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Monday, October 31, 2011

Gold detaches from equities, Q4 price seen at $1875/oz: Barclays

NEW YORK (Commodity Online): Gold prices remained above $1700 despite confirmation of a Euro deal to solve the debt crisis. This week, gold detached itself from equity markets and investment flows have increased, thus signalling higher prices. Q4, 2011 price is expected to average $1875/oz

-Cancellation of Wednesday's meeting between the EU finance ministers raise questions of whether the leaders are capable of implementing the policies. Flash October PMI for the Euro zone fell to its lowest since July 2009. In the US, strong US GDP growth came in line with investor expectations while personal consumption growth indicated a recovering economy.

-Gold physical ETP's recorded positive inflows last week while recent CFTC data revealed non-commercials increased their long positions in COMEX gold.

-Barrick Gold Corp, world's largest gold miner, reported a 7% YoY decline in gold production.

-Last weekly ECB statement showed a marginal increase in Central bank holdings by around 1Koz.

-Technically, the 50 DMA is proving an important indicator of current market trend. A decisive break above the $1740 area could target $1790.

Support : $1690/$1650, Resistance : $1755/$1775

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