The demand for alternatives to the US dollar as a reserve asset has intensified possibly because the US debt issue has not been resolved but only delayed. This is possibly causing central banks and private investors to flock to gold as one of the alternatives, ETFS said.
LONDON: London Bullion Market Association (LBMA) Gold forward rates have gone negative agains suggestive of physical shortage in the market, according to ETF Securities Ltd (ETFS).
There is possibly strong physical demand from central banks and short covering remains strong. "This tightness has continued into the new week, indicating this was not solely short term pre-debt deadline hedging and post agreement short covering demand."
The demand for alternatives to the US dollar as a reserve asset has intensified possibly because the US debt issue has not been resolved but only delayed. This is possibly causing central banks and private investors to flock to gold as one of the alternatives, ETFS said.
Key events to watch this week
US Non farm payrolls will attract attention from markety players. Markit PMI manufacturing readings for China and the US will be closely watched as investors assess the impact of the US budget and debt negotiations on global business sentiment.
courtesy of bullionstreet
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