By Walter de Wet
With gold is holding steady $1,190 – $1,200 we continue to see good physical demand for the metal. Per our Standard Bank Physical Gold Flow Index (see Commodities Daily dated 8 July 2010), we remain encouraged by the positive response from the gold physical market to what was only a marginal decline in the gold price.

The physical market by no means represents the entire gold market, but still, we view its reaction as bullish for gold in a 3 to 6 month horizon.

Although investment interest has slowed substantially from levels seen in May, we expect it to remain healthy throughout 2010. With interest rates low and sovereign debt problems high, the investment case for gold is still intact.

Gold support is at $1,185 and $1,172, resistance at $1,208 and $1,221.

Overall PGM remain very range-bound. Our view remains unchanged on platinum and palladium. We expect prices to head higher in Q4 as seasonal demand picks up. We also see demand for platinum and palladium at an absolute level as healthy (refer to Focus).

Platinum support is at $1,495, resistance at $1,535. Palladium support is at $438, resistance at $460.

Courtesy: Standard Bank

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