LONDON The bulk of the complex posted gains over the week, with gold prices
closing at an 11-month high as the macro environment has become
increasingly supportive.
Gold has consolidated its gains but has yet to breach $1800/oz as equity markets have edged higher and the dollar has weakened. Gold has been looking to macro events for reinforcement, and the ECB leaving rates unchanged in line with expectations has not derailed gold’s trajectory, but non-farm payrolls being broadly in line with expectations has triggered some profit-taking.
“Our FX strategists look for the EUR/USD to strengthen to 1.35 in three months, removing a sticky hurdle for gold prices.” Barclays said.
In terms of non-macro headwinds, the physical market has started to show signs of support, although it remains weaker than the seasonal norm. While markets remain closed with the week-long National Day holiday in China, local dealers in India have reported a pickup in gold buying as local prices have eased from record highs as the INR has strengthened against the USD to levels last seen in mid-April.
Meanwhile, scrap selling has started to slow in Indonesia and Singapore. Earlier in the week, reports highlighted the surge in scrap supply, with local dealers and the trade body estimating supply from India at 200-300 tons this year, compared with 58.5 tons last year.
Gold has consolidated its gains but has yet to breach $1800/oz as equity markets have edged higher and the dollar has weakened. Gold has been looking to macro events for reinforcement, and the ECB leaving rates unchanged in line with expectations has not derailed gold’s trajectory, but non-farm payrolls being broadly in line with expectations has triggered some profit-taking.
“Our FX strategists look for the EUR/USD to strengthen to 1.35 in three months, removing a sticky hurdle for gold prices.” Barclays said.
In terms of non-macro headwinds, the physical market has started to show signs of support, although it remains weaker than the seasonal norm. While markets remain closed with the week-long National Day holiday in China, local dealers in India have reported a pickup in gold buying as local prices have eased from record highs as the INR has strengthened against the USD to levels last seen in mid-April.
Meanwhile, scrap selling has started to slow in Indonesia and Singapore. Earlier in the week, reports highlighted the surge in scrap supply, with local dealers and the trade body estimating supply from India at 200-300 tons this year, compared with 58.5 tons last year.
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