Last Updated : 16 October 2012 at 21:25 IST
Recent Gold correction may not be over: HSBC
Source :Commodity Online
The decline came after the market was unable to hold over $1,790 an ounce and rechallenge $1,800. Further disappointed selling is possible, and prices could drop closer to $1,700 an ounce in the near term.
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NEW YORK (Commodity Online): The recent correction in gold prices may not yet have run its course, but further falls may well attract institutional buying, said HSBC Holdings plc (HSBC) in a commodity snippet.
According to the British bank, yellow metal tumbled on Monday in response to strong US retail sales data, a firmer US dollar and liquidation by macro hedge funds.
The decline came after the market was unable to hold over $1,790 an ounce and rechallenge $1,800. “Further disappointed selling is possible, and prices could drop closer to $1,700 an ounce in the near term,” HSBC added.
SPDR Gold Shares, the largest gold exchange-traded fund, reported a drop in gold holdings of more than 6 metric tons.
“That said, we suspect that even if gold does fall further, longer-term institutional players may enter the market as buyers and stabilize prices,” HSBC concluded.
Global gold prices are modestly higher in early trading on Tuesday, supported by some bargain hunters stepping in to buy the dip in prices.
A weaker U.S. dollar versus the other major world currencies is also supportive for the yellow metal in early trade on Tuesday.
December gold last traded up $6.30 at $1,743.90 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold was last quoted up $4.70 at $1,742.75. December Comex silver last traded up $0.252 at $32.995 an ounce.
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