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Gold’s positive momentum continued last week with gold recording a 1.8% gain. Gold has now risen three weeks in a row and looks set to record a second monthly gain after October’s monthly gain with Credit ..

15 Nov 2011

NEW YORK (Commodity Online): Gold’s positive momentum continued last week with gold recording a 1.8% gain. Gold has now risen three weeks in a row and looks set to record a second monthly gain after October’s monthly gain with Credit Suisse expecting a $1800/oz break in the coming days.

Gold remains up 25% year to date in US dollars and (22% in Euros and British pounds) and thus the recent correction and consolidation was a healthy development that took the short term froth out of the market and has now left the gold market with stronger foundations.

-Physical demand from Asia continues but for now is below the very high levels seen in recent weeks.

-Central bank demand continues. Overnight, the Russian central bank announced their intention to buy 100 tonnes of gold in 2011. Ria Novosti reports that Russia has acquired over 90 tons of gold since early 2011 and plans to increase the amount by 100 tons, the Central Bank Deputy Head Sergey Shvecov stated at a finance conference. Concerns about the Euro and Eurozone and the weak dollar have been cited as reasons for Russia’s continuing FX reserves diversification.

Options traders remain bullish with most open interest for November centering on $2000 calls, $3000 calls.

In options on Monday, the largest change in open interest was seen in $1920 calls for the Nov 22 expiry, where OI rose 643 lots to 1,389 lots. $1900 calls rose 526 lots to 9,242 lots.

Gold ETF data shows continuing safe haven flows and diversification into gold.

-Global holdings of gold rose last week, by nearly 897K oz, their largest weekly rise since the week ending Aug 5 2011, when holdings rose by a net 1.089M oz, according to Reuters.

-Total gold ETF holdings stand at around 68.854M oz, up a full 1.749M oz in the last month. November is shaping up to show the largest monthly inflow since July. So far this month, holdings have risen by 947K oz.

Goldman Sachs on Monday reaffirmed that it remains overweight in commodities. On gold it says it will roll over its Dec 11 long to Dec 12.

"We expect gold prices to continue to climb in 2011 and 2012 given the current low level of US real interest rates, and as a result recommend a long gold position.

Credit Suisse has said that gold may climb over $1,800 in the coming days with negative real interest rates as the ‘key driver’.

 

Source: goldcore


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