Displaying items by tag: metals

Monday, 01 July 2019 09:42

Commodities are Rallying for Many Reasons

(Houston)

Something very interesting is happening across commodities markets—they are rallying. The reason this is interesting is it is a broad-based rally, not just in a narrow safe haven like gold. Oil, a major barometer for growth, is also jumping. The reasons why are two-part. Firstly, the US and China seemed to ease trade tensions somewhat this week at the G20; but secondly, OPEC has said it is cutting oil output. Metals, grains, and emerging markets also rallied.


FINSUM: This makes sense because a de-escalation of the trade war would help the global economy. Further, a reduction in tariffs would simply make the flow of commodities and goods smoother once again.

Published in Eq: Energy
Friday, 28 June 2019 09:41

Why the Gold Rally Won’t Reverse

(New York)

Gold has been doing well recently. Between global trade turmoil, a falling economy, and decreasing yields, the metal has thrived. Here are three reasons the gains won’t reverse. The first is that the stock market continues to look risky, meaning gold’s allure as a safe haven seems assured. Secondly, yields on bonds have a definitively downward direction, which makes gold more attractive. Finally, inflation is unlikely to stay low forever. When it starts to rise, it would give investors another reason to bet on gold instead of bonds.


FINSUM: We don’t really think inflation will be much of a factor for gold in the immediate term, but the first two points are material.

Published in Comm: Precious
Friday, 21 June 2019 10:20

How to Play Gold with ETFs

(New York)

Gold is doing well, and it is no surprise. Markets are worried about an economic downturn, and yields are falling, both of which are bullish for gold. The metal is up almost 7% in July alone. But what is the best way to play the commodity using ETFs? Owning gold directly is costly, so passive structures are great. Consider the SPDR Gold Shares ETF (0.40% fee), the iShares Gold Trust (0.25%), and the GraniteShares Gold Trust.


FINSUM: Passive is definitely the best way to play gold. We like the outlook for the metal as rates and yields are definitely headed lower, which helps gold in multiple ways.

Published in Comm: Precious
Friday, 14 June 2019 10:14

Gold is Looking Bullish

(New York)

Gold has been doing well, and it is no surprise as to why. Both the economy and the trade war are having a bullish effect on gold, which has responded in line with investor fears. Additionally, worries over tensions in the Middle East and the protests in Hong Kong have offered a short-term boost to prices. Stephen Innes, managing partner at Vanguard Markets, says “Today’s price action suggests the market is not long enough gold, especially by historical standards, for this elevated level risk as investors have remained far too complacent to mounting risk in Hong Kong and the smolder explosive political powder keg in the Middle East”.


FINSUM: Gold has been in a bear market for so long that it had many times seemed to have lost its role in a portfolio. However, it appears to once again be finding its footing.

Published in Comm: Precious
Friday, 03 May 2019 11:08

Why Gold Will Rally 20%

(New York)

Gold had a great start to the year, but has since fallen back and is now down 1% in 2019. That’s said, there are some encouraging signs. Global demand for gold rose 7% from a year ago in Q1, and inflows to gold ETFs rose 49% versus the same stretch in 2018. Summer is a seasonally weak period for gold, but the metals outlook is going to be highly dependent on central bank action.


FINSUM: To be honest, we do not see a bullish scenario for gold right now. There are neither worries about an economic meltdown or high inflation, so the two big drivers for gold to move sharply aren’t there.

Published in Comm: Precious
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