Barclays remains bullish on Gold in short term

Gold  |  2012-10-15 08:35:05   |   By

Barclays Capital said that the gold's recent pullback as a healthy pause from the run-up that began in late summer and they remain constructive.

NEW YORK (Scrap Monster): Barclays Capital said that the gold’s recent pullback as a healthy pause from the run-up that began in late summer and they remain constructive.

“Gold prices have retreated from the $1800/oz mark but gold ETP holdings are still at record highs and speculative positions at their highest since August 2011,” Barclays added.

They continued that, “Gold has found some support from a pick-up in buying in India in the weeks preceding the key festival of Diwali; however, demand remains sensitive to local prices. We remain positive on gold’s outlook but expect gains to be moderated in comparison to the run-up in prices ahead of the QE3 announcement, which was boosted by the sharp acceleration in both short-term and long-term investment demand.”

The macro environment, investment flows and technicals as bullish but fundamentals as neutral.

As for the technicals, divergence signals on a daily chart “signal a near-term pause in the uptrend for gold, but do not change the greater bullish trend. Indeed we would view the current pause as a healthy development for gold that ultimately helps to maintain a sustainable move higher. Support near 1725/1735 is expected to provide near-term buying interest on any move lower,” the British bank concluded.