TD Securities: Dollar Continuing to Put Pressure On Gold

Gold and other precious metals have continued to feel the weight of a strong dollar, with the U.S. economy continuing to outperform the world, says TD Securities. The most recent Commodity Futures Trading Commission data showed that money managers were again cutting long positions in gold and silver futures due to the muscular greenback and rising interest rates, TDS says. “With U.S. wages recording a 0.4% increase last month, inflation running at near target and the U.S. economy continuing to post fairly robust activity, an important contingent of the market is questioning the wisdom of being so far below the dots,” TDS says. “As such, gold did not manage to stay above $1,200/oz and is at risk of testing the lower bound as the USD and rates will continue to seek higher levels in the near term. Silver also performed poorly, as sentiment declined due to its strong links to gold and as result of weak industrial demand. The white metal is now trading at its lowest relative to gold since 1995.”

Commerzbank: Weak Chinese Car Sales Hurt Platinum, Palladium

Weak Chinese auto sales apparently played a role in platinum and palladium weakness last month, says Commerzbank. Analysts cite data from the China Association of Automobile Manufacturers showing that sales declined by 4.6% year-on-year to 1.79 million cars. This came after a fall of 5.3% in July. The association’s general secretary was quoted as saying that the Chinese have become more cautious about making large purchases due to a slowing economy. “The trade dispute with the U.S. has also been weighing on consumer sentiment,” Commerzbank says. “The weak car sales presumably played a part in platinum and palladium prices falling for a time to multi-year and multi-month lows, respectively, in August.”

By Allen Sykora

For Kitco News


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