By Commodity Online
Gold has been impacted by softer investor demand amidst positive physical demand and prices could average $1700 per ounce in the first quarter of 2012, according to Barclays Capital. The yellow metal will average $1875 in 2012, it said.
“Gold is in search of its next catalyst, but near-term hurdles persist in the form of dollar strength and profit-taking. It bodes well for prices that the physical market remains responsive and the broader external environment positive, given negative real interest rates, concerns over currency debasement and inflationary pressures longer term.”
Barclays Capital notes that macroeconomic factors are supportive of gold, additional QE would be supportive of gold prices as is the interest rate environment which is positive for the yellow metal. A quick resolution to Greek crisis is difficult. Moody’s has downgraded the sovereign credit rating of six European countries, including Italy.
Technical Strategy from Barclays Capital : Neutral. Gold is holding within a 1700/1750 range while momentum studies unwind from stretched levels. We are bullish and would prefer to buy dips against the 1640/1670 area. A move above 1752 would confirm that the next leg higher has begun toward our target near the 1800 range highs. Support: 1700/1670; Resistance: 1803/1763 Medium term: Neutral
