Saturday, January 19, 2019
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Gold Near One-Week High; Palladium at Highest Since 2011

Gold futures traded near the highest in a week as prices held above a technical support level. Palladium matched a 34-month high set last week.

The dollar rose 0.3 percent after reaching a two-week low set versus the euro on June 6, when gold climbed to a one-week high. The metal slipped 3.9 percent last month, as signs of an improving U.S. economy sent equities there to a record. Price declines stalled above about $1,240 last week.

U.S. data this week may show retail sales rose after a June 6 report found employment exceeding its pre-recession peak. Bullion slid 28 percent last year on expectation the Federal Reserve would reduce bond purchases. The central bank has made four cuts since January and next meets June 17-18. Palladium rose 18 percent this year as mine workers downed tools since January in South Africa, the second-largest producer.

"Prices are underpinned near solid support at $1,240," Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. "The Fed will continue to taper quantitative easing, while a potentially stronger dollar will still provide a major hurdle to bullion's upside" later this year, he said.

Gold for August delivery added 0.4 percent to $1,256.90 an ounce by 7:55 a.m. on the Comex in New York. It reached $1,258.20 on June 6, three days after falling to a four-month low of $1,240.20. Bullion for immediate delivery rose 0.3 percent to $1,256.76 in London, according to Bloomberg generic pricing.
Futures Trading

Futures trading volume was 55 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Bullion's 60-day historical volatility fell to the lowest since April 2013.

Holdings in gold-backed exchange-traded products fell 2.1 metric tons to 1,715.7 tons on June 6, the lowest since October 2009, data compiled by Bloomberg show.

Silver for July delivery rose 0.9 percent to $19.165 an ounce in New York. Platinum for July delivery was little changed at $1,453.80 an ounce. Palladium for September delivery was little changed at $844.70 an ounce. It reached $846.40, matching a level on June 6 that was the highest since Aug. 1, 2011.

Mineworkers have been on strike since January in South Africa, the largest platinum producer. Minister of Mineral Resources Ngoako Ramatlhodi said today would be the last government-led meeting to resolve the impasse, as producers and the dominant union are nearing an end to negotiations.

"Although palladium's fundamentals remain very attractive, overextended positioning suggests a short-term pullback once a resolution in South Africa is reached could be quite violent," UBS AG analysts wrote in a report today. "We would be buyers of those corrections."

To contact the reporter on this story: Nicholas Larkin in London at This email address is being protected from spambots. You need JavaScript enabled to view it.

To contact the editors responsible for this story: Claudia Carpenter at This email address is being protected from spambots. You need JavaScript enabled to view it. John Deane, Nicholas Larkin

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