Precious Metals News Roundup

Week of September 16- September 20, 2019

Gold jumps 1% as attacks on Saudi lift safe-haven bets

Reuters - Karthika Suresh Namboothiri September 15, 2019

* Asian equities dip; yen sees safe-haven demand

* Fed, BoJ meetings in focus later in the week

* Gold may retest resistance at $1,524/oz - technicals (Updates prices)

Sept 16 (Reuters) - Gold prices jumped 1% on Monday as attacks on Saudi Arabia’s oil facilities dented risk appetite, boosting demand for the safe-haven bullion, while investors awaited for clues on monetary easing from major central bank meetings due this week.

 

Spot gold was up 1% at $1,503.60 per ounce, as of 0601 GMT. Prices had dipped 1.2% in the previous week on hopes that an end to the U.S.-China trade tiff could be near.

U.S. gold futures rose 0.8% to $1,511.40 per ounce.

 

The attacks on Saudi oil installations have lead to a rotation of interests out of stocks and into safe-havens, said OANDA analyst Jeffrey Halley.

 

The risk-averse sentiment in the market underpinned the bullion, often seen as an alternative investment during times of political and financial uncertainty.

With escalating tensions in the Middle East and hopes of more stimulus measures from major central banks, the next target for gold will be $1,530, Halley added.

Yemen’s Iran-backed Houthi rebel group claimed responsibility for the attack over the weekend on the world’s biggest oil-processing facility.

However, a senior U.S. official said that evidence indicated Tehran was behind it, and President Donald Trump said the United States was “locked and loaded” for a potential response to the attack, souring its already strained relations with Iran.

The event hurt risk sentiment in the markets, with Asian equities trading lower at 515.4, and the safe-haven yen up 0.4% to 107.64 per dollar. Against a basket of currencies, the dollar was 0.2% lower at 98.053.

Investors also await the outcome of the U.S. Federal Reserve and Bank of Japan’s policy meetings on Wednesday, for signals on their future policy path.

“Accommodative monetary policy by global central banks will support bullion’s appeal for 2H 2019,” Phillip Futures analyst Benjamin Lu said in a note. Central banks globally are facing increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade dispute hurt trade and business sentiment. Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.

Denting risk sentiment was dismal data from China, which showed factory and consumer sectors slowed further in August, with industrial production growing at the weakest pace in 17-1/2 years, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand. 

Spot gold could retest resistance at $1,524 per ounce, as it has temporarily bottomed around a support at $1,480, said Reuters technical analyst Wang Tao.

Among other precious metals, silver jumped as much as 3% to $18 an ounce and platinum was up 0.5% at $953.31. Meanwhile, palladium rose 0.5% to $1,614.00 per ounce. (Reporting by Karthika Suresh Namboothiri and Eileen Soreng in Bengaluru, Editing by Sherry Jacob-Phillips)

Gold Rallies on Concern Saudi Attack May Presage Wider Conflict

By Ranjeetha Pakiam September 15, 2019, 6:04 PM PDT Updated on September 16, 2019, 6:45 AM PDT

  • Bullion gains along with silver following record jump in Brent

  • U.S. central bank widely seen cutting rates at midweek meeting

Gold and other precious metals rallied after a strike against Saudi Arabian oil facilities raised the possibility of retaliatory U.S. military action in the Middle East.

Investors are seeking haven assets at the start of a week that will also see critical policy decisions from central banks including the Federal Reserve.

Gold futures jumped as much as 1.3% as investors gauged the ramifications from the assault against the world’s top oil exporter, and palladium hit a fresh record. Secretary of State Michael Pompeo blamed Iran for the disruption; that charge was rejected by Tehran.

Bullion hit a six-year high this month as slowing growth and the U.S.-China trade war drove central bank easing, with geopolitical tensions playing a secondary role aiding prices. After reducing rates in July, the Fed is poised to cut again at its Sept. 17-18 meeting.

Following the strike over the weekend, President Donald Trump pledged to help Middle East allies and said the U.S. is “locked and loaded depending on verification” that Iran staged the attack, raising the specter of a military response.

“There’s still a bit of uncertainty on the oil attacks,” Ryan McKay, a commodity strategist, at TD Securities, said by phone Monday. “I think if you get Saudi Arabia coming out and formally blaming Iran, which could happen, I think that will generate more of a safe haven bid.”

Gold futures for December delivery advanced 0.6% to $1,508 an ounce at 9:15 a.m. in New York, while silver gained as much as 2.8% to $18.065 an ounce. Spot gold advanced 0.9%. On the New York Mercantile Exchange, platinum and palladium each rose more than 1% before reversing.

