Palladium futures rallied Wednesday to settle at their highest level in more than a year, with strong vehicle sales in China implying strong demand for the metal used in car-making.
A weaker U.S. dollar provided support to the broad dollar-peg precious-metals complex.
Gold and silver futures notched a second straight session of gains as some traders bet on a potential rise in Asian demand for the yellow metal.
September palladium PAU6, -0.69% jumped up by $32.05, or 4.6%, to settle at $726.40 an ounce on Comex. The settlement was the highest for futures prices since mid-June 2015, according to FactSet. Futures prices for the metal trade more than 30% higher year to date.
Its sister metal, October platinum PLV6, -0.32% added $23.20, or 2%, to $1,183.10 an ounce, with prices based on the most-active contracts scoring for the strongest finish since early March of last year.
Meanwhile, December gold GCZ6, -0.22% rose $5.20, or 0.4%, to finish at $1,351.90 an ounce. Silver for September delivery SIU6, -0.45% jumped 32 cents, or 1.6%, to $20.17 an ounce.
Metals got a boost “due to short-covering as the bears view the falling dollar, stalling stock market, and tight trade in the palladium market being a trade they want to walk away from,” said Adam Koos, president of Libertas Wealth Management Group. “When shorts cover, it adds buying pressure to a security, driving the price up.”
He said palladium and silver are most likely outpacing gains in gold as traders look for “something new and exciting. Maybe investor psychology has humans convinced that if they buy something not so mainstream, maybe they’ll make more money.”
Weakness in the dollar versus its currency rivals also helped make metals that are traded in the greenback more attractive to overseas buyers. The ICE U.S. Dollar Index DXY, +0.16% fell 0.5%.
Additionally, China’s car market grew at its fastest pace in six months in June, driven by a tax break, according to Dow Jones. That signals a likely spike in demand for palladium and platinum, which are both used to make car parts.
As for gold and silver, Chintan Karnani, chief market analyst at New Delhi-based Insignia Consultants, said he is bullish on both, and expects to see a rise in physical demand for the metals.
The Indian Hindu festival season will begin on Aug. 18 and the monsoon rainfall has been good all over India, he said.
Given that, “rural demand for gold and silver will be on the higher side of expectation curve,” said Karnani. And “tensions in the South China Sea will ensure higher gold demand from East Asia as well.”
Overall, however, gold prices have been subdued since last week’s stronger-than-expected July jobs report pushed down precious metals prices as expectations for a U.S. interest-rate hike in 2016 increased. So far this month, gold futures are off about 0.2%, but year to date are up 28%.
The near-term challenge for the precious metal is a “stronger dollar and positive risk sentiment on back of upbeat U.S. data,” said UBS strategist Joni Teves, in a note to clients. See Economic Calendar.
She said the likely catalyst for a pickup in trading activity is the looming Federal Reserve retreat in Jackson Hole, Wyo. It takes place Aug. 26 and may offer some clues on the speed and scope of potential interest-rate hikes. Higher rates are presumed to boost the dollar, cutting the appeal of greenback-priced gold to overseas investors. Further, a rising-rate climate tends to sway investors away from nonyielding gold into yield-bearing alternatives.
Still, precious metals prices remain underpinned by global economic uncertainty and bets that the rates could stay lower for longer, some analysts argue. And with global interest rates so low, Teves made her bullish gold position clear.
“We would regard any further weakness up ahead as a potential buying opportunity, given our view that the macro story remains intact,” she said.
Read: The chart that’s proving crash-happy stock bears wrong
Rounding out metals trading Wednesday, high-grade copper for September delivery HGU6, +0.46% rose 2.1 cents, or 1%, to $2.171 a pound.
Among exchange-traded funds, the SPDR Gold Trust GLD, +0.47% rose 0.5% and the silver ETF iShares Silver Trust SLV, +1.54% added 1.6%, while the VanEck Vectors Gold Miners ETF GDX, +1.76% rose 2.1%.
