The gold price is lower by 0.17% at $1431 an ounce at 10:20 AM in London. A look at the 15 minute chart does show that the price has been improving throughout morning trade.
"Gold prices are off slightly this morning having moved up to touch a record yesterday as concerns over the continued unrest in North Africa fuelled demand for safe haven investments," say Fairfax IS.
UBS has reported that Gold purchases in China rose to 200 tons in the first two months of the year. World Gold Council estimates suggest that gold investment in the country could rise by as much 40% this year.
Statistics from Beijing’s largest jewellery store, show sales of gold and other jewellery have totalled circa US$608 million so far this year suggesting a 70% increase from a year ago.
Gold prices stalled on Monday as safe-haven buying faded along with fears that turmoil in the Middle East could derail the global recovery via spike in oil prices.
A dramatic build in the short-term correlation between 10-year Treasury notes – the benchmark safe-haven asset – and gold spot over the past two weeks suggests that a shift in focus back to steadily improving fundamentals may undermine the metal along with bond prices. This seems particularly compelling as ETF holdings, a proxy for investment demand continue to edge lower having set another eight-month low last week.
Technically speaking gold prices continue to consolidate between triple top resistance at $1424.60 and a rising trend line set from the January low (now at $1401.15).
Negative RSI divergence hints at the likelihood of a downside scenario, with a break below the trend line and the nearby horizontal barrier at $1393.30 (the Jan 13 high) initially exposing $1376.20.
