Gold physical demand may weaken,ETF outflows pose risk: Barclays
On the macro side, the situation is bullish.US Fed's asset purchases have boosted risk asset prices. The rising equity strength has proved too much for gold and continued strength in equities is likely to continue to cap upside momentum in gold prices, Barclays said.
Gold is at risk due to a slowdown in physical demand while ETF outflows continue to be strong except for last Thursday when infows turned positive. If physical demand support prices at $1500 level, the risk of continued ETF outflows would subside, according to Barclays Research.
Indian demand has weakened after aggressively responding ot lower prices while record demand from China has eased, albeit remaining elevated.
Price forecasts: Q2 13: $1350/oz, 2013: $1483/oz.
On the macro side, the situation is bullish.US Fed's asset purchases have boosted risk asset prices. The rising equity strength has proved too much for gold and continued strength in equities is likely to continue to cap upside momentum in gold prices, Barclays said.
Gold ETP holdings continued their downward march last week, with the exception of Thursday when SPDR recorded its first daily inflow since 19 March. That said, the outflows resumed on Friday and holdings are at their lowest since October 2011, now at 2379 tonnes. So far in May, outflows have hit 39 tonnes, bringing year-to-date outflows to 381 tonnes—compared to 279 tonnes of net inflows in 2012. Outflows now represent 14% of the 2767 tonne peak holdings at the start of this year.�
Tactical positioning in Comex gold has scaled back further by 7.6k lots, according to the latest CFTC data for the week ending 7 May.
The fall in net positioning was split roughly evenly between a fall in long positioning of 4k lots, and a rise in short positioning of 3.7k lots. Once again, gross shorts have scaled another high and are now at their highest on record (database commences 1987), and speculative positioning now makes up just 20% of open interest, the lowest since July 2007. Although tactical investors have yet to turn favourable towards gold, the data suggests that prices could find support from a short covering rally.�
Fundamentals remain supportive of Gold but volumes in India have dropped so has trade volumes at Shanghai Gold Exchange. In India, traders expect symbolic purchasing on Akshsaya Tritiya day on Monday, May 13.
Technical strategy: BEARISH�
"The end-of-week break lower in gold helps keep our focus lower. We expect selling interest near the former range lows to cap the upside. Look for a move back toward the April lows near 1320. Ultimately, given the magnitude of the sell-off back in 2008 (approximately 34%), we see downside scope toward 1300 and potentially the 1275 area before we would look for signs of a base.�Support 1400 1320; Resistance 1490 1522,"Barclays said.
Sumber : Google
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