Read more - https://www.goldcruderesearch.com/comex.php
A weaker U.S. dollar provided support to the broad dollar-peg precious-metals complex.
Gold and silver futures notched a second straight session of gains as some traders bet on a potential rise in Asian demand for the yellow metal.
September palladium PAU6, -0.69% jumped up by $32.05, or 4.6%, to settle at $726.40 an ounce on Comex. The settlement was the highest for futures prices since mid-June 2015, according to FactSet. Futures prices for the metal trade more than 30% higher year to date.
Its sister metal, October platinum PLV6, -0.32% added $23.20, or 2%, to $1,183.10 an ounce, with prices based on the most-active contracts scoring for the strongest finish since early March of last year.
Meanwhile, December gold GCZ6, -0.22% rose $5.20, or 0.4%, to finish at $1,351.90 an ounce. Silver for September delivery SIU6, -0.45% jumped 32 cents, or 1.6%, to $20.17 an ounce.
Metals got a boost “due to short-covering as the bears view the falling dollar, stalling stock market, and tight trade in the palladium market being a trade they want to walk away from,” said Adam Koos, president of Libertas Wealth Management Group. “When shorts cover, it adds buying pressure to a security, driving the price up.”
He said palladium and silver are most likely outpacing gains in gold as traders look for “something new and exciting. Maybe investor psychology has humans convinced that if they buy something not so mainstream, maybe they’ll make more money.”
Weakness in the dollar versus its currency rivals also helped make metals that are traded in the greenback more attractive to overseas buyers. The ICE U.S. Dollar Index DXY, +0.16% fell 0.5%.
Additionally, China’s car market grew at its fastest pace in six months in June, driven by a tax break, according to Dow Jones. That signals a likely spike in demand for palladium and platinum, which are both used to make car parts.
As for gold and silver, Chintan Karnani, chief market analyst at New Delhi-based Insignia Consultants, said he is bullish on both, and expects to see a rise in physical demand for the metals.
The Indian Hindu festival season will begin on Aug. 18 and the monsoon rainfall has been good all over India, he said.
Given that, “rural demand for gold and silver will be on the higher side of expectation curve,” said Karnani. And “tensions in the South China Sea will ensure higher gold demand from East Asia as well.”
Overall, however, gold prices have been subdued since last week’s stronger-than-expected July jobs report pushed down precious metals prices as expectations for a U.S. interest-rate hike in 2016 increased. So far this month, gold futures are off about 0.2%, but year to date are up 28%.
The near-term challenge for the precious metal is a “stronger dollar and positive risk sentiment on back of upbeat U.S. data,” said UBS strategist Joni Teves, in a note to clients. See Economic Calendar.
She said the likely catalyst for a pickup in trading activity is the looming Federal Reserve retreat in Jackson Hole, Wyo. It takes place Aug. 26 and may offer some clues on the speed and scope of potential interest-rate hikes. Higher rates are presumed to boost the dollar, cutting the appeal of greenback-priced gold to overseas investors. Further, a rising-rate climate tends to sway investors away from nonyielding gold into yield-bearing alternatives.
Still, precious metals prices remain underpinned by global economic uncertainty and bets that the rates could stay lower for longer, some analysts argue. And with global interest rates so low, Teves made her bullish gold position clear.
“We would regard any further weakness up ahead as a potential buying opportunity, given our view that the macro story remains intact,” she said.
Read: The chart that’s proving crash-happy stock bears wrong
Rounding out metals trading Wednesday, high-grade copper for September delivery HGU6, +0.46% rose 2.1 cents, or 1%, to $2.171 a pound.
Among exchange-traded funds, the SPDR Gold Trust GLD, +0.47% rose 0.5% and the silver ETF iShares Silver Trust SLV, +1.54% added 1.6%, while the VanEck Vectors Gold Miners ETF GDX, +1.76% rose 2.1%.
Read more - https://www.goldcruderesearch.com/comex.php
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