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"Gold is without structural support at the moment, but since positioning remains relatively light, weaker-than-expected macro data could quickly spur prices higher."

02 Feb 2013

LONDON (Commodity Online): In terms of demand, central bank buying of gold continues, but with the exception of coin sales, investor demand has been fickle, notes Barclays in a report on gold. "Gold is without structural support at the moment, but since positioning remains relatively light, weaker-than-expected macro data could quickly spur prices higher." the Bank said. 

The US Mint reported gold coin sales have already reached 150koz in January, the strongest month since July 2010. ETP flows have turned positive over the past week (up almost 20 tonnes), with UK-listed product being the primary recipient.

Flows for the year-to-date are modestly negative at 3.1 tonnes. Speculative positioning, on the other hand, continues to hover around levels seen ahead of the QE3 announcement (ie, when conviction in gold was low).

Platinum has flirted with a premium to gold since mid-January, but the weaker-than-expected Q4 US GDP data proved how negative data could quickly push gold prices higher.

Equally, the absence of a solid floor set by physical demand and strong investor conviction shows how quickly gains could be surrendered.

Buying in China remains robust ahead of the Lunar New Year, although volume traded on the Shanghai Gold Exchange softened modestly at the end of the month.

In India, the local price has fallen to levels last seen in mid-August as the rupee has strengthened to levels last seen in October.

Reuters reported the lower INR prices prompted healthy interest in gold imports and leading dealers to restock.

Meanwhile, India’s Finance Minister was quoted by Reuters as saying the government was not planning to introduce additional taxes or measures to curb gold imports but would wait to see the effect of recent measures first.


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