Physical demand for gold from Asian consumers may be showing some modest signs of stabilization but the buying interest so common at this time of year during religious festivals and the wedding season still won't be strong enough to lift prices above $1,800 an ounce, strategists said.
India and China are collectively the world's largest gold buyers, contributing 45 percent of total global consumption in the second-quarter of 2012, but the global economic slowdown has hit sales and undermined the stimulus-driven rally in bullion prices. Gold jumped to an 11-month high above $1,795 in October after the Fed's stimulus plan but retreated after failing to break $1,800. It is down more than 3 percent for the month. ...
Robin Bhar, the head of metals research at Societe Generale, is less pessimistic about the outlook for Asian demand. He noted in a Tuesday report that the recent drop in gold prices reflected weaker investor appetite but the resulting softer prices were attracting bargain-hunters in the physical market.
"The balance of interest may be shifting in the short term, away from professional investors who have been active in Q3 (and helping to drive the price higher), while their retreat, and associated price fall, is now starting to entice fresh physical interest," Bhar wrote. Outside India and China, and elsewhere in Asia, "physical demand remains keenly attuned to price movements, but there are signs now of some bargain hunting on any approach to $1,700." ...
Tactically, many strategists recommend accumulating gold on any pullbacks below $1,700. Though still a long-term gold bull, Warren Gilman, CEO of CEF Holdings in Hong Kong, said he's looking to buy on the dips. "I believe gold will not hold $1,700 and I will be able to enter again close to $1,600." ...
Frank Holmes, CEO and CIO of money manager U.S. Global Investors, said he would buy more bullion on any decline to $1,650.
India and China are collectively the world's largest gold buyers, contributing 45 percent of total global consumption in the second-quarter of 2012, but the global economic slowdown has hit sales and undermined the stimulus-driven rally in bullion prices. Gold jumped to an 11-month high above $1,795 in October after the Fed's stimulus plan but retreated after failing to break $1,800. It is down more than 3 percent for the month. ...
Robin Bhar, the head of metals research at Societe Generale, is less pessimistic about the outlook for Asian demand. He noted in a Tuesday report that the recent drop in gold prices reflected weaker investor appetite but the resulting softer prices were attracting bargain-hunters in the physical market.
"The balance of interest may be shifting in the short term, away from professional investors who have been active in Q3 (and helping to drive the price higher), while their retreat, and associated price fall, is now starting to entice fresh physical interest," Bhar wrote. Outside India and China, and elsewhere in Asia, "physical demand remains keenly attuned to price movements, but there are signs now of some bargain hunting on any approach to $1,700." ...
Tactically, many strategists recommend accumulating gold on any pullbacks below $1,700. Though still a long-term gold bull, Warren Gilman, CEO of CEF Holdings in Hong Kong, said he's looking to buy on the dips. "I believe gold will not hold $1,700 and I will be able to enter again close to $1,600." ...
Frank Holmes, CEO and CIO of money manager U.S. Global Investors, said he would buy more bullion on any decline to $1,650.
More information can be found online at http://www.goldbullionadvisors.com
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