Gold prices continues to march upward and it looks like it wants to have another crack at the recent high, the spot price of gold is currently at $1356 an ounce (IG Index).
Simon Denham at Capital Spreads says:
"There are still so many bulls of the precious metal and each move to the downside is very short lived.
"The momentum behind it is being driven purely by the QE argument. As long as central governments continue to pump more and more money into the system gold will remain well supported."
According to Barclays Capital the macro economic picture remains supportive for gold prices.
The US FOMC minutes elevated the inflation mandate in the statement and also implied it was willing to provide additional accommodation to support the recovery before too long.
"Indian physical demand has shown signs of softening with gold prices at record highs, although wholesalers have noted price dips have been met with interest. Investment demand has stabilised, with physical gold ETP holdings remaining unchanged following last week’s sizeable outflow. On the supply side, the latest weekly ECB statement shows no gold was settled during the week ended 8 October," says Suki Cooper at Barclays Capital.
The new agreement year has kicked off on a quiet note following sales of less than 7 tonnes for the quota year last year (annual allowance 400 tonnes) by the Euro-system banks.
Outside of the central bank gold agreement, buying remains intact with Russia having purchased 86 tonnes as at the end of August, the Philippines having purchased 21 tonnes and the latest IFS data showing Thailand has purchased 16 tonnes this year.
Although gold prices have picked up across the board this morning, silver was the only precious metal to close in positive territory yesterday, gaining a modest 0.1% to close at $23.27/oz supported by robust ETP demand.
