Gold Probes Below $1,800 Should Uncover 'Buying Opportunities'

Any forays by gold below $1,800 an ounce may well prompt renewed buying, says Credit Agricole CIB. In a weekly report on positioning by speculators, senior metals analyst Robin Bhar notes that investors have been seeking refuge from global currency instability, volatile stock markets and an uncertain economic outlook. “Also, they are worried about monetary reflation and (the) sovereign-debt crisis,” he says. “Europe’s bank balance sheets are becoming increasingly impaired, which is bullish for gold. In the short term, corrective probes below USD1,800/oz should uncover good buying opportunities.”

Gold Rises As Buyers Add To Positions When Recent Selling Abates

Gold posted a “relief rally” as investors continued to eye eurozone debt problems and added to positions after the recent selling abated, says George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures. Overall open interest declined for Monday, suggesting some liquidation as the market fell. At the time, investors were said to be selling gold to raise cash to cover losses in other markets. However, the open-interest data also shows longer-term participants entering the market, Gero adds. CME Group data shows that while overall open interest fell Monday, it rose for the April and June 2012 contracts. As of 1:40 p.m. EDT Tuesday, Comex December gold was $23.70 higher at $1,837 an ounce.

Sources : http://www.kitco.com/reports/KitcoNewsMarketNuggets20110913.html