Monday, September 23rd 06:10 PM IST

Gold could rise to $1482 by Oct on no-tapering effect: Barclays

# gold  # precious metals  # silver  # CFTC data  # Fed tapering  

Gold continues to be impacted by continued outflows from Exchange Traded Funds (ETFs) reaching 24 tons and year-to-date at 694 tons. Therefore, investors are advised to watch infows into ETFs in the coming days for further cues, Barclays said. According to CFTC data, specualtive positioning lightend in the previous weeks to September 17, leaving room for sharp moves in either direction.

LONDON (Bullion Street): Gold prices have the potential to rise to $1482/Oz as soon as October under a delayed tapering scenario, averaging $1463/Oz in Q4, 2013, according to a weekly analysis by Barclays Research.

It said that real interest rates remain a key driver of gold and macro economic environment is bullish for gold.
"Our rates strategists have revised their forecast for 10y US Treasury yields lower to 2.85% in Q4 13 (from 3.1% previously), due to the dovish signals from the Fed about the pace of policy normalisation. Also, they do not think the rates markets will question the path as laid out by the Fed, at least in the near."

"According to our economists, a recent set of solid macro data, combined with a dovish Fed, will likely continue to support risk assets in the near term. This coming week will include data releases such as consumer confidence, durable goods orders, new home sales, and the second release of Q2 GDP, from which we can gauge the aforementioned continued support of risk assets, especially equities, which in turn could provide an external market effect on gold," Barclays said.

Gold downside factors
Gold continues to be impacted by continued outflows from Exchange Traded Funds (ETFs) reaching 24 tons and year-to-date at 694 tons. Therefore, investors are advised to watch infows into ETFs in the coming days for further cues, Barclays said. According to CFTC data, specualtive positioning lightend in the previous weeks to September 17, leaving room for sharp moves in either direction.

Net fund length fell 9.9 k to its lowest since Mid August August, driven primarily by fresh short positioning, which rose 7.4k lots, accompanied by a fall in long positioning of 2.6k lots to its lowest since mid-December 2008.
Asian demand presents a mixed picture with weak volumes at Shanghai Gold Exchange while India which enters a seasonally strong period has seen prices settle above Rs 30,000 per 10 grams.

Gold will witness a period of choppy range trading."While the former range lows near 1522 provide a cap on the upside, we cannot rule out a relapse toward 1180 before the upside can gain momentum. A break above 1522 would confirm that upside traction is taking hold and signal a move toward the 1800 area. Resistance: 1375, 1405, Support: 1290, 1270."

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