Heading into this week, gold holdings in exchange-traded funds had shrunk for the first week in seven on signs that relations between Beijing and Washington were at last starting to thaw. The holdings fell 17.2 tons last week, the biggest weekly loss in tonnage terms since March 1, but they’re still near the highest level since 2013. Money managers also recently reduced net-long positions, highlighting a tug-of-war among bullion investors.

“Gold and silver should be significant beneficiaries of the expected rush to safety, and the impending rounds of central bank rate cuts this week,” Jeffrey Halley, a senior market analyst at Oanda Corp., said in a note.

 

“A continued escalation of tensions, or a move into outright hostilities in the Middle East, could see a $1,600 handle sooner rather than later.”

Gold Scores a Pop From Historic Oil Outage -- MarketWatch

By Mark DeCambre MarketWatch Updated Sept. 16, 2019 9:37 am ET | WSJ Pro

Gold futures headed solidly higher on Monday after an attack on Saudi Arabian oil production sent oil prices skyrocketing and investors turning to haven assets, including

bonds and precious metals.

 

December gold on Comex gained $9.70, or 0.7%, to $1,509.20 an ounce, after registering on Friday a weekly decline of 1.1%. Silver for December delivery added 32 cents, or 1.8%, to trade at $17.885 an ounce, following a weekly loss of 3%, according to FactSet data.

 

The gain for oil comes after Saudi oil production facilities on Saturday were hit by a drone attack according to Saudi Arabian officials, which knocked out 5.7 million barrels of daily production, representing some 5% of global production. The event, described by commodity experts as the largest-ever single disruption to crude output, has rattled markets because spikes in oil prices can hobble global economies. The kingdom has been racing to restore roughly one-third of the disrupted production.

 

“Gold suffered a pullback last week but remains an attractive alternative given the uncertain geopolitical backdrop and the likelihood that sovereign debt expansion will be more widely implemented in conjunction with aggressive monetary policy,” wrote Bruce Bittles, chief investment strategist at Baird.

 

Trade in bullion also comes as investors are awaiting the Federal Reserve’s Wednesday policy decision, where a rate cut is expected, which could influence gold and other metals.

Gold rises 1% on global turmoil — but silver surges more

PUBLISHED MON, SEP 16 2019  12:13 AM  Saheli Roy Choudhury

  • Spot gold jumped 1.27% to $1,507.40 per ounce while U.S. gold futures rose 0.83% to $1,512.1.

  • Spot silver gained 2.96% to $17.94 per ounce.

  • Investors fled to safe-haven assets after an attack on Saudi oil facilities raised concerns over global energy supply and ratcheted tensions in the Middle East.

Gold and silver prices jumped more than 1% on Monday as investors fled to safe-haven assets after an attack on Saudi oil facilities raised concerns over global energy supply and ratcheted tensions in the Middle East.

Spot gold jumped 1.27% to $1,507.40 per ounce while U.S. gold futures rose 0.83% to $1,512.1. The gold-backed SPDR Gold Trust exchange-traded fund was down 0.82% at $140.15, with 874.51 tonnes of gold in trust on Friday.

Like gold, silver is seen as a safe-haven investment but the metal is also used in the production of consumer electronics goods as well as in the industrial sector, such as solar panels. Spot silver gained 2.96% to $17.94 per ounce.

The moves came after Saudi Arabia on Saturday shut down half its oil production after a series of strikes hit the world’s largest oil processing facility. The attack was claimed by Yemen’s Houthi rebels and the Trump administration has blamed Iran.

That closure is set to affect almost 5.7 million barrels of crude production a day, according to Saudi Aramco. That’s about 5% of the world’s daily oil production. In August, Saudi Arabia produced 9.85 million barrels per day, according to the data from the U.S. Energy Information Administration.

The Kingdom’s energy minister said the attacks also led to a halt in gas production, which is set to reduce the supply of ethane and natural gas liquids by 50%.

U.S. crude and Brent prices jumped more than 9% each Monday morning during Asian hours.

The attack raised tensions in the Middle East after the United States blamed Tehran for the strikes, and called it an “unprecedented attack on world’s energy supply.” For his part, U.S. President Donald Trump said the U.S. is “locked and loaded,” but his administration is waiting on Riyadh to determine who launched the strikes before proceeding on a course of action. Iran has dismissed those allegations as “meaningless.”

Elsewhere, the U.S. Federal Open Market Committee is set to meet on Tuesday and Wednesday and markets expect the central bank to cut interest rates by a quarter point.

