SWOT Analysis: UBS Recommends Buying Gold on Dips
By Frank Holmes
GoldSeek.com
Monday, 2 November 2015
Strengths
Platinum was the best performing precious metal, although it still suffered a loss of 1.61 percent for the week. Platinum had held up pretty well for most of the week but slipped below $1,000 an ounce on Friday. Impala Platinum noted it sees its output rising 17 percent in 2016.
India has regained the top spot from China as the biggest overall consumer of gold in the first nine months of this year with total consumption of 642 tons. China is trailing by just 63 tons.
Gold consumption in mainland China may match or exceed the record in 2013 after financial market turmoil and the yuan’s devaluation have boosted the metal’s appeal. Further, China’s net imports of gold from Hong Kong increased for the third month in September as lower prices and inventory building before a week-long holiday spurred buying. Net purchases rose to 96.6 metric tons from 54.7 tons in August and 61.7 tons a year earlier.
Weaknesses
Palladium was the worst performing precious metal, falling 2.48 percent for the week. Momentum in gasoline auto sales is likely to fall as pent up demand has largely been satisfied and consumers do not appear to be abandoning diesel powered vehicles.
Disappointing earnings releases from Alamos Gold, New Gold, and Goldcorp sent the stocks on a downward spiral this week that saw prices collapse by more than 15 percent. Goldcorp reported third-quarter profits that missed analysts’ estimates. The company’s net loss was $192 million, or 23 cents per share, wider than the loss of $44 million, or 5 cents per share, a year earlier.
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