in gold's bullish veneer, particularly among Wall Street analysts, according to the latest results of the Kitco News Weekly Gold Surv...

Wall Street, Main Street Sill Bullish On Gold, But Caution Creeping Higher...
Monday, 12 August 2019 12:41 WIB

The market remains emphatically bullish on gold. But, looking past the headlines, the yellow metal is beginning to look overbought, according to some analysts. The gold market is on track to see its ...

Gold Survey Shows Bulls In Full Control...
Monday, 5 August 2019 13:19 WIB

The gold bears had their chance to take control of the market but failed, and now the bulls are in full control as both Wall Street and Main Street expect to see higher prices in the near-term as unce...

Wall St., Main St.: Gold To Shine During FOMC Week...
Monday, 29 July 2019 14:29 WIB

Wall Street and Main Street both look for gold prices to climb this week, with the Federal Open Market Committee widely expected to cut U.S. interest rates, according to the weekly Kitco News gold sur...

POPULAR NEWS
Gold Set for Worst Run in Five Months as Demand Eases

Gold is set for a third weekly drop, the worst run in five months, as investors weigh goodwill measures on trade from China and the U.S. against fresh stimulus from the European Central Bank and prospects for another U.S. rate cut next week. Palladium fell after hitting a record Thursday. Spot gold little changed at $1,499.41/oz at 7:13am in London; -0.5% this week. Bloomberg Dollar Spot Index -0.1%. Trump administration officials have discussed offering a...

Gold ends lower, suffers a weekly loss as bond yields rise

Gold futures ended lower on Friday, giving up earlier gains to feed a loss for the week as appetite returned for assets perceived as risky and bond yields climb. Gold pared some of its earlier gains then turned lower after data Friday revealed that the University of Michigan consumer sentiment index rebounded to 92 in September from 89.8 in August. U.S. business inventories also increased by 0.4% in July and U.S. retail sales rose 0.4% in August. December gold on Comex lost $7.90, or 0.5%,...

U.S Stocks End Mostly Lower as Dow Extends Seven-Day Streak of Gains

U.S. stocks closed mostly lower on Friday after easing trade tensions and central bank policy moves briefly buoyed investor sentiment earlier in the day. The S&P 500 was down less than 0.1% to end near 3,007. The Dow Jones Industrial Average advanced 36 points, or 0.1%, to finish around 27,219, based on preliminary numbers.The Nasdaq Composite fell 0.2% to end near 8,177. The blue-chip Dow clinched its seventh consecutive gain, its longest such streak since 2018. Both the Dow and the...

Hong Kong Shares End Week With Sharp Gains

Hong Kong stocks finished Friday with a flourish as investors were cheered by easing tensions in the China-US trade row while also betting on another interest rate cut by the Federal Reserve next week. The Hang Seng Index jumped 0.98 percent, or 265.06 points, to 27,352.69. Source : AFP

Hong Kong shares end week with sharp gains

Hong Kong stocks finished Friday with a flourish as investors were cheered by easing tensions in the China-US trade row while also betting on another interest rate cut by the Federal Reserve next week. The Hang Seng Index jumped 0.98 percent, or 265.06 points, to 27,352.69. Source: AFP

DISCLAIMER

Seluruh materi atau konten yang tersaji di dalam website ini hanya bersifat informatif saja, dan tidak dimaksudkan sebagai pegangan serta keputusan dalam investasi atau jenis transaksi lainnya. Kami tidak bertanggung jawab atas segala akibat yang timbul dari penyajian konten tersebut. Semua pihak yang mengunjungi website ini harus membaca Terms of Service (Syarat dan Ketentuan Layanan) terlebih dahulu dan dihimbau untuk melakukan analisis secara independen serta memperoleh saran dari para ahli dibidangnya.