Last Updated : 15 October 2012 at 10:45 IST
'Gold has potential to break all time high during December'
Source :Commodity Online
The potential for gold reaching the 2011 high at $1,921 an ounce during December following an initial period of consolidating as $1,800 offers strong resistance. Into 2013 the rally may eventually take us up and above the physiological barrier of $2,000 before reaching a technical target of $2,075/oz.
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By Col. Ajay
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NEW YORK (Commodity Online): Gold has potential to break all time high of $1,921an ounce during December this year, according to Saxo Bank, a Danish investment bank.
According to the bank, gold investments through Exchange Traded Funds reached a new record during the week with more than 200 tons added since the rally resumed in mid-August once the price moved above $1,625an ounce.
Hedge funds and other leveraged investors only joined in following the break above that level but have since then added 380 tons. Physical demand from China and India, the two major buyers, has been subdued but a pick-up has been witnessed over the last couple of weeks while central bank buying, especially from emerging economies, is expected to reach a new record in 2012.
All in all we continue to see further upside potential for gold and to a lesser degree silver as reduced demand from industrial users increases the pressure on financial investors to keep the supply surplus down, the Copenhagen based bank added.
“With the open ended nature of quantitative easing, part three, we see the potential for gold reaching the 2011 high at $1,921/oz during December following an initial period of consolidating as $1,800 offers strong resistance. Into 2013 the rally may eventually take us up and above the physiological barrier of $2,000 before reaching a technical target of $2,075,” they noted.
The absolute line in the sand below is now $1,500 but we expect technical support at the 200-day moving average, currently at $1,659, will hold off any downside attempts, Saxo Bank concluded.