Gold futures on Monday sputtered in flat territory to start the week, barely budging from its range-bound finish in the prior session as traders continue to mull when the Federal Reserve will start tapering its bond-buying program.
At last check, gold for December delivery slipped 10 cents to $1,287.30 an ounce. Silver was flat at $20.73 an ounce.
On Friday, gold futures rode Fed Chairwoman nominee Janet Yellen’s support for the stimulus program to their first weekly gain in three. For the week, gold added 0.2%. But the bullish lean toward gold likely won’t continue much longer, according to MKS analyst Moudi Raad.
“Gold is likely to find it hard to gain any upside momentum, especially with equity markets continuing to reach record highs, which not only look set for further gains, but they provide the much-sought- after yield which investors around the globe are yearning for,” he said.
Analysts at Barclays said a dovish Fed is not enough to keep gold steaming higher and see range-trading in the near term. While a potential pickup in Chinese buying ahead of the Chinese New Year could support gold on the downside, expectations that Fed tapering will be further pushed out on its own “is insufficient to drive prices substantially higher, in our view,” said Barclays lead analyst Suki Cooper in a note Monday.
“Indeed, gold has been presented with a number of catalysts over the past year and in particular over the past two months, all of which have failed to reignite investor demand,” said Cooper.
Barclays analysts noted that the latest Commodity Futures Trading Commission data, for the week ending Nov.12 — a week showing stronger-than-expected payroll data and a surprise rate-cut by the European Central Bank — revealed that investors had scaled back gold exposure in what they described as “the most aggressive reduction in positioning since March 2012.”
Gold exchange-traded-product holdings have so far fallen 13.6 tonnes in November, which implies a slower rate of redemptions than in October, the Barclays analysts noted.
S&P 500 has notched weekly gains for six weeks straight, closing Friday at record levels.
Elsewhere, January platinum rose $1.90 to $1,440.80 an ounce, while December palladium fell $3.45, or 0.5%, to $729.20 an ounce. High-grade copper held steady at $3.17 a pound.
Source : Marketwatch
