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It said that recent gains in precious metals look toppy. Therefore, selling on any gold price rallies is suggested especially when it is expected that legs of support to give and to expose gold on the downside.

14 Jul 2014

LONDON (Commodity Online): Gold appears bullish towards $1370 per ounce and then $1430 an ounce levels, according to Barclays.

It said that recent gains in precious metals look toppy. Therefore, selling on any gold price rallies is suggested especially when it is expected that legs of support to give and to expose gold on the downside.

"We caution against interpreting recent strength in investor flows as a long-term shift in sentiment, as gold still represents healthy selling opportunity," according to Barclays.

Price forecasts: Q3 2014: $1200/Oz, $1260/oz

The macro environment, FX strategy are neutral for Gold while investor flows are bullish.Barclays economists point out that FOMC outcome signalled tapering to conclude by October but there is no firm guidance on the expected timing of any rate hike cycle.

The committee continues to expect only modest wage growth and for inflation to remain at or below its 2% target over the forecast horizon.

Currency: 1 month targets: EUR/USD 1.35, USD/JPY 102, USD/CHF 0.90. US economic data is not entirely supportive of the dollar and hence its impact on gold appears limited.

Investor behavior: In June, net ETP flows remained in negative territory, albeit just at a small 3.96 tonnes, as inflows into US-listed products tempered outflows elsewhere. So far in July, there have been net inflows to the tune of 6.9 tonnes."The net inflow as of late likely will not continue in the long term, in our view. In fact, we do not expect a sustained upward trend in holdings in the near term."

According to the latest data from the CFTC for the week ending 8 July, tactical investors once again increased their net speculative positioning in Comex gold, this time by 4 k lots, a noticeably smaller increase versus the previous few weeks. The move was driven almost equally by the establishment of fresh long positioning to the tune of 2.2 k lots (now standing at its highest since April 2013), and short covering to the tune of 1.8 k lots.

Gold coin sales ended June at 64.5koz, the highest since January according to the latest data from the US Mint. So far in July, gold coin sales have already reached 14koz, bringing the YTD total to 391.5koz, roughly half of sales reached at this point in 2013. Full-year US gold coin sales were nearly 1.1Moz in all of 2013.


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