Thursday, August 22nd 12:53 PM IST

Billionaire Paulson may not have lost his appetite for Gold: Saxo Bank

# paulson  # gold ETFs  # silver prices  # Fed tapering  

Gold prices now have the possibility to climb up as most of the selling seems to have been done already. Phgysical demand remains strong despite India government efforts to curb gold purchase through increased import duties.

Photo Courtesy of BigStockPhoto.com

LONDON (Bullion Street): Billionaire investor Paulson may have caused a crash in gold prices to $1180 levels in June as he sold 1.1 mn ounces held in the world's largest physically backed gold ETF, SPDR Gold Shares (GLD) in the second quarter of 2013 while gold holdings declined by 402 tons in ETFs.

Now that US gold futures for December delivery has hit a high of $1378.9 before falling back to $1362.9 on Thursday electronic trading. But has Paulson lost his interest in Gold? According to Ole S Hansen, Head of Commodity Strategy at Saxo Bank, it is very unlikely  that Paulson has lost interest in gold. He could have moved his investments into swap markets where it is slight cheaper on the funding side and is also easier for investors to remain anonymous.

Gold prices now have the possibility to climb up as most of the selling seems to have been done already. Phgysical demand remains strong despite India government efforts to curb gold purchase through increased import duties.

Supportive factors for gold are the technical break of $1350 which was a major resistance level and the rally in silver but Fed tapering and rising bond yields provide some downside risks. 
Gold has the potential to move to $1350 levels, according to Ole S Hansen.

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