Gold: the Geopolitics creates conditions for the growth of precious metals
Last week the precious metals markets continued to decline under the pressure of a strengthening U.S. dollar, as well as the flow of funds of investors in Treasury bonds that earn interest.
However, escalating trade wars creates significant risks in the medium term for the global economy, risking recession, the tightening of financial conditions and shocks to the markets. Amid expectations the markets of gold and silver are getting good support.
Stocks in silver and palladium ETF funds in the last period has grown, and stocks in gold and platinum ETF-funds fell.
Prices on the Shanghai gold exchange SGE in the past, the company has grown, the trading volume has also increased. The cost of silver and platinum fell. The Renminbi to US dollar has significantly weakened, which together with the fall in the Chinese stock market increased investors ‘ interest in gold.
China’s Central Bank once again reduced the reserve requirement ratio, increasing the liquidity in circulation. Gold holdings in the reserves of the Bank of China at the end of may totaled 59,24 million ounces, but the Bank raised their estimated cost to $77,323 billion.
Net imports of gold from Hong Kong to China in may 2018 increased by 50% by April 2018 and $ 57,649 so the Total gold imports into China via Hong Kong in may was 62,386 tons against 40,95 t, introduced in April.
Award for delivery of gold in China last week strengthened under the influence of growing demand. Award for the supply of gold in Singapore, Hong Kong and Tokyo also improved in response to falling prices, stimulating demand.
Discounts on the supply of gold in India amounted to $2/oz vs award $1/oz in the last week. Falling prices have brought the recovery in demand, especially among dealers.
Gold prices in the past period decreased to $1239,6 and recovered to the level of $1255. Strong resistance levels are near $1240, with passage of which down the market could go to $1150. If this support level holds then when you return above the level of $1320 may develop growth to levels of $1350-1396.
The nearest support levels in gold are $1240-1180, resistance levels – $1272-1316.
Silver prices in the past period, in correlation with the market of gold decreased to us $15.83, after which grew to the level of $16.08. The ratio of gold to silver is 78,33 points. The ratio of platinum to silver is 52,37 points.
The next support levels in silver – $15,80-15,56, resistance levels – $16,20-16,45.
Platinum prices in the past period continued to move in a falling trend under the influence of deteriorating factors. The market of platinum in correlation with the market of gold fell to $806, after which prices quite sharply recovered to the level of $845. The spread between gold and platinum widened to $425/ounce. The spread between platinum and palladium has widened to $128/oz.
The next support levels in platinum – $806-780, resistance levels – $857-882.
The palladium price in the period was down to $930, reacting negatively to the escalation of trade wars, after which the market recovered to the level of $944. The next support levels in palladium – $930-908, resistance levels – $950-983.
Analyst of commodity markets,