Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

US and Global Market Internals
By: Gary Tanashian

Will Gold Prices Soar after March 2019?
By: Arkadiusz Sieron

The Post Bubble Contraction Thesis Receives Validation (Part III)
By: Plunger

Whose Trillion is it Anyway?
By: Andy Sutton and Graham Mehl

The Best Time to Prepare Is While the Bull Runs
By: Frank Holmes

Gold Set to Soar Above $1,300 – Goldman and Bank of America
By: GoldCore

Asian Metals Market Update: Sep 25 2018
By: Chintan Karnani, Insignia Consultants

Ira Epstein's Metals Video 9 24 2018
By: Ira Epstein

SWOT Analysis: Gold Is Now 85 Times More Expensive Than Silver
By: Frank Holmes

Why Are Wages So Low
By: Keith Weiner

 
Search

GoldSeek Web

 
SWOT Analysis: Could Junior Miners See Greater Mergers and Acquisitions?


 -- Published: Monday, 2 July 2018 | Print  | Disqus 

By Frank Holmes

Strengths

·         The best performing metal this week was palladium, down just 0.27 percent on a positive recommendation by Morgan Stanley based on deficit market supply. Gold traders and analysts became bearish this week according to the Bloomberg weekly survey as gold fell to its lowest level so far this year.

·         China’s central bank revised the value of its end-of-May gold reserves to $77.32 billion, up from $73.74 billion, reports Reuters. This is notable since the central bank did not provide an explanation for the changed figure and did not change the total amount of gold held by the bank. According to Bloomberg, the Mauritius International Derivatives and Commodities Exchange expects to trade $6.5 billion of gold annually within the next five years. The move is expected to become a financial gateway from the Indian Ocean island nation to Africa and spur further gold investment.

·         Nighthawk Gold announced positive drilling results of 25.50 meters of 2.68 grams per tonne (gpt) gold plus 9.95 meters of 4.90 gpt gold at its North Inca gold deposit in Canada. Yamana Gold declared commercial production had begun at its Cerro Moro gold and silver mine in Argentina.

Weaknesses

·         The worst performing metal this week was platinum, down 2.78 percent. According to UBS, gold shorts increased by 3 million ounces in the prior week, the largest weekly gain since November 2015. Strategist Joni Teves writes that risks have increased and the risks to the economy are skewed to the downside. “For gold, this means that longs are more resilient and shorts hesitant. We do not expect strong safe haven flows as long as the anticipated impact on growth and inflation remains modest.” Gold has seen its worst week of the year and Jordan Eliseo, chief economist at ABC Bullion, says bullion maybe drop to $1,250, which “will likely prove an attractive entry point, with sentiment incredibly low and futures positioning continuing to unwind.”

·         Investors continue to back away from commodities as commodity ETFs saw a seventh straight week of outflows. Outflows totaled $759 million this week, compared to withdrawals of $256 million in the previous period. Gold ETFs also reached their lowest holdings levels in three months as gold slumped to its lowest in 2018, reports Bloomberg.

·         Gold is set for its biggest monthly drop since November 2016 on the heels of a stronger dollar, which is seeing its third straight month of gains. Gavin Wendt, senior analyst at MineLife, told Bloomberg that “the U.S. dollar has been the biggest beneficiary as investors’ first choice safe haven” and that it has “indirectly led to gold-price weakness.”

Opportunities

·         RBC Capital Markets writes this week that valuations of junior gold companies have compressed this year and now sit at $38 per ounce of resources, compared to the trailing 12-month average of $54 per ounce of resources. This recent pullback could spur greater mergers and acquisitions activity given that junior miners now have more attractive valuations.

http://www.goldseek.com/news/2018/7-2fh/1.png

 

·         Suki Cooper, precious metals analyst at Standard Chartered, says that gold could rally after seeing a weak second quarter. “This quarter is generally a seasonally weak period for physical demand, but we’ve also seen a number of macro indicators line up to present quite a weak backdrop for the gold market.” According to Pictet Wealth Management, gold is set to stage a comeback as the dollar’s recent strength is a temporary rebound and should decline further down the road. Currency strategist Luc Luyet said on Monday that he expects bullion to climb to $1,320 an ounce by the end of the year.

·         Inflation is on the rise, as seen in the costs paid by factories for materials, which climbed to a seven-year high in June in Texas. Bloomberg writes that more manufacturers are paying higher input prices and getting more for the final product, able to pass inflation onto consumers as the prices of materials used in U.S. manufacturing have been mounting for months.  Larry Summers, former U.S. Treasury Secretary, told Bloomberg in a phone interview this week that Federal Reserve interest rate hikes, which slow expansion, are a greater risk to the economy than inflation. “The dangers are still much more on the side of too much slowdown than they are of too much inflation.”

http://www.goldseek.com/news/2018/7-2fh/2.png

Threats

·         General Motors (GM) issued a strong warning to the White House that it could shrink its U.S. operations and cut jobs if tariffs are broadly applied to imported vehicles and auto parts. Because GM’s Silverado pickup is the top imported model from Mexico, this is a significant issue.  In addition, a lot of high-value parts are sourced from Asia. The proposed 25 percent tariff would add thousands of dollars onto their current vehicle prices.

·         Bloomberg reports that gold is now the cheapest relative to crude oil in more than three years as growing concerns over a U.S.-China trade war have failed to revive demand for bullion as a safe-haven asset. High petroleum prices relative to gold can lead to a margin squeeze for large open pit mines that are more energy intensive.

·         The S&P 500 Index has stumbled the last five times the Federal Reserve System Open Market Account has had Treasuries mature, writes Bloomberg. The Fed is allowing bonds to “roll off,” which means pocketing, rather than reinvesting, the proceeds as the bonds mature. This has the effect of reducing liquidities and possibly draining equities. The last five times maturity dates came and went, the S&P 500 Index fell a minimum of 68 basis points. July 1 is next maturity roll off date.

http://www.usfunds.com/

 


| Digg This Article
 -- Published: Monday, 2 July 2018 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2018



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.