“Tug of War” in Gold as Asians Buy Physical and ETF Investors Sell
Ben Traynor
GoldSeek.com
Wednesday, 6 March 2013
U.S. DOLLAR prices to buy gold hovered around $1575 per ounce Wednesday morning in London, in line with last week’s close, as dealers in Asia reported an increase in demand for physical bullion, in contrast with exchange traded funds, which have continued to see selling, in what one analyst calls a “tug of war” between physical buying and ETF selling.
“Short-term, gold should drift lower to the short-term support line at $1569/65 or even to the previous low at $1555,” say technical analysts at Societe Generale.
“Initial support is at 1564.88,” adds UBS.
“A break below [that level] would expose $1556.50, the June 28 low and then $1533.70, the May 16, 2012 low.”
Gold in Sterling hovered just below £1045 an ounce for most of this morning, slightly down on the week, while gold in Euros stayed below €1210 an ounce.
Silver meantime hovered around $28.70 an ounce, very slightly up on the week, while other commodities were similarly flat. Stock markets extended yesterday’s gains, in contrast with major government bond prices which fell.
“We remain somewhat cautious on gold and silver,” says INTL FCStone analyst Ed Meir.
“They could be hit by a downward reversal if and when markets start to decouple from the surging equity markets.”
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