Gold Drops as Climb to 4-Month High Spurs Investor Sales – Bloomberg 07-14-14

Salient to Investors:

  • Hedge funds et al are the most bullish on gold since November 2012.
  • Jeffrey Currie at Goldman Sachs expects $1,050 by year-end as the economy improves.
  • Abhishek Chinchalkar at AnandRathi Commodities said prices are a little overstretched technically as funds are overbought, while gold is vulnerable to a severe pullback should Yellen’s testimony to Congress be seen as not dovish.
  • Barclays says most precious metals look toppy, with downside risk to gold on any earlier than expected interest rate hike.

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Gold Drops With Silver on Speculation U.S. Economy Is Improving – Bloomberg 05-28-13

Salient to Investors:

Morgan Stanley said ETF selling and a stronger dollar is the largest headwind facing gold, so should either trend ease, physical demand via jewelry sales and central bank buying could provide key support.

Feng Liang at GF Futures said prospects for the US economy remain positive and expectations for a withdrawal of QE support the dollar and weigh on gold. Liang said the initial wave of physical demand after the big price drop has eased and purchases tend to slow down as the price approaches $1,400.

The median analyst expects platinum to end the year at $1,690 and palladium at $800.

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Gold Bears Braced for U.S. to China Growth Recovery: Commodities – Bloomberg 02-15-13

Salient to Investors:

20 analysts expect gold prices to fall next week, 11 to rise, 3 neutral – the highest proportion of bears since Dec. 30, 2011. Gold is below its 200-day moving average, indicating more declines may follow. Gold fell in March in 6 of the last 9 years.

Hedge funds have cut bets on higher gold prices by 56 percent since October, while investors cut record bullion holdings in gold ETPs in 2013 and added to funds backed by other precious metals used more in industry. Central banks from Brazil to Russia are buying more gold to diversify from currency holdings.

Industrial usage accounts for 10 percent of gold consumption, versus over 50 percent for silver, platinum and palladium. Barclays and Rabobank Intl say usage will outpace supply this year in tin, platinum and palladium, while corn, wheat and cocoa will have shortages in the 2012-13 season.

Andrey Kryuchenkov at VTB Capital said the global economic recovery is on track and persistently decent macro data is denying gold its safe-haven status, with better returns available elsewhere.

In Q4 2012, Soros Fund Management reduced its investment in the SPDR Gold Trust by 55 percent, Moore Capital Mgmt sold its entire stake in the SPDR fund and lowered holdings in the Sprott Physical Gold Trust, while Paulson & Co., maintained its stake.

Credit Suisse said gold is unlikely to return to its September 2011 high of $1,921.15 because of accelerating US growth and contained inflation. Goldman Sachs expects gold to rise to $1,825 in three months and peak in 2013.

The IMF predicts global growth of 3.5 percent in 2013 versus 3.2 percent in 2012. Economists expect US and Chinese growth to accelerate in coming quarters. The median economist expects US economic growth to accelerate every quarter in 2013 to 2.7 percent in Q4. China is expects to grow 8.3 percent in Q3 from 8.1 percent in Q1.

John Meyer at SP Angel Corporate Finance said a lack of imminent financial disasters is pushing investors towards a more risk-on approach and away from gold.

Adrian Day at Adrian Day Asset Mgmt is accumulating, saying the monetary backdrop remains extremely positive for gold.

Robert Keck at 6800 Capital said economic activity in China and the US is telling us that commodities are poised to rise – Europe maybe slow, but the global economy is growing.

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Platinum Rises to 17-Week High; Palladium, Gold Advances – Bloomberg 02-04-13

Salient to Investors:

Johnson Matthey said platinum output dropped 10 percent in 2012: auto catalysts account for 33 percent of global demand, and industrial applications account for 28 percent.

James Cordier at said platinum fundamentals are very bullish as end-users rush to secure supplies.

JPMorgan Chase said platinum and related metals may spike in 2013 and 2014 because of higher consumption and a lack of investment in mines

Silver inventories are the highest since 1997.

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Speculators Boost Bullish Bets Most Since November: Commodities – Bloomberg 01-21-13

Salient to Investors:

Commodity speculators increased net-long positions last week by the most since Nov. 27.

Barclays says investors increased commodity holdings by $20.4 billion in 2012 versus $14.6 billion in 2011. Suki Cooper et al at Barclays said palladium will be the best performing precious metal in 2013 as supplies tighten and demand increases from China. Barclays expects energy and industrial metals to rise in 2013.

Mihir Worah at Pimco said increased investor flows into commodities are supported by fundamentals.

The median economist expects China’s growth to rise to 8 percent in Q1  and 8.2 percent in Q2.

Adrian Day at Adrian Day Asset Mgmt said higher taxes for Americans is going to have a lot of impact and may dim the outlook for commodity prices if consumer spending slows.

Cameron Brandt at EPFR Global said money managers added a net $861 million to commodity funds last week, while precious-metals funds had $39 million outflows.

John Kinsey at Caldwell Securities said the outlook for global growth has improved, with China’s a big factor because it’s the largest importer of almost any commodity, plus a new regime in Japan, and Europe gotten its act together.

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