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“Given the seasonally weaker period for physical demand, we expect the slowdown in physical demand to be greater than the slowdown in investor demand, placing downside pressure on gold prices in the near term,&r..

15 Jun 2013

MUMBAI (Commodity Online): Gold ETP outflows exceeded 139 tons in April even as physical demand for the commodity is also at its seasonal lows putting pressure on prices.

“Given the seasonally weaker period for physical demand, we expect the slowdown in physical demand to be greater than the slowdown in investor demand, placing downside pressure on gold prices in the near term,” said Barclays in a report on gold.

The price of gold has traded above the $1400/oz level; however, the commodity has struggled to retain gains and sustain above that level. There exists a strong physcial appetite for gold; but the weakness in ETPs have not been completely offset by strength in physical demand.

Besides quarterly supply from mine output and gold scrap has exceeded 1000 tonnes on average.

MCX gold for August delivery was seen trading at 0.18% up at Rs.27862 on 10.45 AM IST. The commodity may trade bullish for the day.

The physical markets have responded well to the prices; but there is a great deal of supply to absorb. Trade data for the month of May from Turkey and for April from Hong Kong reveal persisting strength in the demand.


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