· Gold futures settled back above $1,300 an ounce Friday to post a modest gain of 0.3% for the week, with the haven metal finding support following mass shootings in New Zealand and from uncertainty surrounding the U.K. exit from the European Union. April gold GCJ9, climbed by $7.80, or 0.6%, to settle at $1,302.90 an ounce on Comex.
· Palladium hit a record peak on Friday, on expectations that Chinese economic stimulus would drive demand for the autocatalyst metal, while news that Russia may ban exports of precious metal scraps compounded worries of a supply deficit.
· U.S. gold futures settled $7.80 higher at $1302.90.
· Chinese Premier Li Keqiang said Beijing was open to additional monetary policy measures to support economic growth this year.
· "The announcement of specific stimulus measures helped sentiment in China, which arguably is the global marginal consumer in automobiles, helping palladium climb quietly to new highs," said Tai Wong, head of base and precious metals derivatives trading at BMO.
"There is (also) some concern that talk of possible scrap metal export ban in Russia could impact already extremely stretched palladium supplies," Wong said.
· Spot palladium surged to a record $1,567.5 an ounce earlier in the session. The metal was trading 0.19 percent higher at $1,560.89 at12:55 p.m. EST.
· Meanwhile, gold rebounded following the previous session's over 1 percent decline, gaining 0.5 percent to $1,302.89 an ounce en route to its second straight weekly rise.
· Fuelling gold's advance, the dollar fell against its rivals, weighed down by weak manufacturing and factory output data, ahead of a Federal Reserve meeting next week expected to shed more light on the outlook for interest rates.
· "For gold, whether it closes above or below $1,300 will help determine sentiment early next week before focus moves to the new Fed dot plot," BMO's Wong said.
· Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.
· Also, in a potentially bearish development for the dollar, Chinese news agency Xinhua reported representatives from Beijing and Washington made substantive progress on trade over a call.
· Wall Street and Main Street both remained bullish in the weekly Kitco News gold survey.
Assuming Friday’s rally continues into the close, gold will have risen in seven of 10 weeks so far in 2019, and survey respondents look for that trend to continue.
· Daniel Pavilonis, senior commodities broker with RJO Futures, said that while gold has been choppy lately, the uptrend is intact. He pointed out that gold has tended to bounce whenever it falls back to trendline support. The Federal Open Market Committee is not expected to hike interest rates again in the near future, which is supportive for the metal, he explained.
“It looks like yields are backing off on bonds,” Pavilonis said. “I think the dollar will top out. That will give some upside to the metals.”
· Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, said the $1,290 area seems to have built a “nice base” for gold. Barring any unexpected news, he looks for a range of $1,300 to $1,325.
“We have the FOMC [Federal Open Market Committee] this Wednesday,” Nabavi said. “So [the] market will be watching closely but overall feel bullish towards the gold market.”
· Jasper Lawler, head of research at London Capital Group, described himself as neutral to positive on gold in the near term. He said that gold could consolidate in the current range, but he doesn’t see why gold would go below $1,280 an ounce.
“Overall there is still strong appetite for gold,” Lawler said.
· The dollar has been preferred by investors as a refuge from deteriorating trade relations between the two countries. In other precious metals, silver gained 0.81 percent to $15.30 an ounce, and platinum jumped 1.37 percent to $829.70.
Reference: CNBC, Market Watch, Kitco
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