“Buyers are very eager to step in on dips”
Gold futures remained lower in early afternoon trading on Monday, by $12.20, or 0.7%, at $1,765.80 per ounce amid strength in the U.S. dollar.
Since climbing to near a seven-month high of $1,790 per ounce last week, the yellow metal has been in consolidation mode. On three occasions last week – and once again this morning – gold futures fell toward $1,755 per ounce but quickly rebounded as traders quickly used the declines to add to positions on early signs of weakness.
Commenting on these developments, UBS’ Precious Metals Daily report noted that “What’s been quite evident over the past week is that buyers are very eager to step in on dips such that any move lower has been short-lived. There is a risk that no such better buying opportunity will present itself, as we saw after QE1 when gold simply proceeded to make higher highs and higher lows.”
While the price of gold has surged higher in recent months due to the expectation and later announcement of QE3, analysts at Natixis Bank argued that going forward it is likely to be influenced more by other economic factors.
“The market will instead turn to the question of the imminent US ‘fiscal cliff’ and the need for an increase in the country’s debt ceiling shortly thereafter,” Natixis wrote in a note to clients. “It is worth recalling that the peak in gold prices in 2011 was related not to QE, but to growing concerns about the health of US finances, and the prospect that the US may be suffering from problems similar to those of European governments.”
( for more gold market commentary, analysis and forecasts, visit GoldAlert Pro at http://pro.goldalert.com )
2012-09-25 07:38:38
Source: http://www.goldalert.com/2012/09/buyers-are-very-eager-to-step-in-on-dips/
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