Global growth outlook remains subdued amid the ongoing trade war between the U.S. and China, which could potentially sustain demand for safe-haven assets. Chinese Premier Li Keqiang said in a recent interview that it is “very difficult” for the world’s second-largest economy to maintain a growth rate at 6% or more.

The Last Time This Happened, Silver Prices Surged 300%

If You Are Ignoring Silver Prices Now, You Could Be Making a Big Mistake

 

The price of silver could be setting up to rally big-time. As it sets up to move higher, keep a close watch on silver mining stocks. They could see amplified moves to the upside.

 

You see, these days, not much attention is given to silver. But the gray precious metal is currently presenting a great opportunity. Don’t be shocked to see silver prices doubling or even more in the coming months and quarters.

 

Why be so bullish on silver? The charts paint a very bullish outlook for the metal.

 

One Chart Silver Bulls Shouldn’t Ignore

There’s one chart in particular that every silver bull must look at. See the long-term chart of silver prices below and pay close attention to the blue line drawn on it. That line is the 50-month moving average of the price of silver. This moving average has been very interesting.

Whenever silver prices jump above their 50-month moving average after remaining below it for an extended period, you usually see a massive rally. Go back to the period between 2000 and 2003; during this time, silver was trading below this moving average. Later in 2003, the silver price broke above the moving average, at around $5.00 per ounce.

 

After the price broke above this level, a massive rally followed for several years. The price of silver increased about 320% during this time, from around $5.00 to $21.00.

Fast forward to late 2008: silver broke below its 50-month moving average and remained below it for a few months. It eventually bounced higher in early 2009 and started a massive run until 2011.

The rally began when silver was trading around $12.00 and it peaked around $49.00. That’s a move of more than 308%. In 2013, the silver price broke below the 50-month moving average and remained below it until August 2019. Looking at this situation, one must wonder if another 300% move could be in the making. We have seen something similar happen twice in the past 19 years.

If this is actually the case, based on today’s price, we could be looking at a price of silver higher than $70.00.

Overstock Founder Dumps His Stake for Gold, Crypto Assets

Courtney Dentch Sarah Ponczek

September 19 2019, 6:17 PM September 19 2019, 8:32 PM

 

Patrick Byrne, the eccentric former chief executive officer of Overstock.com Inc., sold his entire holdings in the company he founded and said he would park the proceeds in gold and cryptocurrency.
 

Byrne cashed out nearly 5 million shares for about $90 million, according to a regulatory filing late Wednesday. The sales started Monday after a 65% surge took the stock to the highest in almost a year last on Sept. 13. The stock plunged 20% that day and is down 35% so far this week. Shares fell as much as 8.9%.

In a Wednesday blog post titled “A Message to My Former Colleagues at Overstock,” Byrne, 56, said he planned to plow the proceeds in securities that are “counter-cyclical to the economy,” including gold, silver, and two types of cryptocurrencies by Friday. Byrne also said he would be willing to provide a “capital injection if needed by buying back into Overstock” once he’s legally allowed to do so.

Byrne resigned as Overstock’s CEO last month after comments about the “Deep State” and his involvement in a government espionage probe. In Wednesday’s blog post, he said he stepped down after insurance brokers balked at the prospect of covering Overstock while he was still in charge. The filing came the same day the company delayed its plan to issue a “digital dividend” and formally register the new shares. 

 

Byrne sold his shares at lower and lower prices in the past three days, ranging from $21.84 at the beginning of the week to $16.32 on Wednesday, the filing shows.

“We see this as a tremendous positive,” D.A. Davidson analyst Tom Forte wrote in a research note. Overstock should benefit from further distance between Byrne and the completion of his divestiture should remove some of the recent selling pressure from the stock, Forte said. He has a buy rating and is one of only two analysts on Wall Street covering the company.

Overstock on Wednesday delayed its dividend to allay concerns that it would not be liquid and potentially snarl some transactions if it only traded at Overstock’s affiliated brokerage. Registering it would let it trade more widely, and the company also plans to remove a six-month lockup on the new shares.

Short sellers, for instance, would have found it difficult to meet their obligation to deliver the dividend on borrowed shares to the lender. That hurdle sparked a squeeze that drove Overstock’s shares higher by 65% in the prior two weeks.

Byrne’s August exit came after a series of public announcements where he cited entanglements with the “deep state” that included cooperating with law enforcement agents he called “Men in Black” with their “Clinton Investigation” and “Russia Investigation.” Byrne said he’d been romantically involved with Maria Butina, a Russian operative jailed for failing to register as a foreign agent. The founder had previously battled Wall Street short sellers for two decades.


 

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