Kaloti Precious Metals-Morning Market Report-Wednesday, October 19, 2016

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

Gold Posts First Back-to-Back Gains in a Month on Rate Outlook

• Gold had its first back-to-back gains in almost a month as the dollar weakened amid speculation that the Federal Reserve will stick to gradual monetary tightening.

While a Labor Department report showed the cost of living in the U.S. rose at the fastest pace in five months, consumer prices excluding food and fuel gained 0.1 percent, missing an estimate of 0.2 percent. The Bloomberg U.S. ECO surprise index -- which measures whether economic data have exceeded or fallen short of analysts’ estimates -- fell below zero on Monday.

The odds that U.S. interest rates will rise in December fell to 64 percent after the inflation data, down from 66 percent a day earlier. The Fed has been monitoring data, including inflation, for signs of economic resilience before raising borrowing costs.

“Beyond the headline number, it seems there’s not a lot of growth in inflation,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Inflation is one of the barometers for the Fed. That would not warrant a rate hike. That’s supportive for gold.”

• Gold futures for December delivery rose 0.5 percent to settle at $1,262.90 an ounce at 1:38 p.m. on the Comex in New York. The metal hasn’t seen two straight gains since Sept. 22.

• Holdings in gold-backed ETFs rose 1.5 metric tons to 2,052.8 tons as of Monday, data compiled by Bloomberg show.

• The 16-company BI Global Senior Gold Valuation Peer Group index rose as much as 2.6 percent, the most intraday since Sept. 22.

• Silver futures gained on the Comex, while platinum and palladium futures advanced on the New York Mercantile Exchange.

• Gold is set to rise about 7 percent by the time of the London Bullion Market Association conference in October 2017, according to a survey of people attending this year’s gathering in Singapore. Silver will gain 18 percent.

The yellow metal will trade at $1,347.40 an ounce in a year’s time compared with $1,262.40 onWednesday, while silver will change hands at $20.90 an ounce from $17.65, the survey showed. Last October, attendees predicted the price would be $1,160 in 12 months’ time, about $100 less than it is now.

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-19th-october-2016