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Gold and Silver Prices
Gold gained its second straight weekly gain as prices found support on Friday amid a weaker tone for the U.S. dollar while palladium hit its record peak.
"'The announcement of specific stimulus measures helped sentiment in China, which arguably is the global marginal consumer in automobiles, helping palladium climb quietly to new highs,' said Tai Wong, head of base and precious metals derivatives trading at BMO. 'There is (also) some concern that talk of possible scrap metal export ban in Russia could impact already extremely stretched palladium supplies,' Wong said.
"The price of the metal, used mainly in emissions-reducing catalysts for vehicles, has risen almost 90 percent from a trough in mid-August last year and is up about 24 percent so far this year.
"Meanwhile, gold rebounded following the previous session's over 1 percent decline, gaining 0.5 percent to $1,302.89 an ounce en route to its second straight weekly rise.
"Fuelling gold's advance, the dollar fell against its rivals, weighed down by weak manufacturing and factory output data, ahead of a Federal Reserve meeting next week expected to shed more light on the outlook for interest rates.
"For gold, whether it closes above or below $1,300 will help determine sentiment early next week before focus moves to the new Fed dot plot," BMO's Wong said.
"Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar. Also, in a potentially bearish development for the dollar, Chinese news agency Xinhua reported representatives from Beijing and Washington made substantive progress on trade over a call." ("Palladium soars to record, gold moves back up above $1,300," Reuters, CNBC, 03/15/19.)
Gold ended the week up $4.60, closing at $1,302.30. Silver ended the week down $0.05, closing at $15.31.
Here's Why the Price of Gold Will Keep Going Up in 2019- Krauth
Correction in gold prices may have already hit a low and gold can rally despite the unclear direction of the dollar.
"Bulls can stop worrying about the price of gold falling anytime soon... pullback was not only normal, but healthy.
"Gold prices just notched a huge gain over a short six-month period, blasting 14% higher between August and mid-February. That's big. And if the gold price had continued to power any higher, its correction could have been worse.
"So chalk it up to normal bull action of three steps forward and one step back as gold continues to climb its golden staircase. Although the price of gold has dropped by about $60 from its recent peak, we may have already seen the worst.
"The Fed's renewed dovish stance has lower real rates back as a driving factor for higher 2019 gold prices. And consider too that, seasonally, gold tends to bottom around mid-March then climb through until end of May.
"Gold has already printed a solid bounce back to $1,310 in just the last few days, strongly suggesting its correction has run its course.
"With all this in mind, there are big things ahead for the price of gold in 2019...
Why the Gold Price Is Bouncing Back
"Over the past three weeks, gold has come to terms with its strong gains between August and February, with the metal's price peaking on Feb. 20 at $1,346. From the August low of $1,175, that produced a striking gain of $171, or 14.6%. Since that February peak, gold has dropped back by about $60 to $1,286, giving up a total of 4.5%.
"This correction in the gold price has been an almost perfect negative correlation with the U.S. Dollar Index (DXY), with about a five-day delay. Looking at the action in the dollar, we can see that the DXY bottomed a few days after gold's February peak, and may have peaked just after gold's recent low.
"But even as gold has corrected, its recent price action suggests that correction may have already hit a low... So far, gold's March 7 low has held above its Jan. 24 low, providing for a bullish higher low pattern... I believe we've seen the bottom of this gold correction. What's more, if you consider the seasonal patterns of gold's behavior, we could be in a sweet spot right now.
"Looking at gold's bull years since 2001, it typically bottoms in mid-March, then starts on a spring rally through until the end of May... this potential rally has the ability to push gold above its February high near $1,340 by then. If gold can close above that level, then its previous high of $1,350 (last April) will lie within close reach.
Stronger Indicators for the Price of Gold in April
"... the dollar's direction is anything but clear at this point. The DXY remains above its 50-day moving average, and both the relative strength index and moving average convergence divergence have been trending higher since early January.
"... this doesn't seem to have gotten in gold's way, as gold prices have continued to rally in the face of a stronger dollar. That has been a bullish omen for gold in the past. With the gold price back above its 50-day moving average, it's possible that $1,300 will now become a new support level. If indeed the gold correction is over, it will have been relatively short, barely lasting three weeks.
"... on a fundamental basis, there are positive signs that gold is set to continue climbing higher this year..." ("Here's Why the Price of Gold Will Keep Going Up in 2019," Peter Krauth, Money Morning, 03/15/19.)
