Gold Touches $1400 as “High Syria Risks” Meet “Price-Sensitive” Asian Demand
Tuesday, 3 September 2013
WHOLESALE London prices for physical gold jumped $15 from a drop to $1384 per ounce Tuesday morning, gaining after the Interfax news agency in Russia – political ally of Syria’s President Assad – reported two “objects” being fired in the Mediterranean, towards the sea’s eastern coast.
The gold price then fell back only to rise and touch $1400 for the first time this week – 2.5% below last Wednesday’s 3-month high – as Israel confirmed the launch, saying it was done to test what Reuters calls a “US-funded” anti-missile system.
“As long as Syria stays quiet, I would rather sell rallies [in the gold price] at the moment,” says David Govett at brokers Marex.
But “we would also expect the metal to find support on pull backs,” says Walter de Wet at Standard Bank in London, “not only because Asian demand is likely to improve with gold below $1400, but also because geo-political risk around Syria remains high and oil prices elevated.
“This may also keep ETF liquidation at bay.”
Western investors sold exchange-traded gold funds heavily in the first half of 2013, leading gold ETFs to shed 650 tonnes of bullion.
Holdings have since stabilized some 25% below end-2012’s record levels.
Over in Asia and the Middle East notes Commerzbank’s commodity research team, “Physical gold buyers who had hugely stepped up their purchases after the price collapsed in the spring, appear to be acting opportunistically and with great price sensitivity.