Monday, September 2nd 12:27 PM IST

Bullish potential emerging for Gold, support $1350, 1315: Barclays

# Gold  # Gold ETF  # US dollar  # US employment data  

Fundamentals, maco environment and forex markets remain neutral regarding its influence on gold. Unless there is any surprise in the August US employment report due on Friday, markets may not bounce much.

Photo Courtesy: BigStockPhoto.com

LONDON (Bullion Street): A bullish potential is emerging for gold and monthly price charts highlight the rare occurence of a storng bullish month on the heels of corrective extremes, which previously led to a significant move higher, according to Barclays Research.

Support for Gold is now seen at $1350/oz, $1315 and resistance at $1420, $1435.

If Gold moves into $1522 area, a corrective phase of the past two years is likely to come to a close and point to a period of sideways consolidation in the very least. "Ultimately, we would like to see a move back above resistance in the 1800 area to signal further upside traction into new highs," Barclays said.

Fundamentals, maco environment and forex markets remain neutral regarding its influence on gold. Unless there is any surprise in the August US employment report due on Friday, markets may not bounce much.

"Despite softness in a part of the economy, the labour market data such as initial jobless claims continue to point to a gradual but steady improvement in the US labor market conditions. The August employment report will be the critical for the Fed’s monetary policy outlook and the medium-term prospect of the USD. On the politics front, the development in the Syria issue will continue to drive the market in the near-term, so long as the uncertainty prevails. G20 summit (5-6 September) is also worth attention, although it will face again coordination problems among a large group of member countries with different interests."

ETF holdings held steady last week with net inflows of 0.8 tons while month-to-date flows remain negative. The CFTC data for the week ending 27 August showed net non-commercial positions in Comex gold rose by 17.9 k lots, driven by sizable short covering activity to the tune of 19.2 k lots (long positioning fell 1.3 k lots). Gross short positioning is now at its lowest since March, suggesting that the scope for further short covering may narrow. 

The latest data from the US Mint show that US gold coin sales have reached 20.5koz in August. This has cemented the continued downward trend we have seen in US gold coin sales, as they have slowed m/m since hitting a peak in April. So far in 2013, gold coin sales have hit 880koz, versus 841koz in all of 2012.

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