NEW YORK : Gold has seen quite volatile up and down trading in Asia and Europe but within a narrow $10 band. It saw gains initially in Asia to $1,752/oz before a retracement to $1,744/oz. It then rose to $1,750/oz again as Asian trading closed.
Early European trading saw gold quickly fall from over $1,750/oz to below $1,746/oz prior to a quick reversal and gold reaching an eight week high at $1,753.45/oz. Resistance is at $1,750/oz and there appears to be a determined seller at these levels. However, the short term technicals are positive with a series of higher lows and higher highs.
Bank of America Merrill Lynch said today that gold bullion may reach $2,000/oz in Q4, up from a 1Qtr estimate of $1,850.
Gold is also being supported by central bank buying. Russia's gold and foreign exchange reserves rose to $504 billion in the week to Jan. 27 from $499.7 billion a week earlier.
Gold has risen to 8 week highs despite positive manufacturing data, higher factory activity in Germany, China and the US and the hope that a Greek debt restructuring solution is imminent.
Demand for physical in Europe, Asia and internationally remains robust which is supporting gold.
Investors will today watch the US weekly jobless claims data for the week ending January 28th.
Adding to the very gold supportive interest rate backdrop, Japan's finance and economic ministers are putting pressure on the Bank of Japan to consider easing monetary policy even further.
Negative yields on some bonds (such as TIPS) are very gold positive as is moves to let investors buy short term bills with negative yields.
Knowledgeable industry participants continue to be bullish on gold.
Newcrest Mining, the world's third largest gold producer, expects gold to trade as high as $2,500 an ounce and retain its safe harbour status for as long as the world's financial system remains in crisis.
Newcrest chief executive Greg Robinson said today that gold will remain a hedge against a global financial breakdown, citing risks such as a devaluation of the U.S. dollar, today’s global currency, European economies in dire shape and persistent political tensions throughout the globe.
Source: goldcore
