Displaying items by tag: metals

Monday, 21 October 2019 10:51

Gold May Be Ready to Head Higher

(New York)

Gold has been doing well this year alongside all the market turmoil and uncertainty. While one could construe recent progress on a trade deal with China as potentially bad for gold—given its status as an uncertainty hedge—the reality is that rates are headed lower via Fed cuts. This means the Dollar will weaken, and in turn help gold. Societe Generale, for instance, is advising a maximum allocation to gold, saying investors should have 5% of their portfolios in it. Additionally, a resolution to the trade war would probably also weaken the Dollar as there would be less desire to take advantage of its safe haven status.


FINSUM: Basically Soc Gen is arguing that gold will benefit from both lower rates and a risk-on trade. The former aspect seems sound, but gold benefitting from less anxiety? Sounds a weak supposition to us.

Published in Comm: Precious
Thursday, 05 September 2019 17:07

Why It is Time to Buy Gold

(New York)

A big bank has just come out very bullish on gold. BNP Paribas says gold is going to shoot to over $1,600 per ounce in the medium-term as the Fed embarks on four 25 bp interest rate cuts between now and June 2020. According to BNP Paribas, as headline yields fall with each cut “real rates will move and stay in negative territory, raising the appeal of holding gold”. The ongoing, and seemingly endless trade war, will also be bullish to gold.


FINSUM: This argument makes perfect sense to us, though it is highly contingent upon the Fed cutting and the trade war continuing. In our view, both of these are likely, so this appears like a good buy.

Published in Comm: Precious
Thursday, 08 August 2019 08:02

Time to Load Up on Gold

(New York)

Societe Generale, famed European investment bank, has just told investors they should load up on gold. Gold is seeing several value drivers at the moment. These include the economic cycle and fears over the trade war, a lack of other safe haven assets, and importantly (and much less known), central bank purchases. Global central banks (like China’s) are trying to diverse away from the Dollar, and gold is an attractive way for them to do so.


FINSUM: There are a lot of tailwinds for the yellow metal right now. The Fed is less dovish than most expected and there does not seem to be much risk of a huge risk-on shift that would leave gold forgotten.

Published in Comm: Precious
Wednesday, 31 July 2019 09:43

JP Morgan Says it is Time to Sell Gold

(New York)

Gold has had an extraordinary run over the last few months. It is the first time it has really broken out of its funk since just after the Crisis. However, both JP Morgan and Barclays are saying it is probably time to cash out. Both argue that gold’s recent rise has been driven by speculation and not real fundamentals, such as the direction of the Dollar and interest rates. As such, these prices look vulnerable.


FINSUM: This is good analysis, but we also have another reason for you—if the Fed cuts and investors switch to risk-on assets, where does that leave gold?

Published in Comm: Precious
Tuesday, 23 July 2019 08:34

Gold is at a Six-Year High

(New York)

Gold has been stuck in a bear market for a long time. However, it is getting close to completely breaking out of its funk, as the yellow metal is at a 6-year high. Gold is being driven by worries over the economy, falling yields, and a potentially weaker Dollar, as well as geopolitical fears. UBS summed up gold’s position this way, saying “[Due to the] declining cost of holding gold as rates remain low or continue to fall, gold’s appeal as a diversifier and alternative asset amid the current macro environment is increasing”.


FINSUM: Our only worry about gold is if rate cuts cause a risk-on move by investors that will leave gold in the dust.

Published in Comm: Precious
Page 3 of 8

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…