• MTS Gold Evening News 20181212

    12 Dec 2018 | Gold News
• Gold prices were steady early on Wednesday, supported by expectations of fewer rate hikes by the U.S. Federal Reserve next year, while palladium traded at a premium to gold.

Spot gold inched up 0.1 percent to $1,244.40 per ounce, as of 0115 GMT. U.S. gold futures rose 0.2 percent to $1,249.9 per ounce. Spot palladium was up0.2 percent at $1,246.30 per ounce. Prices climbed over 2 percent in the previous session.

• The dollar held near a one-month high against its peers on Wednesday, supported by a rebound in U.S. yields and weakness of the pound as its battering from uncertainty about Brexit continued.

• Asian stock markets edged ahead as U.S. President Donald trump sounded upbeat about a trade deal with China.

• China has agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from the current 40 percent, a Trump administration official said on Tuesday, setting the stage for new talks aimed at easing the bitter trade war between the world's two largest economies.

U.S. producer prices unexpectedly rose in November as increases in the costs for services offset a sharp decline for energy products, but the overall momentum in wholesale inflation appears to be slowing.

An attempt to oust British Prime Minister Theresa May gathered pace on Tuesday, a day after her decision to delay a vote in parliament on her Brexit deal for fear of a rout angered many in her Conservative Party.

One of the International Monetary Fund's top officials warned on Tuesday that storm clouds were gathering over the global economy and that governments and central banks might not be well-equipped to cope.

• Italy's coalition parties are resisting any major reduction to next year's deficit target, complicating efforts to avoid EU disciplinary action over the 2019budget, a government source said on Tuesday.

• Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.

• SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.43 percent to 763.56 tonnes on Tuesday from 760.32tonnes on Monday.

• Investors looking for a commodity to be bullish on in 2019 should look at gold, according to the latest research from analysts at Bank of American Merrill Lynch (BoAML), which is overweight the precious metal.

In a teleconference presentation last week, Michael Widmer, metals strategist at the bank, said that a weaker U.S. dollar, rising inflation and low real interest rates will drive gold prices higher next year.

In its year-end outlook, the bank sees gold prices averaging the year around $1,296 an ounce with prices rising as high as $1,400 an ounce during the year. The bank’s average price represents a gain of nearly 4% from current prices.

In his presentation, Widmer noted that this past year, three factors worked in collaboration with each other to drive gold prices lower: rising real interest rates, positive U.S. economic growth and a strong U.S. dollar. However, looking to the year ahead, he added that these trends are all reversing.

“True, gold prices will not spike until there is a meaningful shift in some the recent market trends. But we believe the spike in the VIX is already setting the stage for that reversal, while the twin U.S. trade and government budget deficits could come into focus as we head into 2019,” the bank report said. “In our view, gold prices could spike quickly to a $1,400/oz high next year if global markets perceive that the Fed is about to blink in its dual monetary tightening policy.”


Reference: Reuters

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