The price of gold increases using the panic in the stock markets
Last week the price of precious metals has grown, with the exception of the remaining pressure plate. The U.S. dollar weakened amid the intensifying row between D. trump and the leadership of the fed. The result is friction and stop the us government the US stock market showed a very negative trend in the pre period, which supported investor interest in insurance assets.
During the last December meeting, the fed increased the interest rate corridor up to 2,25-2,5%, accompanied by increasing indications of a high level of uncertainty about further rate hikes. It was noted that the US economy and labor market remain in good condition, but the growth rate slowed down. The median forecast of governors of the Federal reserve says about the rate increase in 2019 to two meetings and one increase in 2020
The statement caused a nervous reaction of the markets, who believed in the economic slowdown and before the long Christmas weekend showed a dramatic decline that has supported investment demand for gold. Trades this week are held in shortened mode, the expected volatility is low, the resumption of normal trade will happen in the new year – January 3, 2019
Last week the reserves in gold and platinum ETF-funds have grown, stocks in silver and palladium ETF funds continued to decline.
According to the CFTC report last week, gold saw a sharp increase in short positions. In other metals has also been an increase in the number of short positions.
According to the CBR, the amount of gold in foreign exchange reserves of the Bank as at the end of November amounted to 2102,5 t, accounting for 17.9% of all reserves. From the beginning of 2018, the CBR bought about 273 tonnes of gold in reserves.
At the November customs data, the supply of gold in the key markets of Switzerland remained weak, but the country was still a net exporter of the metal. Delivery of gold in China, Hong Kong and India for 11 months. 2018 increased by 5% to an average volume over the last decade. Imports of gold in India for 11 months. 2018 amounted to about 714 tons, which is 12% lower than in the same period of 2018.
According to the Swiss customs statistics, in November 2018, the country imported 1,969 ton of platinum, and exported 2,065 tons of this metal. Palladium imports in November amounted to 1,740 tonnes, exports – 1,447 T.
Prices on precious metals in Shanghai on SGE in the past week have grown, the Renminbi to US dollar slightly weakened. Trade negotiations between the US and China continued with varying success.
Gold demand in Asia in the past week remained weak due to high prices and the upcoming holidays, but premiums rose slightly because of the weakness of the stock markets. Award for delivery of gold in China last week, remained stable at $5/6,5 ounce, premiums for gold delivery in Singapore and Hong Kong have grown to $0,5/0,8 per ounce and $0,7/1,2 per ounce, respectively. Gold in Tokyo was trading at parity with London. Discounts for gold delivery in India narrowed to $2 per ounce.
Last week gold prices fell to $1245, after which the market overcame a strong resistance level of $1250-1270 on the background of statements of the fed and trying to gain a foothold above the level of $1270. The index the S&P almost to the level of 2300 points supports interest in insurance assets. The level of fear in the markets continues to grow, although still not at panic, but the situation increasingly resembles the crisis of 2008.
The price of silver last week showed high volatility in the range of $14,63-14,88, but the metal has not shown high growth rates in contrast to the gold market. The ratio of gold to silver is 86,09 points. The ratio of platinum to silver is 53,342 points.
Platinum prices in the past period has shown high volatility in the range of $785-798. The spread between gold and platinum is $486/oz. The spread between platinum and palladium is $464/oz.
Prices the March contract for palladium in Chicago last week decreased from $1204 to $1156 under the influence of negative dynamics in the US stock market, and then grew again to $1172. The December contract before expiration is trading at $1225. The London market before the holidays, closing at $1246,2.
With continued collapse of the stock market prices for palladium can stop traffic in a growing trend, in response to the slowing economy.
Analyst of commodity markets,