Investor inflows remain bearish and gold exchange traded fund holdings have failed to stabilise and preliminary data for November show outflows of 47 tons, a similar pace to October.
LONDON: Gold will remain weak despite a seasonally strong period for demand as prices dipped below $1250 per ounce and could be heading to $1180 per ounce, according to Barclays Research.
Price forecasts Q$ 2013:$13254/Oz, 2013:$1425/OzFed tapering is not likely to be announced at the 18 December meeting of Federal Reserve as Unemployment numbers may not be positive for such a move.
"However, the Fed has stressed that the 6.5% threshold is a necessary but not sufficient condition for an increase in interest rates, and our economists do not expect that it will start to raise rates until mid-2015," Barclays Research said in its weekly report on Gold.
Forex markets continue to be bearish for gold. With the exception of Japanese Yen, which appears to be driven by more powerful domestic forces, FX weakness has been largely concentrated in higher-yielding and commodity currencies in the past week. In G10 space, the AUD,NZD, NOK and CAD were the notable underperformers.
One-month targets: EUR/USD: 1.32, USD/JPY: 98, USD/CHF: 0.94
Investor inflows remain bearish and gold exchange traded fund holdings have failed to stabilise and preliminary data for November show outflows of 47 tons, a similar pace to October.
Despite wedding season, India's appetite for gold remains lower than normal and hence don't appear positive to support prices in the near term. Prices are hovering near Rs 30,000 per 10 gram levels.
Recent price action supports our view of further downside risks for gold over the near term. We are looking for a push toward the range lows near 1180, with any move below that level risking the 1155 area as an overshoot. It would take a break back above former range lows in the 1520 area to suggest any kind of a base developing. - Resistance: 1257, 1295; Support: 1227, 1205
courtesy of bullionstreet
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