The macro environment remains bullish for gold as no fed tapering is likely soon on soft US employment report while FOMC meet on Wednesday is unlikely to come up with any policy changes on fiscal brinkmanship and modest employment numbers.
LONDON: Investors could adopt a cautiously bullish strategy with gold which has posted handsome gains to hit one-month high above $1350 supported by continued dollar weakness, strong equities and softer US 10 year treasuries.
However, weaker-than expected macro data provides the spring board for gold to move higher, physical demand is yet to pick up to make sustained gains in gold prices, according to Barclays Research.
The macro environment remains bullish for gold as no fed tapering is likely soon on soft US employment report while FOMC meet on Wednesday is unlikely to come up with any policy changes on fiscal brinkmanship and modest employment numbers.
There seems to be a renewed interest in gold Exchange Traded Funds (ETFs), with their holdings posting their largest daily increase since January.
Forex market is quite neutral for gold as US dollar is likely to remain under pressure on delayed Fed tapring and modest US growth. "For the coming week, the market will continue to focus on the development in Chinese money markets and the outcome of US economic data/FOMC rate decision. They are unlikely to have strong directional implications to the USD; however, we expect little change to the statement from the FOMC (Wednesday) and we expect data to be rather mixed relative to consensus."
The CFTC has now released delayed data for the week ending 1 October, i.e., the week leading up to the US government shutdown. The data show a modest build in speculative positioning, led by a combination of fresh longs (1.1k lots) and short covering activity (4.8k lots). Net longs were at a four-week high at the start of the US government shutdown.
-According to the latest data from the US Mint, US gold coin sales have already surpassed total sales over August and September, having reached 54koz so far in October. This brings 2013 year-to-date gold coin sales to 958koz, versus full year 2012 sales of 857.5koz.
In India, festival demand is yet to pick up on higher prices and gold import curbs.
"Gold recovered within range, patiently awaiting a stronger bullish signal and only cautiously bullish for the time being. Targets towards 1375 before 1425/33 area will become difficult to overcome as the 200-day average provides resistance in this region."-Resistance: 1358, 1375, Support 1325, 1310.
courtesy of bullionstreet
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