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Eugene Mazurov

 
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  • What Will It Take For Investors To Come Back To Precious Metals? [View article]
    Hi toneguru, at first thanks for your feedback.

    1. Gold’s negative correlation with the dollar has strengthened and is indeed stronger than its correlations with the S&P 500 and 10-year US Treasuries.

    2. Gold continues to take its cue from US macro data, yet the physical market is setting a weaker footing for
    prices.

    3. The recent weakness in the dollar has helped to stem gold’s downtrend.

    4. Last week, gold prices drifted lower as they took their cue from US macro data and FOMC guidance. Economists note the tone of the latest statement of FOMC as dovish with references to soft growth, rising mortgage rates, and the need for inflation to increase over time. However, they view the substantive changes as aimed at separating the decision to taper the pace of asset purchases from that of implementing the first rate hike, rather than signaling that tapering has become less likely.

    5. Volume traded on the Shanghai Gold Exchange softened to a four-month low, while the rolling monthly average fell to a three-and-a-half-month low – to levels before the sharp pick-up in demand following the price drop in April.

    6. Gold ETP holdings are down 22.6 tonnes already in August, taking year-to-date outflows to 667.5 tonnes, 24% from its peak.

    7. Physical demand needs to step up to provide support to gold prices. Just as continued ETP outflows suggest a softer outlook for gold prices over coming weeks, the recent pick-up in silver prices seems unsupported.

    Thanks.
    Aug 10 01:07 AM | Likes Like |Link to Comment
  • What Will It Take For Investors To Come Back To Precious Metals? [View article]
    Hi The Recusant, thanks for commenting.
    Please keep in mind that there has been negative developments lately in the gold markets that greatly impact economic precipies, directly and indirectly, coming back to precious metals have advantages at this point, but at a lesser degree coming from Copper:

    1. The recent rally in copper prices is an opportunity to sell short. Potential for prices to push back above $7,000/t and towards $7,200/t over the month of August. In particular, the strength of Chinese copper imports is going to take the market by surprise. Copper imports are estimated to have risen strongly in June and to begin spiking in Q3.

    2. The combination of an open import arbitrage and a substitution from entrepot to conventional import financing trade has boosted import demand, as illustrated by the July preliminary trade data.

    3. August imports to remain strong and expect them to be higher y/y
    (but flat or only moderately higher m/m) given that some material will have been booked forward and import premiums remain high, though easing financing demand offsets this.

    4. Base effects are also likely to flatter the import data through the rest of the year. From August 2012 until the end of the year, imports fell 19% y/y, so this weak base could flatter imports during the same period in 2013.

    5. Gold’s negative correlation with the dollar has strengthened and is indeed stronger than its correlations with the S&P 500 and 10-year US Treasuries.

    6. Gold continues to take its cue from US macro data, yet the physical market is setting a weaker footing for prices.

    7. The recent weakness in the dollar has helped to stem gold’s downtrend.

    8. Volume traded on the Shanghai Gold Exchange softened to a four-month low, while the rolling monthly average fell to a three-and-a-half-month low – to levels before the sharp pick-up in demand following the price drop in April.

    9. Gold ETP holdings are down 22.6 tonnes already in August, taking year-to-date outflows to 667.5 tonnes, 24% from its peak.

    10. Physical demand needs to step up to provide support to gold prices. Just as continued ETP outflows suggest a softer outlook for gold prices over coming weeks, the recent pick-up in silver prices seems unsupported.

    Thanks for your attention.
    Aug 10 01:00 AM | Likes Like |Link to Comment
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