INTL FCStone: Gold Needs More Investment, Jewelry Demand
Wednesday October 23, 2013 7:57 AM
Gold needs to see stronger investor and jewelry demand to maintain the upside momentum from Tuesday, says Edward Meir, commodities consultant with INTL FCStone. He points out that another 10.5 metric tons of gold flowed out of the world’s largest gold exchange-traded fund, SPDR Gold Shares, on Monday. The ETF’s Web site shows a 6.6-ton inflow Tuesday, however. “Despite the recent rebound in gold, we have yet to see any pickup in investor demand,” Meir says. He later continues, “jewelry demand also seems to be subdued; … Indian demand is not being accommodated on account of serious spot gold shortages, while in China, premiums to London remain near their lows for the year. Although we suspect that gold should continue to push higher over the weeks ahead on account of both the Fed being sidelined (from tapering quantitative easing) and the weaker dollar, we do need to see investor and jewelry demand pick up if some of this upside trajectory is to have any staying power.”
By Allen Sykora of Kitco News; asykora@kitco.com
Walsh's Lusk: Pullbacks In Gold Likely To Be 'Buying Opportunities'
Wednesday October 23, 2013 7:55 AM
Sean Lusk, director of commercial hedging with Walsh Trading, says he suspects pullbacks in gold will become buying opportunities. “In my view, a tepid unemployment report released (Tuesday) morning all but dashed hopes that the Fed will announce a tapering of their current monthly stimulus program later this month,” he says. A number of economists seem to be offering the view that the data suggest the economy was weakening even ahead of the partial shutdown of the U.S. government this month, leading to an expectation that the October report will show similar weakness for jobs creation, Lusk says. India is coming into the festival season that tends to be seasonally strong period for demand, although government efforts to limit imports are dampening buying there, he says. However, Chinese demand has remained strong, Lusk continues. “Going forward, we could see a lag in prices as we get closer to next week’s FOMC (Federal Open Market Committee) meeting, but in my view any pullbacks in gold will become buying opportunities, as it looks like the Fed will continue to print money at their current $85 billion per month pace for the foreseeable future.”