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5 Feb 2015
Gold’s current consolidation to resolve to the upside – DB
FXStreet (Barcelona) - According to Deutsche Bank, the current consolidation of Gold might resolve to the upside towards $1329.00/31.00 as long as it remains above $ 1244.00.
Key Quotes
“Positioning data from the CFTC for the week ending January 27th revealed that the speculative community had increased their gold holdings.”
“In the meantime, the metal’s price has merely flat-lined for the most astute of those buyers; fallen for the others. A week is a long time for short-term traders, so we suspect their patience might have worn thin in a market that has clearly lost its upward momentum.”
“As a result, we suspect the optimism that had been growing among this group (that was the fifth consecutive weekly increase in net length), might have taken a knock.”
“Even if this proves to be the case, though, there are still reasons to remain upbeat on bullion. This is largely because gold is also attracting buyers with a much longer investment horizon. As a guide for this we note the steady climb in the holding of exchange-traded products.”
“According to Reuters data, the growth over just the past month has been in the order 2.35m ounces, or 5 percent. This is modest in absolute terms, but nonetheless the sharpest rise since late 2012. This shift likely reflects a renewed allocation to gold that, for the first time in over two years, is not being met by the liquidation of unwanted post-crisis holdings.”
“While it holds above 1244.00, we expect the current consolidation to be ultimately resolved to the upside. The first upside objective will be the 1329.00/31.00 supply zone.”
“An immediate rally beyond 1292.00 would indicate that the uptrend is already resuming.”
Key Quotes
“Positioning data from the CFTC for the week ending January 27th revealed that the speculative community had increased their gold holdings.”
“In the meantime, the metal’s price has merely flat-lined for the most astute of those buyers; fallen for the others. A week is a long time for short-term traders, so we suspect their patience might have worn thin in a market that has clearly lost its upward momentum.”
“As a result, we suspect the optimism that had been growing among this group (that was the fifth consecutive weekly increase in net length), might have taken a knock.”
“Even if this proves to be the case, though, there are still reasons to remain upbeat on bullion. This is largely because gold is also attracting buyers with a much longer investment horizon. As a guide for this we note the steady climb in the holding of exchange-traded products.”
“According to Reuters data, the growth over just the past month has been in the order 2.35m ounces, or 5 percent. This is modest in absolute terms, but nonetheless the sharpest rise since late 2012. This shift likely reflects a renewed allocation to gold that, for the first time in over two years, is not being met by the liquidation of unwanted post-crisis holdings.”
“While it holds above 1244.00, we expect the current consolidation to be ultimately resolved to the upside. The first upside objective will be the 1329.00/31.00 supply zone.”
“An immediate rally beyond 1292.00 would indicate that the uptrend is already resuming.”