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Gold, silver see solid gains as coronavirus scare intensifies – Kitco NEWS

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(Kitco News)Gold and silver prices are solidly higher in midday U.S. futures trading Thursday, on safe-haven demand. Marketplace focus Thursday is squarely back on the coronavirus outbreak that is spreading and which threatens to inhibit global economic growth. February gold futures were last up $13.80 an ounce at 1,583.90. March Comex silver prices were last up $0.488 at $17.98 an ounce and have gotten back most of this week’s solid losses.

After Tuesday and Wednesday shrugging off the coronavirus outbreak that is still not at all contained and apparently escalating, the global marketplace on Thursday was again on edge and risk averse regarding the matter. The latest reports say nearly 8,000 Chinese are afflicted and over 170 have died in China. There are six cases confirmed in the U.S. and the Trump administration has set up a task force to help deal with the situation. Global businesses located in China are closing their doors there and worldwide flights to China are being cancelled. The coronavirus outbreak is now being deemed more expansive than the SARS outbreak that occurred in Asia over 15 years ago.

U.S. traders are wondering if the seriousness of the coronavirus situation in China will give China a legal “out” on its recent signed trade-deal pledge to buy significantly more U.S. agricultural products in the next couple years.

At his press conference after the FOMC meeting conclusion Wednesday afternoon, Fed Chairman Jerome Powell said the coronavirus outbreak could have consequences for global economic growth and said the Fed is monitoring the situation closely. That comment along with other less upbeat remarks on the U.S. economy from Powell, including saying U.S. business investment and U.S. exports are weak, boosted the gold and Treasury markets and pushed U.S. stock indexes off their daily highs. Crude oil prices also sunk at the same time. There is now talk in the marketplace that the Fed will be forced to lower U.S. interest rates later this year.

The U.S. economic data point of the day Thursday saw the advance estimate of fourth-quarter GDP come in at up 2.1% on an annual basis, which is in line with market expectations. Markets showed little reaction to the report.

Asian and European stock markets were mostly lower overnight. Mainland China markets remain closed for the Lunar New Year holiday.  

The key outside markets today see crude oil prices lower, hitting a 3.5-month low and trading around $51.80 a barrel. Meantime, the U.S. dollar index is lower on a corrective pullback after hitting a two-month high earlier this week.

Technically, the gold bulls have the firm overall near-term technical advantage and gained fresh power today. A 2.5-month-old price uptrend is in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the January high of $1,613.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,550.00. First resistance is seen at this week’s high of $1,588.40 and then at $1,600.00. First support is seen at today’s low of $1,574.90 and then at $1,570.00. Wyckoff’s Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls and bears are back on a level overall near-term technical playing field. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $18.895 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at this week’s high of $18.375 and then at $18.50. Next support is seen at today’s low of $17.52 and then at this week’s low of $17.28. Wyckoff’s Market Rating: 5.0.

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Pre-owned business jet shortage drives sellers’ market, demand for new luxury planes

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A shortage of newer-model business jets is driving up prices of second-hand aircraft, a trend that is expected to deliver a windfall for luxury planemakers as new affluent buyers enter the market.

After a turbulent 2020 due to COVID-19, the rush toward private transport is so marked that some buyers are snapping up second-hand planes before fully inspecting the wares as the market shifts toward sellers, lawyers and brokers said.

That is expected to push up demand for new jets from planemakers like General Dynamics Corp‘s Gulfstream, Textron Inc and Bombardier Inc since buyers have fewer pre-owned options, and the price gap between old and new narrows.

“There are virtually no young pre-owned aircraft available – good news for would-be sellers and for (planemakers),” said aviation analyst Rolland Vincent.

He recalled one trucking company’s recent search for a pre-owned Gulfstream jet: “There was one aircraft in the world that fit their requirements.”

Traffic from business jets, which carry roughly a handful to 19 travelers, has rebounded to pre-pandemic levels in the United States, the world’s largest market for private aviation, according to FlightAware data.

“On the pre-owned side, inventory appears to be fairly low, and that’s always a benefit to new aircraft sales,” said Scott Neal, senior vice president worldwide sales, Gulfstream.

“We are seeing strong interest across the board from first-time buyers and high net worth individuals as well as corporate customers with a desire to grow their fleets.”

Textron in April raised its full-year profit forecast, propelled by a rebound in business jet demand.

The trend could encourage some planemakers to increase production rates, although any ramp-up would hinge on supply chain capabilities, Vincent said.

Planemakers do not disclose total number of orders.

Preowned aircraft for sale in May accounted for 6.6% of the worldwide fleet, the lowest level recorded in 25 years by JETNET data, Vincent said. He said 864 pre-owned business jets sold during the first four months of 2021, up 36% from the same period last year.

“There are multiple offers on planes,” said Florida-based aviation attorney Stewart Lapayowker, founder of Lapayowker Jet Counsel PA.

Amanda Applegate, a partner at Aerlex Law Group, said she handled more deals for new jets than usual in May, as buyers fail to secure popular pre-owned planes like the G650, raising prices.

Applegate said it’s a case of pent-up demand as some wealthy travelers previously avoided private jets due to concerns like “flight shaming” over the environment. Corporate planes burn more fuel per passenger than commercial.

But since COVID-19, buyers have been shifting to private aviation to avoid airport crowds and coronavirus variants.

Applegate said some deals are so competitive she’s seen buyers give up pre-purchase inspections to win them.

Don Dwyer, managing partner at Guardian Jet, which does aircraft brokerage, appraisals, and consulting, recalled one case where a client didn’t undertake a pre-purchase inspection, which can take more than a month to complete.

It was a particular case since the plane was highly coveted, in good shape based on a visual inspection, and the seller was reputable, Dwyer said.

“I don’t recommend it, but in certain situations it can work.”

 

(Reporting by Allison Lampert in Montreal; Editing by Denny Thomas and Steve Orlofsky)

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Ford starts shipping Bronco SUVs from Michigan assembly plant

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Ford Motor Co said on Tuesday it had started producing and shipping the new Bronco sport utility vehicles (SUVs) from its Michigan assembly plant, following a delay in the launch of the SUVs due to COVID-19-related issues with the automaker’s suppliers.

Customers have booked more than 125,000 sixth-generation Bronco SUVs since the beginning of the year, the company said. The SUVs are targeted at the Jeep Wrangler market segment.

Ford said it had made more than 190,000 reservations for the Bronco in the United States and Canada.

The company built the first generation of Broncos from 1966 to 1977, and withdrew the line in 1996 amid falling demand.

Ford said it had invested $750 million into and added about 2,700 jobs at the Michigan assembly plant to build the new Broncos.

 

(Reporting by Ankit Ajmera in Bengaluru; Editing by Vinay Dwivedi)

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Lufthansa sets 2024 goal, eyes capital increase

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Germany’s flagship carrier Deutsche Lufthansa said it aims to boost its return on capital employed (ROCE) and laid out plans for a capital increase as it prepares for a business recovery amid an easing coronavirus pandemic.

The largest German airline aims to have an adjusted EBIT margin of at least 8% and an adjusted ROCE of at least 10% in 2024, it said late on Monday.

Adjusted ROCE was –16.7% in 2020 and 6.6% in 2019.

The group added it had mandated banks to prepare a possible capital increase, though size and timing have not yet been determined and the German state, which has bailed out the airline during the pandemic, has not yet given its approval.

 

(Reporting by Ludwig Burger; editing by Jonathan Oatis)

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