Will gold market prices be supported by physical buying?
*The Wall Street Journal, by Matt Day, October 19, 2011:
''Physical buying seen cushioning gold's declines
Gold futures edged higher Wednesday as a weaker dollar drew some
buying, but gains were muted as investors were reluctant to bet on the
metal embarking on another bull run.
The most actively traded contract, for December delivery, was recently
up $6.30, or 0.4%, at $1,659.10 a troy ounce on the Comex division of
the New York Mercantile Exchange.
Futures in recent weeks have shuffled between $1,600 and $1,700, rising
when investors were optimistic about the global economic outlook or
Europe's debt crisis, but under pressure as investors remain cautious
toward the metal after September's steep plunge.
Gold, sometimes viewed by investors as a safe haven that should rise
when the outlook for other assets was grim, has taken cues recently
from moves in currencies and commodities, moving along with perceived
risky assets.
'Everyone's taking a wait-and-see attitude' toward gold, said Matt
Zeman, head of trading with Kingsview Financial. 'The markets are kind
of teetering on the day-to-day developments' in Europe.
News from the euro zone was mixed Wednesday, with thousands of
protesters marching through the Greek capital to protest new austerity
measures set for a vote Thursday. But the euro was higher against
the U.S. dollar on hopes that the currency union's bailout fund would
receive a substantial boost at a summit of the region's leaders this
weekend.
Dollar-denominated gold can rise when the dollar falls, as it makes
futures cheaper for buyers using other currencies. The ICE U.S.
Dollar Index was recently at 76.761, down from 77.086 late Tuesday in
New York.
Analysts say gold has also been supported during its recent pullbacks
as physical buyers step in to lock in purchases at bargain prices
compared to September's highs above $1,900.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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