There are indications that the pace of gold ETF outflows are slowing and this has reduced the number of loss making ETFs, according to a weekly review by Barclays Research.
LONDON: Gold exchange traded funds (ETFs) witnessed largest daily inflow on Friday (23 August) at 5.8 tons, the highest since January 1, 2013. However, month-to-date flows remain negative at 17 tons. There are indications that the pace of gold ETF outflows are slowing and this has reduced the number of loss making ETFs, according to a weekly review by Barclays Research.
The latest CFTC data showed net non-commercial positions in Comex gold rose by 6.5k lots driven in part by continued short covering activity (3.6k lots), as well as the establishment of fresh longs. Gross short positions are now at their lowest since April, suggesting the scope for further aggressive short covering may slow. However, following the weaker-than-expected US new home sales, it will be key to track if sentiment is changing toward gold, and fresh longs continue to build. This is the first increase in gross longs in four weeks and there have not been consecutive weeks of an increase since April.
-The latest data from the US Mint show that gold coin sales have only reached 15.5koz so far in August. This leaves the run rate for full month August gold coin sales very low, in keeping with the slowing trend we have seen since April when coin sales reached 246.5koz, suggesting retail interest may be slowing. So far this year, gold coin sales have reached 875koz, versus 841koz in all of 2012.
Key highlights of Gold market last week:Gold rose above $1400 as there were no indications that there was any change in QE tapering measures in September. Barclays economists note that asset purchases could fall to $70 bn from $85 bn at the September 17-18 meeting , leaving the new pace at $35 bn per month in Treasuries and $35 bn per month in agency MBS.
Disappointing home sales data which fell 13.4% on a month-on-month basis also contributed to hike in the yellow metal prices.
The sell-off in rates continues, with 10y US Treasury yields, at 2.9%, now back to levels last reached before the debt ceiling crisis in 2011. Our rates strategists now expect US 10y yields to be at 3.1% by the end of this year and continue rising to 3.75% by Q3 14, roughly 30bp higher than forwards
FX market is neutral for gold: -1-month target: EUR/USD: 1.28, USD/CHF: 0.97, USD/JPY: 98 -FX markets continue to take their guidance from rates markets and a further aggressive sell-off in fixed income put higher carry currencies under pressure once again.
Technical strategy:Bullish -Seasonality for gold turns strongly bullish from now through late Feb/early March 2014, with a hiatus in buying in October and November. -Resistance: 1440, 1493; Support: 1340, 1309
No comments:
Post a Comment