Gold Still On Track To Hit $1,400- ABN AMRO - Christensen
A Dutch bank is very bullish on gold and sees a target price of $1,400 by the end of the year.
"In her latest precious-metals report Thursday, Georgette Boele, coordinator of foreign exchange and precious metals strategy at ABN AMRO, said that the metal's technical outlook supports higher prices.
"Despite the recent sharp decline in prices, prices are still above the 200-day moving average at around $1,250 per ounce," Boele said. "We are confident that prices will stay above this level. It is possible that prices drop towards this level and test it, but this would be an opportunity to position for higher gold prices."
"Boele said that her firm is maintaining its year-end target for gold prices to rally to $1,400 an ounce. However, she added that the market will be susceptible to lingering strength in the U.S. dollar and a spike in U.S. bond yields.
"'It is likely that in the near-term, the US dollar will be more resilient and therefore gold prices are unlikely to take off and break above the key resistance area at $1,365-1,375 per ounce,' she said.
"Ultimately, Boele said that the U.S. dollar will be unable to maintain its current momentum as the Federal Reserve and other central banks look to loosen monetary policy this year.
"Finally, ABM AMRO also sees potential for gold as the Chinese government looks to stimulate its economy and support its wavering currency. 'We think that the Chinese authorities will continue to take measures to support the economy, albeit less aggressive than in the past. This and a possible U.S.-China trade deal will support the yuan and gold prices,' she said.
"Although Boele is unabashedly bullish on gold, she is a little bit more reserved on silver. Although higher gold prices will also pull silver higher... 'we continue to expect higher silver prices later in the year,' she said." ("Gold Still On Track To Hit $1,400- ABN AMRO," Neils Christensen, 03/14/19.)
Gold firms as dollar wilts on amended Brexit deal - Reuters
Gold could reach $1,400 an ounce by the end of 2019 according to one analyst.
"Gold edged higher on Tuesday, supported by a retreat in the dollar after an apparent breakthrough in Brexit negotiations between the European Union and Britain... Spot gold rose 0.36 percent to $1,298.61 per ounce...
"Some dollar weakness emerged due to the Brexit talks, in turn providing short-term support to gold prices, Capital Economics analyst Ross Strachan said.
"The dollar fell from near three-month highs hit in the previous session, making bullion cheaper for holders of other currencies.
"Capping gold's rise, last-minute tweaks to Britain's arrangement for leaving the EU triggered gains in global stocks, having soothed investor worries about a possible no-deal exit.
"British lawmakers were preparing to vote on a divorce deal at around 1900 GMT after Prime Minister Theresa May won fresh assurances from the EU.
"The yellow metal has recently found some support from increasing concerns about global growth, briefly rising above $1,300 on Friday. Weak U.S. jobs data and modest retail sales in January were seen as signs of a U.S. economy losing momentum.
"Investors were now focused on the U.S. consumer price index due at 1230 GMT and on U.S.-China trade negotiations.
"Gold could rise to $1,400 by the end of 2019, with global growth concerns a factor underpinning the advance, Strachan said. 'We expect equity markets to move significantly lower and gold's safe-haven properties to come into play.'" ("Gold firms as dollar wilts on amended Brexit deal," Reuters, CNBC, 03/12/19.)
Gold Is Best Bet Against "Currency Destruction"- Lin
Frank Holmes says issuance of low-yield or negative-yielding debt is "currency destruction."
"Investors, especially in Europe, should be stockpiling gold now to protect themselves against currency devaluation, said Frank Holmes, CEO of U.S. Global Investors.
"'What's also interesting is why gold's above $1,300 [an ounce] is seeing the amount of debt that's offering negative real interest rates, it's $9 trillion,' Holmes told Kitco News.
"Holmes said that the issuance of low-yield or negative-yielding debt, especially in Europe, is 'currency destruction.'
"On the mergers happening in the mining space, Holmes said that much of the consolidation is happening out of necessity, due to a dwindling of reserves. 'I think you get these smart guys who understand this thesis that there's peak gold, and [reserves] are very hard to replace, so you're going to get these mergers that try to maintain their status quo,' he said.
"His comments come as Newmont and Barrick have agreed to a joint venture project in Nevada instead of a full merger.
"'It's called peak gold. They're scrambling to try to maintain; they can't replace. Just think of Nevada. Those two companies, when they put their joint venture together, will produce 4 million ounces a year. If they collaborate and drive down their costs they can maintain those 4 million ounces a year,' he said." ("Gold Is Best Bet Against "Currency Destruction," David Lin, Kitco News, 03/15/19.)