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Outflows from ETFs once again accelerated as gold ETP holdings have already declined by nearly 18 tonnes over the first few sessions in April, following net redemptions of 50 tonnes in March. Should outflows persist a..

08 Apr 2013

LONDON (Commodity Online): Gold prices are expected to trade in range with some support expected from the physical market amidst worries about accelerating outflows from exchange traded funds in April, Barclays Research said.

Price forecast: Q2 2013: $1615/oz, 2013 annual average: $1647/oz

Gold market sidelined the comments by ECB President Draghi on Cyprus and possibility of moderate rebound in H2 13 although weaker-than expected jobs data provided some support last week.

Outflows from ETFs once again accelerated as gold ETP holdings have already declined by nearly 18 tonnes over the first few sessions in April, following net redemptions of 50 tonnes in March. Should outflows persist at this pace, they would match the weakest month on record, which was set in February. ETP outflows remain the largest downside risk to gold prices, Barclays said.

-Tactical investors scaled back exposure to Comex gold during the week ended 4 April as a rise in gross shorts (14.5k lots) far outpaced a small increase in long positioning (2.2k lots). Gross longs continue to hover around the 200k lots mark, a level positioning has fluctuated around since last August ahead of the QE3 announcement.
- US Mint data show that gold coin sales have reached 22koz so far in April, versus 20koz in all of April 2012. Year-to-date sales have reached 314.5koz so far, as retail demand for gold has been healthier than ETP flows and speculative positioning. (Jan-April 2012 sales: 230.5koz; Full year 2012 sales: 753koz).

" Whilst our greater view for gold is bullish, we are prepared to be patient in our timing for a move higher. For now, range trade is the main theme and we would prefer to fade any weakness against the range lows near $1,522. Near term, a move above the $1,625 area would encourage further strength within the range toward targets near $1,700 and then the $1,800 highs. It would take a break above the latter to signal that the longer-term bullish trend is resuming for new highs above $1,921."

-Support: 1,539, 1,522; Resistance: 1,577, 1,625.


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