Gold News

Gold Prices Flat, Silver Gains on Week as Money Managers "Go Overweight" Commodities But Asian Demand "Lacking"

GOLD PRICES ticked higher just above last week's closing level in London trade Friday, edging up to $1317 per ounce as European stock markets neared their first weekly loss since April.
 
Silver prices extended their weekly gains to 0.9%, heading for the first Friday finish above $21 since mid-March.
 
Brent crude oil also steadied, but was on track for 1.3% weekly losses, the sharpest 1-week loss since March according to Bloomberg.
 
"Some of the Middle East risk premium in gold is easing as crude oil prices also decline," says Standard Bank's commodities team.
 
This week's failure to hold above $1320 per ounce "adds to our belief that most of the recent rally was largely on the back of short covering rather than new buying demand," it says.
 
Human Rights Watch today said Sunni militants ISIS have carried out mass executions in Tikrit, northern Iraq.
 
The Kremlin meantime said Russia will "take all the necessary measures to protect our economy" after former Soviet Union states Ukraine, Georgia and Moldova signed a free trade agreement with the European Union.
 
Commodity investment holdings worldwide fell 1.5% to $317 billion last month, analysis from Barclays Capital says. 
 
But with commodity prices now 11% higher from New Year, more than 2-in-5 money managers are looking to go "overweight" on natural resources in the next 12 months, according to 350 corporate, institutional, family office and fund investors surveyed by Swiss bank Credit Suisse.
 
Gold prices have been "squeezed higher," says a note from London market-maker Societe Generale, "but investor and physical buying is lacking."
 
Overnight gold trading in Asia saw "some buying for the first time this week," says Marex Spectron's London head David Govett.
 
Shanghai gold prices closed Friday dead-flat from last week in Yuan, and at a $1 discount per ounce to London quotes.
 
Official reports of a gold financing scam may hurt China imports analysts warned this week, after Beijing's auditor general identified $15 billion in "fake trades [and] idle arbitrage."
 
Short term however, "Gold market bulls still have the overall near-term technical advantage," say chart analysts at Swiss refining and finance group MKS.
 
But "bullish momentum indicators continue to wane," says London market-maker Scotia Mocatta's New York office, "with near-term support expected at $1300."
 
The technical picture "suggests potential for a near-term push to the $1370 area," reckons Australia's ANZ Bank.
 
"But this would be seen as a medium-term range-defining move, rather than a reversal in the downtrend."

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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