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Bingo GOLD @ $ 1132

July 17, 2015

Bingo GOLD @ $ 1132 =

In my last note on May 16, when Gold was trading @ $ 1223.50, I cautioned through my column that initially gold could still make some more up-moves and break of $ 1245-50 is required for test a of $ 1280-90 zones, which looks unlikely to happen, as sellers may emerge on rise and gold needs to penetrate below $ 1175-80 levels for $ 1120-40 zones.

The call for gold down move have been spot on the target, as gold failed to move beyond $ 1233 perfectly hitting my downside target after loosing $ 100 of its value against US Dollar.

The problem in recent times is that gold, no more enjoying safe haven status, as is a costly metal to hold that offers no return to holders.

Easing Geo-Political condition with the lifting of Iran sanctions & Greece agreeing to lenders terms and condition does not help Gold. Chinese economic unrest further dents gold buyers confidence, as demand for US Dollar is constantly on the rise.

Fear of US interest rate hike this year is putting further dent on gold, as lack of Central Bank buying for reserves purpose and Quantitative Easing reversal is the added Bearish factor.

My 2015 Outlook on gold that appeared in “Business Recorder” on January 2 2015

remains unchanged, as it is likely to remain under pressure and my target of hitting $ 924-50 zones is intact.However, $ 1110-20 is the level that could hold for now for a test of $ 1180 before the fall occurs.

Ideally profit should be taken at suggested levels and long gold is preferred around $ 1070-90 if seen, unless $ 1050 breaks, which may not happen in near term.

Gold Price Forecast Until December 2015

May 16, 2015 =

GOLD @ $ 1223.50 =

While India look poised to overtake China as World’s largest consumer of gold due better economic condition, but Indian growth needs to climb 7 pct and beyond to remain on top. This drop could be due to economic slow down in China, but one cannot ignore the fact that Chinese Central Bank is making every effort to push up its economy.

Last week Peoples Bank of China (PBOC) announced slashing of its benchmark deposit and loan interest rate by 25 basis point. It was China’s 3rd rate cut in 6-month pushing one-year deposit rate @ 2.25 pct and lending rate for same period @ 5.1 pct.

Some of the factors that weighed on gold was the weakness of US Dollar, as major currencies made sharp gains. Geo-political Middle Eastern factor was another cause that helped gold to recover.

Despite numerous unfavorable factors, US economic condition should provide bigger picture for gold trend in coming weeks and months. Market witnessed firm support around $ 1170 and current surge in gold that we are witnessing is purely due to sluggish growth in USA in first quarter caused by poor weather conditions.

Though ongoing US economic slowdown could be temporary. Nevertheless, market will be keenly watching overall second quarter economic performance, which needs healing because first quarter GDP was constantly revised downward.
Further, FED in its last FOMC release saw shift in its stance that was enough to put the dent on gold bears, which is why market witnessed 10-year US bond rising beyond 2 pct, currently at 2.15 pct.

Events in next couple of months could be key to gold’s next move that will largely depend on US economic recovery. After the release of of FOMC minutes due on May 20, market will try to determine the direction by reading FED language.

More importantly, Greece is still unfinished Euro-zone agenda and is brittle to any unrest. ECB and IMF are the two influencing force behind the scene and they may play important roll to cool down any uneasiness, as both the institutions can ease the situation by either agreeing to delay payment or even write-off Greece borrowings.

And lastly Iran’s discussion on nuclear deal, which is suppose to reach an agreement by the end of June needs to be watched carefully, as sanction relief is linked with verification and monitoring.Therefore, there is risk that popping up of any uneasy condition until end of second quarter could see demand for gold.

Technically, initially gold could still make some more up-moves and break of $ 1245-50 is required for test a of $ 1280-90 zones, which looks unlikely to happen, as sellers may emerge on rise. On the downside, gold needs to penetrate below $ 1175-80 levels for $ 1120-40 zones.

However, any deteriorating condition in Greece or Iran disagreement could see a sharp surge towards $ 1330-50 zones.

Prospects for GOLD & CURRENCIES “Feb 02”

By: ASAD RIZVI   Published on January 02, 2015

GOLD Gold is a US dollar-denominated commodity and scope for strong USD is bright. Yellow metal that in recent past enjoyed strength due to Eurozone uncertainty, quantitative easing, Geo political factor in Middle East and Central Bank buying failed to find aggressive buyers.

View on gold is bearish, as China slowdown is at a faster pace, forecast for global economy is not very encouraging, Swiss Central Bank buying did not happen, global unrest has eased, commodity price is likely to remain soft and excessive liquidity has dried up.

So there is nothing exciting for gold to give boost, Russian/Ukraine conflict is not big enough to excite buying. Hence, gold buyers have little reason to believe that the metal still enjoys safe haven status.

Therefore, any up-move is considered good opportunity to sell. Upside break of $1225-30 zones will encourage for a move towards $1280 zones. Only break here risks for another $50-70 gain, which is not a favoured move. Gold is likely to fall and break of $1110-20 levels will open gates for $1080, as medium to long-term target remains test of $925-50 zones.


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