AX: Gold prices bullish, analysts say $1000 gold near
(AXcess News) New York - Gold prices are bullish, according to commodity analysts and the prospect for gold to rise above $1000 per ounce remain likely. Silver futures are also strong, with prices in New York up Wednesday morning.
Standard Bank commodity research analyst Walter de Wet said, "The difference now is that physical buying [in gold] is taking place at a gold price which is $70 higher than it was in mid-April; this a bullish signal."
Indeed, gold futures in New York were up $6.30 per ounce, or more than 0.6%, at $961 as of 9:30am ET Wednesday. Silver futures post a 16 cent per ounce increase, or more than 1%, to trade at $15.30 after having been as high as $15.40 per ounce earlier this morning.
Inflation fears are weakening the greenback this morning pushing precious metals higher. Standard Bank's de Wet says that if the dollar falls to levels seen last week gold prices could advance even more towards the $1000 per ounce mark.
"Our index which tracks the net flow of gold buying and selling in the physical market has jumped in recent days, confirming the positive momentum for the gold price from the physical market," said de Wet.
The commodities analyst also noted strong demand in ETF buying.
On Monday ETF gold holdings stood at 53,561,849oz of gold. Open interest on COMEX is also rising. Open interest has reached 534K contracts last week with the higher gold price - the highest level in two months. "Together with a rising gold price, this is a bullish signal," de Wet stated.
Economic data also suggests a further demand for physical gold and silver will occur.
China’s consumer and producer price data was released this morning. Both price indices registered a fall in price levels, Standard Bank noted. PPI in May declined 7.2% year-over-year in China, while consumer prices declined 1.4%. "The fact that we see deflation in an economy which is growing indicates that inflation is not a problem yet," explained de Wet. "Excess capacity, high unemployment and low commodity prices (compared to a year ago) remains deflationary. However, crude oil prices should start to provide upward pressure on m/m prices soon."
