17

Jun 2019

17

Jun 2019

Weekly markets round-up for StoneX Bullion

By StoneX Bullion

Welcome to a very brief overview of recent market performance.  The essentials are captured in the table below and each week we will show a chart of interest.

Gold touched an intraday high of $1,358 at the end of last week, the highest level since mid-April 2018.  Although the market continued to respond to trade tensions and has subsequently eased a fraction in what is being attributed to a revival in the dollar, there is obviously momentum-trading in here as well, with the breach of key moving averages.  At the start of trading in Europe on Monday the price has retreated to the 10-day moving average which, at $1,334, should offer some support.  Institutional interest is awakening, and sentiment overall is now much more constructive than in the first five months of the year.  The markets now await the Statement from the FOMC meeting of Tuesday and Wednesday.  No rate cut expected this month but fed futures are factoring in an 85% probability of a cut in July.

Silver pushed through $15 last week but has subsequently retreated, and the technical construction on the chart remains broadly neutral and $14.90-$15.00 still looks like tough resistance.

Elsewhere, palladium pushed smartly through $1,400 last week on a shortage of supply, defying theoretically bearish news of further falls in China car sales, with April sales 17.7% lower than April 2018. With the new emissions standards due to be implemented on 1st July in the four major cities (a year early, with several other countries and regions bringing plans forward also), dealers are offering big incentives in order to try and clear inventories.

Thought for the week

World Gold Council quantitative analysis suggests a range of 2-10% gold weighting in a portfolio; optimum ~5% depending on portfolio mix

Chart of the week

Note that this is indicative, and it does not look as if local charges etc are accounted for, but the profile is informative and points to a market on the sidelines at present following the price move

Spot gold and India differential against London (source: Platts, Bloomberg)

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